Hansard, Thursday, 15 November 2012

1 Mr Zainudin Nordin asked the Minister for National Development under HDB's Lift Upgrading Programme (a) how is the cost per benefiting housing unit computed; (b) whether it is timely for HDB to review the basis of this computation; and (c) in extenuating cases, how will residents of non-benefiting units be assisted to overcome the physical barriers that affect their quality of life at old age.

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Sir, the figure is derived by dividing the total cost of upgrading a block by the number of units which will benefit directly from the Lift Upgrading Programme (LUP). By "total cost", we mean cost comprising the building construction cost, the lift cost and other related costs, such as consultancy and service diversion.

HDB has applied this basis of computation consistently to all blocks selected for LUP. As we near the end of the programme, it will not be appropriate for HDB to change the basis.

HDB is focusing its efforts now on upgrading the remaining feasible blocks by 2014. However, there will still be some blocks for which the LUP cannot be offered due to excessively high cost and technical constraints, and HDB will continue to look for solutions for these blocks. Meanwhile, residents in these blocks who require special assistance, for instance due to medical conditions, can approach HDB to look into how best they can be assisted.

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Sir, a supplementary question. The objective of the LUP is quite clear – to provide barrier-free access to our residents who are getting old. Beyond the construction of lifts, are there other alternatives that HDB or MND are looking at that are more feasible and viable for our residents, perhaps beyond half a landing or even one or two floors? Can the Senior Minister of State explain?

Sir, the LUP is a huge programme. It covers 5,000 blocks with a budget of $5 billion. By necessity, we have to set a financial cap on how much we can build and spend on each benefiting unit. This is so that we spend prudently, and maximise the budget. When this programme was being executed, initially, we encountered about 1,000 blocks which are very difficult to deal with because of the way that the flats were laid out and the tight site constraints. Over time, we have found technical solutions to some of these blocks and we have managed to reduce the number of difficult blocks to about 200 today. We will still continue to look for technical solutions that can be cost-effective and still address the needs of the residents. But some of these technical solutions will take time to test whether they are feasible. For residents with medical conditions and with severe handicap in physical movements, let HDB know. We will see how best to assist them.

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2 Ms Denise Phua Lay Peng asked the Minister for National Development (a) how other non-public housing buildings provide for bomb shelters; and (b) whether HDB can consider other alternatives to the construction of bomb shelters in new HDB flats.

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Sir, the Civil Defence Shelter Act requires all residential developments to be provided with a shelter. Developers or owners have the option of providing household shelters within each residential unit or storey shelters to be shared by residents on each floor. Storey shelters could also take the form of a staircase shelter. This requirement applies to HDB flats as well as non-public housing, including private apartments, condominiums and landed houses.

HDB has built household shelters for most of its flats as they offer some advantages. For example, household shelters offer immediate protection as the residents do not need to leave their flats to search for shelter protection. Such shelters can also be used as a store room during peace time.

While some private apartments and condominiums provide staircase shelters, for HDB to do likewise requires it to fully enclose its staircases. This will incur high maintenance costs due to the need for 24-hour mechanical ventilation. Further, unlike private condominiums, HDB precincts are not gated. Hence, such an enclosed space may also pose security issues, and give rise to illicit activities within the space. Due to the high maintenance costs and potential security issues, HDB has, therefore, not adopted this option and has not incorporated such staircase storey shelters in HDB blocks.

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Sir, I thank the Minister of State for the reply. As HDB flats become smaller, there are quite a lot of requests from residents and new home-buyers who ask for a re-look at this policy and practice as every square footage becomes very precious real estate. Currently, bomb shelters are used primarily as store rooms for many of the residents. In fact, this does not really align with the objective of the Civil Defence Shelter Act that was just quoted. I was wondering if MND could consider taking the no-wrong-door policy and work with the Ministry in charge of Civil Defence to see if this practice can be re-examined and re-studied, and whether other alternatives could better address the need for Civil Defence, due to the request by many home-buyers for better use of this space.

Sir, it may be useful to go back a little in time to visit the purpose of bomb shelters. In 1987, the Government first introduced a comprehensive shelter programme, beginning with public places. Beyond the obvious underground MRT stations, at that time, public shelters were built in Secondary schools, community centres and other public buildings. In 1994, household shelters were incorporated in new HDB flats. In 1998, when the Civil Defence Shelter Act was reviewed, the Act specifically required that all residential units must have shelters, either in the form of household shelters or in storage shelters. At the same time, the practice of building shelters at void decks and underground in HDB precincts were discontinued. This is so that within 40 metres of the entrance of each household, they can get to the shelter.

In peace time, home shelter space is used as store rooms and maybe to put other items, but, in crises, this is really the place that will give protection to the households in terms of either preventing direct shock or collapse. Or even in the case of tremors from earthquakes. This is like buying an insurance policy. You only realise its usefulness when the time comes.

Having said that, HDB has improved the layout of the home shelters over time. It has reduced the setback requirement. In the past, it used to be four metres from the edge of the building, very specific as to where you can locate the home shelter. But now, the distance is shortened. So, it can be placed in different parts of the house. Over time, the internal space of the home shelter has been reduced, but yet, still satisfying the Civil Defence Shelter Act.

So, it is a necessary balance between practical use and against war-time, tension-time scenarios. I would be happy to convey your feedback to MHA which is overseeing the Civil Defence Shelter Act.

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3 Mr Alex Yam asked the Acting Minister for Manpower (a) how effective have the National Wages Council's recommendations been in raising real wages for low wage workers over the past decade; and (b) whether a strategic review of the National Wages Council is needed to enable its recommendations to carry more weight with employers.

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Mr Speaker, the key role of the tripartite National Wages Council (NWC) is to ensure orderly wage increases in line with Singapore's economic development. While NWC wage guidelines are not mandatory, they are widely referred to by companies in both the unionised and non-unionised sectors. They are also gazetted under the Employment Act and form the basis for wage negotiations between unions and management.

Over the last decade, notwithstanding the three economic recessions that we have been through, workers have enjoyed real and sustainable wage gains that are generally in line with productivity growth.

Income from work, including employer CPF contributions, of full-time employed residents at the 20th percentile level rose by 35% over the last five years from 2006 to 2011, which is about 6.1% per annum. Factoring in inflation, the real income growth at the 20th percentile level was 14% or 2.6% per annum. This was despite the financial crisis in 2008/2009. Offset by the income loss in the preceding five-year period, the real income growth over the decade was more modest, at 2.4% or 0.2% per annum.

The NWC has been in place for many years. And in recent years, the NWC has been paying particular attention to low-wage workers. For example, this year, the NWC recommended specifically that employers grant a built-in wage increase of at least $50 to workers earning a basic monthly salary of up to $1,000. While it is too early to know the full impact of the guidelines, indications from the Singapore National Employers Federation and the National Trades Union Congress are that employers have generally been supportive of this recommendation.

The NWC is not a static institution. It will continue to evolve and finetune its recommendations to meet the changing economic and social needs of the country.

Sir, I thank the Acting Minister for the response. I would like to ask Acting Minister this. Since the NWC was first formed in 1972, and all the way through to 1985, 1986 during the major recessions, the NWC guidelines have always been quantitative rather than qualitative. But we moved towards a more flexible wage system thereafter. It is only this year that we have returned to a quantitative recommendation. Does the Acting Minister feel that this should be the way forward over the next five years, that is, for there to be more quantitative guidelines, especially for low-wage workers?

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Sir, I would like to thank the Member for the supplementary question. We would monitor the situation. NWC is not a static institution. The measures put in place are aimed at uplifting the wages of the various levels. So, the recommendations that NWC had put forward this year had been a slight deviation in that it is specifying wage increases, not just in quantitative terms but specific dollar terms. Whether this becomes a norm would depend on how we see the situation unfolding over the coming years. If there continues to be a need for that, I am sure the NWC would consider in future whether to specify a quantum. As with all things, we will look at the situation to see how incomes progress at the different levels.

I would like to ask the Acting Minister this. Many low-wage workers, especially those working under outsourced services contracts, are experiencing stagnant wages. Given the fact that we are moving towards giving a quantitative recommendation under NWC, can MOM consider making it mandatory for both service providers and service buyers to bear the cost equally of adopting NWC recommendations, especially those pertaining to low-wage workers?

Sir, I would like to thank the Member for the supplementary question. We will take onboard the suggestion. What I would say is that we would leave it very much to the market to look at this. We are quite aware and we have been in discussion with the unions and with the employers on the issues affecting low-wage workers. There is a range of measures that we have put in place. Certainly, we know that Workfare remains something that is important. And we will be reviewing that quite extensively for next year. At the moment, we are also working closely on the cleaning and security sectors, accreditation being a big part of it. Those are the means and, through a combination of the various measures, we believe we can uplift the wages.

As to whether it is borne by service providers and so on, that is something, for the moment, we will leave it to the market to decide. But the key thing is whether we are able to move and uplift the wages for the lower income levels. The programme we have put in place is something that is aimed towards achieving that, and we are reasonably confident that that will happen. We will take onboard the consideration for future use. But, for now, let us work the existing processes and see how that unfolds.

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4 Asst Prof Tan Kheng Boon Eugene asked the Acting Minister for Social and Family Development (a) what is the estimated number of youths in Singapore deemed to be at risk; (b) what is the national plan and strategy to reach out and engage with youths at risk; and (c) whether the national plan can avoid an excessive focus on youth delinquency and crime, which may not adequately deal with the root causes of the vulnerability and propensity of youths at risk to at-risk activities.

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Mr Speaker, Sir, at-risk youths may exhibit different attributes, such as truancy, anti-social behaviour and juvenile delinquency. They may be exposed to situational risks, such as broken families, undesirable company or drop out from school. It is not possible to provide a single definitive figure on the number of at-risk youths. We will have to monitor different indicators to have a sense of the situation. For example, the percentage of the Primary 1 cohort who did not complete Secondary school is 0.9% in 2011. The number of juvenile delinquents arrested in 2011 was 1,488.

The National Committee on Youth Guidance and Rehabilitation (NYGR) oversees our national plan on at-risk youths. It is supported by the Central Youth Guidance Office (CYGO), an inter-Ministry set-up.

We agree on the need to work on addressing root causes of vulnerability and upstream issues, instead of focusing only on youth delinquency and crime. And, indeed, that is what the various agencies have been working on. The national plan is thus focused on a co-ordinated approach among key Government agencies and community organisations, not just on rehabilitation efforts but also on prevention and early intervention initiatives.

Sir, I thank the Acting Minister for his reply. While I appreciate that it is hard to pin down the precise numbers, would the Acting Minister enlighten us on the sort of numbers that his Ministry is working on? There must be some planning parameter.

Secondly, with regard to youths-at-risk, one of the challenges is that such youths tend to be highly mobile. So, it is not like you can go to a particular spot and engage them on a regular basis. Mobility is one key attribute of such youths. How does the Ministry plan to reach out to these youths who essentially do not really want to seek engagement or are not receptive to engagement?

I have one last concern. While part of the whole arsenal of action, whether policing could be used as a last resort because that will actually make the youths-at-risk less willing to engage with the VWOs who seek to work with them.

Sir, in reference to the planning parameters, there are various groups of at-risk youths that we can take a look at. For example, those who drop out from schools or those who are exhibiting problems with their academic progress in schools. There are people who hang out at various joints. All these are places where we look out for the youths-at-risk and we try to engage them as far as possible.

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On the second point, the Member is, indeed, correct that the youths are mobile. They have different sorts of activities that may be slightly different from the conventional youths. Having said that, there are also opportunities for us to engage them on the platforms that they actually like. For example, some of them may drop out from schools and they may like soccer. The Police has a scheme that encourages them – it is called the Delta League – to come together. I must say that Delta League is not just for at-risk youths, it is also for other youths to come together as well, because we do not want to brand people as being at-risk. Whoever needs help, we try to engage them in activities that will appeal to them. For example, soccer is one opportunity and, through it, some of these youths are also brought into community service action plans with the community leaders, so that they not only have the opportunity to be given guidance but also have access to mentors who can work with them on a much more preventive basis, than just to do the policing action, as the Member had mentioned.

And, indeed, we agree with the Member that policing will be the last resort. We very much like to invest in upstream efforts. Some of these efforts have paid off and, if we look at the policing figures, they have slowly, gradually declined over the years, in terms of the number of people who are arrested for youth crimes. This is perhaps one small sign that the upstream efforts are paying off.

Having said that, we should never be complacent. We should continue to see how else we can work on upstream measures to better engage these youths.

I thank the Acting Minister for his response. Just two very quick supplementary questions – one, if the Acting Minister would be able to provide a quick update on the success or non-success of the pilot programmes, such as Youth Goal and Streetwise. And if the Acting Minister has any statistics on the number of children who have been referred to the children care court in the past year for parents who are filing for their kids being beyond parental control.

Sir, on the first question – the Youth of Go! Programme (YGP) aims to engage youths in meaningful activities and help them to develop problem solving and coping skills to steer them away from crime. Unfortunately, I do not have the statistics that the Member requires at this point in time but I will be happy to provide him with the statistics should he need them.

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5 Mr Png Eng Huat asked the Minister for National Development (a) what is the average time lag between a Lift Upgrading Programme (LUP) announcement and polling; (b) what is the average time lag between LUP polling and completion; (c) whether HDB can initiate a programme to assist residents whose flats are not selected for LUP because of construction cost issues due to the design of their flats.

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Sir, the scale and complexity of each LUP project are different, thus affecting the time taken for each project. For most precincts, it typically takes about one year between announcement and polling. So, there are two parts.

From announcement to polling, typically this would take a year. During this period, a Working Committee is formed to study the design solutions, residents are consulted, and sometimes, shown samples, and the relevant tenders are then called for consultants and contractors.

From polling to completion, it generally takes another two and a half years. During this time, the works include diversion of underground services, which by themselves can take up to six months. And, then, foundation works, such as piling, construction of lift shafts, lobbies, link bridges to opening to the balcony. Finally, there will be the installation and testing of lifts to ensure performance and safety standards.

HDB tries to expedite LUP works without compromising quality and safety. Where feasible, LUP works are phased to minimise inconveniences to residents. On the Member's question on trying to help blocks that are not selected for LUP, in my reply to Mr Zainuddin Nordin earlier, I have explained that we will try and continue to look for technical solutions. And for people with mobility and health problems, we will look into the cases, on a case-by-case basis.

I thank the Senior Minister of State for the answer. I just have one question. Based on the timeframe that has been stated – one year from announcement to polling and then two and a half years from polling to construction – there are a couple of batches in Hougang that are way overdue. Some batches have started – Batch 8, Batch 10 – but Batch 9, which is the 700 cluster, which was announced in October 2010, I would like to find out whether the Ministry would still be able to complete their LUP on time by 2014?

Our plan is to complete by 2014, so I think we can look at the Member's specific cases to see what is being held up. Suffice to say that most precincts will find the consultation period useful. Because after the announcement, the consultants would be engaged to draw up the designs and facade and solutions. Using that, they will go and consult the residents and residents will give feedback. Sometimes, certain modifications are required or deemed beneficial and the consultants will take in these and then they would proceed to the next stage to conduct the formal polling. Typically, the first period of one year for consultation is quite useful, but we will look into the Member's request specifically.

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Equally, in Sunset Way, there are two blocks that have been announced. We are still waiting for construction. No doubt they were held back because residents decided to take a vote at a later date. Will MND also try to expedite their construction of LUP?

I hear you. Thank you.

Thank you, Sir. I would like to ask Senior Minister of State: for the non-benefiting units, while I am happy to learn that the authority is willing to consider perhaps a relocation for them to enjoy a flat with lift access, would the Ministry be able to consider offering a package to facilitate the relocation, to be of a value similar to the subsidy cap that is offered to each benefiting unit, which I believe is about $30,000?

Our focus right now is to complete the rest of the eligible units by 2014. So, for the very few cases, as the Member mentioned, that are affected by severe mobility and handicap, we will look into them. But what formula to use, what is the benchmark and how we do it, we are still looking at the options. We thank the Member. We appreciate his suggestion.

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6 Er Dr Lee Bee Wah asked the Minister for Transport in view of the recent increase in ERP rates for six gantries leading to the CTE and ECP (a) what is the rationale for the rate revisions; (b) how much additional fees will be collected following this revision in rates; (c) whether there will be a reduction in road tax as a result of an increase in ERP revenue; and (d) whether our public transport system can cope if car owners are to switch to public transport.

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Sir, Electronic Road Pricing (ERP) rates are reviewed every quarter, as well as during the June and December school holidays every year. On expressways, rates are adjusted generally by $1 when traffic speeds fall outside the optimal range of 45km/h to 65km/h. Speeds at two locations on weekdays – the southbound Central Expressway (CTE) after Braddell Road from 7.30 am to 8.00 am, and the westbound East Coast Parkway (ECP) from 8.30 am to 9.00 am had been falling, and were below 45km/h in the current quarter. ERP rates were, therefore, adjusted upwards by $1 at these two locations.

The ERP revenue that will be collected is dependent on the number of motorists who choose to continue driving on these routes within these time slots. However, let me stress that the aim of the ERP is to manage congestion, and not to raise revenue.

No reduction in road tax is planned as the ERP rate increases are a routine adjustment in response to the latest traffic conditions. Our public transport system is able to cope if some of the affected motorists switch to public transport.

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Thank you, Sir. I have two supplementary questions. When ERP was introduced years ago, Minister for Transport at that time said that it is not for revenue generation, therefore, the road tax will be adjusted accordingly. So, with the revision of the ERP upwards, we will expect revenue to increase. Why is it that there is no reduction in the road tax?

Question number two, increasing the ERP to $4.00 along CTE is quite a shock to many of my residents who use CTE every day. This is especially so because CTE has just been expanded – additional lane added. Why is it that the Ministry needs to increase the ERP? Are there any plans to scrap the evening ERP along CTE?

