Wednesday, 6 February 2013

Parliament Highlights - 5 Feb 2013 - Debate on the Population White Paper Day 2

MPs spar over WP plan to grow local workforce, cap foreign labour
By Rachel Chang, The Straits Times, 6 Feb 2013

DAY Two of the parliamentary debate on the Population White Paper was dominated by exchanges between MPs on the Workers' Party's alternative population road map.

The WP plan envisions growing the resident workforce at a rate of 1 per cent a year through attracting more locals back to work. If this is achieved, the WP wants the tap on additional foreign labour turned off, and for the size of the foreign workforce to remain at the current level.

Coupled with productivity gains of 2 to 3 per cent, the WP says that would yield economic growth of about 2.5 per cent to 3.5 per cent from now until 2020.

In line with party chairman Sylvia Lim's argument that the citizen core must be made up of "born and bred" Singaporeans, the WP also wants a cap of 10,000 a year on new citizens. This is lower than the projected 15,000 to 25,000 in the Government's White Paper.

The WP plan drew strong reactions from the PAP side of the House. Ministers and MPs rose to question if the WP wanted to kill local businesses, and pressed it for concrete plans on how to lure more senior citizens and women back to the workforce.

Acting Manpower Minister Tan Chuan-Jin said that a slew of such initiatives was already in place. The labour force participation rate of older Singaporeans is already among the highest in the world, he added.

In response, WP MP Chen Show Mao (Aljunied GRC) and Non-Constituency MP Gerald Giam said that more can still be done. Mr Giam said that local businesses must restructure away from dependence on foreign labour and that the Government should help them do it now while the country's budget is healthy, and not later, when Singapore is "bursting at the seams" with 6.9 million people.

Second Minister for Trade and Industry S. Iswaran asked if the WP's stiff approach towards foreign workers extended to sectors like construction, where firms find it very difficult to attract Singaporeans.

PAP MP Inderjit Singh (Ang Mo Kio GRC) said this was callous to small and medium-sized enterprises, which need time to adjust their business models. The WP plan would not accelerate restructuring; rather, he said, it would "kill companies".

In a hard-hitting speech, Mr Singh also told the front bench it "missed the mark over the last 10 years" and that many Singaporeans do not have the confidence that the PAP Government can handle another steep spike in the population.

His plea to aid local businesses suffering from the curbs on foreign labour was echoed by Nominated MP Teo Siong Seng, who issued a stark declaration that enterprises "will not survive" workforce growth falling below 1 to 2 per cent a year.

As soon as the sitting ended yesterday, the Singapore Business Federation issued a statement disagreeing with the WP proposals to have no additional foreign workers till 2020. It would be "disastrous" for the economy and "does no one any good", it said.

While on Day One most MPs focused on the negative reactions to the White Paper, yesterday several showed their strong support of it. MPs like Ms Jessica Tan (East Coast GRC) and Minister of State for Health and Manpower Amy Khor (Hong Kah North) said it showed a serious government planning for the future. Dr Khor called it a "bold step" to bring a contentious topic to the table now.

Lively debate on benefits and dangers of WP plan
Key question: the effects of a cap on foreign workers
By Rachel Chang, The Straits Times, 6 Feb 2013

THE Workers' Party fleshed out its alternative population road map in Parliament yesterday, one that envisions growing the local workforce at 1 per cent a year and capping the inflow of foreign labour at current levels.

It drew immediate questions from the PAP front bench and backbenchers, who warned that the plan would kill companies.

The WP plan projects that local workforce expansion, coupled with productivity gains, will create economic growth of 2.5 per cent to 3.5 per cent from now until 2020, Non-Constituency MP Gerald Giam said.

Beyond that, as productivity gains slow, the WP is aiming for economic growth of 1.5 to 2.5 per cent from 2020 to 2030.

It wants to see the workforce grow primarily through attracting economically inactive locals back into the labour market, he said.

According to the Labour Force Survey of 2012, there are 418,000 such residents, of whom 90,000 are willing to work.

By expanding the local workforce, the WP wants to then stop the inflow of more foreign workers.

Mr Giam stressed that forcing local businesses to restructure away from their dependence on foreign labour and focus on productivity growth would raise wages for locals - which in turn would attract more locals to enter the workforce.

He noted that the workers' wage share of gross domestic product here, at 42.3 per cent, is small compared to that of most other developed countries.

But several PAP backbenchers and ministers said that the WP's plan to turn the tap off on foreign labour was unrealistic and would sound the death knell for many small and medium enterprises.

Describing the WP's plan as a "zero tolerance approach" towards foreign labour, Second Minister for Trade and Industry S. Iswaran asked if the WP would deny even sectors that Singaporeans shun, like construction, more foreign labour.

He probed Mr Giam repeatedly on whether the WP wants to freeze immigration before the NCMP replied that the party would take in new citizens of up to 10,000 a year, considerably lower than the 15,000 to 25,000 a year that the White Paper projects.

