Head F – Parliament
Mdm Chair, I beg to move, “That the total sum to be allocated for Head F of the Estimates be reduced by $100”.
Mdm Chair, when a Member proposes that a Bill which will become law ought to be committed to a Select Committee of Parliament, it means that while the Member generally agrees with the objectives of the Bill, he or she is concerned about its implementation or its provisions.
The last time a Select Committee was formed in this House after the Second Reading of a Bill was in 2004 when the Building Maintenance and Management Bill came up for Second Reading. A variety of reasons were put forth by Members for the committal of the Bill. Some Members cited better representation of the interest of all stakeholders and to gain support for the Bill. Others highlighted the importance of the Bill by virtue of the number of people who would be affected by its enactment into law, hence, requiring further feedback. Another called for extensive consultations to ensure the relevance of the proposed law.
Over the last year, the Workers’ Party and the SPP, through Mrs Lina Chiam, proposed two Bills in particular for committal to a Select Committee. In both these cases, the Government rejected the calls as a consultation process through the Government feedback channel, or REACH, was deemed to have been sufficient.
Mdm Chair, I would like to request that the Government consider committing more Bills to Select Committees in future. Participation on such Select Committees is envisaged to take up more of a Member of Parliament’s time, and rightfully so. While I accept citizens have an opportunity to engage issues through the Government feedback channel, and this should continue to be encouraged, this should not mean that Parliament’s role in scrutinising Bills through a Select Committee is minified or rendered unnecessary.
In fact, in today’s day and age, Select Committees can add much needed civility to the public discourse through the active engagement of issues, as Select Committees are empowered to call for witnesses and for documents and records. They present a good opportunity for the Government to deepen discussions and generate greater public support for laws.
The Minister for Defence and Leader of the House (Dr Ng Eng Hen): Mdm Chair, the Government welcomes calls from Members of Parliament to increase engagement, and in the Member’s words, to deepen or increase the engagement when it comes to legislation in this House.
Indeed, that is what we have been doing over the last few years. Government agencies routinely conduct public consultation exercises with the public to facilitate and incorporate inputs from members of the public and relevant stakeholders before new legislation is introduced into this House. This process includes close engagement with Members of Parliament in this House through the Government Parliamentary Committees who provide valuable suggestions to improve proposed legislation. The extent of consultation varies depending on the issues involved. There are many Bills that are introduced in the House. Let me give some examples of Bills in recent times that have undergone extensive public consultation: the Human Organ Transplant (Amendment) Bill in 2009, Personal Data Protection Bill in 2012, Transboundary Haze Pollution Bill, Remote Gambling Bill and Public Entertainments and Meetings (Amendment) Bill in 2014, and most recently, the Liquor Control (Supply and Consumption) Bill and Industrial Relations (Amendment) Bill in 2015.
Members will remember that in November last year, Nominated Member of Parliament Ms Chia Yong Yong proposed an amendment to clause 3 of the Pioneer Generation Fund Bill. She wanted to ensure that no means testing would be applied. Since it was never the intention to apply means testing to the PG package, MOF accepted her proposal and will introduce an amendment to the Bill at an opportune time to provide this certainty. Apart from the Government Parliamentary Committees, this is another positive example of how Members of Parliament in this House have contributed to improve legislation.
As Mr Pritam Singh had said, there have also been some occasions when the Government judged it necessary and beneficial to propose to this House to refer specific Bills to a Select Committee of Members of Parliament instead of the Committee of the Whole Parliament after the Second Reading. He has mentioned some, but let me give the list of Bills that have done so.
The Bills which this House referred to a Select Committee include the Parliamentary Elections (Amendment) Bill in 1988, the Maintenance of Religious Harmony Bill and the Administration of Muslim Law (Amendment) Bill in 1990 and 1999 respectively, the Women’s Charter (Amendment) Bill, the Maintenance of Parents Bill, and the Advance Medical Directive Bill in 1995 and 1996, and the Companies (Amendment) Bill, Goods and Services Tax Bill, and the Bankruptcy Bill in 1993 and 1995.
The reasons for Bills to be committed to a Select Committee are when the Government judges that a Select Committee will allow a smaller group comprising Members of the House to further examine the details of implementation for complex issues, or seek views from experts and other focus groups on matters related to the Bill.
On the whole, these public consultation exercises, Second and Third Readings in this House, and Select Committee for some Bills have allowed Government to obtain views from members of the public and Members in this Parliament, and pass legislation in a timely and responsive manner to meet the needs of our society.
Mr Pritam Singh: Mdm Chair, according to the revenue and expenditure estimates for FY2015/2016 on page 41, one of the desired outcomes under this Head is public awareness of the roles and functions of Parliament. I thank the Leader of the House for his reply. And I hope the Government can consider how this outcome can be furthered in future either through topical Select Committees, ad hoc Select Committees and so forth, covering even subject areas of interest. With that, Madam, I beg leave to withdraw my amendment.
A major theme of this year’s Budget revolves around preparing Singapore and Singaporeans for the future. The two aspects of the Budget that are the focus of my speech are SkillsFuture and more briefly, the inclusion of Temasek in the Net Investment Returns (NIR) framework. On both fronts, the government has considerable experience to call upon and Singapore is not starting from a zero base. First, SkillsFuture.
Skills upgrading before SkillsFuture
As a national philosophy, upgrading of skills and lifelong learning are not a new phenomenon. Almost 35 years ago, then Prime Minister Lee Kuan Yew announced at the 1979 National Day Rally that a Skills Development Fund would set up compelling employers to pay a percentage of wages in to Skills Development Fund as recommended by the National Wages Council. A month later, Finance Minister Hon Sui Sen informed parliament that the introduction of the Skills Development Levy was a necessary intervention as the Singapore economy had to be upgraded and restructured promptly, for Singapore to move up economic value chain.
The Skills Development Levy Act of 1979 legislated skills upgrading primarily at low-level workers, but also included mid-level workers and managers too, with some, especially those involved in technology work sent overseas for training by the early 1980s. Since the Skills Development Levy was introduced in 1979, an entire ecosystem of training and skills upgrading has been part of the governance firmament in Singapore.
Lifelong learning since 2000
Lifelong Learning is also not new phenomenon. The Lifelong Learning Endowment Fund was first announced by then Prime Minister Goh Chok Tong in the year 2000 to promote and support lifelong learning in Singapore and to provide assistance and opportunities for Singaporeans to meet the needs of a knowledge-based economy and cope with the threat of structural unemployment. Last year, during Budget 2014, it was announced that the fund would be topped up by $500m bringing the fund size up to a total of $4.6b.
