Parliament Highlights - 11 Mar 2013

Committee of Supply Debate: MINDEF, MTI, MND, MOF

Panel set up to salute national servicemen

It will review support network and better reward those who have served

By Jermyn Chow, The Straits Times, 12 Mar 2013

A NEW committee will conduct a comprehensive review of the support network around national service (NS), as the Government seeks to reinforce the standing of this key pillar of national security.

Defence Minister Ng Eng Hen said yesterday that he will convene the Committee to Strengthen National Service that will look into, among other things, how to better reward those who have fulfilled their NS obligations and increase buy-in from various groups like families, employers, schools, permanent residents and new citizens.

He said that while the committee will be open to new ideas, its most important goal would be to strengthen Singapore. "We should avoid using this as an exercise to serve narrow interests... This exercise must bring our nation together, not divide us; it must strengthen NS and Singapore, not weaken it."

The minister will personally oversee the high-ranking committee that will include working groups headed by Senior Minister of State for Defence Chan Chun Sing and Senior Parliamentary Secretary for Defence Mohamad Maliki Osman.

The two groups - called Support for NS, and Recognition and Benefits for NS - will canvass for views and feedback from a cross-section of society, with the committee set to complete its work within a year.

The unprecedented move tops past efforts to recognise the contributions of servicemen and comes at a time when discussions about the need to preserve a Singapore core are gathering steam.

In recent weeks, there have been calls from numerous quarters to increase the recognition for Singapore's 300,000 national servicemen. Those calls were repeated in Parliament yesterday during the debate on the budget for the Ministry of Defence.

Both Dr Lim Wee Kiak (Nee Soon GRC) and Mr Pritam Singh (Aljunied GRC) called for NS to be reassessed, and asked if it could be used as a tool to integrate citizens and new citizens.

Mr Zainudin Nordin (Bishan-Toa Payoh GRC) also asked for ways to recognise the sacrifices of national servicemen that "speak more to the heart than to the wallet".

Dr Ng did not give details about the measures that the committee will consider, but said he heeded calls for more to be done to match the abilities of the men to their roles during NS, increase their commitment and recognise their efforts.

He added that he will look into ways to help reduce the impact of NS on studies, work and family commitments.

"We should study how we can provide more springboards for NSmen," he said.

Yesterday, Dr Ng also said that building up the country's military would also mean Singapore "investing steadily" to ensure it remains the most advanced military force.

He revealed that the Republic of Singapore Air Force is in the final stages of deciding whether it will get a F-35 Joint Strike Fighter, touted as the world's most advanced fighter jet, and it is also looking to replace its ageing Challenger-class submarines.

But he stressed: "Ultimately, our defences are only as strong as the resolve and commitment of our people to defend Singapore and our way of life."

UNPREDICTABLE TURN
My family and I spent a very nice holiday in Sabah one or two years ago - idyllic. From mountain to sea within two hours. The base camp of Kota Kinabalu, very tranquil. The best goreng pisang I’ve tasted in a long time because they use a special type of banana. Mee Goreng was also very sedap (delicious in Malay). Then you take a ride to the sea - World Heritage sites that you can dive from the shore, natural corals. Who could have predicted that a few hundred gunmen with rifles and grenade launchers would go into Sabah?
- Defence Minister Ng Eng Hen

High-level panel to scrutinise SAF safety
It will enlist external experts to audit training safety against best practices
By Goh Chin Lian And Jermyn Chow, The Straits Times, 12 Mar 2013

A HIGH-LEVEL body reporting to the permanent secretary of the Defence Ministry will scrutinise the Singapore Armed Forces' (SAF's) safety practices with fresh pairs of eyes.

It will enlist experts and professionals outside the SAF to audit the organisation's training safety against best practices of not just militaries elsewhere, but also across industries, Defence Minister Ng Eng Hen said yesterday.

More eyes will be trained on the ground too when national servicemen undergo training, following a spate of training accidents last year. The army has sent more full-time safety officers to its ground units, with a direct reporting line to the unit commander.