Perhaps, let me put the situation in perspective. Sir, if I were to look at what has happened over the last two years, from 2011 to the end of 2012. There were 11 ERP rate decreases, and eight ERP rate increases. If I were to take into account the reduction in hours in the evenings along the CTE, the Singapore River Line, the Saturday ERP, there have been 25 ERP rate decreases over the past two years. These are accounting for half-hour blocks. So, that is number one.

Number two is that along the CTE, if I look at the entire stretch, southbound, at the start of 2011, from 7.30 to 9.30 in the morning, the ERP rates were between $1.50 and $6.

00. Now, even with the latest increase, for the same period, they are $1.00 to $5.

00. I think that puts a certain perspective to the increase. And we must remember that, taken over the extended period of time, there were actually more decreases than increases.

The last is that I hear the call to scrap the evening ERP altogether, but we want to also make sure that we provide options to people who would like to have a smoother travelling experience in the evening. And if you look at what has happened over the past year, since the changes to the ERP, during the period before 8.00 pm, you actually had an increase in traffic speed northbound along the CTE and, after 8.00 pm, particularly from 9.00 pm onwards, you actually had the speeds coming down. So, I think shortening the hours preserves the option that for those who want to have a smoother ride home, they can pay the dollar, use it before 8.00 pm; for others who choose not to do so, they can ride after 8.00 pm.

Er Dr Lee, last question.

I would like to ask the Minister whether he is encouraging residents to go back after 8.00 pm.

I am offering a choice to residents.

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7 Mr Christopher de Souza asked the Minister for Transport whether the Ministry will consider coming to an internal, objective and confidential calculation of infrastructure project costs before calling for tenders to ensure that projects will be sufficiently funded and awarded appropriately to companies without pressuring sub-contractors' fees.

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Sir, for infrastructure projects, such as a new road or rail line, LTA works through the project cost estimates and seeks budget approval to ensure sufficient funding before a tender is called. These cost estimates are based on cost norms as well as prevailing market rates, and are kept confidential to avoid influencing the tender process.

For each project, competitive tenders are called, in line with the key Government procurement principles of transparency, open and fair competition, and value for money. The tenders are first assessed for overall quality before prices are then considered during shortlisting. LTA's internal cost estimates of the project and clarifications with the tenderers also serve as checks during tender assessment. Throughout the tender process, the Ministry and LTA do not exert pressure or influence on sub-contractors' fees.

I thank the Parliamentary Secretary for the response. My question has to do with the sub-contractors. Therefore, if there is an internal calculation which LTA comes to, for any given infrastructure project for transport, would the LTA then not award to a person who has tendered much lower than that figure? Because, realistically, the project could not be done within that lower figure and, therefore, we avoid squeezing the sub-contractors further down the road.

Sir, if I understand the Member correctly, I would like to reassure the Member that when we call for a tender, or even before we call for tender, we make sure to assess the project accurately and we go stages by stages. Wherever possible, we meet the tenderers to discuss on the cost estimates per se. We do not necessarily look at the lowest tenderer; we also look at quality and how realistically the project can be implemented and completed. In fact, prior to looking at all the cost estimates, we work very closely with the market, the industry, to ensure that our cost estimates are accurately provided.

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8 Mr Teo Siong Seng asked the Prime Minister whether MAS can take more pro-active measures to enhance consumer awareness of the Investor Alert List (IAL), so as to give consumers the necessary protection in assessing the credibility of gold investment buy-back schemes.

9 Er Dr Lee Bee Wah asked the Prime Minister (a) how many investors are affected by the investigation into Genneva Pte Ltd; (b) why MAS does not regularly publicise the companies on its Investor Alert List through the media; (c) how many other gold bullion companies are currently operating buy-back schemes; and (d) whether the MAS or CAD will consider giving updates to the public on its investigations.

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Mr Speaker, Sir, if I may take Question Nos 8 and 9 together?

Yes.

The MAS Investor Alert List (IAL) contains a list of companies which are not licensed by MAS but, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS. MAS assesses public feedback as well as documentary evidence on the entity in question before deciding whether to place it on the IAL. The list is updated regularly.

The IAL is publicly available on the websites of MAS and MoneySENSE, which is the national financial education programme. Er Dr Lee Bee Wah has suggested that MAS should publicise companies listed on the IAL through the media. Indeed, we do so. MAS works with the media, both the English and vernacular media, on programmes to educate consumers about unregulated investment schemes. In 2012 alone, so far this year, we have about 20 media stories about unregulated schemes and entities listed on the IAL. They have been carried in the papers as well as on TV and radio. Such media programmes often include consumer tips from MoneySENSE on the risks involved in dealing with unregulated entities. Likewise, the MoneySENSE website has a Consumer Alerts section which publicises media articles and consumer guides on schemes, such as landbanking and gold trading.

The IAL is not exhaustive. The fact that a company is not listed on the IAL does not mean that the company is sound or credible. Consumers must exercise caution when dealing with all unregulated entities, not just entities that are listed on the IAL. Consumers can check if an entity is regulated by MAS, as well as the activities it is licensed to conduct, by referring to the Financial Institutions Directory on the MAS website.

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However, the fact that a company is listed on the IAL does not necessarily mean that it has breached any of MAS' regulations. Nor does it mean that MAS has the power to monitor its activities or to investigate its operations. Where there is evidence of fraud or any other breaches of law, action will be taken by the appropriate enforcement agency, which typically is the CAD.

There are currently five companies operating buy-back schemes, which Mr Teo and Er Dr Lee Bee Wah had mentioned, which are listed on the IAL. Some companies are currently under investigation by CAD. The exact number of affected investors is not known at this point as the investigations are still ongoing. In the meantime, the public can refer to CAD's website for updates on the investigation.

MAS will continue its efforts in educating Singaporeans on the pitfalls in dealing with unregulated entities and the risks of unregulated schemes, such as gold buy-back schemes.

The public has to play its part. Before committing to any investment scheme, any investor should first check if the entity is licensed by MAS and what regulated activities it is authorised to conduct. The second critical step is to assess if the potential returns that are offered are realistic and seek to understand how these operators generate their returns and what the risks are. Thirdly, consumers should assess if there is any protection or recourse if the entity should fail. These are the three basic steps, and they are very important steps when you are dealing with unregulated schemes. It is truly unfortunate when people lose their money in schemes that turn out to be fraudulent or unsustainable. But if every consumer were to follow these steps, we would have far fewer cases of people losing their money this way.

Sir, I would like to thank the Deputy Prime Minister for his answer. I realise that quite a number of those who are so-called being cheated or swindled are the elderly who hardly read English. I have come across some of them, who are my residents. I would like to ask the Deputy Prime Minister whether MAS would consider working with other organisations in order to reach out to more residents on the IAL, for example, the Consumers' Association.

We certainly will. We have been stepping up our activities through MoneySENSE in the last two years quite considerably, engaging in many more activities in the neighbourhoods, for instance. We have been using the non-English language media actively and we will continue to find every way of reaching out particularly to people who do not normally look at the financial pages in the newspapers. So, we are very keen to do more in this regard.

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I would like to ask the Deputy Prime Minister if the banks are today working with the MAS on perhaps publicising the list. Unless many of these citizens are actually keeping money under the bed, I would suspect many of them would have to withdraw money from the banks. Perhaps putting signs on the ATMs or giving out brochures as they withdraw money from the banks would be useful. Is the MAS working with the banks to educate consumers on this?

Not specifically to publicise the Investment Alert List, but it is something which we can consider. We have to make sure that there are no competitive implications. But it is something which we will consider.

I thank the Deputy Prime Minister for the explanation. In the case of the Genneva Pte Ltd, was there any lapse or delayed action by the MAS officials in alerting the public?

Genneva has been on the Investment Alert List for some time. I think there were some members of the public who did notice this.

Mr Liang Eng Hwa, last question.

Sir, to follow up on Mr Teo's question, if a product published or advertised a return that is too good to be true, would the Government intervene and point this out in a more proactive manner?

That is a very useful point. One of the things that we do have to look into is tightening of the rules on advertisement, particularly for any investment scheme. I think what was implied in the question is the old adage, which is that if something is too good to be true, it is not true. Unfortunately, people keep forgetting this adage. So, it is important also to try and minimise the scope to mislead through advertisement. It is something which the MAS is now following up with MCI and other agencies to see whether we can tighten the rules on advertisements.

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10 Mr Ong Teng Koon asked the Prime Minister (a) whether permanent resident (PR) status has a validity period; (b) how many persons have been PRs for more than 20 years and 30 years respectively without choosing to become Singapore citizens; (c) how can the Ministry encourage PRs to become Singapore citizens; and (d) whether the Ministry will consider not renewing PR status after a stipulated number of years.

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Mr Speaker, Sir, the permanent resident (PR) status does not have a validity period per se. However, PRs are issued with a Re-Entry Permit (REP) that has a maximum validity of five years and may be renewed if the PR meets the prevailing criteria, including whether he is gainfully employed and is contributing to Singapore, or whether he has family roots in Singapore and continues to maintain ties here. The actual length of validity granted may vary, depending on the specific circumstances of each case. A PR who travels out of or remains outside Singapore without a valid REP will lose his PR status.

Based on available data, around 10% of the PR stock would have been PRs for 20 or more years. My Ministry has no plans at this point of time to consider not renewing the REP after one has held PR status for a stipulated number of years.

Taking up citizenship is a serious commitment which is ultimately a personal decision. The best way to attract qualified PRs who have decided to make their future here to consider applying for citizenship is to ensure that our Singapore Citizens are well looked after. To reflect the responsibilities and privileges of citizenship, and to acknowledge Singapore Citizens' commitment to Singapore, Singapore Citizens receive more support and benefits in the areas of marriage and parenthood, housing, healthcare and education.

Over the past few years, we have widened the differentiation in benefits accorded to Singapore Citizens and PRs. It is also important that we continue to be an inclusive society where we are gracious and warm towards one another. How we relate to PRs and newcomers would also affect their decisions to sink roots here permanently.

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11 Mr Christopher de Souza asked the Minister for Transport if he will provide an update on the progress of works on the MRT Downtown Line 2, especially along the Bukit Timah corridor (namely Bukit Panjang, Cashew, Hillview, Beauty World, King Albert Park, Sixth Avenue and Tan Kah Kee Stations) and whether the works are progressing on schedule.

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Sir, the Downtown Line Stage 2 (DTL2) remains on track for completion in 2015. The Member has asked specifically about the Bukit Timah corridor. Tunnelling and station works along some parts of this corridor have met with adverse soil conditions. In addition, some of the contractors have had to restrict their working hours due to complaints about noise and inconvenience. This has resulted in the works for some segments experiencing slippage from their original planned schedule, although I should add that this is not uncommon for a project of this scale and with construction so near to built-up areas.

LTA is taking measures to keep the overall DTL2 project on schedule. For instance, it is working with the contractors at these stretches to extend project hours when and where possible. LTA is also exploring the feasibility of shortening the period of installation for track-work and Electrical and Mechanical (E&M) works.

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LTA is monitoring the progress of the DTL2 closely and, at this point in time, does not see the need to revise the 2015 targeted timeline. I thank Members, as well as the communities in the vicinity of the worksites, for their continued patience and support. While the construction of new lines inevitably brings with it some inconvenience, the lines will greatly benefit residents and businesses when completed.

The reason why I asked about those seven stations is because all seven are within Holland-Bukit Timah GRC and, thankfully, three of those seven are within my ward in Ulu Pandan. My supplementary question to the Minister is, would the LTA keep me very closely informed if there are any ways to quicken the pace of the construction so that those living in the Bukit Timah corridor benefit from a faster pace and a sooner completion date?

We will certainly be happy to do so. I want to express my appreciation to the Member, as well as to the other advisors in the area, for the amount of support and cooperation that they have already given to LTA in making sure that the work stays relatively on schedule and we appreciate very much the cooperation from the residents as well.

Sir, I would like to take this opportunity to thank the LTA staff for making every effort to minimise traffic inconvenience to our residents affected by the Downtown Line construction. I would like to ask the Minister on this particular aspect of the last-mile experience. In particular, whether LTA would design and work out thoughtful pedestrian pathways and linkways to the MRT stations, especially the high-traffic station, like the Bukit Panjang Station. And whether LTA, as part of this massive construction, will put some effort into giving the commuters a positive experience in this last mile?

Sir, I thank the Member for the supplementary question. Indeed, it is a very important point that we provide more options for commuters in the last mile, whether it is through a bus feeder, whether it is cycling, or, for those who are physically mobile, to walk that last distance.

Today, the sheltered linkways and connectivity are for 200 metres around the stations or key transport nodes. Going forward, we intend to extend this further and we would want to do so to provide more convenience to commuters who would prefer to walk to the station rather than to have to take a feeder bus or to cycle.

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12 Mr Yee Jenn Jong asked the Minister for Transport (a) what is the estimated budget needed to fix the faulty power cables of the Circle Line and who will bear the costs; (b) how long will the replacement programme take; and (c) whether there was a failure to anticipate the rapid deterioration of the cables during the planning and design phase or a failure to use appropriate materials for the cables.

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Sir, based on preliminary investigations, the disruption on 25 October this year was caused by a faulty power cable at Promenade station that disrupted the power supply to the trains. The incident that took place in September last year, when Circle Line trains were disrupted for about four hours, was also due to a faulty power cable.

The Circle Line power cables were designed and put through site tests in accordance with international specifications. However, investigations after the September 2011 incident found that the insulation of some of the cables could have been damaged during installation. During laboratory tests after the September 2011 incident, some of the cables were also found to have manufacturing defects at microscopic levels, which could not have been detected during earlier site tests. Furthermore, exposure to water in the cable pit had caused these cables to deteriorate at a faster rate than expected.

Following the completion of LTA's detailed investigation of the September 2011 incident in June this year, LTA and the contractor had already planned for a cable replacement programme which would commence in January 2013. The replacement programme is expected to take 18 months to complete, as we have to replace over 1,000 cables totalling some 120 km in cable length, and given the constraints of only three to four engineering hours each day. LTA is working with the contractor and SMRT to try to shorten the duration of the cable replacement programme, with a properly-executed planned disruption of Circle Line services to provide for extended engineering hours for these replacement works.

For Circle Line stations located in areas where the water table is high and which may be more susceptible to water seepage, LTA is working with SMRT and the contractor to replace existing cables with higher grade cables to suit the site conditions. Where faulty cables are replaced with cables of similar grade, the replacement cost will be borne by the contractor at an estimated cost of $12 million. LTA will bear only the incremental cost of higher grade cables and expects the amount to be $2 million to $3 million.

In the interim, before the replacement is completed, LTA will work with SMRT to conduct more frequent checks, particularly at locations where the risk of exposure to water or moisture is higher.

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I thank the Minister of State for the answers. I would like to find out, given that the Circle Line is only three years old, there have been various problems, particularly revolving around the cables. After the studies, was it determined that, perhaps, it was a design fault in the specification or was it the contractors that had failed in providing the correct kind of cables that had caused these problems? And what are the kinds of lessons that we can learn in the future lines that we are building, particularly the Downtown Line and the Thomson Line?

Mr Speaker, Sir, I thank the Member for his questions. The laboratory tests following the Dakota incident revealed certain manufacturing defects in some batches of the Circle Line (CCL) power cables, as well as damages in some cables sustained during the installation process. So, some of the defects were due to manufacturing defects, and some occurred during the installation process that created these damages.

But I would like to assure him that not all the CCL cables are defective. Nevertheless, for greater assurance of service reliability, LTA and SMRT have already embarked on a cable replacement programme to replace all the CCL power cables that are on the tracks. So, that is the first item that we are going to follow up on.

Mr Yee has asked about the lessons learnt and what we are going to do about it. I think one important lesson learnt is that during the manufacturing, the factory tests are conducted on cable samples based on quantity in accordance with international standards. So, there may well be cases where the cables with manufacturing defects go undetected and they still clear the factory tests. And, so, there is a possibility that cables may have component defects at the microscopic level which cannot be detected through factory tests or through the site tests even after installation. Such defects can be picked up through laboratory tests which are designed to determine the root cause of the cable failure.

Manufacturing defects may, however, cause the cables to deteriorate at a faster rate than expected when coupled with damages to the cables caused during installation and exposure to water in the cable pits. And these may eventually lead to cable faults. Stepping up the frequency of checks, therefore, will be important in helping to provide early indication of cable deterioration. And, so, the frequency of the checks has increased – it used to be once in six months. We have now increased it to once in three months, and we are looking at how we can increase it to once every month. So, that is another important lesson learnt.

Now, as to what else we might do, for example, with the rest of the Downtown Line and the Thomson Line, LTA is reviewing whether higher grade cables should be used for future projects, as well as the installation methods, so as to minimise the defects that could be caused during installation.

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Sir, just to follow up on this issue. There was a report in the papers which stated that at some parts of the tunnel, there was flooding up to a metre which also contributed to this problem. Can I just confirm with the Ministry whether there is any plan also to conduct a thorough check of these tunnels to ensure that this flooding does not become a larger safety concern beyond the issue of cable and cable damage?

Mr Speaker, I thank the Member for his question. It goes back to the question of water tables. And the water tables for a number of stations – Dhoby Ghaut, Bras Basah, Esplanade, Promenade, Bayfront and Nicoll Highway – are higher as compared to other stations. As a result of which, these stations may be more susceptible to water seepage. So, the water seepage is due to the high water tables.

What we are doing is that we are installing water pumps to drain out the water which may accumulate in the cable pits in these stations. We have also required SMRT to regularly monitor the cable pits, to ensure that any accumulated water is removed expeditiously and that they remain relatively dry at most times. So, that is something that is on-going.

Now, for the Downtown Line, we are already installing the cables in such a way as to place them in a cable trough to protect them from exposure to water, and to minimise the exposure to water. This is also actually quite useful for the installation works and also for cable inspection. These lessons are very useful and we will continue to draw from them as we implement other lines.

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13 Ms Foo Mee Har asked the Minister for Transport in the last 10 years (a) what are the failure rates of inspection checks for private cars at third, fifth, seventh and ninth year of inspections; (b) what are the numbers of car breakdowns and road accidents as a result of poor car maintenance; and (c) whether the Ministry will consider reducing the frequency and nature of the inspections to help car owners save costs and time.