A decade later by 2010, the National Productivity Fund (NPF) was launched with a $1b injection. This year’s budget will also see another injection of $1.5b into the fund.
Over the years, the Workforce Skills Qualifications (WSQ) framework, a key component of the Continuing Education and Traning (CET) system allowed Singaporeans to improve their qualifications in various industries from certificate up to diploma level, and even graduate diplomas for certain industries. In industries where there has been an acute of shortage of skilled professionals, the Workforce Development Agency (WDA) has even introduced scholarships at the post-graduate level, thus providing opportunities for professionals who wish to upgrade themselves further. There are currently 34 WSQ frameworks covering the manufacturing and services sectors such as Precision Engineering, Aerospace, Retail, Hospitality, Community and Social Services, Financial Services, Infocomm and Logistics, some of which have also been identified under SkillsFuture initiatives, in particular Earn and Learn.
When the Skills Development Levy Act was amended in 2008 to cover all employees including those earning more than $2000 a month, in a functional way, the seeds were sown for SkillsFuture with the Skills Development Levy acting as the primary tool to better support the CET system supporting all workers, regardless of age, skill or education level, to upgrade and seize new opportunities as they progressed in their careers.
SkillsFuture – What makes it different from earlier schemes?
The long tail of experience surrounding retraining and lifelong learning makes it important for the Government to identify why and how SkillsFuture is different. How will it mark a critical shift away from the existing skills upgrading framework and what shifts in thinking among Singaporeans will be required for it to work? To this end, the identification of the starting point of the journey – in schools and the provision of career counsellors, commonplace in many Western countries like the US and Canada – is a good place to start. However, the challenge to convince hearts and minds, especially those of parents in an Asian society fixated on grades and a tuition culture will not be easy. To this end, I hope career counsellors in school work together with parents to identify the strengths and interests of students, with parents also playing their part in motivating children to aim for excellence, regardless of the paths they choose.
Even employers will need to imbibe a new mindset and to accept that skills upgrading is a fact of life. Employees are more likely to stay on in a firm if the firm also shows a readiness to upgrade itself too, and attempt to adopt work new processes. For example, appreciating the importance of work-life balance in the Singapore of today and tomorrow where the reality dual-income households can leave precious little time to raise young children and look after our elderly, to say nothing of pursuing other interests such as community volunteerism or the onset of a medical issue for a family member.
Born from the UK Leitch Review: SkillsFuture Credit
A new feature of our skills upgrading system is the creation of SkillsFuture Credit, which provides learning credits for all Singaporeans above 25 years of age, supported by regular top-ups. The SkillsFuture Credit largely mirrors the proposal made in the UK-government commissioned 2004 independent review by Lord Sandy Leitch to maximize the economic growth, skills and social justice by 2020. The Leitch Review of Skills proposed the establishment of a learner accounts as a centrepiece of what it called “adult vocational further education”. In fact, the “Earn and Learn” work-study program under SkillsFuture is also conceptually similar to the Leitch Review’s “Train to Gain” program with a focus on apprenticeships.
In fact, the creation of a SkillsFuture Credit along the lines of the UK model was also proposed in this house in 2010. However, the Government’s reply then was and I quote, “[i]nternational studies show that by providing a training account with monetary value may still not be the best and most effective way of motivating individuals to take up courses. What we have today in our system is a CET infrastructure that comprises a large number of training courses that individuals can go forward and sign up.” In view of this stated position of the Government five years ago, how does the Government envisage the provision of the SkillsFuture Credit as being enough of an incentive to motivate Singaporeans to take up courses to improve themselves?
In recommending the learner accounts, the Leitch Report noted that for about 20% of those who did not pursue upgrading in the UK, lack of funding was not a reason. In fact, high course fees, lack of childcare support and transport were some of the potential issues that workers had to take into account when deciding whether to upgrade their skills. In response, the UK government has sought to provide some basic courses for free, in addition to extending study loans repayable only after a worker exceeded a certain salary. It has also made an allowance for a support fund to provide assistance for costs such as childcare, transport, books, equipment that can mitigate the impact of financial problems workers face as they upgrade their skills. While some of these gaps are specific to the situation in the UK, in addition to applicability in the Singapore context or otherwise, there are nonetheless lessons for Singapore, and the Government should regularly review and identify reasons Singaporean workers may be hesitant to upgrade their skills, as it looks to make SkillsFuture a success.
Making SkillsFuture a Success
Madam Speaker, the SkillsFuture Council will have its hands full, as SkillsFuture cannot represent upgrading for the sake of upgrading. Minister mentioned in his speech that a key challenge of SkillsFuture is to help uplift the SMEs, and involve them in this process of skills development.
In the UK, a parliamentary Innovation, Universities, Science and Skills select committee, in wake of the Leitch Report, noted with concern that a conflation of skills and qualifications in targets could lead the UK Government to assume that a qualifications strategy is an adequate substitute or proxy for an overall skills strategy. The select committee noted that a qualifications-focused strategy which identifies the numbers of workers who have upgraded their qualifications would inadvertedly reinforce the skills gap if companies were unable to achieve high performance working practices and thereby raise productivity.
To this end, as SkillsFuture gets off the ground, it may be worthwhile for the Government to track the qualification and certification outcomes of SkillsFuture initiatives, especially for our SMEs, as to assess how the scheme has been effective in achieving the desired productivity increases and economic outcomes so as to better track the real value of the SkillsFuture initiatives for various industries.
Improving Productivity with SkillsFuture
The formation of the SkillsFuture Council has resulted in the devolution of CET oversight from the National Productivity and Continuing Education Council (NPCEC) to the SkillsFuture Council. With NPCEC renamed as the National Productivity Council (NPC) also headed by the Finance Minister, greater synergies and coordination between both councils can be expected. This administrative change should be a lot more significant that a mere change of nomenclature. This point is worthy of some reflection considering the large amounts of public funds that will be devoted to SkillsFuture. For example, $250 million dollars was set aside from the National Productivity Fund to improve productivity for the construction industry in 2010. Five years later, in view of the productivity numbers, there is some legitimate doubt as to how effective these huge investments have been. Once again, going forward, the provision of an institutionalised, dedicated and regular review framework can be helpful to arrest efforts and correct a course of action that does not appear to be engendering favourable results. This would be more critical over time as the reality of less fiscal room for manoeuvre becomes a reality, if it has not already.