"This will ensure better compliance with training safety regulations," Dr Ng assured MPs Lim Wee Kiak (Nee Soon GRC) and Irene Ng (Tampines GRC).

Five months ago, he disclosed that seven commanders had been replaced or redeployed over safety breaches in which two national servicemen died in separate accidents. Breaches included using six smoke grenades instead of the two specified in regulations and allowing an unlicensed driver to take the wheel of a jeep.

An inspectorate in the SAF was to be set up in the aftermath to look into training safety, but now it will be elevated to a Directorate for Safety and Systems Review under the ministry.

Besides the permanent secretary, it will also report to the Chief of Defence Force. Its review panels, like the first one examining training safety, will submit recommendations to the Defence Minister.

Dr Ng foresees it having greater impact: "Rather than ad-hoc committees formed after incidents occur, this standing panel will provide oversight and direction for the longer term."

As for concerns about the inexperience of SAF's junior doctors and their readiness to handle emergencies, civilian doctors will be on hand at some SAF medical centres later this year, said Senior Minister of State (Defence) Chan Chun Sing. They will mentor SAF medical officers who are full-time national servicemen with two years' hospital experience.

When the Ng Teng Fong Hospital in Jurong opens next year, soldiers training in the western part of Singapore will get faster access to medical support as well.

Associate Professor Eillyne Seow, who chairs the SAF Emergency Medicine Specialist Advisory Board, said a casualty could be rushed to the hospital in 15 minutes, half the 30-minute journey to the National University Hospital, where most SAF casualties in the west are sent to.

Mr Chan said: "The SAF will continue to harness the medical expertise and experience at the national level to ensure our servicemen can have peace of mind when they train hard in service of our nation."

Mindef will also support public giving for its injured men. It will match dollar for dollar up to $2.5 million for the SAF Care Fund, set up for people to support severely disabled servicemen.

Dr Ng said the fund has received $1 million in contributions.

Speech by Senior Parliamentary Secretary for Defence and National Development Dr Mohamad Maliki Bin Osman at the Committee of Supply Debate 2013

Speech by Senior Minister of State for Defence Mr Chan Chun Sing at the Committee of Supply Debate 2013

WP calls for more openness on military spending

By Leonard Lim, The Straits Times, 12 Mar 2013

A REVIEW is needed to decide how much more of Singapore's military spending can be made public, Workers' Party chairman Sylvia Lim said yesterday.

This will help to minimise the risk of corruption, she added, in the wake of Transparency International giving Singapore a "D+" grade in its first Government Defence Anti-Corruption Index.

Singapore was among 82 countries in the index with bands ranging from very low risk (A) to critical risk (F), based on indicators in five key risk areas: politics, finance, personnel, operations and procurement.

Singapore fared poorly in areas like financial risk, as no specific legislation regulates defence procurement, said Transparency International in its January report.

Australia and Germany received an "A" and the United States a "B", although they have equally compelling security concerns about transparency, Ms Lim said.

Mindef's rebuttal cited security considerations for not publicising details of defence and security expenditures, and this point was reiterated by Senior Minister of State for Defence Chan Chun Sing yesterday.

He said Singapore would get higher scores if spending on sensitive operations and classified research and development projects was publicised.

Still, Ms Lim (Aljunied GRC) said there was scope to be more open, given how Singapore has not been impacted by international publications' revelations of its military hardware purchases in the past.

Mr Chan, an army chief before he entered politics, said more information can be released so long as it does not compromise security.

He then detailed Mindef's robust internal and external checks against corruption. This includes credit bureau checks of officers who are in positions to approve projects, and regularly rotating the job among different people to reduce the risk of a person being cultivated by suppliers.

Mindef is also audited by the Auditor-General, who submits a publicly available annual report to the President and Parliament.

Mr Chan stressed that Mindef has a zero tolerance policy towards corruption, with suppliers knowing that it drives a hard bargain when it comes to pricing.

He also noted how Mindef uses limited land resources more effectively.

This includes an upcoming facility where seven rifle ranges in Pasir Laba are combined into one.