Mr Giam said that the need for low-productivity sectors to restructure is not a matter of "if" but "when", and that the Government should help them to do so now while the budget is healthy, rather than later when the country is "bursting at its seams".

To further questions, he emphasised that the WP is not an "anti-immigrant party" and that it welcomes foreigners who can contribute.

But it wants to keep the foreign workforce at the current level of 1.4 million - replacing those who leave with newcomers. Its goal is not to turn the tap of foreign labour off, but rather see local workforce expansion power economic growth, he said.

But Mr Inderjit Singh (Ang Mo Kio GRC) said that the approach was callous to local SMEs, which will need time to change their business models. The WP's plan, he said, "is not going to accelerate restructuring; it's going to kill companies".

The "how" of the WP plan also drew a flurry of questions from the PAP side.

In his speech, WP MP Chen Show Mao (Aljunied GRC) zeroed in on senior citizens and the foreign spouses of citizens as groups that can be tapped further to augment the resident workforce.

Currently, foreign spouses here on long-term visit passes must apply for work permits before they can take up jobs, and about a fifth are rejected, he noted. It is especially hard for those who want part-time work, so that they can take care of their kids, to find arrangements, he said.

There is also scope for senior citizens to contribute more and for longer, he said, adding that the Government should stop seeing senior citizens as a drain on the country's resources.

"An ageing population is a triumph of development," he said.

To this, Acting Minister for Manpower Tan Chuan-Jin (Marine Parade GRC) pointed out the schemes already in place to attract more homemakers and seniors to the job market.

For example, there is the Special Employment Credit to incentivise employers to hire older workers.

He asked the WP MPs for concrete new proposals on how to boost the labour force participation rate of senior citizens, which is already one of the highest in the world at 64 per cent.

Mr Chen said that Mr Tan's call reminded him of "the person who claims that quitting smoking is easy because he has done it a hundred times".

"We may well have programmes already in place, but unless we are saying there is no more room for us to grow in these directions, (the WP) is proposing that we focus (more) resources in these important directions instead of importing more foreign workers," he said.

Mr Tan rejected the suggestion that this was the Government's approach, pointing out the measures in place, from skills retraining to boosting productivity.

In all these, the Government's goal was to "generate the level of growth (at which) we can provide for our people".

If this can be achieved through productivity gains or more locals entering the workforce, then "it obviously allows us flexible space in terms of the foreign labour numbers as well".

To this point, Mr Giam said: "This is not in contradiction to what we have said.

"With increased labour force participation, we can achieve a reasonable GDP growth without having to import a whole lot more of foreign workers."

When the session ended, both men were seen deep in discussion in a corner of the chamber. Mr Tan said on his Facebook last night that he had a "nice long chat" with Mr Giam on his team's suggestions. There were common perspectives, but also differences, he noted. "Some differences lie more with degree rather than trajectory. But best to debate it in Parliament!"

Crossfire in Parliament
Second Minister for Trade and Industry S. Iswaran (West Coast GRC): Does the WP's zero tolerance for foreign workers extend to sectors like construction and others where we are having great difficulty finding Singaporeans to do the job?

Non-Constituency MP Gerald Giam: Firstly, we do not have a zero tolerance policy towards foreigners. The WP is not an anti-immigrant party and we welcome foreigners who come here to contribute to our economy. On sectors like construction, we have said that we don't see a need to increase the foreign labour force numbers. It does not mean that we kick out all the foreigners right now (but) that we maintain the numbers that are here and replace those that leave. It is not our goal to hit zero foreign worker increments; our goal is to hit that 1 per cent resident workforce.

Mr Iswaran: I'm surmising from this that the WP position is that you presume 1 per cent growth in the resident workforce and in that context there is no increase in foreign worker numbers in Singapore even if it means construction and other sectors that are having difficulty getting those workers from the Singapore pool are unable to do so.

Mr Giam: The short answer to that question is yes. And I believe that we can attract workers into the different sectors if the wages are raised and there's proper retraining that's available to the workers.
Mr Giam: (Mr Inderjit Singh) gave the impression that the WP doesn't care about companies folding up because of the lack of manpower. I share the concern for the well-being of our companies, but the question is not if companies should go through restructuring but when. So I'd say there's no better time than now to go through this when our budgets are healthy. The Government must be prepared to bear a significant part of this (cost of restructuring).

Mr Inderjit Singh (Ang Mo Kio GRC): If the WP cares about SMEs, then I think we would not have seen this proposal of zero growth in the foreign labour simply because if you have your feet on the ground, you would have known that SMEs are suffering right now with the current policy of still growing but growing at a slower rate. And we just heard yesterday from the (foreign) chambers of commerce that they too are going to leave Singapore if we do not address this issue.

Mr Giam: If the Government really cares about SMEs, they will help the SMEs go through the restructuring and bear the cost of that because that's where the long-term benefits will come.