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Sir, the average inspection failure rate for both three-year and five-year-old cars for the last 10 years is 6.3%. For seven-year and nine-year-old cars, the rates are 7.1 % and 8.7% respectively over the same period.

We do not have data on car breakdowns and accidents that were the result of poor maintenance. However, preventive maintenance, and our vehicle inspection regime, are important in ensuring that cars maintain roadworthiness and that road safety is not compromised. LTA regularly reviews the inspection tests, frequency and passing standards, in line with international practices.

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14 Mr Alex Yam asked the Acting Minister for Manpower (a) whether labour clauses applicable under International Labour Organization Convention No 94 have been included in public sector contracts for services during the pre-tender process; (b) if so, how have such clauses been enforced; and (c) if the clauses have not been included, why have public sector contracts not conformed to ILO Convention No 94.

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International Labour Organization (ILO) Convention No 94, otherwise known as the Labour Clauses (Public Contracts) Convention, stipulates that labour clauses should be included in all government procurement contracts that involve the expenditure of public funds and employment of workers. These labour clauses should require contractors to provide wages and other employment conditions that are not less favourable than those established by law or collective bargaining for similar work.

Singapore upholds the principle of ILO Convention No 94. In the absence of industry-level collective agreements in our national context, this requires that contractors and vendors of the Government should not provide their workers with poorer standards relative to our laws. This extends to all companies in Singapore, and includes compliance with the basic standards in labour laws, such as the Employment Act and Central Provident Fund Act. The Government enforces compliance by conducting regular random audits on companies.

The Government further affirms its commitment to the principle of the Convention through our best-sourcing initiative, which encourages service buyers in all sectors, and not just for public contracts, to outsource responsibly and adopt best practices. Good practices include having service buyers incorporate in their contracts a requirement for providers to comply with employment laws, and provide written employment contracts and training for their workers. This helps to raise the productivity and professionalism of workers, translating to higher wages and better employment terms.

The Government will continue to take the lead to shape responsible buyer behaviour. From 1 April 2013, it will be mandatory for all Government agencies to award new public contracts for cleaning and security services only to cleaning companies accredited under the National Environment Agency's Enhanced Clean Mark Accreditation Scheme and security companies with an "A" or "B" grade by the Police Licensing and Regulatory Department. Such companies are expected to be able to deliver higher service standards, and have better trained workers who can progressively earn higher wages. Accredited cleaning companies, in particular, will also have to show that they have in place a progressive wage structure for its cleaners such that they receive appropriate wages commensurate with the higher training standards and productivity required. In addition, to ensure better employment standards, accredited cleaning companies must not default on any Labour Court orders in the preceding 12 months. These requirements for public sector contracts ensure contractors are subjected to strict standards and accord better employment conditions to their workers.

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Mr Speaker, I thank the Acting Minister for his comprehensive reply. I have three very quick supplementary questions. One is with regard to the requirement under ILO Convention No 94, whether the NWC guidelines should also follow part of this requirement for employers under public sector contracts to pay their workers the guidelines recommended. Secondly, based on what the Acting Minister shared earlier, whether any contractors so far have been taken to task for any lapses in the requirement to pay their workers a fair wage? Thirdly, in Germany, based on my understanding, this year, 10 out of 16 of the Federal States have introduced socially responsible procurement standards. These include tenderers having to declare that they will adhere to all arbitration contracts as well as recommendations by states for increase in wages as well as equal opportunities for workers, whether the Ministry will consider including these socially responsible procurement terms in future tender requirements.

I would like to thank the Member for the three supplementary questions. With regard to the first question, it is slightly related to my response to the question raised by Member Zainal Sapari earlier. This is with regard to whether the requirements could be worked into the NWC guidelines. At present, we do not believe that is necessary. Right now, what we have found is that, by and large, most companies do respond to the NWC recommendations. The main issue at hand really is whether we are able to uplift the wages of the workers at the lower income brackets. There are a number of programmes we are putting in place. So, let us work those programmes and measures and let us see how the situation unfolds. We will explore what are better ways to improve the situation should it not progress as we desire.

Secondly, with regard to the number of companies, I do not have the specific data with me. However, we do expect companies to adhere to the requirements stated. We will stipulate some of these standards and, in violation of some of these standards, action will be taken. But I do not have the specific numbers. Lastly, with regard to the suggestion on some of the terms that companies have worked into contracts in Germany, we will be quite happy to take a look at some of the socially responsible terms and conditions being applied in countries like Germany and elsewhere. We could explore as to whether, from a responsible best-sourcing initiative point of view, we could work this into future contracts. So, that is something that we are open to exploring.

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15 Mr Yee Jenn Jong asked the Minister for National Development (a) in which HDB housing estates have test-bedded solar photovoltaic (PV) panels been installed and how many blocks of flats does this comprise; (b) on average, how much savings have the Town Councils for these estates gained in their electricity bill ; (c) taking into account the subsidies given by the Government for the PV installations, how long will it take for the PV installations to break even on the savings achieved; and (d) whether the savings have benefited the residents directly or through rebates in the Service and Conservancy Charges.

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Sir, under HDB's Solar Capability Building Programme, about 100 HDB blocks have been installed with solar PV systems. These blocks are scattered in different geographical areas in about 15 locations to enable HDB to study the impact of the microclimate on the performance of the solar panels. The solar power generated is used to power the lighting at the common areas, water pumps and lift operations.

Initially, the implementation of the solar PV systems was fully funded by the Government. Later on, in order to stretch the budget to benefit more estates, HDB adopted a solar leasing model to tap on private enterprises to carry out the design, financing, installation and maintenance of solar panels in HDB buildings. HDB funds a small percentage of the initial start-up costs, and the remainder is funded by the contractor. The contractor recoups its investment from selling the generated solar electricity to the Town Councils (TCs). Under this model, the Town Councils will enjoy monthly savings of up to 5% off the prevailing electricity tariff rate.

To-date, HDB has installed solar PV systems at 40 blocks in Punggol through this solar leasing model. The payback period for the latest phase of the solar leasing model is 19 years.

The savings derived from the installation of solar PV systems will help TCs to mitigate rising operating and estate management costs. Residents will, in turn, benefit, as this helps to keep the cost of maintaining the common areas low.

Sir, I thank the Senior Minister of State for the answer. Just a quick question, whether this programme has resulted in savings in the S&CC for the residents. If not, whether it is because we are still in the pilot phase and if we have to scale this project up to a much larger scale across Singapore to get the economies of scale that will result in direct savings to residents in the fees that they have to pay.

Sir, right now, the blocks that have the PV solar systems installed will enjoy about $500 to $800 savings per month per block. So, compared to the entire block consumption, it is not a huge sum of money. That is why it is still a pilot phase. The benefit is directly accrued to the TCs. The TCs can mitigate part of the operating costs and perhaps the rising costs, so the TCs can delay adjusting the tariffs to the residents to a further date. The economics of PV solar system is such that even with some form of Government subsidy today, it would still take another 19 or 20 years. Over time, we hope that the prices of PV cells would come down. Indeed, it has come down. From last year to this year, it has come down almost by half. If the cost of production of PV cells continues to go down, we hope, one day, the economics would be favourable to us implementing PV system on a wider scale. Having said that, we have to keep it in perspective because, worldwide, in most countries, if PV applications can reach 1% of the country's overall power generation, it is considered to be very good. If it is 2% nationwide, it would be a very successful implementation.

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16 Mr Zainudin Nordin asked the Minister for Education how is the objective of holistic development of students being achieved in the ITEs and Polytechnics.

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Sir, each of the Polytechnics and ITE has its own interesting programmes and unique approach towards the holistic development of its students. Singapore Polytechnic does this through Design Thinking; Ngee Ann Polytechnic through its Ngee Ann Learning Model; Temasek Polytechnic through its Applied Principles for Effective Living curriculum; Republic Polytechnic through its Student Life Activities framework; Nanyang Polytechnic through its Teaching Factory concept; and ITE through its Global Education Programme.

Students at the Polytechnics and ITEs are also strongly encouraged to participate in a wide range of club and interest group activities, and are given opportunities to participate in both local and overseas community involvement programmes to broaden their learning experience.

Supplementary question, Sir. For the enrichment programme and extra programme beyond the curriculum, what are the key objectives that MOE has set for the institutions, and what do they hope to arrive at for these students?

Sir, just like our schools, ITEs and Polytechnics aim to achieve holistic education for their students and, apart from the academic programmes or skills programmes, our students are also given the opportunities to take part in CCA activities. Quite often, the CCA activities are generated by the students themselves – community service as well as international programmes, either in the internship programme or exchange programme. Holistic development is the aim of our Polytechnics and ITEs.

Mr Speaker, a couple of supplementary questions. The Senior Parliamentary Secretary mentioned the enrichment programmes that the students have participated in. I have seen success stories in many of my residents' children and how ITE has helped them and encouraged them. But is there support provided to graduates of ITEs – after they have finished and they are in the industry – for them to enrich themselves and to continue the skills upgrading because the jobs are evolving and changing? The second question: could the Senior Parliamentary Secretary share some notable industries or firms that have played a big role for ITE students to be involved in the international programmes and to upskill? As I have said, it is a very good social leveller, and I want to know if there are any success stories where ITE also work with industry partners.

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I thank the Member for the questions. Yes, generally, both ITE and Polytechnics work with the industries to give our students the opportunities of work experience as well as learn about the skills in the industry. Our students are also given the opportunities to go for international or overseas attachment. But, specifically on continuing education, it is another agency's work. WDA has programmes for both graduates of Polytechnics and ITEs to pursue further skills upgrading, and I think this is quite well funded. We all know this.

Mr Zainudin, last question.

The Senior Parliamentary Secretary mentioned about the international internship and programmes. May we know the kind of percentage of success among students who are able to go through such a programme? If there are costs to such a programme, how are loans to families assisted if they want to attend an overseas programme?

Sir, I do not have the specific information here. I remember in my last reply to the Member's question on ITE students at the last sitting, I explained that there are support schemes for students to take part in various activities, including international exchanges and attachments.

So, our students are given these opportunities to take part even though they may come from low-income families and may have problems financing their participation.

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17 Mr Pritam Singh asked the Prime Minister in light of our current population of 5.31 million and his view that Singapore can accommodate six million people in the future (a) how many of the 690,000 additional arrivals are envisaged to comprise new citizens, permanent residents and non-residents respectively; (b) whether the Government has made any social assessment of the impact of these additional arrivals; and (c) what is the projected impact of these new arrivals on prices of public and private houses.

18 Mr Png Eng Huat asked the Prime Minister (a) whether the existing infrastructures, such as those for public transport, healthcare and housing, discounting those that are under construction, are adequately designed to support the current population of 5.31 million; (b) what is the target population density in five, 10 and 15 years' time; and (c) whether the Government has conducted a survey on the quality of life vis-a-vis the increase in population density.

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With your permission, Sir, may I take this question and the next one together?

Yes, please.

The Government recognises that population growth in recent years has outpaced our planned infrastructure capacity. We have ramped up infrastructure development in the areas of transport, housing and healthcare and these are coming on-stream progressively. Going forward, we will strive to better match infrastructure provision with population needs.

Issues, such as our societal make-up and cohesion, our living environment and economic viability, are fundamental in determining the sustainable population we want for Singapore into the future.

Over the course of this year, the Government has been engaging the public widely on these issues and is preparing to release a White Paper on Population in January 2013 which will address them. We have invited Singaporeans, including all Members of Parliament, to provide their views. We have met with numerous stakeholders, such as the business federations, labour unions, students and various civic and community groups. In the process, we have received well over 2,000 pieces of feedback from individuals, groups and organisations. I wish to thank everyone who has sent in their views and proposals, many of which were substantial and which required much time, energy and effort to put together. We are taking these inputs into consideration as we formulate and review our population policies for the White Paper which will address these issues, as well as other important issues, in a holistic way.

Sir, I thank the Deputy Prime Minister for his reply. The upcoming White Paper notwithstanding, can I enquire if any studies have been done by the National Population and Talent Division on an increase in the population size for Singapore, going forward? Has such a study been conducted and, if so, can this study be released for public information as well?

Sir, as Mr Singh would doubtless be aware, a number of different papers have been released by the National Population and Talent Division over the past year. I am sure he has read all of them thoroughly. These are all in the public domain and are part of the current discussion that we are having. I would rather address the population issue holistically through the White Paper, rather than in a piecemeal manner like right now.

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19 Asst Prof Tan Kheng Boon Eugene asked the Minister for Education (a) what impact does the annual data of major ethnic groups' academic performances have on racial stereotyping; and (b) given that year-to-year changes in the ethnic groups' academic performance are not significant, whether the same objective of providing feedback to the communities on their academic performance can be achieved by a limited release of the annual data to the ethnic self-help groups, with a public release of such data at five or ten-year intervals.

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Mr Hawazi Daipi (for the Minister for Education): Sir, the objective of MOE's annual press release is to provide timely information to the various communities on how their children have fared in the national examinations and in their progression to post-secondary education. This enables the respective communities to monitor the effectiveness of their educational programmes, and recognise and celebrate their children's achievements. There is also value in providing such information so that the community, ethnic self-help groups and the public can study the data and discuss areas for improvement.

Sir, I thank the Senior Parliamentary Secretary for his reply. I do not doubt the utility of those data. I just would like to enquire whether the same purpose would be served by not so regular reporting. If year-to-year information is needed, they could be provided to the ethnic self-help groups. I raise this because, from anecdotal evidence, the data tend to reinforce racial stereotypes. In the process, they could possibly undermine performances of students that we actually want to help. It would affect their self-esteem. One thing about the data is that because the ethnic Chinese students probably comprise at least three quarters of the student population, the national average is invariably heavily influenced by the performance of the ethnic Chinese students.

Sir, in our discussions with the self-help groups, we find that the release of the data has been welcomed, because it gives them the opportunity to assess their programmes and devise new programmes and activities which may help propel further progress of children in their ethnic community and to do better. If, indeed, there are very little variations year-on-year, and then it is only necessary to give updates on ethnic educational performance of our students periodically, then the effect would be more or less the same. Based on our interaction with the self-help groups, they do welcome the annual release of data of the performance of their students because they want to see the progress of the programmes that they have carried out over the years.

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Just last Monday, I informed the House, in answering Mr Zaqy's question, that 88% of Malay students have progressed to post-secondary institutions. If we take the annual figure, we see probably marginal changes, but, over the years, we see great improvement. Despite that, the self-help groups and many members of the community want to see the progress year-on-year.

Asst Prof Tan, last question.

Sir, I certainly appreciate the clarification and, certainly, we all welcome the progress made by the various communities. My concern is, as I mentioned, about racial stereotyping. Every year, some Singaporeans would take the view that the performance figures reinforced their views of certain communities. I do not find that very helpful. Granted that the ethnic self-help groups find the information useful, I see no reason why the information cannot be made available to them directly, rather than through lots of publicity in the newspapers, especially when the Ministry recognises that the year-on-year changes are actually not very significant.

Sir, I appreciate the Member's opinion on this, but we find that, through self-help groups and community leaders, there has been positive feedback. They use it as a tool to devise new activities, new programmes that can help the community to improve further. It is not just pertaining to the Malay community self-help groups or leaders. I chair the committee with our self-help groups – the four self-help groups – and they do welcome this. They want to find new ways to help students of their own ethnic groups, yet, at the same time, want to find some ways where students of the different groups can enjoy the activities or programmes together. In a nutshell, they do find value in having or knowing the performance of these students annually because it gives them a sense of whether their programmes have been effective or not.

As for stereotyping, through the self-help groups – as a reflection of the communities' reaction to this – we do not feel that sense that it enhances stereotyping. Yes, some people may feel so, but, generally, the communities do not feel that it has enhanced stereotyping as a result of the release of the data.

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20 Mr Yee Jenn Jong asked the Minister for Trade and Industry (a) how many grid-connected commercial and household solar photovoltaic (PV) installations are there in Singapore; (b) what is the total capacity of these installations; (c) what percentage of Singapore's total electricity generating capacity does this represent; (d) how much subsidies, grants or funding-in-kind have been given for these installations, if any; (e) what schemes are available to encourage grid-connected PV installations by the private sector and households; and (f) whether the Ministry is studying the viability of Feed-In Tariffs, Rooftop Leasing, and Solar Leasing to encourage private grid-connected PV installations.

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Mr Speaker, Sir, as at 1 January 2012, there were 157 grid-connected solar PV installations in Singapore with a total installed capacity of 5,546 kilowatts peak (KWp). This is almost three times the capacity compared to end of 2009, and it represents 0.05% of Singapore's total generation capacity.

Our principle is to price energy correctly. The right price signals will help to ensure greater energy efficiency and conservation. Hence, we do not subsidise energy through, for example, feed-in tariffs, as this would lead to the inefficient use of a scarce resource.

Also, there are challenges with the use of solar energy. It is an intermittent source, and we have limited land for large-scale deployment of solar panels. Nonetheless, we are investing in research, development and demonstration (RD&D) to build capabilities that can support greater adoption of solar energy. The Economic Development Board's (EDB) Clean Energy Research and Test-bedding (CERT) programme has set aside $16.6 million for Government agencies to work with private companies to develop and test-bed clean energy solutions, including solar, for Government buildings and facilities in Singapore. Another $20 million has been set aside for the private sector through the Solar Capability Scheme (SCS), to offset part of the capital costs to install solar technologies in energy-efficient commercial and industrial buildings. This seeks to build capabilities and encourage innovative integration of solar panels into such buildings.

Last year, the Housing Development Board (HDB) announced a pilot solar leasing scheme for 40 HDB blocks in Punggol – Senior Minister of State Lee Yi Shyan elaborated on some of the projects earlier. And under this test-bedding arrangement, HDB supported part of the start-up costs, while the commercial partner designed, financed, installed, and is now operating and maintaining the solar PV installations, offering the Town Council electricity at a rate not higher than the retail electricity tariff.