Finally, some practical skills and qualifications are not learnt through skills upgrading, but in the course of National Service too where specific skills or credits can be relevant in the private sector. Repair and maintenance certification and operating of heavy machinery and vehicles and leadership skills are part of a lifelong learning skills framework and these can give our NSmen a leg up at certain workplaces. I understand a similar recommendation was also made by the Committee to Strengthen National Service, and I hope that skills and qualifications earned during the course of NS are constantly reviewed and incorporated into the SkillsFuture framework as far as practically possible.
Temasek’s inclusion in NIR
Madam Speaker, the increased spending on human capital for the future must mean increased Government expenditure. For this reason, amongst others, Minister has announced the inclusion of the expected investment returns of Temasek in the NIR framework. The move of our reserves held by MAS and GIC from to the NIR framework from Net Investment Income (NII) framework was the subject of an extensive Constitutional Amendment Bill debate in 2008. Then, Minister established that as Temasek was expected to make higher returns and was not encumbered from investing in high-risk assets, it would be difficult to project Temasek’s future earnings. Minister has stated in his 2015 Budget speech that Temasek’s equity-only portfolio will continue to be more volatile and subject to more pronounced investment cycles than the MAS and GIC portfolios. For this reason, a brief primer from Minister on the expected long-term expected real returns from Temasek’s inclusion in the NIR framework and its methodology would be appreciated. In reply to NCMP Gerald Giam’s parliamentary question in 2014, Minister stated that for FY2009 to FY2013 the government took in about 47% of the NIR, and that the NIRC has been able to supplement the Budget by $7 billion to $8 billion annually. I would like to enquire from the Minister, based on current projections, how much would subsequent Budgets be supplemented by with Temasek’s inclusion in the NIR framework?
In conclusion Madam Speaker, Minister spoke at the 2014 Budget debate about changing social norms, in three broad areas, at the workplace, in professional competencies and to change habits for the better. This was not hard policy per se, but related to important softer aspects which can be the critical factor that make the difference between a how successful or unsuccessful a policy is. SkillsFuture, requires social norms and attitudes towards education to change. A deep mind-set shift towards lifelong education must truly be a goal for all Singaporeans. With human capital as our only natural resource, a more forgiving attitude must be exercised towards people who may not have succeeded at the first instance either in an exam or at some other important career cross-junction. Equally important, the opportunity for skills upgrading and a second chance should be one every Singaporean must grab with both hands. SkillsFuture must be positioned as a key feature of the Singapore system. A large part of the continuing economic prosperity of Singapore should also serve as a report card for SkillsFuture. My recommendation to track the expenditure and to constantly review the implementation of SkillsFuture notwithstanding, I support the initiative and encourage Singaporeans to draw up, review and update their own skills upgrading and career objectives, and to tap on the initiatives will be rolled out under SkillsFuture.
Madam Speaker, in Minister Khaw Boon Wan’s letter to Minister of Finance dated 18 Feb 2014, the Minister highlighted four issues in particular that he felt were not addressed by the Aljunied-Hougang-Punggol East Town Council (hereafter referred to as AHPETC or TC). This lead to his request to the Minister of Finance to carry out an audit of the Town Council (TC) through the Auditor-General’s Office (AGO).
Ms Sylvia Lim has already spoken on the first two points covering Related Party Transactions and transfer of Sinking Funds.
The third issue, on the failure to make available accounts and records after the audit period FY12/13 available to the auditor Foo Kon Tan (FKT), called “Subsequent Event Review”, has been addressed by the AGO. The AGO found no significant matters in these documents that would materially affect AHPETC’s FY12/13 financial statements.
I will speak largely on the fourth matter raised in the Minister’s letter to the Finance Minister, covering the unexplained differences in the figures under audit amounting a total exceeding $20m. This matter overlaps to some extent with the observations made by the AGO summarized as items four and five in its main report. This broadly covers Lapses in Internal Control and Procurement and Inadequacies in Record Management and Accounting System.
|S/No||Disclaimer||Amount||AHPETC Remedial Action & Enhancement|
|1||Lift Upgrading and Lift Expenses||$20.2m||Regularised and cleared.|
|2||Receivables from Stakeholders||$3.1m||CCC: Cleared with AGO assistance.|
|IRAS: Main sum reversed out and regularised.|
|Sundry Debtors: AHTC managed to trace about $1.5m as received.|
|New Process: AHPETC has adopted monthly debtor list for close tracking and monitoring of receivables.|
|3||Creditors and Accrued Expenses||$647,094||Accrued Liabilities: SOP for timely recording of liabilities enhanced.|
|Accrual without Work Orders: New Works Order system introduced in 2012 to replace manual system. This will address cases of overstatement etc.|
|Temporary Receipts: $283,989 of $308,715 of unexplained receipts regularised. AHPETC will put in resources to clear remaining amount.|
I will deal with these matters focusing on the disclaimers and issues that have the highest financial signature, in the spirit of full transparency and accountability to the residents of AHPETC and to Singaporeans. I will also provide some context that the public should be made aware of, acknowledge shortcomings, identify areas where systemic improvements will be or have already been made and where processes will continue to be enhanced.
First, Lift Upgrading Program and Lift Expenses
Mdm Speaker, FKT’s fifth disclaimer was on the HDB Lift Upgrading Program (LUP) or LUP and covered its inability to determine the accuracy of AHPETC’s lift upgrading expenses of about $18.6m. To provide some context to this point, the FMSS staff who previously worked in the old Hougang Town Council environment were not familiar with the nature of the billings to HDB for LUP works, as no lift upgrading was carried out in Hougang SMC in the past. Some LUP bills were passed on to FMSS from the previous Managing Agent under the PAP-run Aljunied Town Council. This matter was also brought up in parliament in 2012 by Ms Sylvia Lim. In particular, the TC was concerned about instances where it was billed one year in advance by HDB and certain bills were carried over from FY11 to FY12, amongst other matters.
Accordingly, the TC did not recognise LUP expenses in earlier years amounting to $8.38m as the TC disputed its share of the LUP expenses with HDB. In view of the very large numbers, one can understand why the TC took a cautious approach.
The AGO report has since confirmed that AHPETC has fully paid up the $18.61 million owed to the HDB in May 2013, and that this matter has been fully resolved.