Mr Singh: Yes, we need to focus on productivity improvements, but it's going to take us a bit more time because companies have got a certain business model that they're used to. Business models cannot change overnight. So if you really care about companies, then we will not tighten the labour workforce any further. Give them a chance, a longer time horizon, to restructure and then talk about tightening the labour force. But what the WP is proposing is just shut off the tap right now. That is not going to accelerate restructuring; it's going to kill companies.
Acting Minister for Manpower Tan Chuan-Jin (Marine Parade GRC): A key component of your strategy is to beef up labour force participation rates to such a stage that we actually do not need more foreign workers. I'm very interested to know what the initiatives and ideas are that would bring that about. It's not the rhetoric that's important. Governance is about how you translate ideas, visions into reality.

Mr Giam: "I'm not sure why the minister seems to be implying that we're just doing rhetoric. We intend to push for measures to increase the labour force participation rate. We've mentioned things like flexi-work, telecommuting, part-time work. But I think one area that's a very important way of increasing labour force participation rate is to raise wages. This increases the opportunity cost of people staying at home. I think we appreciate the work-life balance measures that MOM is taking. But I think there's more that can be done and this is one way.

Mr Tan: The Government's goal isn't GDP growth. It's to provide a level of economic growth to improve the quality of life for our people. We agree with the WP on that. The question is how do you bring that about. These things don't happen naturally. There are challenges, there's competition. Whatever we do, other countries are doing as well. So we need to be in cognisance of that. If we are successful in bringing up the labour force participation rate, if we can improve our birth rates, if we can also reach the productivity targets, that gives us policy space to not necessarily ramp up the foreign labour force as needed.

Proposal to amend motion's wording
By Goh Chin Lian, The Straits Times, 6 Feb 2013

PEOPLE'S Action Party MP Liang Eng Hwa has proposed a change in the wording of the motion seeking Parliamentary endorsement of the Population White Paper.

The Holland-Bukit Timah GRC MP felt the move would better reflect Singaporeans' concerns on maintaining a strong citizen core and resolving current infrastructure bottlenecks.

His call yesterday was supported by Minister in the Prime Minister's Office Grace Fu, who oversees population matters, and Mr Patrick Tay (Nee Soon GRC).

On Monday, Deputy Prime Minister Teo Chee Hean had moved a motion to endorse the White Paper as the "population policy road map to address Singapore's demographic challenge" and the Land Use Plan to "support Singapore's future population".

Mr Liang wanted the motion to make clear that the population projection beyond 2020 is for land use and infrastructural planning, and not a population target, a point he said Mr Teo had also raised in his speech. So, he suggested deleting the words "population policy" from the motion and adding that the Land Use Plan was to support Singapore's future population "projections".

He also asked to tag on a statement to reinforce Parliament's support for maintaining a strong Singaporean core by encouraging more Singaporeans to get married and have children, to be supplemented by a calibrated pace of immigration to prevent the citizen population from shrinking.

His amended motion called on the Government to do four things:
-Place priority on resolving current strains on infrastructure, particularly in transport;
- Plan, invest in, and implement infrastructure development ahead of demand;
- Ensure that the benefits of population policies, such as better job opportunities and salaries, flow to Singaporeans; and
- Carry out medium-term reviews of population policies and assumptions to take into account the changing needs of Singapore and Singaporeans, as well as changing domestic and external circumstances.

He said: "My belief is that we will not get the buy-in from Singaporeans on our long-term plans if we do not demonstrate and commit to Singaporeans that we are serious in resolving our current bottlenecks and that going forward, we will plan and invest in infrastructure ahead of demand."
Speaker of Parliament Halimah Yacob proposed, for convenience, to proceed with the debate on the original motion and any amendments simultaneously, as a debate on a single question.

The House agreed, and no vote was taken on the amendment.

Ms Fu later praised the amended motion for clarifying the Government's intentions and taking in many of the MPs' concerns.

Amy Khor says WP proposal on White Paper on Population will hurt businesses
By Leonard Lim, The Straits Times, 5 Feb 2013

A DAY after the Workers' Party attacked the White Paper on Population and offered its own alternative, Minister of State (Health and Manpower) Amy Khor said their proposal could hurt the very people it wants to help.

The WP's idea to sharply cut workforce growth to 0.5 per cent a year from 3.3 per cent per annum over the past three decades would "exact punishing cost" on local businesses and some multi-national corporations, she said on Tuesday, in a sharply-worded response to WP chairman Sylvia Lim.

"Under this scenario, many companies are likely to fold or move out of Singapore whilst others will not be attracted to set up shop here resulting in fewer jobs for Singaporeans," said Dr Khor.

Already, many businesses are complaining of tighter immigration policies, she said. To curb immigration or foreign workforce growth to safeguard citizens could, ironically, "hurt the very people this reversal is intended to help".

Putting the ball back in the WP's court, Dr Khor said it will be instructive to find out how the opposition party's MPs explain how the proposed 0.5 per cent workforce growth annually will translate into growth in resident and foreign workforce, and the number of new citizens and PRs.

Dr Khor also took aim at Ms Lim's argument that the white paper's focus on a "strong Singaporean core" was an empty one, with the share of Singaporeans projected to fall to 55 per cent of the population in 2030 from the current 62 per cent, and will include new citizens.