Economy must stay open & be flexible to tap opportunities: Lim Hng Kiang
By S Ramesh, Channel NewsAsia, 11 Mar 2013

Singapore's strategies for achieving quality economic growth are twofold.

Outlining them in Parliament during the budget debate for the Ministry of Trade and Industry on Monday, Minister Lim Hng Kiang said the economy must stay open and be flexible to tap global and regional opportunities.

The other strategy involves restructuring the economy so that companies and workers can achieve higher productivity and sustainability.

Singapore's economy is expected to grow at an average of three to four percent for the rest of the decade, said Trade and Industry Minister Lim Hng Kiang.

He noted that this slowdown would be a significant change as Singapore has enjoyed twice that rate of growth since 2003.

Mr Lim said: "The slowdown would be most acutely felt in our workforce as our population ages and the citizen workforce shrinks over time. Foreign manpower as a complement to our Singaporean core must be managed judiciously.

"To deal with this slowdown, our companies must restructure and aim for higher productivity."

The government sees opportunities for Singapore companies in four sectors.

The first is the high-value pharmaceutical industry which offers high wages and employs more than 5,700 people.

In 2012, the pharmaceutical sector's value-add grew by 14 per cent to S$13 billion. Mr Lim said biologics is one niche area within the industry that has been gaining momentum.

Over the next 3 to 5 years, the biologics sector will create at least 500 highly skilled jobs for chemists, microbiologists, biotechnologists, engineers and technicians.

Next, the baby products and services sector is expected to be fuelled mainly by the population boom in Asia and the rising middle class.

The silver industry is also a potential growth segment.

Finally, high-end logistics services will also see strong growth.

The concerns of small and medium enterprises (SMEs) also received attention in the parliamentary speeches of several MPs. They raised concerns of SMEs in coping with restructuring.

Mr Lim assured them that the government pays close attention to SMEs, as they provide good jobs to some 1.3 million Singaporeans.

Adding to Mr Lim's assurances, Minister of State for Trade and Industry Teo Ser Luck said two-thirds of the S$5.3 billion Transition Support Package announced during the Budget will benefit SMEs.

Mr Teo said: "We want to achieve two outcomes for our SMEs. First, we want a productive, competitive and vibrant SME sector. Second, we want to help our SMEs to be a source of meaningful and good jobs for Singaporeans.

"To do so, we will focus on helping SMEs along three broad thrusts. First, the top-line -- we have to tap on opportunities for growth.

"Second, drive productivity -- make sure it's efficient, it's effective -- the money that works for you, gives you that kind of returns that you need to sustain your business, and the government will play its role. Thirdly, to provide a conducive environment for SMEs."

The underlying message is that there are no quick fixes in addressing the challenges, but companies here have the assurance that the government is committed to help them face the challenges.

SMEs get help to boost talent as they restructure

3,000 poly, ITE students to be matched with firms in next 5 years

By Chia Yan Min, The Straits Times, 12 Mar 2013

TALENT development is key to helping small and medium enterprises (SMEs) restructure, said Trade and Industry Minister Lim Hng Kiang.

It is the rationale behind the SME Talent Programme, which will match 3,000 polytechnic and Institute of Technical Education students with SMEs in the next five years.

The programme, which will be rolled out by the middle of the year, aims to reach about 700 to 800 SMEs. It will be developed by Spring Singapore with industry chambers and trade associations and will receive funding of $70 million over the next five years.

Details of the scheme, unveiled last month in Budget 2013, were announced yesterday during the debate on the Ministry of Trade and Industry's budget.

Targeted at Singaporean students who have completed at least their first year of study, it will pay for school fees and a monthly allowance. Students will also get a sign-on bonus when they complete their studies, and will be bonded to the sponsoring SME for two years.

Up to 70 per cent of the costs incurred by SMEs will be covered by Spring Singapore.

Mr Chan Chong Beng, president of the Association of Small and Medium Enterprises (Asme), which represents 6,500 SMEs, said he hopes the scheme will attract more talent into the SME community.