Associated with this point is FKT’s fourth disclaimer which stated that lift repair expenses of about $1.6m were expenses that related to the previous financial year, and that the TC management did not ascertain the quantum of the prior year’s expenses, and that the expenditure had been overstated. The TC informed the AGO that some Works Order were not raised before 31 March 2012 for works performed in FY2011/12 due to a staff oversight explaining the incorrect recording of those expenses.
The AGO found that the actual amount of expenses relating to FY11/12 included in the FY12/13 audit was actually $63,902 and that the impact of this error, in the AGO’s words, was “not significant”. Nonetheless, AHPETC informed AGO that with the implementation of the Works Order System module on 1 April 2012 for non-routine works and 1 October 2012 for routine works, lift repair expenses would be accounted for in a timely manner going forward.
Point 2, Receivables from Various Stakeholders
The second disclaimer from FKT covered receivables from the Citizens’ Consultative Committee (CCC) – a carry over largely of CIPC funding process governed by MND to the previous PAP Aljunied Town Council. The other stakeholders in this disclaimer are the taxman and Sundry Debtors. The total amount in question under this heading is about $3.1m.
First, the CCC:
The AGO’s findings revealed that in fact, about $614,237 was due from the CCC while the remaining $563,622 were receivables from other parties such as tenants and lessees.
Separately, even though HDB had banked in about $388,887 into AHPETC’s bank account in June and September 2012, the TC was unable to match the receipts to the corresponding receivables. The TC would like to acknowledge the AGO’s efforts in unravelling this disclaimer and following up with the Ang Mo Kio Town Council which in the aftermath of the AGO’s audit and intervention, established that the reimbursement it received from HDB should have been originally made to AHPETC instead, by virtue of the boundary changes made on the occasion on the 2011 General Elections.
I will deal with the point made by the AGO that it was able to unravel the issue of the CCC receivables using documents given to it by AHPETC later in my speech, covering the handover and taking over of records between ATC and AHPETC and the management of records in general.
Secondly, on receivables from IRAS:
FKT noted in its FY12/13 audit report that it was not able to ascertain receivables amounting to $110,735. AHPETC acknowledges that these receivables were wrongly stated and it has duly reversed out these incorrectly stated receivables in May 2014.
Thirdly, on Sundry Debtors:
FKT noted in its FY12/13 audit report that it was not able to ascertain about $1.8m of receivables from sundry debtors. The AGO found out that the TC had incorrectly overstated about half of these receivables and that the TC should have been more industrious in recovering payments on a timely basis.
Madam Speaker, while I acknowledge this point, a bit of background would be helpful to contextualize this particular issue. When AHPETC up-scaled the Hougang Town Council’s computer system to replace the terminated system used by the former Aljunied Town Council, the Hougang system had a limited number of categories for TC operations. This system was set-up for the operation of a single-member ward of an opposition TC. The accounting for Government programs such as the Revitalisation of Shops (ROS), Neighbourhood Renewal Programme (NRP) and schemes involving Town Council collaborations with the NEA were new and in some cases, unheard of to the management of AHPETC. Like lift upgrading, many of these were not extended to the Hougang in the past. Separately, some invoices were the subject of disagreements with the HDB on co-payment for façade repair to HDB blocks and hence subject to follow up by the TC, resulting in them not being removed as receivables.
The TC has since informed AGO that it received payment from Sundry Debtors in the two financial years, after the FKT audit of FY12/13 amounting to $508,370 of which $483,134 was owed by the HDB.
Separately, the AGO report noted that about $376,316 remained outstanding to AHPETC from the HDB and NEA respectively, with some owed for more than two years.
The AGO’s findings also confirm that the NEA had overlooked eight invoices amounting to $11,673 owed to AHPETC. For two particular invoices not rejected by HDB and deemed to be in order, HDB informed the AGO that it was still reviewing claims amounting to $175,067 which it received in May and September 2012, almost two a half years from when they were presented to the HDB by AHPETC.
The above point notwithstanding, the TC has adopted a practice of management regularly churning out a list of debtors and appointing a finance staff to follow up with debtors by issuing reminders on the sums owed. This due diligence will have a positive knock-on effect ensuring that receivables owed are captured in the accounts to accurately reflect the transactions and state of affairs in AHPETC.
Point 3, Creditors and Accrued Expenses
According to FKT’s disclaimer, the total amount in question under this head comes up to $647,094. The first issue on accrued liabilities covers a claim by FKT that the TC did not have a Standard Operating Procedure (SOP) covering the timely recording of liabilities. I will deal with this first.
The AGO has taken a different position from FKT on this point to correctly report that the TC indeed had an SOP, with the qualification that this SOP does not stipulate a timeline for verification works done by Property Officers after job sheets were received to enable a timely issuance of Works Orders. I have since personally checked on the SOP with the Town Council’s Property Manager and confirmed that for the overwhelming number of accrued liabilities, the SOP now puts the time frame from job completion to issuance of payment take a maximum of three months.
Secondly, on Accruals without Work Orders:
FKT reported that the TC was unable to provide details covering some $338,379 in accrued expenses from the previous Aljunied Town Council. The TC explained that it was not able to provide the details required, as it did not have supporting documents. The AGO was able find out that some of these items were overstatements, as the TC did not reverse out the accrued expenses from its accounts. As explained earlier, the TC was hampered operating a GRC with a manual Works Order system. With the rollout of a new Works Order System in 2012, the TC is enhancing its SOPs to ensure that moving forward, an accurate reflection of the amounts due to external parties is established.
Thirdly, on Other Payables:
The AGO found poor monitoring and lack of due diligence by AHPETC in following up on items in a temporary clearing account which FKT noted came up $308,715. AHPETC has since cleared up many of these receipts, and will put in resources to clear up the remaining amount.
Madam Speaker, the TC accepts that proper management involving the handover of records from the previous management was something that on hindsight should have been better addressed. The reality at the time was that many staff who signed for Finance-related files from the previous MA after GE2011 resigned in 2011 and 2012. With this came the loss of a lot of institutional knowledge specific to documents pertaining to the handover period. Going forward, and in the interests of better corporate governance, the TC will monitor the management and handover of records more systematically. To that end, proper handover procedures for resigning staff prior to issuance of their final paycheck have already been implemented.
Oversight of Contracts & Tenders
Before concluding Madam Speaker, I wish to say a few words about Tenders and Contracts as I have been the Chairman of Tenders and Contracts Committee since 2012. In that context, it would also be appropriate for me to make some comments about the Managing Agent’s role in the decision-making process involving the calling of tenders and award of contracts in view of some media reports insinuating personal benefit for FMSS by virtue of being the Managing Agent of AHPETC.