Asking whether the fact that she was not born in Singapore made her any less Singaporean, Dr Khor said: "It is unhelpful and unfair to distinguish between local born Singaporeans and new citizens and cast doubts on the loyalty of the latter."

Singapore 'cannot expect that growth will just happen'
By Leonard Lim, The Straits Times, 6 Feb 2013

WHILE it is important to mitigate any negative impacts of economic growth, Singapore cannot take for granted that growth will just happen, East Coast GRC MP Jessica Tan said yesterday.

Laying down a strong defence of the White Paper on Population, she used the example of a business to make the case that Singapore cannot ignore growth. A successful business, she said, must balance costs and growth.

"If we all just focus on cost... (in the) short term, it will solve problems but there will come a time when it's not going to be enough, then you're going to need to grow. And if we don't invest early to grow, we're not going to be able to catch up," she said.

She stressed that growth was what brought good jobs to Singapore. She said: "We talk about making sure Singapore has quality jobs. Where are those jobs going to come from without growth?"

She was speaking towards the end of the session that saw WP parliamentarians put forward a plan that called for a gross domestic product growth rate that is about 0.5 to 1 per cent lower than that projected in the White Paper.

The WP also proposed that the foreign workforce growth be kept at zero for the next few years, assuming the resident labour force participation rate can be raised by 1 per cent annually.

But Ms Tan expressed concern at this and its impact on Singaporean businesses already strapped for workers.

She said: "Every week I make appeals for small and medium enterprises (SMEs) to get workers, because they provide jobs for us. Do I tell the SME (boss) who comes and sees me, a father of three or four children and who employs 10 Singaporeans that, sorry, I don't have people for you?"

Delay population growth for 5 years: MP
Focus instead on infrastructure and integration issues, says Inderjit Singh
By Leonard Lim, The Straits Times, 6 Feb 2013

VETERAN PAP MP Inderjit Singh wants the Government to delay population growth for five years.

Political leaders should focus instead on fixing infrastructure bottlenecks and social integration issues caused by the rapid expansion of the past, and earn back the trust of citizens, he said yesterday.

If economic growth is imperative, he suggests slowing the intake of new citizens and permanent residents (PRs), and adopting Dubai's model of a transient workforce.

That means Singapore can continue to expand its economy, but have more flexibility in managing population numbers in the longer term.

The Ang Mo Kio GRC MP, giving a speech that was critical of the Population White Paper and had many in the House listening in rapt attention, felt that many in Singapore were diffident about a new surge in population.

"At this stage, many Singaporeans from all walks of life don't have the confidence that we can handle another steep growth of the population, so let's not push it," he said.

To illustrate, he pointed out that Singapore's resident population has grown by more than a million in the last decade. The total population soaring from 2.4 million in 1980 to 5.3 million today could also be the world's fastest rate of growth, he said.

Mr Singh then turned his gaze on the number of new citizens and PRs to be taken in each year, saying that he had a "big issue" with it.

The White Paper projects that 15,000 to 25,000 new citizenships will be given each year, similar to the average of 18,500 each year in the past five years.

As for PR status, it plans to give it to 30,000 foreigners annually, as it has done in the past three years.

But adding another 500,000 to 800,000 more PRs and citizens in the next 17 years, as proposed, will be "disastrous", said Mr Singh. He believes it will further worsen the current infrastructure and social problems.

Calling for a better balance between economic growth and social cohesion, he said he was willing to adjust his growth expectations for a more comfortable life for all citizens and stronger social cohesion.

Time and energy should also be channelled towards achieving the goal set by former prime minister Goh Chok Tong of a Swiss standard of living for most Singaporeans, he added.

He then used an analogy from one of his parliamentary speeches in 2008, and urged the Government to abandon the "instant tree mentality" in trying to grow the population to counter the declining birth rates.

"Instant trees cannot grow strong roots and can be uprooted in difficult times. I don't think we can live with a 6.9 million population in 2030.

"We may be able to handle it in 2050, no one really knows.

"(But) I'd rather we err on the side of caution when it comes to growing our population. We cannot keep paying a high price for planning misjudgments."

"Promoting marriage & parenthood" central to keeping Singaporean core: Grace Fu
By Imelda Saad, Channel NewsAsia, 5 Feb 2013

Minister in the Prime Minister's Office Grace Fu has rebutted the notion that bringing in more foreigners would dilute the Singaporean identity.

That was one area of concern raised by several MPs, including the opposition Workers' Party, during the parliamentary debate on the Population White Paper and Land Use Plan.

Ms Fu said promoting marriage and parenthood is central to maintaining a strong Singaporean core and that allowing immigration does not mean the government takes its marriage and parenthood objectives less seriously.

Over the two days of debate, several MPs have questioned what it means to have a Singaporean core with more foreigners in the midst.

Addressing this issue, Ms Fu said encouraging marriage and parenthood remains top priority.

She pointed to the recently enhanced Marriage and Parenthood package aimed at supporting parents in balancing work and family life, supporting shared parental responsibility and defraying the cost of raising children.