All these efforts will allow us to harness solar energy to its full potential when it becomes a cost-competitive option for Singapore.

Mr Yee Jenn Jong, keep it short.

I thank the Minister for the answer. The reason I have been asking questions about the solar situation in Singapore is because I feel that this represents an opportunity for Singapore to be able to develop our own capability to export overseas even though we have limited capability —

Mr Yee, we are going to run out of time.

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Yes. I just want to know what sort of blueprint we have to develop our local abilities to be able to export our expertise in solar energy installation.

Mr Speaker, Sir, I am not sure whether the Member meant exporting energy or exporting the expertise.

Expertise.

Thank you, I understand. I just want to elaborate to make it very clear. First, solar as an option for us, we continue to look at it as we do all other energy options because we cannot rule anything out in the context of energy security for Singapore.

Secondly, solar energy in the context of meeting Singapore's basic energy needs has limited potential for the reasons I have elaborated – its intermittency and the large land take that is required to meet our energy needs through solar puts some natural limits on it. Our investment in R&D is precisely in order to develop capabilities in this space. We are working with the private sector through our research institutes. And I think in the long term there will be potential, therefore, to collaborate with the private sector and to potentially export that expertise.

Order. End of Question Time.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 23-24, 27 and 30 on the Order Paper are reproduced in the Appendix (Pg 1423-1429). Question Nos 21-22, 25-26, 28-29 and 31 have been postponed to the sitting of Parliament on 16 November 2012.]

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[(proc text) "to establish the Singapore Accountancy Commission, to establish a framework for the growth and development of the accountancy sector and its related fields in Singapore, to provide for the registration of chartered accountants in Singapore, and for matters connected therewith, and to make consequential amendments to certain other written laws", (proc text)]

[(proc text) presented by the Minister of State for Finance (Mrs Josephine Teo); read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

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

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

Since its introduction in October 2001, the Securities and Futures Act (SFA) has undergone several reviews to ensure that Singapore's regulatory framework remains robust and keeps pace with developments in the capital markets. The last amendments to the SFA were passed by this House in 2009.

The 2008/2009 global financial crisis has led to significant reforms in the regulation of financial markets. This Bill seeks to amend the SFA in line with reforms being implemented in most other major financial centres. It concerns two key areas.

First, over-the-counter (OTC) derivatives. These are derivatives that are not traded on exchanges. The events surrounding the collapse of major financial institutions, such as Bear Sterns, Lehman Brothers and AIG, exposed significant weaknesses in the structure of OTC derivatives markets. The Financial Stability Board (FSB) has, after extensive deliberations, issued recommendations to strengthen the regulation of OTC derivatives markets and improve their transparency, in order to mitigate risks to the broader financial system, as well as to guard against market abuse. Singapore, through the Monetary Authority of Singapore (MAS), is a member of the FSB and has contributed to formulating these global reforms.

Second, the crisis highlighted the need to strengthen safeguards for retail investors, particularly in light of the mis-selling of certain Lehman Brothers-related investment products. There were other examples as well. From 2009 to 2010, MAS conducted a review of its regulatory regime for the sale and marketing of investment products, and put forward a number of proposals to protect the interests of retail investors. This Bill seeks to give legal effect to the proposals that require legislative changes. The Bill will also strengthen the protection of retail investors' monies that are placed with capital market services licensees.

To support a tighter regulatory framework in the two major areas I have just mentioned, the Bill will also enhance and refine MAS' supervision and enforcement powers, and make other ancillary amendments to the SFA.

The MAS has consulted the industry and the public on the proposed amendments this year. It has considered all the views and feedback received, and taken them into account in the amendments where appropriate.

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Mr Speaker, Sir, let me expand first on the amendments relating to OTC derivatives.

The Financial Stability Board (FSB) has made specific recommendations for regulators globally to institute reforms in the following four areas: (i) reporting of OTC derivatives contracts to trade repositories; (ii) central clearing of all standardised OTC contracts; (iii) standardisation of OTC derivatives contracts; and (iv) trading of standardised OTC derivatives contracts on exchanges or electronic platforms, where appropriate.

Singapore is committed to implementing reforms in accordance with the FSB recommendations. In view of the wide-ranging amendments necessary for effective implementation, MAS is undertaking this exercise in two phases.

The first phase, proposed in this Bill, involves the mandatory reporting of OTC derivatives trades to trade repositories, and mandatory central clearing of OTC derivatives trades at central counterparties (CCPs). We are carefully deliberating how best to implement the remaining reforms in the context of the nature and state of the OTC derivatives markets in Singapore, and with due regard to international developments. MAS will issue further consultations on these remaining aspects of the OTC reforms, which include the introduction of mandatory trading obligations where appropriate and the regulation of OTC derivatives market operators and market intermediaries at a later stage.

I will now describe the first of the two main thrusts to implement OTC reforms in this Bill – the reporting of OTC derivatives trades. The crisis highlighted a lack of transparency in OTC derivatives markets globally, which compromised the ability of regulators to assess the build-up of systemic risks and detect market misconduct. The new Part VIA in the Bill requires financial institutions and large non-financial entities which book or trade prescribed OTC derivatives in Singapore to report such trades to a trade repository licensed by MAS. MAS will prescribe OTC derivatives trades for the purpose based on their significance in Singapore's OTC derivatives market, as well as international approaches towards reporting of such trades.

Trade repositories are a new class of financial infrastructure, whose main function is to collect and maintain information on financial transactions. To support the reporting mandate, the new Part IIA introduces a framework for the regulation of trade repositories. Any trade repository that intends to facilitate the reporting of transactions subject to the reporting mandate under the SFA will have to obtain a licence issued by MAS. The proposed amendments set out statutory obligations on the safe and efficient operation of regulated trade repositories and ensure that the authorities are able to access the information reported.

The second major initiative is to subject certain OTC derivatives trades to central clearing. Traditionally, OTC derivatives trades are privately negotiated bilateral transactions, where a participant assumes the credit risk of its counterparty and manages the risk bilaterally. Systemic build up of large counterparty exposures among market participants, if not properly managed, can, however, destabilise the financial system and cause stress to market participants generally in the event that one large participant fails. Requiring OTC derivatives trades to be centrally cleared aims to mitigate such risks by substituting the credit risk of the counterparty with the credit risk of a regulated, well-capitalised Central Counterparty (CCP). At the same time, it allows the CCP to reduce overall credit risk in the system by netting risks across participants.

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The new Part VIB sets out the obligation for financial institutions and large non-financial entities to clear certain prescribed derivatives contracts booked in Singapore on CCPs. MAS will prescribe certain OTC derivatives contracts for clearing, taking into account factors, such as the level of systemic risk they pose and the characteristics and degree of standardisation of the contract.

Mr Speaker, Sir, to reap the benefits of central clearing and preserve stability of the financial system, the sound functioning of clearing facilities for OTC derivatives is vital. The current regulatory regime in the SFA extends only to clearing facilities for securities and futures contracts. Such clearing facilities are regulated as designated clearing houses only if they are systemically important to Singapore's capital markets. The Bill will, therefore, amend Part III of the SFA to introduce an authorisation regime for all clearing facilities, including securities, futures contracts and OTC derivatives clearing facilities.

Under the authorisation regime, systemically important locally-incorporated clearing facilities, including CCPs, will be regulated as approved clearing houses, while all other clearing facilities will be regulated as recognised clearing houses. The proposed amendments set out statutory obligations on the safe and efficient operation of regulated clearing facilities similar to what are currently imposed on designated clearing houses.

I would like to assure this House that MAS will continue to engage the industry to ensure that these wide-ranging reforms do not impinge unduly on the smooth and efficient functioning of the markets. The OTC derivatives reforms are taking effect in the US, and have begun to be implemented in other jurisdictions. Some of the reforms have cross-border impact on foreign entities, including entities operating in Singapore, resulting in potentially overlapping requirements and increased compliance burdens. MAS is sensitive to these issues and is working closely with our regulatory counterparts abroad to minimise unintended consequences of the OTC derivatives reforms.

Mr Speaker, Sir, I would like now to turn to the amendments relating to the strengthening of safeguards for retail investors.

In January 2012, MAS introduced new requirements for intermediaries to formally assess a retail investor's investment knowledge and experience before selling more complex investment products, termed as "Specified Investment Products" (SIPs). These requirements were aimed at ensuring that intermediaries recommend investment products that are suitable to the investor, taking into account his ability to understand and bear the risks inherent in that product. The Bill will formalise the obligations of issuers to properly classify capital markets products, and provide certainty with regard to the products subject to the new requirements.

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The Bill will also introduce amendments to promote more effective disclosure to enable investors to make better-informed investment decisions. Specifically:

Prospectuses for offers of asset-backed securities, structured notes, unlisted collective investment schemes and exchange-traded funds are to be accompanied by Product Highlights Sheets (PHS). The Product Highlights Sheets must summarise key information in a clear, objective and simple language. A similar requirement has been introduced in other jurisdictions, such as in the European Union, Hong Kong and Australia.

Issuers of unlisted debentures with tenures of 12 months or longer will be required to immediately disclose any material information concerning the debentures. They will also have to make available to debenture holders semi-annual reports containing pertinent information on the debentures, and semi-annual and annual financial accounts. Where the terms of the unlisted debentures allow for redemption at the option of the holder of the unlisted debenture, issuers will be required to make available, publicly and regularly, bid or redemption prices.

The Bill will also enhance the regime governing advertisements of certain offers of securities by empowering MAS to prescribe additional requirements and restrictions on advertisements, such as the requirement for fair and balanced advertising.

Next, to provide a further safeguard for investors, the Bill will require issuers of a debenture offered with a prospectus, including unlisted debentures, to appoint a trustee for the entire tenure of this debenture. Currently, only issuers of listed debentures are required to do so under the Listing Rules of the Singapore Exchange. The amendments will ensure that there is an independent party vested with the legal right and obligation to take timely collective action on behalf of retail investors in the event of default by the issuer.

Currently, firms which are holders of a capital markets service licence are permitted to withdraw customers' monies maintained in segregated trust accounts, subject to customers' written authorisation. For instance, with the authorisation that a customer gives at the point at which he enters into a contract, the firm can withdraw and place the customer's monies with other counterparties to meet the firm's own obligations incurred in connection with the customers' transactions. Customers in such an arrangement will lose the trust protection accorded under the SFA or find that their monies are not readily recoverable should the licensee default. Such arrangements expose customers' monies to risks and will often not be in the best interest of retail investors. The Bill will disallow such arrangements as MAS may prescribe.

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Sir, I will now turn to the last category of amendments to the SFA. These amendments will enhance civil remedies, strengthen MAS' supervision and enforcement powers, and make other ancillary changes.

The Bill will enhance civil remedies available to investors in cases of market misconduct. It will allow investors who have suffered loss as a result of relying on false or misleading statements or omissions to obtain compensation, regardless of whether the contravening person had gained a profit or avoided a loss. For insider trading cases, the Bill will provide compensation to be based on the difference between the price transacted by the claimant and the notional price if the inside information had been generally available, instead of the notional price if the contravention had not occurred. This will ensure that compensation awarded more accurately reflects the loss suffered by the claimant.

To better ensure compliance with the SFA, the Bill will also strengthen MAS' powers to investigate and take regulatory action. For example, MAS' powers to revoke capital market service licences or revoke the status of an individual as a representative on the Public Register will be extended to a wider range of situations. These include situations where directions issued under the SFA have been breached or where the licensee or representative has not acted in the client's best interests.

MAS' investigation powers will also be extended to allow MAS to enter premises without a warrant in certain circumstances and to apply for search warrants without having to first issue a production order, if there are reasonable grounds for suspecting that documents required as evidence would be concealed, removed, tampered with or destroyed. This would give MAS investigation powers similar to what securities regulators in Australia and the United Kingdom have, for example, the ability to enter premises without a warrant is also similar to powers that the Competition Commission of Singapore currently has.

MAS is currently empowered to impose prohibition orders (POs) on representatives who are registered on the Public Register (Register) under the Representative Notification Framework.

The Bill will extend the class of persons against whom POs may be issued to include representatives who are not required to be registered on the Register. For example, employees of financial institutions who undertake proprietary trading for the institutions are not required to be registered on the Register as they do not deal with customers. However, as the nature of their activities is similar to that of regulated persons, they should be subject to similar regulatory actions as representatives on the Register if they commit a serious offence, such as fraud or dishonesty. Consistent with MAS' existing practice, all POs issued will be published.

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Lastly, arising from judicial guidance in the MAS' first civil penalty court action under section 197 of the SFA, the Bill will give greater clarity with regard to the mental state required for liability to be established against a person with respect to false trading or market rigging. In summary, the person must have done the prohibited act knowingly or recklessly, or with the purpose of creating a false or misleading appearance with respect to the market or the price of securities.

Mr Speaker, Sir, let me conclude. The Bill introduces significant changes to our capital markets legislation, particularly to strengthen MAS' oversight of OTC derivatives markets and to strengthen safeguards for retail investors. MAS will propose further amendments to the SFA at a later stage to implement other elements of the FSB's recommendations on OTC derivatives. MAS will continue to review our regulations and policies to ensure that they remain effective in preserving the integrity and stability of Singapore's financial system, and the confidence of investors in our markets. Sir, I beg to move.

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

Mr Speaker, Sir, thank you for allowing me to join the debate. First off, I would like to disclose that I work in the financial services industry. I would like to concentrate my speech on the regulation of OTC derivatives.

Sir, in my view, there are two main considerations to formulating an appropriate framework for this issue. The first consideration is what position Singapore wants to take within the spectrum of regulatory regimes, given the need to be a responsible global citizen working under G20 guidelines.

The second consideration is, given the position that we have chosen, how would this impact our ability to prevent systemic risks to our financial architecture and, consequentially, the need to use taxpayer's money to bail out failed financial institutions?

Sir, the G20 leaders met in the Pittsburgh Summit in September 2009 in the aftermath of the global financial crisis and issued a set of guidelines to "rein in the excesses that led to the crisis".

It is, therefore, imperative that Singapore must be a responsible global citizen. However, what does this mean in the context of regulating OTC derivatives? There are generally two approaches in the spectrum of regulatory regimes. Should we lean towards a prescriptive rules-based approach or do we want to adopt a more flexible principles-based approach?

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The United States is at the forefront of this regime change. It has chosen to take the position of enacting rules-based approaches via the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act has been criticised in some quarters and, just this month, the CME group sued the US CFTC to block Dodd-Frank swap reporting rules, because it felt that these rules would impose "costly, cumbersome and duplicative requirements on derivatives clearing organisations".

No less influential a figure than CFTC Commissioner Jill Sommers, has, in a speech made on October 2012, admitted to the confusion and uncertainty that Dodd-Frank rules have introduced. She remarked that, in her view, it was a mistake to abandon principles-based approach in favour of a prescriptive one-size-fits-all regime. Lack of clarity, higher compliance costs, potentially cross-border duplicative compliance regimes. She asked and I would pose the same question to the Minister today: can these rules stand the test of time?

The MAS, to its credit, is well aware of these criticisms. In a powerful joint statement together with five Asian regulators to CFTC Chairman Gary Gensler on 27 August 2012, MOF expressed its preference for a principles-based approach to achieve the concept of international comity which the CFTC is seeking.

Sir, even though Singapore is a small country, we must have the courage of conviction to do what is best for our own interests, according to the geography of our local financial landscape. This courage must be maintained even in the face of accusations of regulatory arbitrage by various international commentators.

Singapore, unlike New York City or London, is not the centre of the financial universe. It is not our prerogative to take the lead to be the world's financial police. We have neither the moral obligation nor the legal necessity to be the first mover. However, our duty to responsible global citizenry compels us to support G20 guidelines. I would submit that we should not follow these guidelines blindly, but to consider rules enacted by other countries carefully, and to apply them judiciously as it suits our conditions. Rules that we enact have to be fit for purpose. In this regard, I state my support for the Bill.

Sir, this brings me to my next point. Given the principles-based position that we have chosen, how do we prevent systemic risks and protect our taxpayers from ever having to bail out our financial institutions?

MAS has created a superstructure by mandating OTC derivatives to be centrally cleared on central counterparties and to be reported to licensed trade repositories or licensed foreign trade depositories. The structure has to be made sense of against the definition of "specified person" and "specified derivatives contract", which, I submit, is where the real teeth of this Bill are.

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It is my strong belief that, in this regard, we should seek to protect the integrity of our system by concentrating the definition on local players and local products consistent with the local financial landscape.

My assertions are premised on the following. New York and London set the pace when it comes to finance. They have a culture of creating financial feats of engineering and innovation. They are the trendsetters while we are the trend followers. Their diverse and deep markets account for the bulk of the volume traded in OTC derivatives. So, really, if Singapore does not yet have the scale or sophistication, we are likely to be at the receiving end of any instability to the global system, instead of being a source of it. And to this end, there is precious little that we can do. It would not make sense if we seek to regulate every new fangled product that comes out of New York or every new hedge fund that opens in London.

We should not try to be too strict in our definition of "specified person" because trying to capture all eventualities is too complex without corresponding measurable benefits. It might even be counterproductive by undoing the hard work that we have put in place to position Singapore as a global financial centre. Finance is global, and global firms based in Singapore are not beholden to a jurisdiction that is inhospitable, especially if there is no substantial local market to speak of. We can regulate such global firms with an iron fist and create impractical rules, but they will just leave and we would have tried for nothing.

We should also not try to define "specified derivatives contract" too broadly. It is impossible to capture everything that is traded under the sun. And furthermore, if products can fit into a cookie cutter and be standardised to be cleared, chances are, it will not blow up. What will blow up are the third and fourth derivatives of these standard instruments that are, by definition, too difficult to fit into a cookie cutter and, therefore, too difficult to be defined.

It is my belief that we should tailor the definitions to our local market. "Specified person" should focus on systemically important Singaporean companies. And "specified derivatives contract" should focus on products that have a nexus to Singapore, for example, derivatives on underliers that are traded on our exchanges, Singapore Dollar products, products that originate from companies whose ultimate parent is based in Singapore, and so on.