But employers also have a part to play. "SMEs have to do their part to prove that they can be good employers...Many SMEs lack good human resource practices," he said.

A series of other schemes targeted at SMEs were also announced yesterday, including the $18 million Market Readiness Assistance (MRA) grant, which aims to help companies looking to expand abroad.

MRA will give SMEs access to consultancy services from a panel put together by trade agency IE Singapore. The grant will cover up to 50 per cent of these costs, with a cap of $20,000 per company each fiscal year.

A $100 million Collaborative Industry Projects initiative, also announced in Budget 2013, will encourage the formation of groups of at least three companies, to develop solutions for challenges specific to particular sectors.

Priority sectors include food manufacturing, retail and social services.

The government will also ramp up its efforts to educate SMEs about the help available to them, said Minister of State for Trade and Industry Teo Ser Luck.

The five Enterprise Development Centres, set up to lead SMEs to relevant aid programmes, will be expanded to become SME Centres from April 1.

These will be one-stop centres where companies can get help from government agencies and productivity experts as well as in their networking efforts.

The various productivity enhancement grants Spring used to offer will be streamlined into one Capability Development Grant.

Other new measures include expansion of the 2010 Partnerships for Capability Transformation scheme, which encourages collaborations between large enterprises and SMEs.

Already implemented in manufacturing, it will include retail, construction and food services from April 1.

Govt will help SMEs, but only if they help themselves first
By Aaron Low, The Straits Times, 12 Mar 2013

AT FIRST glance, this year's Budget does seem a lot more generous than the past few years', especially to small and medium-sized enterprises (SMEs).

There is the $5.3 billion three-year transition support package announced by Deputy Prime Minister Tharman Shanmugaratnam to help companies ride out the restructuring process.

The biggest piece of the package is the $3.6 billion Wage Credit Scheme in which the Government will co-pay 40 per cent of the pay raises of Singaporeans earning gross monthly wages of up to $4,000 for the next three years.

All companies will benefit from this, but the bulk of the measures will aid SMEs most, a critical sector of the economy that has been calling out for help since the restructuring drive began in 2010.

But yesterday's session during the Ministry of Trade and Industry's (MTI's) Committee of Supply debate showed that the Government's offer of help is not as simple as it seems.

Gone are the days when the Government would dish out rental rebates or tax concessions that help all companies, regardless of whether they are productive, inefficient, loss-making or profitable.

These days, every dollar that is offered comes with a condition attached. With the exception of the corporate income tax rebate of 30 per cent capped at $30,000 for three years, most of the other policies rolled out by the Government had a specific objective in mind: moving SMEs up the value ladder and getting them to grow their businesses out of the resource- limited country.

Nominated MP Teo Siong Seng and Mr Inderjit Singh (Ang Mo Kio GRC) yesterday repeated calls, as they have in the past, for more measures to help companies cope with rising costs, particularly industrial rents.

Trade and Industry Minister Lim Hng Kiang's response to their concerns was polite - and firm.

He said he recognised SMEs will face more difficulties ahead, but reiterated that there was no turning away from restructuring.

Mr Lim cited the Productivity Innovation Credit (PIC), as well as the Wage Credit Scheme (WCS), as ways for companies to defray rising costs.

Both measures also happen to be geared towards getting companies to raise their productivity.

The WCS may not have a direct link with productivity, but many analysts note that companies using the scheme to bump up wages without also raising productivity will feel a lot of pain when the scheme ends in three years.

Likewise, the PIC bonus helps - but only for those companies that invest in productivity measures like machines or software systems first. Under the PIC bonus, businesses that spend at least $5,000 a year on those efforts will receive a dollar-for-dollar matching cash bonus of up to $15,000 over the next three years.

This is on top of existing PIC benefits, which include a generous 400 per cent tax deduction on productivity investments.

The MTI is also going all out to help link SMEs with research institutes to raise their technological profiles and level of innovation.