While the government is "hopeful" and "ambitiously" looking forward to improving the Total Fertility Rate (TFR) to between 1.4 and 1.5 from the current 1.29, authorities are also realistic about how quickly birth rates can improve, said Ms Fu.

"In the meantime, we continue to have to address the shortfall of births, and our approach has been to supplement our citizen population with a calibrated pace of immigration," she said. "Allowing immigration does not mean that we do not take our marriage and parenthood objectives seriously."

"Members have spoken on the risks of taking in too many immigrants too quickly. It takes time and effort for our immigrants to understand and adapt to our norms. If the texture of society changes too quickly, we will experience a sense of displacement and an erosion of our national identity. We understand the concerns of Singaporeans of feeling displaced in their country," added Ms Fu.

She framed Singapore's population as three concentric circles.

The outermost ring comprises non-resident workers - transient workers whose numbers can be reduced when the economic situation requires it.

The second ring consists of permanent residents (PRs), many of whom have worked or studied in Singapore for many years and some even served National Service, said Ms Fu.

At the core are the citizens.

"All our policies are designed to ensure that citizens get the lion's share of any privileges and benefits, in recognition that this is their home. We have relentlessly improved our healthcare, education, marriage and parenthood, and other benefits given to Singaporeans only," said Ms Fu.

Ms Fu noted that new citizens would have made the commitment to sink their roots in Singapore.

"So, to become a Singapore citizen, they would have spent a few years as PRs and before that a few years in Singapore. When assessing their situation, we consider a holistic set of criteria. We evaluate not just their economic contributions but also their ability to integrate and sink roots into our society as well," she said.

But integration efforts are a critical complement to the immigration policy and efforts in this area are being stepped up, for example, through schools and the workplace, as well as looking into new touch points such as through sports and the arts.

Speech by Minister Grace Fu at the Parliamentary Debate on the Population White Paper from NPTD PMO on Vimeo.

Ms Fu also addressed several Malay MPs' concerns over the impact of immigration on Singapore's racial balance.

She said: "The proportion of Malays in the citizen population has been stable over the years, from 14.9% in 2000 to 15.1% in 2010. Malays constitute the second largest ethnic group after the Chinese, and will continue to do so for the foreseeable future. It is our policy to maintain the ethnic balance in the citizen population as far as possible."

Wrapping up, Ms Fu said: "In our deliberations on what is the best way forward for Singapore, Singaporeans were at the heart of our considerations, and a strong Singaporean core was our objective. What does this mean?

"In my view, a strong Singaporean core is one where Singaporeans have a sense of well-being and belonging in a place where we can all call 'home'. Well-being comes both from the tangibles - having fulfilling jobs and a good quality living environment - as well as the intangibles - strong supportive families, values that connect us and a collective hope for a brighter future."

The White Paper is designed to give future generation of Singaporeans the most options for a better life, said Ms Fu.

Malay share of citizen population to stay
By Janice Heng, The Straits Times, 6 Feb 2013

THE proportion of Malays in Singapore's citizen population will be maintained, Minister in the Prime Minister's Office Grace Fu said yesterday.

She gave the assurance when replying to two Malay MPs who had noted on Monday the Malay-Muslim community was worried its population share might fall.

They were Dr Intan Azura Mokhtar (Ang Mo Kio GRC) of the People's Action Party and Mr Muhamad Faisal Abdul Manap (Aljunied GRC) of the Workers' Party.

Ms Fu said the Government recognises the need to maintain the racial balance "to preserve social stability".

"The pace and profile of our immigration intake have been calibrated to preserve this racial balance," she added.

She also said that the Government's policy is "to maintain the ethnic balance in the citizen population as far as possible."

The proportion of Malay citizens has stayed stable, from 14.9 per cent in 2000 to 15.1 per cent in 2010, she noted.

But in the resident population - made up of citizens and permanent residents - the share has dipped, from 13.9 per cent in 2000 to 13.4 per cent in 2010.

Earlier in yesterday's debate, Mr Zainudin Nordin (Bishan-Toa Payoh GRC) took issue with Mr Faisal's comments on Monday about the Malay community's concerns about equal opportunities.

Mr Faisal had said that "the issue of equity is still lingering in the minds of the Malays".

Yesterday, Mr Zainudin defended Singapore's meritocratic system, saying it gives opportunities to all regardless of background.

Speaking in Malay, he said the Malay-Muslim community should be proud of its achievements under this system, like the higher educational attainment of the community and the rising proportion of Malay-Muslim professionals, managers and executives.

He asked if the WP's position was that there should be a special programme for the community.

Replying, Mr Faisal clarified that what he said on Monday were not the views of his party, but the community.

He hoped the Government could provide explanations to reduce the community's worries about inequity.

To that, Mr Zainudin said MPs themselves should not give the wrong impression.