If we succeed in making the Singapore market a safe place, we have not only protected our taxpayers from bailing out failed financial institutions, but also, by extension, we have made global finance safer.

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Mr Speaker, Sir, in conclusion, I believe the MAS has taken the sensible and logical step in favouring a principles-based approach, at the same time, retaining flexibility to respond to market conditions by not resorting to strict and prescriptive definitions to try to capture all eventualities. On this, I support the Bill.

Mr Speaker, Sir, I thank Mr Ong Teng Koon for his comments on the Bill. Mr Ong has provided an useful perspective on whether Singapore should adopt a prescriptive rules-based approach in regulating OTC derivatives or opt for a principles-based approach. He argues rightly, in my opinion, against imposing one-size rules on an extremely diverse OTC derivatives marketplace.

MAS' approach is to avoid moving towards either of two extremes in financial regulation. To avoid relying solely on prescriptive rules for every type of instrument or market participant on the one hand, or solely on issuing broad principles and guidance, which can be then interpreted in different ways by different market participants, and hence, introduce uncertainty in markets. Neither of these polar extremes in financial regulation – relying solely on prescriptive rules or solely on principles and guidance – has worked well in international experience. They certainly would not work well in preserving stability or enabling sustained growth in today's world.

MAS has taken very seriously the high-level recommendations of the international standards setting bodies, especially the Financial Stability Board, in designing the regulatory framework for OTC derivatives. The proposed legislative framework for trade reporting and central clearing rests on clear principles. But the framework also allows MAS the flexibility to set more detailed requirements through regulations. In other words, the rules are not all written out in the law but our subsidiary legislation will be able to write rules that are carefully calibrated to the circumstances that our markets face. These regulations will provide clarity and certainty where necessary. There is flexibility for the rules to apply differently or not at all, depending on the nature of the derivatives trade or the participants, and for the rules to evolve over time.

Mr Ong Teng Koon rightly said that rules have to stand the test of time and they will only stand the test of time, if we allow them to evolve. MAS will consult the industry in setting out these detailed regulations to ensure that they achieve the broad objectives of the international regulatory community that we are part of while having due regard for the characteristics of the Singapore market.

Mr Ong had also rightly pointed out that it is not Singapore's prerogative to be a first mover in OTC derivatives regulation. We are not a large player in the derivatives space, at least by standards of London, New York and some others. However, we have to recognise, too, the cross-border nature of OTC derivatives transactions, and the need to preserve Singapore's role as a reputable global marketplace. I would add that our reputation as a well-regulated financial centre is itself a competitive advantage for a broad span of financial businesses. Further, Singapore plays a not insignificant role in global trading of certain OTC derivatives, such as interest rate derivatives.

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The European Union, United States and Japan – jurisdictions with the authority over the largest and most developed OTC derivatives markets – are in various stages of establishing legislative and regulatory frameworks to regulate these markets. I would like to assure Members that MAS has been in active engagement with its regulatory counterparts on each of the reforms being undertaken. There is a need for close coordination internationally to address and prevent, where possible, unintended consequences on reforms in any one of the major jurisdictions. The global regulatory landscape for OTC derivatives markets is also still evolving. MAS will develop a regulatory regime with the flexibility to adapt to these on-going international developments.

This evolving regulatory landscape is also one of the reasons why we have phased our reforms in Singapore. This Bill will implement the mandatory reporting and mandatory central clearing requirements as the first phase. The information gathered through this phase of reforms will enable MAS to monitor their impact on our markets and adapt the implementation of further reforms accordingly.

Mr Ong's final points on the scope of the definitions of "specified person" and "specified derivatives contract" are pertinent and are issues that MAS has considered carefully. MAS has considered the definition of "specified person" in the context of our industry players.

Foreign financial institutions form the bulk of the participants in our market, trading significant volumes of OTC derivatives locally. So, if we confine the definition of "specified person" to Singapore-domiciled companies, it would decrease the effectiveness of our regime in mitigating systemic risks, including the build-up of risky bilateral exposures. On the other hand, expanding the definition to include all overseas entities which trade in Singapore would be counter-productive. MAS has, therefore, defined "specified persons" to cover entities with local presence which are already regulated by MAS in Singapore. MAS is keenly aware of Singapore's positioning as a hub for global financial institutions. It has and will continue to align its regulatory approach, such as to relieve global market participants of undue compliance burden, while at the same time ensuring that the objectives of the FSB recommendations are met.

With regard to the definition of "specified derivatives contract", MAS will consider the significance of a product in Singapore's OTC derivatives market, international developments, as well as market feedback, when deciding on the products to include in the reporting and clearing requirements. Where the characteristics of certain OTC products are not standardised, subjecting these not very standardised products to mandatory clearing requirements may not be appropriate. Instead, industry efforts to standardise some of these contracts would usually be a more sensible first step to facilitate moving these products to a central clearing platform. These products should, however, still be monitored by MAS on an on-going basis, for instance, through the trade reporting requirements.

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Mr Speaker, Sir, let me briefly conclude. The proposed reforms to OTC derivatives regulation in Singapore have been designed to provide flexibility to respond to international developments and to take into account our local market conditions. I believe MAS has struck an appropriate balance in its approach, and the steps being taken will enhance the safety, efficiency and reputation of Singapore's financial markets.

[(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 Tharman Shanmugaratnam]. (proc text)]

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

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

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

The House has just debated the Securities and Futures (Amendment) Bill 2012. The changes we have adopted are complemented by the proposed amendments in the Financial Advisers (Amendment) Bill 2012.

Firstly, the Bill introduces amendments which mirror those in the Securities and Futures (Amendment) Bill 2012 relating to:

the enhancement of MAS' powers to investigate and take regulatory action; and

the extension of MAS' powers to make prohibition orders.

Secondly, the amendments will strengthen safeguards for the investing public.

The Bill widens the scope of a Financial Adviser (FA) firm's obligations when communicating and dealing with customers. Currently, it is an offence under the Act to make a false or misleading statement only where the statement is made with the intent to deceive. Further, it only applies to statements relating to the amount payable for an investment product, such as the premium or benefits under an insurance policy, or to the effect of a provision in a contract for an investment product. That is the current scope of the provisions in the Act.

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The scope of this provision will be expanded in two ways. First, it will cover all statements made by the FA firm in connection with its financial advisory services, such as statements relating to the features or risks of an investment product.

Second, the Bill extends the law to cover negligent or reckless dissemination of false or misleading information, and not just statements made with the intent to deceive. It will make it an offence for an FA firm to disseminate such information as long as it ought reasonably to have known that a statement is false or misleading. It will also be an offence to do so if the FA firm has not cared to ascertain if a statement is true or false. These amendments do not seek to impose liability on FA firms or their representatives if they have acted honestly, carried out the necessary due diligence and have reasonable basis for the statements that they make.

Clause 7 of the Bill will also make it an offence under the Financial Advisors Act to engage in any conduct to defraud or deceive any person in connection with the provision of any financial advisory service. This provision mirrors similar provisions in the Securities and Futures Act, and will subject the conduct of FA firms to the same standard as that expected in the context of securities and futures.

The Bill will also extend the provisions on civil liability to breaches of an FA firm's business conduct obligations, specifically, the obligations to furnish product information to investors and to avoid making false or misleading statements. This will enable investors to obtain compensation from FA firms for any loss or damage suffered as a result of breaches of these obligations.

However, while the Bill extends the civil liability of an FA firm, it also encourages investors to resolve disputes with FA firms through channels other than court action. The Bill will enable the Court, in making an order in a civil action commenced by an investor, to have regard to whether the investor has made reasonable efforts to minimise his loss and resolve the dispute with the FA before commencing the court action. This includes the use of alternative dispute resolution processes, like mediation or adjudication through the Financial Industry Disputes Resolution Centre (FIDReC).

To conclude, MAS will continue to review its regulatory framework for the provision of financial advisory services to ensure that investors are treated fairly in their dealings with FAs, while allowing for competition and sustainable growth in the financial advisory industry.

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In April this year, MAS set up the Financial Advisory Industry Review (FAIR). The FAIR panel will make recommendations aimed at enhancing the quality of financial advice, and ensuring a more competitive and efficient system for the distribution of life insurance and investment products in Singapore. Legislative changes arising from the recommendations of the FAIR panel, where accepted by MAS, will be introduced in Parliament subsequently. Sir, I beg to move.

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

Mr Speaker, Sir, I wish to declare my interest as an employee of DBS Bank.

I speak in support of the Bill. I support the objective of the Bill, which is to increase the protection of investors. However, extending civil liability to FAs may be too onerous. I am sure that there are alternative measures which are not so difficult or cumbersome to minimise the incidents of FAs making false and misleading statements.

Certainly, FAs should exercise due care and diligence when making presentations to clients. However, how far can we expect them to take responsibility is another question. Many products these days have varying and complex attributes which perform very differently under various market circumstances, especially when market cycles have shortened and become more volatile and unpredictable. As for due diligence, many instruments are linked to a web of other factors worldwide and, on a number of occasions, as we have observed in recent years, investments can go wrong through no fault of the local distributor or FA. The domino or butterfly effect of a single incident or poor judgement in the link of a chain can send huge and totally unexpected repercussions through the financial sector.

Lastly, all FAs will now find it necessary to take on profession insurance and this will be costly. In the end, the cost will be passed on to the investor. I am concerned that this cost may reach a level that will make investment advice unavailable to a significant segment of our public. Would the Minister care to share with the House his views on this?

Mr Speaker, Sir, first, I wish to declare my interest as an employee of Standard Chartered Bank. I speak in support of the Bill.

The Financial Advisers (Amendment) Bill seeks to improve the protection of the investing public by extending civil liability to FAs on their obligations to furnish product information to investors, and not to make false and misleading statements.

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The introduction of this Bill is timely in the wake of the Mystery Shopping exercise commissioned by MAS. In their report released in July 2012, MAS found the quality of financial advice and information provided by FAs to be "inadequate". Up to 30% of the products recommended did not match the client's financial objectives and investment horizon, and there is significant room to improve market conduct.

The amendments proposed are in line with expectations that FAs are to exercise due care and diligence when making representations of products that they recommend to clients. Only when clients have thorough and accurate information will they be able to properly evaluate financial products in terms of suitability, risk exposure and expectations of investment returns. This Bill will further raise the standards expected of FAs in disclosure requirements.

However, Sir, section 26 of the Bill may have gone too far in imposing liability with the range of prohibited conduct as it relates to FA representatives, not so on FA firms. I would like to seek clarification on the level of due diligence that one can reasonably expect from a licensed FA representative. Product information is prepared by financial product specialists, and it may be asking too much of an FA representative to judge whether every piece of information provided in the Product Highlights Sheet is correct. The amendments extend liability from "intention to deceive with false and misleading statements", to include recklessness and negligence. Given that the technical elements in financial products are assessed by specialists, I am concerned about the challenges in ascertaining if an FA representative "knows or ought reasonably to have known that the statement is false or misleading", per the Bill.

Sir, as MAS implements this series of tightened regulations, and also a slew of measures set out in the 2010 Consultation Paper, I would like to sound a cautionary note about imposing overly onerous requirements. These could well stifle the development of the financial market and have unintended consequences for investors, in terms of product choice, costs and convenience.

I have observed how FAs in other Asian markets, in their efforts to comply with regulations, end up building safeguards into their client investment processes that are bureaucratic and inconvenient. This ends up becoming a frustrating experience for their clients. One example is the insistence that financial transactions can only take place in person at the FA's branches where interactions with clients are fully recorded.

Another example is clients being subjected to lengthy documentation, confirmations, double confirmations and independent checks in order to guarantee that compliance can never be disputed. And each time the client buys the same product, he is subjected to the same lengthy disclosure process, as if he is buying the product for the first time.

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To facilitate the implementation of this Bill, I urge MAS to guide FAs in their interpretation of the changes so as to strike the right balance between building appropriate levels of safeguards for the investing public and unnecessary bureaucracy with no value added outcomes for investors.

Another point of caution, I urge MAS to ensure that, in tightening the regulations, they do not inadvertently constrain consumers' access to advice and products that meet their financial planning and retirement needs. Allow me to illustrate this danger with the sweeping reform of the UK's financial advice industry, known as the Retail Distribution Review. This reform, currently underway, will raise the costs and requirements for dispensing financial advice so sharply that industry players believe they can no longer afford to advise less affluent consumers in retail settings. These consumers will have to turn to non-advised service or use online "do-it-yourself" channels to navigate their own financial planning and retirement planning alone.

One major UK bank has announced that they will no longer offer retail customers financial advice at their retail bank branches. And several other key players have decided to stop servicing mass market customers, preferring to only offer holistic financial planning services to clients with a minimum level of investible assets because they believe it is no longer commercially viable to serve smaller clients.

So, MAS should ensure that the proposed amendments do not adversely impact the average consumers' access to the much needed financial advisory services that help to secure their financial future. The changes should not limit access to quality and variety of products to meet their needs.

In reality, raising the standards of market practice can only be achieved by raising the skills, knowledge and expertise of practitioners within the financial industry. It is often the case that when FA representatives provide inaccurate information to clients, they do so not out of wilful intent but rather because of a lack of knowledge and expertise.

Sir, currently, the entry requirements for anyone seeking to be an FA representative are four GCE "O" level passes. I find these to be inadequate, and not in keeping with the rising complexity of financial products, and also the intricacies involved in financial planning and the rising service expectations of a more educated and sophisticated public.

I hope that MAS will review the competencies of FA representatives critically as part of the wider Financial Advisory Industry Review, in consultation with the industry players and also benchmarking them against other jurisdictions, such as Australia and the UK.

I believe there is room for a higher standard in academic preparedness for a select group of FA representatives, so that they can serve the burgeoning wealth management market in Asia. I would like to ask that MOE consider introducing a course of study leading to a Degree in Applied Banking and Finance, which, in turn, would lead to a professional qualification for the Financial Advisory industry. This practice-oriented degree, which should be developed in close consultation with MAS and the financial industry, should equip students with a strong understanding of financial products and deep expertise in financial planning.

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The programme should aim to produce graduates with a very special focus on understanding Asian investors and investment opportunities in Asia. Such an approach will generate a pool of Singaporean graduates who are able to serve the needs of increasingly sophisticated investors. They will be able to tap into the huge opportunities presented by the rapidly growing mass affluent segment throughout Asia who are attracted to bank in Singapore.

Sir, I support the amendments under section 98C, which empower the Court to have regard to the claimant's reasonable effort to minimise his loss and resolve the dispute before commencing civil action in court. With this amendment, I would like to suggest that the jurisdiction of the Financial Industry Disputes Resolution Centre Ltd, FIDReC, be expanded to cover cases beyond $100,000 for claims on insurance companies and $50,000 for disputes between consumers and banks. Lifting the cap to higher amounts will help to make sure that investors have access to a low-cost dispute resolution scheme that is both independent and impartial.

Finally, I believe that the best protection against mis-selling is a knowledgeable investor. Investors should understand their rights, what they can expect from a financial adviser, and questions they should always ask of any product they are considering, to ensure complete understanding. They should absolutely be jointly responsible for ensuring the suitability of products that they purchase. In this regard, I believe there is much we can do to educate the investing public on risks, pitfalls and the importance of sharing their own details with the FA to allow proper assessment of what is best for them.

In conclusion, I believe that the proposed amendments will enhance market conduct. They are in line with the standards set in other leading financial centres. When implemented effectively, they should augment our efforts to further strengthen Singapore's position as a leading international financial centre and improve consumer confidence and trust. Mr Speaker Sir, I support the Bill.

Mr Speaker, Sir, I would like to thank both Ms Foo and Mr Gan for their support of the Bill, and the pertinent issues that they have raised. Mr Speaker, if I may make a broader observation of the three speeches we just heard from Mr Ong, Ms Foo and Mr Gan. Legislation concerning the financial markets often appears and is abstruse and highly technical. But it is critical to the smooth functioning of our financial markets and our economy, and it is critical to preserving investors' confidence in our market. I think the speeches we have heard from Mr Ong, Ms Foo and Mr Gan, and the very thoughtful points they have made illustrate the real value of having in this House a few Members with experience in the financial markets. I just like to make that broader observation.

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The first question that has been raised concerns how far we should go in requiring Financial Advisory firms to exercise care and diligence when making representations on products they recommend to their clients. How far should we go? The proposed amendments in section 26 of the Bill set out this duty and penalise recklessness or negligence when making representations to clients. The amendments are, in this regard, similar to the standards in other jurisdictions, certain other major jurisdictions like the United Kingdom and Australia. The amendments do not seek to impose liability on FA firms or their representatives where they have acted honestly, carried out the necessary due diligence and have reasonable basis for the statements that they make.

Specifically, with regard to the question that Ms Foo has posed, the law will not impose liability on FA representatives – in other words, the individuals who represent the FA firms – when they use statements that have been approved for dissemination by the FA firms which they represent. Where the representative uses statements approved by his or her FA firm, the representative cannot be said to have been negligent or reckless. In taking the decision to distribute certain investment products, an FA firm needs to ensure that it has reviewed and understood the key features of the product, and is able to explain the product to its clients. An FA firm should seek explanations from the issuer or the manufacturer, as they call it, of the product, if necessary, as part of its due diligence process.

Mr Gan Thiam Poh raised a useful point, which is that you have situations in rapidly changing markets where investments go wrong for reasons that are quite unrelated to the advice that has been provided by the FA firm. Sometimes, an investor turns around and accuses the FA firm of having misled him. Let me just make two points in that regard. First, it is important for an FA firm to inform customers upfront of the key risks involved in an investment, not just the potential upside. Sometimes, we notice the tendency to place great emphasis on the potential upside and only routine or passing mention of the potential risks. So, that is a duty. It is a duty that the FA firm owes its customers.

The second point I like to make is that the Act makes the FA firm liable only if a false or misleading statement is made recklessly or negligently, and the loss incurred by the investor can be attributed to the statement. Ms Foo's observation on clients in other jurisdictions being subjected to excessive documentation to absolve FAs of liability is worth bearing in mind.