As Minister of State for Trade and Industry Teo Ser Luck said yesterday: "However, they have to take that first step. If they're going to take that first step, the schemes will always be there to help them."

In other words, the message behind all these schemes is this: We will pour in a lot of resources to help SMEs, but only if they help themselves first.

Or as DPM Tharman put it when he wrapped up the Budget: Rather than handouts, companies will be given a leg-up if they seek ways to boost their own operations and productivity.

For the rest of the SMEs that either choose to not adapt or just cannot move to the new high-cost economy, driven by productivity and innovation, the writing is on the wall.

The signal is clear: The Government will not protect weak companies from the harsh realities of global competition and finite land resources that Singapore is facing.

Some call it economic Darwinism, but I prefer to think of it as being pragmatic, given that the state does not have infinite resources to support all local firms.

In fact, over time, the state will have to progressively wean companies off the expectation that it will always be there to support them during difficult periods. After all, if companies cannot survive without handouts today, it is unlikely they will thrive in the new competitive landscape of tomorrow.

ON RABBITS AND CARROTS

If the carrots are hung too high, how can the rabbits eat them?
- Nominated MP Teo Siong Seng, who called on the Government to eliminate red tape and over-regulated policies to reduce compliance costs, even as it gives businesses new productivity incentives

I don’t know who hung up the carrot...We will plant the carrot on the ground so that the rabbit can just eat it and not have to jump about.
- Minister of State for Trade and Industry Teo Ser Luck, in Mandarin, on help schemes for small and medium-sized enterprises to be streamlined into one development grant

More to get electricity directly or wholesale

By Grace Chua, The Straits Times, 12 Mar 2013

ANOTHER 11,000 users will be able to buy electricity wholesale or directly from private power companies next year, meaning they may enjoy more competitive prices.

These newcomers include town councils and retail chains like Home-Fix DIY.

Currently, only big users, like petroleum refineries, which consume more than 10 megawatt-hours (MWh) on average each month, can do so. They represent 75 per cent of Singapore's electricity use.

Singapore's nearly 1.2 million households, however, will have to wait while studies work out the technology needed for private consumers to buy electricity wholesale, Second Minister for Trade and Industry S. Iswaran said yesterday.

Mr Iswaran was responding to the Workers' Party's Ms Sylvia Lim (Aljunied GRC), who said many households are concerned about their electricity bills.

She suggested they be given the option to buy electricity either directly from power companies or in the open market, a practice called retail contestability.

Prices in the open market fluctuate every half an hour, which means consumers may reap savings when electricity demand is low and prices fall - but also risk paying more when demand is high. Alternatively, direct purchase allows a user to negotiate a supply package from the electricity retailer.

Currently, only about 9,000 large users enjoy such retail contestability.

The rest pay electricity tariffs regulated and revised quarterly by the Energy Market Authority, the national regulator.

Mr Iswaran said retail contestability for smaller users will be introduced in two stages next year.

Organisations that consume more than 8 MWh a month can do so from April 1 next year, and users of more than 4 MWh, from October 1 next year.

Consumers that are eligible will receive notification letters from May onwards.

Companies with many accounts - like retail chains - are eligible if the total electricity use across all their accounts meets the threshold, he added. Hence, town councils are eligible.

With the new move, the total number benefiting from retail contestability is about 20,000 consumers with 70,000 accounts altogether, a jump from the current 9,000 big users with 13,000 accounts.

As for households, Mr Iswaran said there are two considerations.

"First, we want to be sure that when we embark on this, we are able to do it in a systematic way and extend it to all the households.

"Second, that when we do so, we also have a clear idea of the capacity in the system at the back end."

Speech by Mr Lee Yi Shyan, Senior Minister of State for Trade & Industry, During the Committee of Supply Debate 

Heritage areas: S'pore must strike balance
By Grace Chua, The Straits Times, 12 Mar 2013

SINGAPORE must strike a delicate balance between conservation and development, putting people first - even if not everyone agrees on where that balance should lie, said Senior Minister of State for National Development Tan Chuan-Jin in Parliament yesterday.