More plans to boost bus services
Private operators may run localised routes to MRT stations, says Lui
By Goh Chin Lian, The Straits Times, 6 Feb 2013

PRIVATE bus operators may boost Singapore's public bus service by adding to the 550 new buses the two public bus companies are expected to put on the road over the next five years.

They could run new, shorter and localised routes that ferry people to MRT stations, Transport Minister Lui Tuck Yew told Parliament yesterday.

He did not elaborate, but The Straits Times understands that commuters would have more direct and frequent connections to MRT stations within a housing or industrial estate and buses would be less crowded too.

These plans would be on top of having more morning peak-hour services from Housing Board estates to the city via expressways.

Mr Lui said: "This will allow us to scale up the Bus Service Enhancement Programme beyond the 550 buses that the two public bus operators are committed to implement, and give us the resources to implement more new routes and other service improvements."

The $1.1 billion government programme pays for SBS Transit and SMRT to roll out 550 buses over five years to improve frequencies and add new services.

Speaking during the ongoing debate on the Population White Paper, Mr Lui dwelt on other improvements to the public transport system, from increasing train capacity into the Central Business District (CBD) to improving the reliability of bus timings.

Members of the public and MPs have expressed scepticism that Singapore can cope with a 30 per cent increase in population by 2030, given the overcrowding and strain on public transport in recent years.

Mr Lui admitted that despite a plan to double the rail network by that year, it was not easy for many to see the benefits.

"What we have experienced in public transport in the last few years has affected how we view the future," he lamented. "But I do believe we will begin to see a gradual but noticeable and perceptible improvement in the next five years."

One measure is the increase in train capacity, as the Downtown Line opens over the next five years, along with resignalling work and new trains being added on existing lines.

He also expected less crowded trains to the CBD in the morning peak hour in five years' time, as train capacity is set to expand faster than ridership.

Mr Lui said a new scheme would be tried out later this year to improve the reliability of some bus services. He is keen to try out what he learnt from London and Seoul, which reward and penalise operators based on commuters' expected waiting times.

Operators there have to invest substantially to monitor their buses and act to make sure buses arrive at more regular intervals along the entire route, he said.

To give buses more priority on the roads, Singapore will also add about 30km of bus lanes and quadruple the number of larger bus stops to 40.

Private bus operators told The Straits Times they might be tempted to step up, if the new offers are better under the financing framework where the Government bears the risk of fare revenue and the operator is paid a fee to run the service. But they pointed to a shortage of drivers, as Singaporeans are reluctant to do the job.

Of Woodlands Transport's 240 drivers, 22 per cent are foreigners, mainly from China, said its general manger Roger Wong. It is still short of 30 drivers.

Said Xing Sheng Transport Services operation manager Lim Yong Long: "We can do it if the Manpower Ministry is willing to relax the foreign worker quota."

Profit-driven model works for transport sector here: Lui
Fares here lower than in other cities, he says
By Jermyn Chow, The Straits Times, 6 Feb 2013

SINGAPORE'S operating model that lets profit-driven companies run the public transport system works because commuters pay on average less than folks in cities where other models are used, said Transport Minister Lui Tuck Yew.

Fare hikes have also been smaller, he added.
But the Government is willing to consider other models, he told Parliament yesterday.

He was replying to Mr Baey Yam Keng (Tampines GRC) and Dr Lily Neo (Tanjong Pagar GRC), both of whom had asked if it was feasible for the public transport system to be nationalised instead of leaving it in the hands of profit-driven operators.

Citing figures, Mr Lui said Singapore commuters are better off than their counterparts in cities such as New York and London, where transport systems are government-run.

For instance, bus and train fares in Singapore inched up by 1 per cent in 2011, after two successive years of decrease.

In London, fares have soared since 2009 (see table).

Mr Lui said Singapore's public transport model must be cost-efficient and financially-disciplined, and having profit-driven companies "run the day-to-day operations helps us achieve this".

On the other hand, restricting their ability to make profits will give them less of an incentive to keep costs down and improve productivity - a scenario that will be a "heavy burden on the state and ultimately on the taxpayers".

"The concern is that this will lead to higher fares or larger government subsidies, both of which are not to the benefit of Singaporeans," he said.

Dr Lim Wee Kiak (Nee Soon GRC) suggested having a model along the lines of the cooperative that runs NTUC's FairPrice supermarkets.

Mr Lui, while stressing that Singapore will look at all options, said an affordable and sustainable public transport system will require a "balance of responsibilities" between commuters, public transport operators and the Government.

This can be achieved with a robust regulatory framework that tightens rail service standards and requires transport operators to invest more to improve service levels and reliability.

He said the Land Transport Authority will complete a regulatory review in a few months' time.

Mr Lui also reiterated that the Government is "fully committed to keeping public transport fares affordable".

To do so, it is looking at different income levels and various vulnerable groups that need "special help" should fares go up.

This also includes polytechnic students who do not receive the subsidies given to other students. Mr Lui said the specially appointed fare review committee will look into it as it re-examines the fare formula.

He also said seven small fare adjustments were made from 2003 to last year.