Firstly, in a situation where FMSS is a tenderer in a tender called by the Town Council, as was the case in 2011 for the Managing Agent contract, FMSS is kept at an arm’s length and a China wall is built between FMSS and the Town Council.
What happens in such this case? The evaluation of the such a tender is done solely by the elected and appointed members of the Town Council, all of whom have no interest, pecuniary or otherwise in FMSS.
The decision-making to award the tender in such a case would also be the sole remit of the Tender and Contracts Committee. No staff member of the Managing Agent is privy to the evaluation or the decision-making process in this case. The Secretary of the Town Council, Mr Danny Loh and the General Manager, Ms How Weng Fan and are not involved in this process at all. In 2011, in view of operational exigencies, a decision was made with the concurrence of Town Councillors; and as detailed earlier, FMSS did not participate in the evaluation or recommendation of the tenderer in strict adherence with the Town Council Financial Rules.
This was the same scenario that played itself out in the late last year and early this year when the Town Councillors met to evaluate the specifications of the Managing Agent tender for FY2015 and beyond.
In a second scenario, where FMSS does not participate in the tenders called by the TC pertaining for example to conservancy, lift maintenance and horticultural contracts, FMSS’ role is purely administrative. FMSS is expected to thoroughly evaluate and assess the tenderers and recommend which tenderers meet the minimum requirements of the TC. At no point does FMSS make a decision on who to award the contract to. FMSS’ administrative role is purely to advise the Tenders and Contracts committee on the tenderers and their submissions. It is for the committee to deliberate and determine in the interests of the residents of the Town Council which tenderer the contract ought to be awarded to after considering all the relevant facts. Once again, no personal benefit is accrued to FMSS by virtue of these processes.
Madam Speaker, I have not covered all the points made by both the AGO and the PWC in their reports, but have focused on the big-sum items. This is in no way minifies or downplays the weight the TC places on areas where the amounts owing or owed, and for reconciliation or follow-up are lower or less significant.
The TC will strengthen its processes. And we will do it with the same vigour when we sought to ensure that resident’s lives would not be affected during the course of the post GE2011 handover. I would like to thank all the staff of the Town Council, past and present, for their efforts and service to the Town Council. I note that the AGO with a full-time team working for almost a year with upto12 personnel including those from PWC, did not suspect and flag out potential criminal wrongdoing on the part of any staff member of the Town Council. We will make full use of the AGO’s findings to boost our financial systems and processes. Thank you.
Mdm Speaker, in between the fist and second reading of this Bill – a period of two and a half months – two stories about foreign worker accommodation in particular, caught the public eye. Both stories unwittingly put the importance of this Bill and the scope of the work ahead to better manage and look after the well-being of our foreign worker population, into acute perspective.
On the ground
On 6 December 2014, the New Paper reported that four Malaysian foreign workers who were employed as cleaners died in a fire at a Geylang Lorong 4 shophouse, in Singapore’s worst fire in 10 years. Two firemen and eight other individuals suffered injuries from the blaze. The unit in question – reported to be an area only slightly bigger than 1,300 sq ft – had nine rooms, each equipped with bunk beds, a tiny kitchen and a toilet. The Malaysian Star newspaper, STOMP and a Today article reported that premises was occupied by some 100 foreigners from China, India, Bangladesh and Malaysia, partitioned into 11 units of rooms each occupied by about 10 people. The local Chinese paper Shin Min Daily News on the other hand reported that the affected unit of the three-storey walk-up apartment had eleven rooms, each occupied by up to eight workers, which makes for a total of about 88 people in a single apartment.
In a separate piece of news on 29 Dec 2014, the New Paper reported that eight blocks of HDB managed flatted factories at Tampines Industrial Park A, comprising of workshops, furniture manufacturers and warehouses – were operating as a (I quote) “secret dormitory” (unquote) for 1000 foreign workers, in clear violation of HDB rules.
While these stories were headline-grabbing, other articles pertaining to our foreign workers continued to make the news. On 21 November 2014, the Straits Times reported that a spot check by the Migrant Workers’ Centre found more than 50 construction workers from Bangladesh and India crammed in two small apartments in Selegie Road with the report adding that the “men slept shoulder to shoulder, amid rotting food and soiled clothes”. The same article reminded readers that the paper had raised several reports on unhygienic and overcrowded foreign worker housing recounting one an incident of a Punggol HDB construction site where hundreds of workers had to use choked and broken urinals, and another story covering the plight of about 5000 workers living at Tuas View Square in factory-converted dormitories infested with rats and mosquitos.
A Business Times story the same month reported that of the 770,000 work permit holders, only 200,000 stay in purpose built dormitories that this Bill will regulate, with requirements for a little less than double the amount. The rest of our foreign workers stay in a variety of places like the putatively illegal dormitories in Geylang and Tampines, in HDB flats in some cases, and at temporary housing at construction sites all unregulated by an omnibus act of parliament – notwithstanding the spaghetti bowl of guidelines and restrictions governing such accommodation from the Urban Redevelopment Authority (URA), Singapore Civil Defence Force (SCDF), Public Utilities Board (PUB), the Building and Construction Agency (BCA), National Environment Agency (NEA) and the Housing and Development Board (HDB).
Better foreign worker dormitory employment standards for all foreign workers
During the second reading of the Employment of Foreign Manpower Bill in 2012, the Minister informed the House that in 2011, MOM conducted close to 800 inspections of premises used as foreign worker housing and that in 2009, enforcement action was taken against 1,800 employers for housing their workers in unacceptable conditions. A recent Business Times article reported that the first half of 2014 saw 360 inspections. However, the large number of these continuing violations and inspections suggest that Singapore, a first world economy by any stretch, does not host a robust enough framework governing the housing of foreign workers, even as this Bill is a step in the correct direction.
Mdm Speaker, the explanatory note of the Bill defines “foreign employee dormitory” to mean a premise that provides accommodation for more than 1000 workers. By this threshold, the Bill does not address the sort of accommodation at the centre of the Dec 6 Geylang fire and “secret dormitories” such as those in Tampines. I would like to ask the Minister what plans are envisaged to reduce this threshold number within the context of this Bill since it is explicitly suggested in the explanatory note and separately, how this figure of 1000 was arrived at in the first instance, in view of the need for greater oversight, regulation and enforcement across this industry, than is currently the case.