He was responding to MPs' concerns about conflicting uses of heritage areas like Kampong Glam, and requests to carry out environmental impact assessments (EIAs).

Nominated Member of Parliament Faizah Jamal brought up the example of Kampong Glam, a heritage area once settled by Bugis, Javanese, Arabs and other ethnic groups.

Now there is more nightlife, she said, but alcohol is drunk at bars within sight of the Sultan Mosque, causing tension in the Muslim community there.

She also asked if preliminary impact assessments were done for plans such as large-scale reclamation or the 50km cross-island MRT line through the Central Catchment Nature Reserve, while Non-Constituency MP Yee Jenn Jong asked for EIAs to save wooded areas that help keep Singapore's carbon footprint in check.

Mr Tan said the balance between conservation and development was subjective and highly contextual.

"For example, one may strongly believe that this patch of greenery is very important. But somebody else might say, does it really matter? Why are we spending so much time, so much resources, dragging our feet on the issue?"

The Government strives to achieve win-win situations, he said, by seeking out and balancing views and engaging stakeholders.

Responding to Ms Faizah's and Mr Yee's questions, he said major projects already undergo EIAs, and that firm decisions on reclamation are taken only after EIAs are conducted.

These EIAs are gazetted and available for public viewing, he added. But they are time- and resource-intensive and should not be done for every single development.

Meanwhile, he said, Singapore keeps a tenth of its land for nature reserves and parks.

New parks at Holland Village and Woodlands will be completed this year, adding to Singapore's 350 parks, while a Kheam Hock Road corridor of trees and plants which allows butterflies and birds to move between green areas has also been launched.

As for heritage areas, Mr Tan said the community should discuss and shape their character.

For instance, the business community at Kampong Glam closed Haji Lane to cars on a Sunday afternoon, and there will be more such car-free pilot projects there and in Chinatown.

THE Budget AND MY heritage neighbourhood
By Janice Heng, The Straits Times, 12 Mar 2013

Mr Johari Kazura, Owner of Sifr Aromatics

AFTER about a year of talks between the Kampong Glam Association and the Government, Haji Lane will soon become a car-free zone on weekend evenings for three months.

No date has been fixed for the pilot programme, which has an option for it to be extended by another three months.

Mr Johari Kazura, a council member of the association, hopes this will bring back a relaxed "kampung feel" to the historical area.

Shops can have activities that spill over onto the streets, a move that shop owners say will inject more colour into the district.

Mr Kazura, who owns perfumery Sifr Aromatics in nearby Arab Street, said the idea to close off Haji Lane was a "naturally evolving" one, after successful one-off closures in the past.

"We just thought it'd be nice to have it not just closed on certain occasions, but for it to be a regular way of life."

Last month, it was closed for the Samsara Sunday Fair.

Mr Kazura and his friends were among those who put up street performances, and their "flow arts" performance, similar to fire dancing, wowed passers-by.

Even when it is not playing host to colourful events, the narrowness of Haji Lane makes it a natural stretch for strolling, said Mr Kazura, 37.

In Parliament yesterday, Senior Minister of State for National Development Tan Chuan-Jin touched on the car-free pilot schemes at Haji Lane and the Ann Siang Hill area.

He said the Government's preference is for a ground-up approach in shaping the character of such heritage areas.

"We have learnt that the community is in the best position to determine what works best, rather than have the Government impose its views from the top," he added.

Rental flat supply raised to 60,000
By Janice Heng, The Straits Times, 12 Mar 2013

THE Government is raising the supply of rental flats to 60,000, exceeding its earlier promise to build 57,000 by 2015.

Senior Parliamentary Secretary for National Development Mohamad Maliki Osman announced this yesterday after MPs expressed concern about rental housing.

Dr Maliki also assured the House that tenants will not suffer a rent increase when they get a pay rise that lifts their wages above $800 a month.

He was replying to Mr Lim Biow Chuan (Mountbatten) who said: "We should encourage these low-income residents to work hard, and (allow them) to keep their well-deserved salary increase."