Between 2006 and 2011, fares rose cumulatively by 0.3 per cent, while diesel prices went up by about 55 per cent and national wages by more than 25 per cent.

These varying increases have put downward pressure on wages for public transport employees, said Mr Lui.

Given the worsening financial health in the bus industry, he said it will be a challenge for transport operators to "do more without fare increases or government subsidy".

SMRT to spend $1.75 billion on rail system
By Royston Sim, The Straits Times, 6 Feb 2013

TRANSPORT operator SMRT will spend about $1.75 billion between now and 2019 to upgrade and purchase assets for its rail network, said Transport Minister Lui Tuck Yew yesterday.

The operator will pay about $1 billion in 2019 to buy over the first set of Circle Line operating assets from the Government.

SMRT will spend another $750 million on two items. First, it will purchase more trains for its MRT and LRT lines - this includes 24 new trains for the Circle Line.

It is also embarking on a resignalling project to improve train frequencies on the North-South and East-West lines.

Mr Lui revealed the figures in response to Nee Soon GRC MP Lee Bee Wah's query in Parliament. Several MPs had tabled questions about the financials of the two public transport operators (PTOs).

Non-constituency MP Gerald Giam asked Mr Lui what was a reasonable return on equity (ROE) for the operators, below which fares had to be increased or subsidies provided to them.

Mr Lui replied that the ROE is not an appropriate measure of public transport operators' profitability.

He noted that the ROE covers all of the company's businesses, including those which may not be related at all to rail and bus operations.

Fundamentally, the ROE also hinged on a company's financial arrangements and capital structure, Mr Lui said.

He added: "It does not always correlate closely to profitability at the operating level of a PTO's public bus and rail businesses, with which we are concerned."

A more common measure of profitability for asset-heavy companies such as transport operators is the return on total assets (Rota), he said.

Rota assesses the level of pro-fits the company generates for every dollar of assets.

Recommended by the 2005 Fare Review Mechanism Committee, Rota is one area that the Public Transport Council currently looks at when deciding on fare adjustments.

Mr Lui said SMRT's current Rota is about 7.6 per cent, and SBS Transit's is about 4.9 per cent - generally in the range of other public transport operators.

Still, he noted that Rota also had limitations. First, investments needed for public transport fluctuate, so "we should avoid being overly seized with the Rota on a year-to-year basis", he said.

The Rota for the operators also does not include assets which they are already using to generate revenue but have yet to purchase from the Government, he added.

COE categories for cars could be reviewed
Govt also studying how to help small businesses deal with rising premiums
By Christopher Tan, The Straits Times, 6 Feb 2013

THE Government could allocate certificates of entitlement (COEs) for cars according to measurements other than engine capacity.

It is also looking at ways to help small businesses cope with rising premiums.

Minister of State for Transport Josephine Teo revealed this yesterday in response to a flurry of questions in Parliament from MPs about soaring COE prices that are now close to $100,000 for cars and about $60,000 for goods vehicles.

The COE supply for the two groups has shrunk to 2,199 per month, from 3,022 two years ago.

To a suggestion from Mr Ang Wei Neng (Jurong GRC) on grouping COEs according to the open-market value instead of the engine capacity of the car, Mrs Teo said that was one valid way "in which we could rethink how COE categorisation can be done".

The open-market value approximates the cost price of a car before taxes.

It was the second time in four weeks that the Government has said the COE system could be reviewed.

Last month, Transport Minister Lui Tuck Yew said his ministry was looking closely at "the many suggestions we receive" to improve the 23-year-old system.

Yesterday, Mr Ang also pointed out that the share of COEs allocated to smaller cars had shrunk considerably in the last 10 years while that for bigger and luxurious cars had grown.

The latter now has a bigger supply of certificates, he said.

Mrs Teo said this was precisely why the Government had recently adjusted how Open category certificates - which are used almost exclusively for bigger cars - are recycled back into the system.

From this month, the Open category will be made up of 15 per cent of COEs from each of the other four categories - down from 25 per cent last year.

Dr Lim Wee Kiak (Nee Soon GRC) noted that when "BMW and Mercedes are the top-selling cars in Singapore, something is wrong". Toyota and Nissan used to be at the top, he said, adding: "It seems that the middle class and the smallest cars are being completely squeezed out of the market."

Mrs Teo said there used to be a wider price gap between category A (cars up to 1,600cc) and category B (cars above 1,600cc) COEs.

But because premium brands have also begun making cars with smaller engines - in response to stricter environmental laws worldwide - these cars end up in Category A and the gap has narrowed.

Category A and B COEs are currently $91,010 and $95,501 respectively. At the same time last year, they were $48,112 and $67,889.

Mr Low Thia Khiang (Aljunied GRC) asked how "hawkers and small-time contractors can afford to renew COEs or buy a replacement vehicle" in order to continue their business.

Mrs Teo said that "we're looking at various ways" to help this group of people, but offered no details.

Last week, the Government said it was studying a plan mooted by the Motor Traders Association that called for a one-off incentive payment of at least $10,000 for a replacement of a pre-Euro 4 vehicle with a model that meets Euro 4 or higher emission standards.