In formulating our proposed amendments, MAS' aim has been to improve the financial advisory process in the way that better serves the investors and develops a culture of advice over the long term that will benefit retail investors in particular. In this regard, I strongly urge both the industry and investors to view the documentation process and the compliance cost that FA firms will have to bear, not merely as regulatory requirements, but as a process, as part and parcel of a process that enables FA firms to carry out their duties in the best interest of their clients. We must have a robust process, one that ensures that the FA has obtained the necessary information about the client and, therefore, understands the client's ability to take on risks and his investment time horizon before recommending an investment product. The process must also ensure that all relevant and material information is disclosed to investors to enable them to make a well-informed investment decision.

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Putting one's savings into an investment product is an important decision for anyone, and especially for retail investors. Even if the product remains the same, the circumstances of the investor may have changed. MAS, therefore, encourages investors to take their time and not rush into making an investment decision. They should ask the FA the right questions and not sign on documents that they do not understand. I cannot emphasise enough. Never sign documents that you have not fully understood. Therefore, I can assure Members that as part of the ongoing review of the financial advisory industry, MAS would take into account the experiences of other jurisdictions when it calibrates the rules and best practices that are appropriate to our situation in Singapore. We are mindful of the risks of over doing things; over doing the documentation and leading to excessive compliance costs.

On FIDReC, Ms Foo has suggested the FIDReC's jurisdictional limits be raised. I should first clarify that FIDReC operates as an approved dispute resolution scheme under the MAS Act, but it is an independent institution that operates in accordance with its own terms of reference.

The jurisdictional limits of FIDReC or the claim limits are set out in its terms of reference, which FIDReC will review from time to time. The current claim limits were established in 2005, taking into account FIDReC's role as an affordable dispute resolution option for the average consumer. That was the intent, as well as the fact that its awards bind financial institutions but do not bind the consumers. The limits were set to cover the majority of retail transactions.

Currently, if a complainant wishes to bring claims which exceed FIDReC's jurisdictional limits, FIDReC can hear the claim if, firstly, the financial institution agrees to allow FIDReC to hear the claim; and, secondly, if the complainant agrees that any award will be capped at FIDReC's jurisdictional limits.

MAS will bring Ms Foo's suggestion on the claims limit to FIDReC's attention as part of the continuing dialogue with FIDReC on how to ensure the relevance and efficacy of this alternative dispute resolution scheme.

Competency – a very important issue. Rules alone cannot work to raise standards or practice. As Ms Foo has pointed out, the skills and competencies of practitioners in the industry and the empowering of investors are two important elements in the equation. MAS has taken several steps to raise competencies, besides the measures that we have introduced in the past two years to enhance the sale and advisory process for listed and unlisted investment products. MAS has also required representatives to provide advice on more complex products, what we call "specified investment products", to pass additional examinations on product knowledge and analysis. This aims to ensure that representatives are apprised of developments relating to specified products and are quick to advise clients on their key risks and features. And I quite agree with Ms Foo that we should explore the development of practice-oriented degrees in Applied Finance. I am sure MOE will consider this together with our tertiary institutions. It is probably helpful that the present Minister for Education is a former Managing Director of MAS and, indeed, the present Minister in charge of the MAS is a former Minister for Education.

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At a broader level, the on-going Financial Advisory Industry Review (FAIR) process that I mentioned earlier, is looking into enhancing the professionalism and quality of financial institutions and their representatives so that they can deal with customers fairly. The FAIR process is an extremely important process and we are going about this carefully. The FAIR panel includes representatives from the financial advisory industry, as well as from investor and consumer bodies, academia, the media and other stakeholders. So, I think this diversity of the panel will ensure that the balance of perspectives is heard and that the recommendations are realistic and achievable. The FAIR panel is expected to issue its report within the next two months.

Finally, the need for knowledgeable investors, well-informed investors. We recognise fully the continuing need to raise financial literacy amongst investors themselves. We were talking about this during Question Time earlier as well. Better understanding of the basic risks involved in different investment products, different types of investments, and what information the customer should ask for before investing, will help customers and retail investors to evaluate the financial advice they receive and make informed investment decisions. The more informed customers are, the more the discipline that will be brought to bear on FA firms as well. It is a process that involves raising standards on both sides but there is a relationship between the two. The higher the standards of advice demanded by customers and the greater knowledge they have in evaluating the advice, the more we are likely to see the raising of standards amongst financial adviser firms. But investor education will continue to be our focus at the MAS in this coming year and, particularly, through the MoneySENSE programme.

Mr Speaker, Sir, to conclude, I stress again the package of amendments to the FAA as one that will seek a better balance in regulation; one that will encourage the development of a culture of financial advice that is centred on the needs of the customers. I urge the industry to view the amendments as a means to improve professionalism as a basis for sustained growth of the financial advisory business. Quality financial advice, coupled with competitive and transparent costs, will build consumer trust in the industry and enable the industry to grow on a sustainable basis in the years to come.

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I would like to declare my interest as a banker, working for DBS. I waited for the end of the discussion of these two Bills in order to make a comment and also a suggestion on how we could perhaps relook at combining both these Bills – the Financial Advisers (Amendment) Bill and the Securities and Futures (Amendment) Bill – to further protect the investing public in Singapore.

Firstly, as we all know, financial products are, by and large, manufactured by global financial firms. Global financial firms are credit-rated by top rating agencies like S&P, Moody's and Fitch. As we all now recall, when Lehman went under, it was an overnight situation and Lehman went from investment grade one day to junk status the next day. So, I often use the term —

Ms Tan, it is an opportunity to seek clarification, not to make a speech.

Okay. The clarification is this. Would the Securities and Futures (Amendment) Bill, together with the Financial Advisers (Amendment) Bill, look at the overall OTC derivatives of financial institutions, perhaps not on a net basis, but on a gross basis, so that the gross overall exposures are in OTC derivatives or CDSs of financial firms, in addition to their credit ratings, before the products are allowed to be sold to the investing public?

Mr Speaker, that is a useful point. Indeed, the MAS does look at gross exposures of financial institutions and would want to discriminate between firms which have large gross exposures and subject them to greater or higher requirements. And that is the way we have to calibrate things generally. It cannot be one-size-fits-all. There are some players that are doing something dangerous but they are small and they do not pose systemic risks, and they do not have retail customers. We should not have to subject them to a large amount of regulation and a large amount of compliance costs. But there are other players which, by virtue of their size, do get involved in large bilateral exposures, as well as just large risks to their balance sheet, and which do have retail clients. We have to subject them to greater scrutiny, which means greater supervision as well as, possibly, a higher standard of rules that they have to comply with.

[(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 Tharman Shanmugaratnam]. (proc text)]

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

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

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

The Casino Control Act (CCA) was enacted in 2006. It is the primary piece of legislation to manage and regulate casinos in Singapore. It also helps to ensure that the Integrated Resorts (IRs) make a positive contribution to our economy, while minimising any potential adverse social impact and maintaining law and order.

It is timely, at this juncture, to review our casino regulatory regime and the Casino Control Act. Over the past two years, our agencies have gained from the practical experience of regulating the casinos. Moreover, this is a complex and dynamic industry. It is, therefore, imperative that we continually monitor developments, anticipate trends and challenges, and ensure that our regulatory regime stays effective and relevant.

Hence, the Ministry of Home Affairs and the Casino Regulatory Authority (CRA) have worked with the Ministry of Trade and Industry (MTI), the Ministry of Social and Family Development (MSF) and the Ministry of Finance (MOF) to review the regime and identify areas for refinement. In this process, we have also sought to learn from the latest developments and best practices in jurisdictions, such as Australia and the US.

Mr Speaker, Sir, let me first emphasise that, fundamentally, our approach to regulating the casinos remains unchanged. The IRs were introduced to enhance our tourism appeal through world-class attractions and facilities and to generate economic benefits for Singapore. Though the casino is a small component of the entire IR development, we recognise the impact it can have on law and order and problem gambling. Hence, from the outset, we have sought to establish a stringent casino regulatory regime, with strong enforcement measures, and strict social safeguards to address the potential adverse effects. The Government is determined to keep Singapore safe and secure, and to ensure that our society's strong work ethic and values are not compromised.

This Casino Control (Amendment) Bill aims to strengthen our legislative framework for the regulation of casinos in Singapore. The Bill has five main objectives. First, it enhances the provisions for effective gaming regulation, and streamlines regulatory processes. Second, it strengthens law enforcement levers to deal with casino-related crime. Third, it broadens our framework of social safeguards. Fourth, it refines the regulatory framework to give effect to the economic policy intent of introducing the IRs in Singapore. And, finally, it improves tax administration, for consistency with other Tax Acts.

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In reviewing the legislation and drafting this Amendment Bill, the different Ministries engaged a wide range of stakeholders on the key proposals. In particular, the National Council on Problem Gambling (NCPG) sought views from the community, grassroots and religious sectors, as well as social service professionals on the social safeguards provisions. The two IR operators, as well as regulators and experts, were consulted for an industry perspective on the proposed amendments. The Ministry of Home Affairs also conducted a wider public consultation exercise over a four-week period from 9 July to 6 August this year. I would like to thank all who contributed for their general support of our policy intent behind these amendments, and for their valuable suggestions which have helped my Ministry and the various Government agencies develop and refine the Bill.

Let me now highlight the key amendments proposed in the Bill, beginning with the gaming-related amendments.

The Bill amends provisions regarding two important aspects of casino regulation – the International Market Agent regime and the credit issuance regime.

Clause 2 amends section 2 to redefine "junket promoter" as "international market agent". The term "international market agent" (IMA) more accurately describes the role of these middlemen who bring international high-rollers to the casinos. Clause 45 repeals and re-enacts section 110 and inserts new sections 110A, 110B and 110C, to provide for a more comprehensive articulation of our stringent IMA regime. Casino marketing arrangements aimed at Singapore Citizens and Permanent Residents will be expressly prohibited. CRA will be empowered to set a cap, where necessary, on the commission payable by the casino operators to the IMA. CRA will also have the powers to suspend or cancel an IMA licence when it is in the public interest to do so. As a stronger deterrent to illegal IMA activity, the maximum penalty will be raised from $300,000 to $500,000.

With regard to credit issuance, it is our policy that casino operators cannot extend credit to Singapore Citizens and Permanent Residents, with the exception of premium players. In line with this policy intent, the definition of "premium player" in section 2 and the provisions on credit are amended to provide for procedural requirements to be prescribed in Regulations. For example, one of the additional procedures we will prescribe in the Regulations is that the minimum deposit of $100,000, which is required for one to be deemed a premium player, must first be drawn down for gaming purposes, before the Singapore Citizen or PR may be granted additional credit by the casino operator.

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Currently, section 54 of the Act empowers CRA to take disciplinary action against casino operators for regulatory breaches. Such disciplinary action can include letters of censure, financial penalty of up to $1 million, or the variation, suspension or termination of the casino licence.

To ensure that CRA has sufficient levers to deal with serious breaches, clause 15 amends section 54 to raise the maximum financial penalty which may be imposed in the event of serious breaches, from the current maximum of $1 million to 10% of the casino's annual gross gaming revenue. Serious breaches are those which severely affect the integrity of casino operations or gaming, or which severely undermine social safeguards. They include situations where a significant gain or loss of property had been wrongfully caused; where the breach occurred as a result of wilful intent or reckless disregard for regulatory compliance; where the breach arose from systemic failure or multiple failures in the management or operation of the casino; or where the breach is injurious to the public interest.

This enhanced financial penalty will complement CRA's existing powers to take disciplinary action, including the authority to vary, suspend or terminate the casino licence.

Other amendments for greater regulatory effectiveness target both the casino operator and other licensees like the casino special employees. A casino operator's failure to provide information to the Regulator when required, or the provision of false or misleading information, will explicitly be made grounds for disciplinary action.

Today, CRA may suspend a special employee's licence if he has been convicted in court. Clause 33 inserts a new section 93A to empower CRA to immediately suspend a special employee's licence, pending the conclusion of any inquiry or disciplinary proceedings against the licence holder.

The Bill also includes other gaming-related amendments that serve to refine, clarify and streamline gaming regulatory processes for greater effectiveness and business flexibility, without compromising gaming integrity.

Let me now turn to amendments relating to law and order.

Today, casino operators are required to take steps to ensure that criminal activities, such as vice, illegal moneylending and disorderly behaviour, do not occur within the casinos. Clause 57 amends section 129 to add that the casino operator must also ensure that illegal betting activities and unlicensed casino marketing activities do not occur in the casinos.

While the crime situation in the casinos has been under control, we are mindful of the vulnerability of casinos to criminal infiltration. Therefore, the Home Team agencies continue to be vigilant and proactive in seeking to enhance our levers to prevent, detect and deal with casino-related crime. Clauses 94 to 98 amend sections 171 to 174 to create specific casino-related offences, such as those relating to counterfeit chips, cheating at play, collusion and unlawful interference with gaming equipment. These amendments will make the CCA a more comprehensive piece of legislation to deal with the range of crimes that commonly occur within casinos.

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Next, let me address the amendments pertaining to social safeguards.

Today, we have a robust social safeguards regime to minimise the potential harm of casino gambling. This regime has several components. We require locals to pay an entry levy to discourage casual and impulse gambling in the casinos. We prohibit minors from entry and have a system of casino exclusions targeted at vulnerable persons, including those on Government social assistance programmes and undischarged bankrupts. We disallow the extension of credit to locals unless they are premium players.

While the existing set of social safeguards has worked well for most Singaporeans, there is a need for a complementary set of targeted measures to address the more vulnerable groups.

Earlier this year, NCPG released the findings of its 2011 Gambling Participation survey. The survey showed that the problem gambling rate in Singapore has remained stable relative to the previous survey conducted in 2008, that is, after the casinos have opened. The latest survey, however, highlights a few emerging areas of concern. The proportion of low-income gamblers who bet large amounts has increased. Also, problem gamblers have the propensity to gamble more frequently and have poorer self-control. Hence, one key objective of this Bill is to further protect financially vulnerable Singapore Citizens and Permanent Residents who visit the casinos frequently.

Clauses 79 to 81, 84, 86 and 88 introduce a new casino visit limit regime. This new visit limit regime will complement the current casino exclusion regime. It broadens the suite of measures to protect an individual from the harm of problem gambling. In addition to issuing exclusion orders, the NCPG may now also impose visit limits on financially vulnerable locals who visit the casinos frequently. The visit limit will set a cap on the number of times an individual may visit the casino each month.

Analogous to the casino exclusion regime, there will be three forms of visit limits. Individuals and families can apply to the NCPG for voluntary self-imposed visit limits and family visit limits respectively. In addition, the NCPG will be empowered to appoint a Committee of Assessors to determine whether a third-party visit limit should be imposed on a financially vulnerable person. The Committee of Assessors, chaired by a member of the Council, will comprise two other members drawn from a pool of experienced community and grassroots leaders, as well as social service professionals. The Committee will be deliberate in its evaluation of an individual's financial vulnerability, taking into consideration factors, such as the frequency and extent of casino visits in relation to his credit record and financial circumstances, as well as information provided by family members.

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The actual visit limit imposed may differ from person to person, depending on each individual's circumstances. Individuals will have the right to be heard and the right of appeal. MSF estimates that some 4,000 to 6,000 locals could fall within this category of persons requiring more targeted intervention through the imposition of visit limits. MSF and NCPG are working towards rolling out the visit limit regime by the middle of next year.

The existing NCPG casino exclusion regime will also be enhanced to improve its responsiveness and efficacy. Clause 85 repeals and re-enacts section 164, clause 88 inserts new sections 165B, 165C and 165D, and clause 89 amends section 166, to enhance the powers of NCPG's Committee of Assessors to issue and revoke casino exclusion orders and visit limits. Provisional family exclusion orders can be made if there is a need to act urgently to protect the family from further harm.

The Committee will also be empowered to issue a family exclusion order in the event that the family member with a gambling problem cannot be located or is uncooperative. The revocation process for exclusions and visit limits will be tightened by requiring excluded persons to undergo counselling or harm assessment, as necessary, as a condition for revocation of self and family exclusions and visit limits.

Clauses 49, 54 and 99 amend or add sections, namely, 116, 125 and 175A, to penalise deliberate breaches of the social safeguards regime. The proposed amendments will make it an offence for one to remain in the casino beyond the validity period without paying the entry levy for the period of over-stay before leaving the casino. Attempted entry into the casino without payment of the entry levy will also be made an offence. Both of these offences will be punishable with a fine of up to $1,000.

A breach of an NCPG third-party exclusion or third-party visit limit will also be an offence punishable with a fine of up to $10,000 or imprisonment not exceeding 12 months, or both. It will also be an offence for a person to enter the casino under false pretences. This offence carries a penalty of a fine of up to $10,000 or imprisonment not exceeding three years or both.

The casino operators will be required to commit to Responsible Gambling and to improve the efficacy and visibility of Responsible Gambling at the casinos. Clause 93 inserts a new Part XA, comprising new sections 170A to 170C, to establish a more robust regulatory and approval framework for Responsible Gambling and also for casino advertising and promotion.

The casino operators must have an approved Responsible Gambling programme that meets prescribed requirements. These include regular reviews and comparisons with good practices in other jurisdictions, and greater specificity on operationalising Responsible Gambling practices in the casinos. The new section 170C enables the Authority to require a special audit to be conducted on the casino operator's advertising and promotional activities or Responsible Gambling practices.

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Mr Speaker, Sir, let me now move on to the amendments with respect to the economic policy intent of the IRs.

The casinos were always envisaged as one relatively small component of a large and diversified IR development that would contribute significantly to our tourism industry and our economy.

In this regard, the IRs have met our expectations to date. Together, the two IRs have committed a total development investment of more than $13 billion. They have brought in non-gaming elements, such as Meetings, Incentives, Conferencing and Exhibitions (MICE) facilities, theme parks, celebrity chef restaurants, museums and theatres, which have broadened our leisure offerings. The IRs have received prominent international coverage and added vibrancy and buzz to Singapore.