Replying, Dr Maliki said the Government was alerted to the issue two years ago. "Since then, we have fixed it."

The rent increase is waived so that these tenants pay the same rent as before, for one tenancy term of two years. After two years, if their pay rise is still lower than the intended rent increase, the HDB will continue to charge them the same rent, he added.

Workers' Party's Ms Lee Li Lian (Punggol East) asked that low-income Singaporeans married to foreigners be allowed to rent HDB flats while Mr Png Eng Huat (Hougang) hoped the $1,500 monthly household income ceiling could be raised for families with children.

Dr Maliki said the Government will continue to review the rules from time to time, and will be sympathetic in applying them. The Government is prepared to offer rental flats to those in financial difficulties, even when their income is above $1,500. As for foreign spouses, he said only Singapore citizen households qualify as rental flats are heavily subsidised.

More funds for builders to raise productivity

But firms must have more labour-efficient designs for new projects as well

By Daryl Chin And Melissa Tan, The Straits Times, 12 Mar 2013

CONSTRUCTION firms will get more funding for productivity improvements but will also need to adopt more labour-efficient designs when bidding for new projects starting July.

These measures are aimed at helping the construction industry, particularly smaller firms, become more efficient and sustainable, said Senior Minister of State for National Development Lee Yi Shyan yesterday.

Calling the next three years a "crucial transition period" for the industry, Mr Lee said firms will have to mechanise, automate and streamline workflow for higher productivity. He was responding to questions from Dr Teo Ho Pin (Bukit Panjang) and Mr Charles Chong (Joo Chiat).

He explained the need to further cut man-year entitlement quotas - which set the total number of foreign workers a main contractor can hire based on the project's value - for new projects this July, as the built environment sector, on average, has accounted for more than half the annual foreign worker growth.

"But we must be careful not to allow the tight labour market to affect the timely delivery and quality of our key public projects", including new Build-To-Order flats and more train lines, he said.

To help the construction industry transit successfully, the Government will raise its co-funding level for two schemes under the $250 million Construction Productivity and Capability Fund set up in 2010. Some $85 million has been committed to 2,300 firms, of which over 80 per cent are small companies.

Mr Lee said the Government's co-funding will rise from 50 per cent to 70 per cent for both the Mechanisation Credit (Mech C) scheme and the Productivity Improvement Project (PIP) scheme, for companies that can raise productivity by at least 30 per cent.

The PIP funding cap for firm-level projects will go up from $100,000 to $300,000. At the industry level, applicants using technologies that raise productivity by 40 per cent and are "game-changing" will get PIP funding of up to $5 million.

Contractors welcomed these measures, though some said new equipment must be coupled with more training to see productivity gains. Mr Choo Tat Jin, Kimly Construction project director, was grateful for the extra funds as his firm has already spent almost $300,000 on precast moulds for every project.

Contractors who successfully refer their smaller sub-contractors to Mech C programmes will also get a $20,000 credit.

New projects must also have higher buildability and constructability scores, meaning designs must be easier to construct and save labour.

It will go up three points this July, and another two points by next July.

Higher scores in these areas can give contractors an edge in tender bids, Mr Lee said. This will apply to all public sector projects and some private sector ones such as those stemming from government land sales.

Mr Ong Soo Kiat, project director at SH Design & Build which builds warehouses and factories, said the higher standards would make it tougher for smaller outfits to compete, given the limited resources at their disposal.

Govt needs to explore new revenue sources to cope with ageing population
By Imelda Saad, Channel NewsAsia, 11 Mar 2013

Singapore's Minister of State for Finance, Josephine Teo has said that the government will need to consider additional revenue sources as it copes with an ageing population and a rise in social spending.

She was speaking during the Committee of Supply debate for the Finance Ministry.

Mrs Teo also announced further measures to up the pay of low-wage workers and enhance procurement processes within the public sector.

Several Members of Parliament (MPs) expressed concerns about Singapore's fiscal sustainability during the Budget debate.