The association said high COE prices were one reason companies were holding on to old, pollutive vans, trucks and buses.

To suggestions that first-time car buyers be given access to cheaper COEs, Mrs Teo said: "It is hard for us to say definitively why a person who is buying a car for a second time is always less deserving."

She added that such a policy would also be easy to circumvent. For instance, someone might simply register a second car in the name of a relative.

BTO prices delinked by 'varying discounts to first-timers'
By Robin Chan, The Straits Times, 6 Feb 2013

NATIONAL Development Minister Khaw Boon Wan said the Government has delinked the prices of new flats from the prices of resale flats by varying the discounts given to first-time buyers.

This is to keep the prices of new flats stable and affordable for Singaporeans buying public housing for the first time, and the discounts are in addition to the housing grants these buyers also enjoy, he said in Parliament yesterday.

"The meaning of delinking means I vary the discounts so that the prices can remain steady," he said in reply to a question from Ms Lee Bee Wah (Nee Soon GRC).

Last Friday, Mr Khaw said he had delinked these prices since he took over the housing portfolio in 2011, to keep prices affordable amid a rising property market.

That is how Build-to-Order flat prices across HDB's launches have remained largely stable, despite the resale price index rising 12.5 per cent since the second quarter of 2011.

Mr Khaw has directed the Housing Board (HDB) to continue with this new pricing policy for as long as "property remains hot".

He also took questions yesterday on resale levies, which have become a barrier to some families when making a subsequent flat purchasebecause they sold their first flat before a formula revision in 2006.

He said the Government can reduce or waive the interest charges on resale levies to help families upon an appeal. The levy can also be incorporated into the price of the new flat, so that it can be paid in instalments or out of their Central Provident Fund accounts.

"Yes, indeed, there are some families where the levy has become a barrier and these are essentially (those) who sold their flats quite some time ago, when the levy was computed based on a different formula," said Mr Khaw.

"And when policy changes, it will not be fair to all those tens of thousands of people who already paid based on the previous formula. But we try to be as helpful as we can," he said, replying to questions from Dr Lim Wee Kiak (Nee Soon GRC) and Mr Pritam Singh (Aljunied GRC).

Mr Khaw said the HDB collected about $22 million in resale levy per year over the last three years and received on average 2,900 appeals to waive or reduce the levy each year for the same period. The resale levy is paid by the buyer to HDB when purchasing a second subsidised flat, and can range from $15,000 to $50,000, depending on the flat type. Previously, it was pegged to a percentage of the flat's selling price.

It is meant to reduce the subsidy on the second discounted flat in order to maintain a fair allocation of subsidies for first- and second-time buyers.

New baby bonus start date stands

THE start date for the new enhanced baby bonus and Medisave grants for newborns remains Aug 26 last year, said Ms Grace Fu, Minister in the Prime Minister's Office.

That was when Prime Minister Lee Hsien Loong first spoke about the enhanced bonus in his National Day Rally.

The Government will stick to that date for administrative efficiency, even as it tries to be as inclusive as possible, she said.

In a response to Ms Tin Pei Ling (Marine Parade GRC), Ms Fu said it is rare for the Government to implement measures or policies retrospectively. "But for this particular case," she added, "we have taken cognisance of the hopes of many couples and we have actually backdated to the day when these measures were first alluded to by the Prime Minister. So it is not an arbitrary date."

Manpower study for sports sector

THE Ministry for Culture, Community and Youth and the Singapore Sports Council will do a study this year on the long-term manpower needs of the sports sector, said Acting Minister Lawrence Wong yesterday.

It will look at how to ensure a stable supply of expertise in sports administration, among other things.

The ministry and the sports council will have discussions with the National Sports Associations, Mr Wong said in his reply to Nominated MP Nicholas Fang.

$268m in wage subsidies paid

THE Government has paid out $268 million to the employers of older as well as disabled workers under the Special Employment Credit (SEC) scheme, which began two years ago.

This sum went to 91,000 employers for hiring 404,000 older employees between January 2011 and June last year. Of this, $2.5 million was given to 2,000 employers who hired 3,200 disabled workers between January and June last year.

These figures were released yesterday by Acting Manpower Minister Tan Chuan-Jin, in a written reply to Mr Gan Thiam Poh (Pasir Ris-Punggol GRC).

The SEC is a wage subsidy given to employers of Singaporeans older than 50 and earning up to $4,000 a month, and those who hire the disabled.

12 lift upgrading projects delayed

LAST year, 12 Lift Upgrading Programme projects were delayed, said National Development Minister Khaw Boon Wan yesterday.

However, most projects are completed ahead of schedule, he noted in a written reply to Mr David Ong (Jurong GRC).

The delays had three main causes, he said. One, residents asked to modify the work scope.

Two, the projects affected some adversely and more time was needed to consult the residents.

Finally, the service providers sometimes encountered unforeseen site constraints.

In all such cases, said Mr Khaw, the HDB would work with contractors to minimise the delay.

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