Separately, a Straits Times report of 19 August 2014 reported, rather oddly, that there were at least 5,000 empty beds still available at purpose-built dormitories that will be covered by this Bill. The reason for this sudden turn of events was put down to more construction firms being permitted by the authorities to set up foreign worker quarters on the sites of major building projects, including LTA and HDB sites.
I recognise that manpower proximity to the workplace helps reduce costs for businesses particularly construction contractors. To this extent, government policy should support such considerations wherever possible. However, rendering such operational flexibility for business would have been an opportune time to introduce clear licensing requirements, regulatory standards and a penalty framework for such temporary foreign worker quarters. This would have greatly supported contractors on the one hand, and improved the living conditions of the foreign workers on the other.
In drafting this Bill, I would like to enquire if the Ministry considered for example, introducing a separate category or categories of licencing for premises that operate as smaller foreign employee accommodation below the threshold number, so as to bring many more dormitories and places of accommodation for foreign workers under a licencing framework? Such a broad strategy would be aligned with the purpose of the Bill, as spelt out in clause 4, which seeks to establish certain accommodation standards for the foreign employee dormitories; for the appropriate mechanisms to ensure adherence to those very standards, and to promote the sustainability of and continuous improvements in the provision of services at foreign employee dormitories.
One possible way to support SMEs, and small businesses and contractors on the one hand, and our foreign worker community on the other, is for the Government to consider building and managing some dormitories for our foreign workers. For example, companies that employ 100 or less foreign workers, being more sensitive to cost pressures can be eligible to house their workers in Government-built and operated dormitories which set the standard for the entire industry. The entry of the Government into this sector can be modelled along the entry of Ministry of Education into the kindergarten business, which is to provide good pre-school education and more importantly, to catalyse improvements in this sector. If deemed appropriate, a fraction of the foreign worker levy can be used to establish such dormitories with a subsidy for small companies that show real and sustained productivity improvement in their operations.
Who is ultimately responsible for the health and safety of foreign workers?
Madam Speaker, Part 5 of the explanatory statement of the Bill states that the Minister by way of subsidiary legislation, can determine that several buildings on different parcels of land be regarded as a single boarding premises and whether all the beds therein are to be counted to determine if the total threshold number is attained. This is a positive move as it would prevent savvy operators who would nonetheless operate assiduously to work around the 1000 bed threshold by all means, effectively negating parliament’s intent for example, by creating sister companies thru family and friends. I would like to ask the Minister whether the Ministry has determined how many additional dormitory operators are likely to come under this scenario as spelt out in the explanatory note and how many more beds, so to speak, will come under the licencing framework as a result of this envisaged subsidiary legislation.
This Bill’s intention to determine that several buildings on different parcels of land can be regarded as a single boarding premises, should also interest potential investors. As recently as 2008, Avery Strategic Investments, an entity that was then 97% controlled by Morgan Stanley Real Estate bought three foreign workers’ dormitories for $153m when Jurong Town Corporation offered to sell three dormitories comprising a total of 13,544 beds. An officer of the minority shareholder, Averic Capital Management, was then quoted as saying, “as the Singapore economy grows, likely so will the dormitory business. We’re hopeful the economy remains robust; then there’ll be more opportunities to invest in this asset class.”
About two and a half years later, Morgan Stanley sought to exit the dormitory business citing a dearth of sites made available for dormitory development by the government, preventing them from enlarging their portfolio to spin-off the business into a dormitory real estate investment trust. It was reported that the entity received expressions of interests ranging from $375 million to $450 million, a whopping $100 million more than the total cost of the assets it purchased a mere three years prior.
Madam Speaker, it is not in doubt that the market is the lifeblood of any society. However, for industries and sectors that have significant socio-cultural implications for an urban and high-density society like Singapore, the market approach should go hand in hand with responsibility towards our foreign workers. Away from the dizzying dollars churned by the financial industry and the heady world of mergers and acquisitions, the concern of many Singaporeans and members of this house by virtue of this Bill, is primarily over the health, security and safe lodging of our foreign workers.
To this end, in the Ministry of Manpower’s press release on the Bill dated 4 November 2014, under the section covering penalties – it was stated (and I quote) “that the holder of the dormitory licence will be the dormitory operator responsible for the day-to-day running of the dormitory. Nonetheless, the premises may be owned by a separate proprietor who either sublets the premises to the operator for use as a dormitory; or appoints the operator to manage the daily operations on his behalf. In such instances, (the Ministry) would hold proprietors accountable where they, rather than the operators, have more control, for example, in making repairs or alterations to the premises.” (unquote)
I seek some clarifications on this point in the press release since the Bill does not make specific reference to the degree of control as apportioned between for example, the ultimate owner of a foreign employee dormitory and the licensed operator in the event of an infraction. For example, how far would an owner or a corporate entity be held liable if it can prove it had no control in making repairs and alterations to a boarding premises? Does that mean it is not responsible should foreign workers be found living in unsatisfactory conditions?
The interpretation section of the Bill defines a proprietor as “including the owner of the premises who is the lessor or grantor of the licence to occupy.” Specifically, I would like to ask the Minister, how far does ownership extend by this definition? Would it cover financial institutions and funds that are the ultimate owners and who seek to unlock value in such investments? In keeping with the purpose of the Bill as made out in clause 4, would it not be less ambiguous and keeping with the parliamentary intention of the Bill to make the licence holder and the owner or owners, regardless of their shareholding, jointly and severally liable for any infractions committed by the licence holder? A clarification of this point, in view of the Ministry’s potentially ambiguous press release of 4 November 2014 would be appreciated.
Madam Speaker, if this Bill is about providing for certain standards of accommodation and to promote the continuous improvements in the provision of services at dormitories, then I would argue that a firm enforcement regime that emphasises responsibility for foreign workers up and down the value chain be enshrined by this Bill and enunciated by the Minister. This is especially so since big corporates can potentially come on board and purchase strategic stakes in foreign employee dormitories as investors. The benefits of such a prospect should not be solely to unlock shareholder value – I would argue that benefits should flow back to the industry and to society, and align itself with the purpose of the Bill. In some cases, the financial heft of big corporates and holding companies and their ability to undertake independent risk assessments puts them in a good position to be the quasi-regulators of this industry, by virtue of ownership, alongside the Dormitory Association of Singapore.