Nominated MP Tan Su Shan said: "The government has given out handouts, subsidies and top-ups to the welfare assistance scheme to meet this higher cost of living but, if the inflation we are creating becomes structural, how long more can we keep giving these handouts? As our population ages, the need for more healthcare and social subsidies will also rise. We cannot take our nation's fiscal sustainability for granted."

Mrs Teo said it is the changes made over the past five years to enhance revenues through changes to the Net Investment Returns framework and raise the Goods and Service Tax that has given Singapore the fiscal space to make significant investments in infrastructure and social spending.

"We have to use taxpayers' monies carefully, to make sure our expenditure gets the best value, and our programmes are both effective and efficient. This is why, despite keeping social spending relatively low, our social outcomes are not inferior to many countries by most international reckonings."

For instance, Singapore's spending per capita on primary school education is lower than the US.

"Similarly, our spending per capita on secondary school education is also lower than in the US. Yet most international assessments place our school system as amongst the best internationally, and well above that of the US, based on outcomes for students of all abilities," said Mrs Teo.

And while providing broad-based support to give all Singaporeans the chance to achieve their aspirations, social spending is directed at Singaporeans who need the most help.

For instance, Mrs Teo said the Workfare Income Supplement (WIS) scheme is targeted at older low-wage workers, to encourage them to stay in employment. And in healthcare, the government aims to support both lower and middle-income Singaporeans.

What's important, said Mrs Teo, is to maintain a tax regime that's fair, equitable and able to sustain Singapore's economic dynamism.

The public sector is also hoping to lead the way in efforts to raise the pay of low-wage workers.

From April, the government will engage only accredited cleaning companies, under the National Environment Agency's Enhanced Clean Mark Accreditation Scheme.

What this means is that Singaporean and PR cleaners on government contracts will be paid according to the Progressive Wage Model - a system described as a component of Singapore's own Minimum Wage model.

Mrs Teo said the Education Ministry, which is the government's single largest buyer of cleaning services, has taken the lead, with all its contractors on board.

"Effectively, this means about half of all cleaners employed under government contracts, or over 3,500 cleaners, now receive basic wages of at least S$1,000 per month. Further, with training, improved skills and bigger job scopes, the cleaners can earn more," she said.

Next month, the initiative will cover the security sector - where the government will procure only from agencies graded well by the police.

Separately, in its continuing effort to enhance procurement processes within public sector agencies, the government is developing a Procurement Specialist Track for its officers.

Mrs Teo said: "There are over 2,000 officers across the Public Service today who perform procurement roles as part of their job responsibilities. However, not all agencies have dedicated procurement teams. In some agencies, procurement could be decentralised to many different officers for whom procurement is a secondary role. It is also likely viewed as an administrative support function, rather than as a profession. As a result, there are uneven standards of procurement capabilities across the public service."

The Procurement Specialist Track will offer officers proper career pathways and equip them with skills to be discerning when evaluating bids. The Finance Ministry is also working with various agencies to identify opportunities to cluster their procurement functions, where feasible. This is so that capabilities are more centralised. It will also open up more career options for procurement officers.

Rules on the government's tender process were tightened last year following some high profile lapses involving several ministries.

Finance Minister Tharman Shanmugaratnam had said in Parliament in August last year, that the competency of its public officers has been a problem and that the government will look into a career track for procurement officers.

Separately, Mrs Teo said the government has also put in place additional measures to reinforce the accountability and responsibility of supervisors.

Complaints about procurement practices are brought to the attention of the Permanent Secretary or CEO in charge and investigated.

The Finance Ministry also shares audit findings on procurement lapses and common pitfalls with public sector directors of finance and at various management forums.

To help officers who are responsible for approving procurements, the ministry has developed checklists to guide them on what to look out for before giving approval.

"Our system handles over 80,000 procurements each year, the vast majority of which are processed by our officers in accordance with well-established guidelines. However, even with the best of efforts, there will be instances of lapses or misconduct. Therefore, there is no substitute for robust audit and enforcement, along with the willingness to acknowledge problems and correct them," Mrs Teo said.

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