The IRs directly employ more than 22,000 employees and have created 40,000 jobs minimally throughout the economy. The IRs have broadened the range of job and career opportunities for Singaporeans, with the bulk of the jobs in areas, such as theme park operations, retail and food and beverage.

Local businesses have also benefited from the IRs' presence. The IRs have indicated that in 2011, they awarded around $500 million in contracts to local companies across various sectors, including retail, food and beverage, and transportation.

While Singapore's tourism industry has grown, the tourism landscape in the region is also becoming increasingly competitive. Developments that are similar in concept to our Singapore IRs are emerging in countries like the Philippines and Vietnam. We must expect the competition to increase, especially as the novelty factor wears off with our own IRs. Our IR operators will need to continually reinvent, reinvest and enhance their attractions to remain competitive and appeal to international visitors, as, indeed, they have committed to do contractually.

The proposed amendments provide for a clear and systematic engagement process for Government agencies and the IR operators to ensure that the broader tourism and economic objectives are consistently attained.

Clause 9 amends section 45 to allow CRA to take into account the IR operators' ability to maintain, promote and develop the IRs as compelling tourist destinations when assessing applications to grant or renew casino licences. This will be considered alongside the casino operator's track record of compliance with other legal and regulatory requirements, including social safeguards.

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Clause 10 will introduce a new section 45A for the Minister responsible for tourism development and promotion to appoint an Evaluation Panel (EP). This Panel will render an independent opinion to CRA on the ability of the IR operators to fulfil their economic obligations. The IRs' ability to do so will be considered on the basis of a broad range of indicators such as visitor appeal and visitorship trends, benchmarks with respect to similar international attractions, industry standards, and tourism contributions.

In convening the EP, MTI will seek to appoint members who understand both the economic policy intent of Government and the business needs of the IRs to ensure the sustainability of the IRs' economic contributions. To allow for adequate lead time to develop and work through the EP assessment framework, these amendments will apply in respect of any application for the grant or renewal of any casino licence commencing only on or after 1 January 2015.

Finally, let me touch on the tax-related amendments and other matters. Clauses 68 to 74 of the Bill amend Part IX of the CCA to empower the Minister for Finance to prescribe obligations of the casino operator for tracking revenue attributed to premium players. The time bar period for the claim of refund of casino tax, and the data sharing provisions, are also aligned with similar provisions in other Tax Acts.

The Bill will also expand the ability of CRA to make Regulations, including the adoption and approval of codes, standards, and the issuance of guidelines for casino operations. These provisions are at clauses 115 and 116. In addition, clauses 110, 114 and 117 will broaden the existing data provisions, primarily section 190, so that Government Ministries like MSF and MTI may obtain relevant data from CRA for the purposes of policy formulation.

Mr Speaker, Sir, let me conclude. Over the past two years, the IRs have generated significant economic benefits for Singapore. At the same time, Government Ministries and agencies have been vigilant, and endeavoured to minimise any adverse social impact, and to maintain law and order. This amendment Bill will put us on an even more robust legislative footing to effectively regulate the industry for the long term. This piece of legislation, together with our plans to deepen CRA's capabilities and expertise, will help us stay ahead of potential challenges posed by the casino industry, and to achieve an outcome that benefits Singapore and Singaporeans. Mr Speaker, Sir, I beg to move.

Mr Speaker, Sir, the IRs are built for the same reason as our telecommunications satellite, our seaports and airports and our water treatment plans. They contribute to the economic development of Singapore, they give Singaporeans jobs and they bring in investment dollars.

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The difference is that the IRs do not just have an economic dimension, they have a moral one too. We sometimes collapse this argument into a "social ills" package because we are a secular and pragmatic country, and it is both convenient and correct to be tempted to do so.

But in so doing, we rob the debate of its essential core and weight. Whatever our religion, or even we if we have no religion, our beliefs about gambling and the harm it can cause – I say can, rather than must – we must acknowledge that there is a moral dimension to this argument.

Sir, I was not in the House in 2005 when the Great Casino Debate took place. The case for casinos was made by the Prime Minister. It was a scientific, economic and pragmatic argument; hard to refute in logic, harder to oppose against the realities of a downturn of that time.

Yet, a few Members did. To me, two speeches against the casinos were the defining moments of the debate. The first was made by a Member of the Cabinet, a staunch Catholic and a key figure in the unions; the second by a party stalwart, a man who had fought and won elections and held his ward for four terms. Both of them are not here today, but I will revisit their arguments to see in what way they have been upheld.

Mr Lim Boon Heng was the Secretary General of the NTUC, representing workers. He is also a father, now a grandfather, a champion of workers, a man with strong values and a good engineering mind. For him, the casinos were a necessary evil. At one of his last appearances as a Member of Parliament, he revisited the debate and was manifestly torn between the two – the economic gains and the possible moral decay. He did not want the casinos, but with the 35,000 jobs to be created, he could not say no. For him, therefore, the casinos were a right decision if it means more jobs for Singaporeans.

Mr Loh Meng See, the Member for Kampong Glam in Jalan Besar, he made his argument in a less forgiving fashion. For him, gambling is wrong, and absolutely so. But since the Cabinet had decided, he would, and I quote him, "render to God what is God's, and to Caesar what is Caesar's." He maintained that it was a morally wrong decision, and in submitting to it, he urged Singaporeans to refrain from going to the casinos and denying them the one-third revenue that was to come from locals.

These speeches give an idea of the feeling and the trepidation of this House at that point in time. We were unsure of many things. We were discussing values and holding them up against different versions of the future, trying to find out what we could accept, and what not, in a universe where there were many possible futures.

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Today, I hope to set the debate beyond this rhetoric of good and evil – not because values and beliefs are not important, but because I think we need to see these within a context of a coherent national narrative, a narrative which includes not just values and morals, but also the realities we live in today – all these count towards the narrative which we hope to write together in the future; something which I hope our on-going Singapore conversation will also address.

First, have what we hoped for, what we feared, have they come about? The numbers are easy enough – the overall net increase in tax revenue from the two IRs has hit or will hit $1.1 billion in this financial year. In all, in 2011, over 136,000 unique local patrons visited the casino at Resorts World Sentosa (RWS) and over 137,000 visited the one at Marina Bay Sands (MBS).

Taking into account an estimated 30% overlap in local visitors between these two casinos, I think the number of locals who visited the two casinos is about 200,000 in 2011. Last year, it was reported that the MBS casino saw an average of 25,000 visitors daily, with a third comprising of locals. In 2010, our country saw $18.8 billion in tourism dollars, the highest in 10 years. It is a massive 49% increase from 2009 and in this case fortunately it did beat our forecasts.

So, as far as growth is concerned, we have succeeded beyond expectations. what about jobs? The MTI estimated that 40,000 jobs have been created through the economy as a result of the IRs. But how many jobs have been created for locals? According to recent press reports, 70% of the 22,000 people working in the two IRs are locals. That makes about 15,400 jobs. The number may be more if we look at the other jobs that have been created because of the IRs.

Secondly and an equally if not more important empirical question: what of the social costs? A survey conducted by the National Council on Problem Gambling last year found that the average monthly betting amount in Singapore has risen 20% since 2008 to $212 now, while the proportion of Singapore residents who gambled more than $1,000 on average each month has also increased. The proportion of respondents classified as "probable pathological gamblers", it said, has risen to 1.4% from 1.2% in 2008.

These are the hard figures – but I will also throw into this bag the many anecdotal examples – the increase we see in the financial hardship cases at MPS, the children who have had to bear the weight of debts from retired parents, who had visited the casinos as no more than a day of social fun, and even the rise in pawnshops – I do not ever remember seeing so many pawnshops in such great numbers and at MRT stations before the casinos.

Now, I come to the specifics of this Bill. My arguments above are that economic gains have been reaped but remember that policies do not only increase gains, but also distribute them. In addition, the negative externalities we predicted also came to pass. We need to ensure two things – fairer distribution and greater protection against the fallout.

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The first is not the subject of this Bill, but the second is. Here, I must add that the distribution of gains, not just from casinos, but from all economic activities, needs to be one of the key topics for this House, and urgently so.

To this Bill, Sir, we have seen how the casino operators flout regulations – and how lightly monetary fines eat into their profits. What is a few hundred thousand dollars to a company that counts its revenues in billions?

I briefly mention two examples of flouting of regulations by operators and how constant vigilance is needed. In 2010, shuttle buses operated to bring Singaporeans from the heartlands to the casinos. These were stopped after Members and other community leaders brought this up – in fact, it was Mr Liang Eng Hwa who brought this up in Parliament. This was the case too, for patrons who were given Universal Studio tickets for renewing their yearly passes at the casinos. There was another case where one IR was openly announcing winners of jackpots from the casino, which I guess subtly encourages people to have a go at it themselves.

Buses have stopped and regulations have been expanded to cover promotional activities – including membership campaigns and loyalty programme. And the website page publicising the jackpot winners has been taken down – I know, as I was the one who raised this in Parliament.

But this is clearly not the end of the road. The Government, as regulator, does not mean taking a sanitary, arm's length of setting policies and then pushing paper to "regulate". It means getting our hands dirty, it means monitoring, it means constantly speaking to the ground. Members can do our part, too. It is, therefore, important to have increased monitoring as part of the changes we are thinking about.

Mr Loh Meng See had also noted the somewhat unfair battleground in regulating casinos. He said, and I quote him, "Remember, if we enter this realm, we are at the mercy of expert gamblers. On our side are politicians and civil servants who are, I think and hope, novices in this game."

Today, seven years later, I would like to think that we are a little bit more informed. And given this, I wonder if we can have more regulatory innovativeness. The current amendments do the important task of making the stick bigger, but can maybe more incentives be provided for meeting the public interests? I include some examples – can a casino which registers a lower proportion of local visitors be given a lower tax rate? Can the one who makes fewer mistakes in admitting the excluded and so on be given some carrots?

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There is necessarily some tension between the regulator and the operators, but in this case, I think we need to see that there is some common ground between the two. It is in our joint interest to prevent the financially vulnerable from becoming addicted to casinos, and to target their marketing more accurately. So, in this case, I urge the Government to work more closely with the two operators and vice versa.

I would like to make one last point about perception and social values. These are more difficult to measure, and I cannot say if it has changed since the casinos came on board, but let us look at a rough and ready snapshot.

I carried out my own survey and some 133 residents, grassroots leaders and colleagues responded. From these survey results, it told me that while many still do not accept gambling as a way of life, they do see visits to the casinos as something of a social event. About half think it is okay as a social past time, but more than 83% believe that an acceptable number of visits to the casino is four times or fewer each month.

Only about a fifth feel that the current safeguards are enough. Hence, the Bill needs to reflect stronger, stronger restrictions. Half feel that more people should be excluded and a majority, almost 60%, feel that it should be easier for people to exclude family members.

As of end May, over 93,000 individuals are barred from entering the two casinos in Singapore. They include over 64,000 self-exclusions – 13% are Singaporeans and PRs, while 87% are foreigners and there were also over 1,000 family exclusion orders.

So, we see that although the absolute numbers are large, the number of Singaporeans who are actually excluded is actually quite small. We have seen that many people see no more than four visits as being acceptable. The frequency of visits, however, is but one measure. Is there a way to measure the intensity of such visits, the compulsiveness, the loss of control? Ten thousand dollars may be a small flutter for one who makes millions but it is a lifetime's savings for the poor.

My survey bears out the feeling that the lower income should be barred from going to the casinos, with two-thirds feeling that people from low-income families should be barred from going to the casinos.

In a way, this is already the case with people on Public Assistance and undischarged bankrupts, for example, being banned. The list will also widen to those in rental arrears to the HDB. I do not think a simple means test is sufficient for this, but perhaps we can run a check with some other agencies – Singapore Power, for example. I do think if a person is unable to pay for his water bill, he is financially vulnerable.

This may be seen to be draconian. Some may say it is anti-human rights. But in this case, I prefer to err on the side of being conservative. I have not heard of anyone trying to make a case for a human right to gamble, but I do want to say that the financially challenged ought to be protected from the temptation. I say again, the financially challenged ought to be protected from the temptation. The Minister mentioned just now that MSF had estimated that there is this potential group of 4,000 to 6,000 people. I think this is the group that we should really be concerned with.

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The casinos have been a mixed blessing for us. We have seen the benefits, but my feeling is that we have not yet appreciated the true costs. The casinos are here, and if I had to lay my cards, pun intended, I should say that I support their being here. Still, I feel that there should be just two casinos – just two casinos. This is not based on policy theories or an expected erosion of values, but on sheer empirical realities.

Already, stresses on infrastructure can be seen. Jobs for Singaporeans – that was the original reason for the casinos, but now we have jobs looking for people, rather than the other way. I am aware that this is a very needs-based justification for casinos, but this is the reality. The outline of this reality is not laid out by values or futures, but by the physical limits of land. Until we can overcome this in some way, I say, for now, let us pause and say: thus far and no more.

Mr Speaker, thank you for allowing me to speak on the Bill. There continues to be concerns on the social threats and ills of the casinos in Singapore, and there have been very strong voices on the ills that Mr Seah Kian Peng had so eloquently addressed earlier. But I must say that, as his survey has also shown, there have also been voices, ironically, that have argued that exclusion orders and limits to the visits to the casinos are an infringement of personal freedom.

I, personally, having seen the effect of problem gambling on lives of individuals and, more importantly, their families, at MPS, am glad to see the amendments to this Bill as they further strengthen our social safeguard measures.

The Bill seeks to amend the Act, Chapter 33A, limiting the visits to the casinos of those who are financially vulnerable, and the enhancements of the power of the Committee of Assessors to make provisional family exclusion orders or exclusion orders in the absence of the respondent under certain circumstances and to ask for the relevant information.

Clause 15, section 54 of the Bill also seeks to ensure greater calibration in the regulatory responses to breaches by the casinos. To reflect the seriousness of these breaches, the financial penalties will be raised. For the maximum financial penalty imposed in the event of these serious breaches, from the current cap of $1 million to 10% of the casino's annual gross gaming revenue.

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So, I think it is important for us to continue to stress that there can never be enough safeguards against these social ills and that we have to be vigilant while the safeguards are in place.

The amendment of the Act also allows the enhancements of the Casino Control Act to ensure that the IRs – and I stress the Integrated Resorts – continue to develop and maintain to promote their facilities as world-class attractions, not focused heavily on the casinos. I think that is an important point. As the Minister rightly pointed out, when the IRs was conceptualised, they were conceptualised on the basis that the casinos form a small part, and I think we need to make sure that we keep that as the core.

I would like now to touch on the economic benefits and the impact of the Integrated Resorts in Singapore. While we want to see the continued success of the IRs in Singapore, it would be a real concern if the casinos become the main attractions for tourists to Singapore. We are seeing this trend in countries like Macau, where about 83% or more of the government's total revenue comes from gaming in 2011. And an increasing proportion of the working population are dependent on jobs in the sector. This may result in a reluctance in the future to implement measures to limit the growth of the gaming industry.

So, how can we ensure that our economy does not become overly dependent on gaming revenue? I am glad to see that the Bill seeks to amend section 33A of the Act to include the setting up of an independent evaluation panel to assess the suitability for the grant and renewal of the casino licence, to help in some way to ensure that the IRs in Singapore are constantly developing the non-gaming components.

The IRs have so far brought in significant economic benefits. To ensure sustainable economic benefits to the broader tourism industry, the IRs will need to maintain the quality of their non-casino or non-gaming offerings and their competitiveness globally as compelling integrated tourism developments. We are seeing competition intensifying regionally for tourism spending and investments in the tourism sector. It would be appealing in the short term in the face of such competition for IRs to drive for shorter term gains by emphasising the gaming components or to neglect or dilute the integrated concept of the IR development. Therefore, we must ensure that we can continue to maintain the sustainability of the economic benefits of the IRs to the economy by ensuring that we stay committed to developing the non-gaming aspects and not just focus on the casinos.

In that respect, I would like to ask the Minister to also share on some of the performance indicators that would be used to assess the IRs' performance. A key reason for the Government's decision to establish the IRs was that it would be a significant benefit for the economy. There was an assumption that this would in turn mean the creation of good jobs for Singaporeans and business opportunities for local companies. With the IRs operating for more than two years now, it would be timely and useful to examine whether the IRs' presence has, indeed, translated the tangible benefits for Singaporeans and local SMEs. The Minister did share that more jobs have been created. Could he share how many have been generated for Singaporeans and are these good jobs?

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The Minister has also shared that our local SMEs have benefited from the IRs' presence. Could he also provide more insights on how local SMEs have benefited from the IRs' presence?

Ensuring that Singapore continues to be able to balance the negative impacts of gaming by having robust regulations while benefiting from the growth of the IRs will not be an easy one but, as stressed by Mr Seah Kian Peng, will be a very necessary one and a deliberate one. On a broader note, while we continue to strengthen our social safeguard measures to address the social risks and threats of casinos and gaming, I would like to say that while we benefit economically from the IRs, we must ensure that Singapore's overall growth strategy continues to be diversified and does not become overly dependent on gaming. With that, Mr Speaker, I support the Bill.

Mr Speaker, Sir, this is the Casino Control (Amendment) Bill. Casino. Control. I understand the idea is, now that we have the casinos as part of integrated resorts, or IRs, and they have been in operation for two years, we should try to better control their effects on our lives, our economy and our society. For example, this Bill adds, as a new factor for consideration in the grant or renewal of a casino licence, an evaluation of the applicant's economic contribution to Singapore. An evaluation panel will be set up to advise the CRA on matters such as "the visitor appeal of the integrated resort" and "the contribution of the integrated resort to the tourism industry in Singapore" in deciding whether to grant or renew a casino licence.

These are the expected benefits of the casinos — mostly economic. What about the costs — mostly social? Could they be evaluated and considered in a similar fashion when deciding whether to grant or renew casino licences? And could that be written expressly into our laws — through the Casino Control (Amendment) Bill, like the evaluation of economic benefits?