In conclusion Mdm Speaker, while I support the Bill, which seeks to regulate some aspect of foreign worker accommodation in Singapore, I fear it may be a half-measure and rendered otiose if there is no parallel strategy to better regulate foreign employee accommodation per se – targeting not just big dormitory operators but the small-time contractors and businesses as well. Such as approach would be fairer and serve regulators and business better too, as it would not unwittingly penalise honest businesses which operate large dormitories that this Bill will regulate who play the game by the rules, and who do many Singaporeans a great service by improving the lot of our foreign workers. If Singapore manages to scale up its standards of foreign employee accommodation, our businesses are likely to attract high quality workers and significantly lower the risk of another tragic and senseless fire in Geylang or potentially wanton violations of statutory regulations as evidenced by the secret dormitories in Tampines.
Workers’ Party opposes the Constitution of the Republic of Singapore (Amendment) Bill
Madam Speaker, the Workers’ Party opposes the Constitution of the Republic of Singapore (Amendment) Bill.
The Workers’ Party is uncomfortable about the appointment of short-term Senior Judges who can be re-appointed after 65. The renewal of these short-term positions are contingent on whether renewal is recommended by the Prime Minister and concurred by the President. The new Article 95(2) provides that a person who is 65 years of age of older may be appointed as the Chief Justice, a Judge of Appeal or a Judge of the High Court for a specified period. The Workers’ Party position is that this weakens a concept critical to judicial independence, namely, the security of tenure.
Democracy and Judicial Independence
According to the former Chief Justice (CJ) Mr Chan Sek Keong:
[T]he “freedom to choose one’s Government is a hallmark of democracy” and that the “governors and the governed must respect the law and all are equal before the law. But respect for and subjection to the law can only be sustained if a neutral institution exists to ensure that the law is respected and enforced against all. That institution, in all democracies, is the Judiciary” and it is “the lynchpin of a democratic society and the rule of law.” Critically, the former Chief Justice notes, “the ability of the Judiciary to fulfil such a role is by no means automatic or assured; this is heavily contingent on it being an independent institution.”
Madam Speaker, these observations of the former CJ appeared in a Singapore Academy of Law Journal article in 2010 titled,Securing and Maintaining the Independence of the Court in Judicial Proceedings. The former CJ’s thesis was that the independence of the Judiciary hosted a theoretical and practical component.
The theoretical component noted that judicial independence can be secured by surrounding judges with a protective wall against pressure from political appointees, parliamentarians and pressure groups with specific agendas. This protective wall can be categorized according to what secures independence “to individual members of the judiciary and those that secure the independence of the Judiciary as an institution.” According to CJ Chan, protection afforded by this wall gives the Judiciary the impetus to carry out its Constitutional role and gives judges unfettered freedom to adjudicate disputes without fear or favour and according to law.
Now what are the components of this wall for individual judges? They include lifelong security of tenure and remuneration, immunity from civil suits, adequate remuneration and pension rights.
What are the components of the wall for the judiciary as an institution? Well they include, a fair process for judicial appointment, adequate funding and support for the Judiciary and, respect and support for the Judiciary in general.
Lost opportunity to strengthen Judicial Independence in Singapore?
Madam Speaker, the Workers’ Party is of the firm belief that this amendment to the Constitution offers the Government an opportunity to strengthen and reinforce the protective wall around the Judiciary to carry out its Constitutional role.
In accordance with our manifesto, the Workers’ Party is of the view that the Constitution should be amended to extend the retirement age of Supreme Court judges from 65 to 70 years with no prospect for extension by the Government thereafter. While extensions and short-term appointments are administratively convenient, it is the Workers’ Party view that they weaken the protective wall that upholds judicial independence.
Under the existing regime, which this Bill re-enacts, it is conceivable that a judge past the retirement age may be retained by the Government because his or her judgments are “safe” ones and acceptable to the Government, even as the Judiciary remains a separate organ of state. While I am not suggesting that this has occurred, such judgments may well be read as a signal by other judges who have not reached retirement age, as a factor that might determine the prospects for future judicial employment past the statutory retirement age or for a permanent appointment in the case of Judicial Commissioners. Such a prospect could threaten to breach to the protective wall upholding judicial independence and confidence in the Judiciary.
It is apposite to note, as CJ Chan did in his article, that there was also a practical component to judicial independence – namely, that each judge must believe in and maintain the integrity that the judicial office requires of him or her, and that no protective wall can maintain judicial independence should judges be unwilling or unable to exercise personal independence in discharging their duties and functions.
Future-Proofing Judicial Independence
Madam Speaker, we have a first class Judiciary. There is no reason to doubt the integrity of our judges. However, judicial independence as an institution may well take centre-stage and remain in the spotlight in the years to come as our polity becomes more plural and as our citizens turn to the court to adjudicate or clarify disputes covering administrative action and social norms. Before that happens, the Government would be well placed to institutionally strengthen the protective wall of judicial independence so that confidence in the Judiciary remains high. Relooking at concept of security of tenure is good place to start.
In fact, there are some signs that the Government is working to buttress the concept of judicial independence. In the Prime Minister’s speech to Legal Service Officers (LSOs) on the 20th of March 2014, it was announced that a separate judicial track would be created for LSOs. While the structure of the Legal Service remains an integrated one – hence retaining room for improvement – this change is an improvement from the current situation where legal officers rotate between appointments in the State Courts as Magistrates and District Judges, and as Deputy Public Prosecutors in the Attorney-General’s Chambers heightening the prospects of a conflict of interest and a potential lack of judicial independence.
The creation of a separate judicial service at the State Court level is a better measure to guard against members of the Executive from influencing the career and advancement of Judges at the State Courts, since the judicial officers career track will now be assessed by the Judicial Branch Personnel Board and not the Legal Branch Personnel Board. In effect, what this change as announced by the Prime Minister does is to play some small, but not imperceptible, part in strengthening the protective wall of judicial independence. Even if this may not be the stated intention of the Government, it ought to operate as such.
Mdm Speaker, this amendment to the Constitution would have been a good opportunity for the Government to address judicial independence with an acute focus on the future of the Judiciary in Singapore. To make it better and to reinforce that protective wall. Along with the prospective introduction of a judicial service at the State Courts, it would have also been an opportunity for the Government to address judicial independence globally, across the courts in Singapore.
Other Constitutional Changes Proposed
On the other changes proposed by the Bill, the Workers’ Party does not object to setting up of the International Commercial Court and the creation of the post of an international judge as it is not envisaged to have direct ramifications on areas of sovereign domestic law which remain the domain of local judges and because it has the potential of making Singapore a key centre for legal work in Asia.