Just as the Bill is trying now to help incentivise the IRs to continue to deliver economic benefits for Singapore by making it an express consideration in the grant or renewal of casino licences, we should give the same pride of place to similarly incentivising the IRs to continue to contain and minimise the social costs incurred by the operation of casinos in Singapore.

It is not easy to quantify the social costs of operating casinos, but researchers have tried. There are extant surveys of the number of problem gamblers and pathological gamblers and the number of other people in society affected by them. There are empirical studies that estimate the medical and social costs of gambling which may include the cost of treatment, counselling of gambler and family and other social welfare services, the cost of loansharking and other crimes and the cost of lost employment and reduced productivity. These could all form the evaluation by any panel or decisions by the CRA on whether to grant or renew a casino licence.

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Individual casino operators could be evaluated in a systemic way on how well they do, in an audit of their sponsorship of responsible gambling programmes for consumer protection. If that evaluation is taken into account in the grant or renewal of casino licences, then it will provide enhanced incentives for the casino operators to commit to responsible gambling. Casino operators could also be evaluated on the basis of how the operations stack up against the international best practices, such as those benchmarked in the Responsible Gambling Index developed by Canada's Responsible Gambling Council.

Sir, it is right that the casino operators shoulder their share of responsibilities to help ensure that the social costs of gambling are minimised, just as importantly as that economic benefits are delivered, and that this be reflected in our laws on the grant or renewal of casino licences.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.55 pm.

Sitting accordingly suspended

at 3.35 pm until 3.55 pm.

Sitting resumed at 3.55 pm

[Mr Speaker in the Chair]

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

Sir, in early 2011, in this House, I cautioned against the potential addiction to easy casino tax revenue and warned that all that glitter is not gold. Then I urged the Government to consider taking the narrower but more sustainable growth path of developing and operating our very own tourism products, MICE industry products, and so forth. And I asked then if there were plans to reduce the casinos to one or none in the future.

Back then, the responses to my questions sounded as though the casinos were here to stay − a done deal − and there was nothing we could do except for the then MCYS to tighten the social safeguards to lessen the social ills.

Sir, my uneasiness about permitting the casino operations in Singapore remains till this day. Singapore is fast becoming a top gaming destination. Revenue generated from the casino industry is seductive but the industry comes with proven social and security ills. In addition, the more successful casino operations appear, the greater the temptation and the opportunity cost to not focus on other more sustainable, value-adding economic ventures.

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This uneasiness was slightly relieved as I study the latest Casino Control (Amendment) Bill.

I am grateful that four Ministries, no less, have now taken tangible steps to address the social, economic and security aspects of casino operations in Singapore. Sir, I support the Bill, but would like to provide inputs on three specific areas: one, on the Evaluation Panel; two, on social safeguards; and three, on online gambling.

First, on the Evaluation Panel. Sir, one of the most prominent amendments, the new section 45 in clause 10 of the Bill is to add an Evaluation Panel appointed by MTI when granting new or renewing casino licences. This Panel is tasked specifically to ensure that the IR operators continue to develop, maintain and promote the IRs as compelling tourist destinations.

But, Sir, as my colleague, Mr Seah Kian Peng, has mentioned, Singapore's IRs are no ordinary tourism products due to their casino gambling component. Our two casinos are located within a small geography in which any criminal and social ills can take root easily. Even as the proponents of the casinos sang praises about how thousands of jobs are created, one does not need to look far to know that the IRs' Human Resource gains are causing stress on the eco-system, leading to the loss of manpower in, for example, other F&B, hospitality and even the cleaning industries.

Because of the multiple impact on society at large, the traditional decision-making model for granting new or renewing existing casino licences needs to be updated. The new section 45 should provide for an Evaluation Panel that is one level higher than that proposed. The Panel should not be under the prerogative of the Ministry of Trade and Industry and individual industry and evaluated based on the KPI of whether the IR, including casino, is still a compelling tourist destination only. The Panel should be an inter-Ministerial one appointed by the Prime Minister's Office and a final decision by the Panel must take into consideration of not just jobs created − the economic aspects − but also an assessment of the degree of transfer of learning for our own economic sustainability; the diversion of manpower to this industry; and the impact on law and order and social resilience. The Evaluation Panel must be open to challenging the given assumption that casinos are here to stay, and the assumption that the decision is only limited to granting or renewing licences.

Second, on tighter social safeguards. Sir, I welcome the changes such as allowing the National Council on Problem Gambling (NCPG) and families to apply for casino visit limits of financially vulnerable people; enhancing NCPG's power to issue casino exclusion orders in justified cases; and the call for casino operators to install more comprehensive and visible Responsible Gambling programmes. These changes strengthen the social safeguards against the vulnerable who do harm not only to themselves but also to their families and friends. And I know, being part of the Government Parliamentary Committee (GPC) for MCYS or MSF, how sincerely and diligently the MSF Minister Chan Chun Sing and his team are, in carrying out this duty of installing further safeguards. But I have one concern.

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Sir, these provisions leave out local residents who are currently not defined as being vulnerable but nonetheless are at risk of becoming financially vulnerable. I recall a resident of mine, an owner of a 3-room HDB flat, asking me several times to make an appeal on his behalf to ask the Government to scrap the annual casino entry levy.

He had succumbed to the glitter of gambling, wanted to make full use of the annual levy he purchased, and lost a lot of money at the casinos. It is also this other group, comprising foreigners who hold work permits, the low-income group, who may enter the casino to gamble even without having to pay an entry levy. In this regard, I once again appeal to the Government to (a) scrap the annual casino entry fee option; (b) increase the per-entry charges; and (c) to find a way to disallow foreign workers on work permits to partake in casino activities.

Third, on online gambling. I also urge the Government to divert resources to hone our expertise in dealing with an up and coming trend in gambling, that is, online gambling. Online gambling is one of the fastest growing preferred gambling modes amongst the young and educated, and especially alarming in a nation as wired as Singapore. One needs only to access http://www.onlinecasinos.com.sg/ to be exposed to some of the most compelling advertisements on why one should gamble online. Let me show you what it looks like.

Let me read to you some of what it says:

"Play at one of the most popular online casinos in Singapore!

There are hundreds of online casinos in Singapore to choose from, but few that will offer you as many benefits for playing with them as we do! [The advertisement says.] Online casinos have become one of the most popular pastimes of our generation, so why not spend your time [It tells the reader] and money at an online casino in Singapore that gives you more value for your dollar?

[The editorial continues] All of our games, ranging from slots, blackjack, roulette and more are developed and designed by expert industry professionals skilled in online casino gaming software. Players can choose between either downloading our casino software to their Desktops or play our games online in browser wherever they are."

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This is what was said in the editorial. The public website then goes on to entice readers with its easy sign ups, welcome offers to new players, loyalty credits, 24/7 multilingual customer support and unlimited free game play. No mention of responsible gambling, whatsoever. So, we need to extend our safeguards and regulatory measures on online gambling and online casinos as well. There is an urgency for the whole of Singapore, Government and the rest of Singapore, to hone our ability to arrest this fast growing global trend of online gambling, before it is too late.

In conclusion, Sir, at the opening of the 2012 International Association of Gaming Regulation, Ministry of Trade and Industry Minister Iswaran said that "the risks (of casinos) will become more complex. Globalisation has led to an increase in transnational crime. Crime syndicates are getting more sophisticated. They use modern business techniques. They also leverage advanced information and communication technology to network with other syndicates, avoid detection by law enforcement agencies or render their illegal activities untraceable." Such is the name of the game.

Sir, the evaluation of the IR-casino strategy should not be made based on pure economic returns anymore. It was with good intent at the time when this strategy was embarked upon in 2005, 2006 and, yes, we should stop questioning the decision made back then. But we have new knowledge and experiences now. Hindsight vision is, of course, always perfect; but now that we see better, we must do better.

Indian political activist Mahatma Gandhi said, "Life is one indivisible whole." One cannot expect to do well in one compartment while not doing well in another, an equal system. We must wean ourselves from such a controversial and worrisome economic strategy. We will never match the sophistication expertise of the smooth casino operators and, at best, can only play catch-up to address the industry's ill effects. Singapore must resolve to engage experts and other fellow innovative Singaporeans to help imagine, create future tourism products that are less controversial and more wholesome. We must believe that our "can-do" Singapore spirit can lead us to develop our own brand of leisure entertainment products, theme park, Universal Studio, even better than that, but without casinos in tow.

Sir, I do not gamble but I was told that the Royal Flush in poker is ranked as the highest hand in the game of poker. It occurs when a player has an ace, a king, a queen, a jack and a ten of the same suit. If you are lucky enough to get a Royal Flush, then you should be sure to bet the entire pot because you will undoubtedly win the pot with the hand. But I was also told that one's best chance to get a Royal Flush in a casino is in the toilet.

Sir, when we reach the expiry timeline of whether to renew or grant new casino licences in Singapore, let us remember this − that the chances of a holistic win – economic, social, moral – for Singapore in this casino business are as good as that of getting the Royal Flush. We should, therefore, work towards exiting from the casino industry. With that hope in mind, I support the Casino Control (Amendment) Bill.

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Sir, I support the Bill's objectives of providing more regulatory oversight over the activities of the casinos in our Integrated Resorts. I would, however, like to comment on some provisions. First, the amended section 153 which introduces the concept of a visit limit. I can understand its rationale. It provides the authorities and families with more options to deal with problem gambling and having more options is rarely a bad idea. However, I am not sure what this option actually achieves.

Sir, I can understand the Government being careful about setting restrictions on people visiting the casinos. There has to be some freedom of choice, there has to be an element of personal responsibility. But I think that assumes everyone behaves in a rational manner. But gambling is not a rational activity, and responsible gambling is an oxymoron. Problem gambling is a disease. In my work as a litigator, I have had to deal with several cases where clients have lost money on account of gambling because the employees or agents stole their money to fuel their habit or where they have been exposed to claims from third parties because their employees have stolen from others.

There is one thing these addicts share − one thing they have in common. It is their unshakeable belief even as they sit in their prison cells that if only they had not been caught so soon, if only they had a bit more time, they would have won all their money back. They acknowledge that the house always wins but believe that it will be different in their case. They tell themselves that they have had a run of bad luck and things were going to turn very soon for them. These are all illusions, a symptom of that disease and the desperation it often breeds. The debate may well continue as to whether it is a good idea to bring gambling to Singapore, whether it is a moral activity, but I think you cannot deny that it is really an irrational way to spend your money.

Sir, the Minister spoke of emerging unhealthy trends in gambling in Singapore. So, in relation to the visit limit, do we really think that limiting the visits of our problem gamblers to the IRs will address or mitigate the problem? He is simply going to find some other outlet and he does not have to try very hard because there are so many options today – Internet, or online gambling, cruise ships, football, horse racing, jackpot machines, Singapore Pools, and the list goes on. If the gambler knows his visits to the IR would be limited, would that not give him an excuse to place higher bets, raise the stakes each time he goes there?

One of the emerging trends, as the Minister has referred to just now, was about people who actually place higher and higher bets each time they go. If we are serious about addressing problem gambling, we should not simply limit the number of visits. I would suggest that we should make it mandatory for the subject, the person, to attend counselling. If we have given the family the power to stop the gambler from entering the casino, why can we not give the power to send him for professional help? And if he refuses to go, he should be excluded altogether, or make it a condition of his appeal if he wants to appeal against the limit ban. That would give him the incentive to attend counselling and get help, and that would be a more effective step in identifying and tackling problem gambling.

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My second comment relates to the amended section 165 which grants the Committee of Assessors the power to exclude or impose a visit limit on a person if it comes to the Committee's attention that the person has a poor credit record. This is a proactive step and I support it. However, my concern is how the Committee may find itself privy to such information. A person's credit record is private and confidential. It is one thing if an individual voluntarily submits such information, though I rarely think it will happen, or a family member provides that information. It is quite another if the Committee receives such information from other sources and acts on it. It seems rather inconsistent that we are nowadays concerned about protecting personal data but appeared to be willing to allow personal information to be used without an individual's consent. Hence, I would like to seek clarification from the Minister regarding the receipt of such information and whether the Committee will act upon information that has not been provided by the individual, or his family members, or at least without his consent.

My final comment relates to the new sections 110, 110A and 110B which collectively set out new regulations pertaining to casino marketing arrangements. I welcome the prohibition against such arrangements involving Singapore citizens and Permanent Residents. However, having junkets or casino marketing arrangements present and operating out of Singapore may lead to an increased exposure to international criminal syndicates and organised crime. I would like to seek clarification as to how such problems may be dealt with under the Act. I would also like to enquire as to what circumstances to justify the suspension of an international market agent licence in the public interest as provided for under the new section 110C.

Sir, there is no doubt that the IRs have provided a tremendous boost to our economy and created many jobs to Singaporeans. Yet, we also concerned by the social costs we have to pay. The fact that the Ministry is taking steps to tighten regulations, including imposing limit visits, suggests a concern over problem gambling, and I hope this is an issue we will continue to keep our focus on.

Mr Speaker, Sir, thank you for allowing me to join in the debate.

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Gambling has always been a part of Singaporean way of life. From the very beginning, our first resident Major General William Farquhar legalised gambling and issued licences to the operators of gambling dens. Over the years, gambling has grown and we have seen the formation of the Singapore Turf Club in 1842 and, of course, Singapore Pools in 1968. The more popular forms of gambling today include the 4Ds and Toto, which have become an integral part of Singapore betting culture, judging from the long queues whenever there is a big draw on-going.

We have also heard many stories of how families came to ruin and stories of loan shark harassment just because of a gambler in the family. I recall there was a run of a TV series called Show Hand "注定" on Channel U last year. Although it was a television series and the stories were fictional, the show accurately portrayed the issues and the challenges that people living with gamblers had to go through. The addiction to gambling can be so strong that the characters constantly turn back to gambling, despite being given many chances to turn over a new leaf.

Sir, in this regard, I rise to speak in support of the Casino Control (Amendment) Bill. The higher financial penalties and the stronger and better measures are essential safeguards to ensure that Singaporeans do not fall prey to gambling and international junkets or immerse themselves further into the culture of gambling.

These changes are necessary just as the casino and Integrated Resort have become an important and essential part of our economy. Thus, while more jobs are created and our economy becomes more vibrant, we need the CRA to have stronger powers to rein in on the possible adverse effects the casino might have on Singapore society. Let us remember that in history, both in Singapore and elsewhere, that excessive gambling has always been viewed negatively and our pioneers have fought strongly for it to be curbed.

Interestingly, within a short span of two years, the casinos in Singapore combined ranked second after Macau, in terms of revenue, outperforming Las Vegas. There are a total of 42 casinos in Las Vegas strip and 33 in Macau. Yet, with merely two casinos, Singapore is able to catapult to such profitability in such an amazingly short period of time.

The Government has always reassured Singaporeans that the gambling situation in Singapore is under control. I would like to ask the Minister what percentage of patrons to the two casinos are Singaporeans and Singapore Permanent Residents (PRs) and how much of the revenue is contributed by the expenses of Singaporeans and PRs. In this regard, is the $100 levy imposed on Singaporeans and Singapore PRs sufficient and effective in discouraging Singaporeans and PRs from trying their hands in challenging Lady Luck?

While I support the imposition of a limit on the visitations to casinos, I am, at the same time, apprehensive about its effectiveness in curbing gambling activities on vulnerable patrons. Having a visit limit system will not address the concerns of increased gambling losses from increased quantum of bets. In fact, some sceptics believe that the imposition of a visit limit may, in fact, increase gambling intensity. A plausible solution to complement the visit limit system would be to impose an additional loss or bets limits on these vulnerable patrons. Alternatively, the Government should also consider a hardline approach of excluding these individuals altogether, once they have been identified as financially vulnerable, rather than offering such an intermediate option.

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In addition, under section 170B, the Bill has been amended to make the casino operator accountable for a responsible gambling programme at all times. While it is useful for the operator to be accountable for such responsible gaming measures, I am especially concerned as there is an inherent conflict of interest. The casino operator would be more concerned with profit, and the prevention of persons from engaging in more gambling might be a tough call. One consideration is to institute a neutral third party in the arena to identify and counsel potential problem gamblers. This neutral third party can be funded by the casino. The National Council on Problem Gambling (NCPG) is already doing much with regard to the promotion of responsible gambling. Can it not be granted the powers and funds to do immediate policing on the ground? Maybe we can have NCPG officials police the casino grounds to ensure responsible gaming and identify high-risk individuals.

Sir, I also support the amendment to increase the maximum penalty for disciplinary action against casino operators from the current $1 million to 10% of a casino's annual gross gaming revenue. This is a very strong signal to operators about the Government's resolve in responsible gaming activities in Singapore and would also encourage the casino operators to constantly review and improve on processes to ensure that they are always compliant with the rules and regulations.

The strategy to ensure the Integrated Resorts bring sustained economic benefits to Singapore in the areas of job creation and promoting tourism must be maintained, if not enhanced. There is no doubt that the two IRs, since their opening, have value-added to our economy and created many job opportunities for Singaporeans. However, the IRs need to keep up the development and promotion of non-gaming attractions to remain as a compelling tourist destination. The formation of an Evaluation Panel (EP) to advise CRA on the IRs' performance on the non-gaming aspects is thus timely and essential. This will help ensure the sustainability and attractiveness of the IRs to the tourists from all over the world. We need to look long term into the future and not just take a myopic view of just using the casino gaming to attract tourists.

While the changes to the Act show our seriousness in preventing problem gambling in the casinos, there are other forms of gambling in Singapore which can similarly wreck families and ruin lives.

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Sir, I recently met one resident whose mother was a gambler. He had tried to stop his mother from gambling, but because of the prevalence of jackpot rooms in clubs, she still frequents such legal joints, without having to pay entrance levies. These legal joints – some of which are available in the heartlands – provide gaming activities to the masses, without the usual safeguards seen in the casinos. With the amendments to the Casino Control Act, is it time to also send a more consistent message to these jackpot clubs which are part of the ecosystem of gambling? Should they not be subjected to the same regulations or rules as the casinos?