I have a clarification for the Minister about the government’s thinking behind the possible appointment of multiple Deputy Attorney-Generals. The AGC already accommodates for the appointment of a Solicitor-General and a Second Solicitor-General. Could not taxpayer money have been better utilised to strengthen the middle ranks of the Attorney-General’s Chambers if a heavier workload is the reason for the creation of the office of one or more Deputy Attorney-Generals?
Finally, I seek clarification from the Minister about the replacement of pensions with gratuities for members of the Public Service Commission, the Auditor-General and the Attorney-General going forward.
Madam Speaker, in 2012, when parliamentary pensions were abolished, DPM Teo said that “the removal of pensions will further strengthen the principle of a clean wage and align the retirement scheme of office-holders and Members of Parliament to the Central Provident Fund system.” There was no replacement of parliamentary pensions with any gratuity, and rightfully so. Indeed, the concept of a clean wage goes hand in hand with good governance and transparency.
In a parliamentary reply to a question in April 2013, DPM Teo stated that for judicial and statutory appointment holders, the proposed gratuity plan is essentially of the same value as the pension and is taken into account in the overall salary levels when carrying out salary comparisons. It would therefore appear that there is a lack of consistency in the Government’s approach towards the concept of a clean wage, if indeed a gratuity is seen to replace a pension.
In principle, because of the competitive salaries already received by civil servants, I seek the Minister’s clarification about the current rationale behind paying certain civil servants a gratuity and why it would it not just be simpler and more consistent to have a clean wage.
Madam Speaker, I oppose the Bill.
8 Mr Baey Yam Keng asked the Minister for Culture, Community and Youth (a) how will the unsatisfactory condition of the National Stadium pitch affect the international reputation of Singapore given that planned international events have been cancelled or rescheduled; (b) besides payment to SportsHub Pte Ltd being withheld, how are the interests of the Government and public protected in the Private-Public-Partnership arrangement; and (c) apart from the commercial events, what other planned events will be affected and how will these event owners be compensated.
9 Mr Pritam Singh asked the Minister for Culture, Community and Youth what steps will be taken to avoid a repeat of the episode where the National Stadium pitch was deemed to have fallen short of international standards during the soccer friendly between Brazil and Japan on 14 October 2014.
Under the public-private partnership (PPP) arrangement, Sports Hub Pte Ltd (SHPL) designed, built, financed and operates the new Singapore Sports Hub for 25 years. The intent of the PPP is to leverage the private partner’s expertise and network to create a vibrant mix of sports and lifestyle activities that would be accessible to all. SHPL is required to make available the various facilities in the Sports Hub for public and private use, according to the specifications and standards detailed in the Project Agreement between SHPL and Sport Singapore.
Now, developing a major sporting venue in land-scarce Singapore does present several unique challenges. Many stadiums around the world are designed for a specific purpose and they are not used intensively all year round. This is perhaps possible in countries which do not face space or land constraints. In Singapore, it is a luxury we cannot afford. As such, SHPL was asked to deliver a multi-purpose Sports Hub, which could accommodate a vibrant calendar of sports and entertainment activities. By and large, I would say that the expertise brought in by SHPL has helped to make the Sports Hub an integrated sports and lifestyle destination for Singaporeans to enjoy.
However, it has faced problems with the National Stadium pitch because of several reasons. For one, SHPL had taken three months longer than expected to complete the National Stadium, and this meant that there was not enough time to allow the grass on the pitch to take root and stabilise. In addition, SHPL misjudged the impact that the intensive events schedule would have on the pitch. It had carried out testing before deciding on the hybrid Desso GrassMaster pitch. This is a hybrid pitch which is primarily natural turf anchored by artificial fibres. It procured a cover that was designed to allow activities and concerts to take place on the pitch with reduced impact on the grass. This had been tested but it did not work out as planned, and in part because the grass was not anchored deeply enough. It did not have time to grow and anchor itself deeply enough, and so, as a result, the repeated use and coverage of the pitch ended up damaging it.
SHPL recognises that the poor condition of the pitch and the changes in the event schedule have brought about negative publicity to the project. This is also not in the consortium’s own interests, and hence it has stepped forward to take ownership of the issue. It has acknowledged its own shortcomings and it has embarked on the necessary remedial actions to improve the condition of the pitch.
Earlier, SHPL had procured growth lights at its own cost to enhance the growth of the grass. And after the recent Brazil-Japan match, the Asia Pacific Dragons – Maori All Blacks rugby match was cancelled and the Jay Chou concert postponed and this was done to give the pitch more time to stabilise before the coming AFF Suzuki Cup in November. SHPL is bearing the costs arising from the cancellation and postponement of these events.
With the freeing up of the events schedule and the measures put in place so far, we have already seen improvements in the pitch conditions. At the same time, SHPL has been engaging local and overseas experts to fundamentally re-examine its earlier assumptions and models for the use of the pitch. They will assess if the current pitch solution is viable beyond the Suzuki Cup, or whether more extensive changes are needed in the medium to longer-term to ensure a consistently robust pitch. These are still being studied, and SHPL intends to put in place longer-term measures after the Suzuki Cup.
Mr Baey Yam Keng (Tampines): Thank you, Madam. I would like to ask the Minister how was the Government involved in deciding the type of pitch used for the National Stadium? Was the Government consulted before this hybrid was decided? In resolving this issue now, how is the Government working with SHPL to settle this issue and what is the time frame that the Minister expect this pitch to be restored to the expected standard?
My last question is the Minister mentioned that as part of the PPP, the Sports Hub has to cater for public use. So, during this period where the pitch is not satisfactory, what are the public events that would be affected and how would this affect this PPP arrangement and how would SHPL be taken to task for not fulfilling its end of the agreement?
Mr Lawrence Wong: Madam, as I have mentioned earlier, the requirement is stated in the project agreement that spelt out between Sports Singapore and SHPL. SHPL is required to deliver on certain outcomes, so it has to take upon itself the responsibility of ensuring the pitch allows for multi-purpose usage and is robust enough to withstand that usage.
In the course of coming up with the present solution, SHPL had done a series of tests and these test results were shown to Sports Singapore to show that these tests were done and that the proposed solution that was eventually put in place was the best solution that they had based on the conditions that they had tried out earlier. This, of course, as I have mentioned we know now that it has no worked out as planned, not necessarily because the proposed solution is not the desired one but perhaps there were other extenuating circumstances – as I had mentioned the project was late, and the grass itself had not had time to stabilise before it had to deal with a very heavy event schedule.
The current arrangement or presently, even with the postponement of the events in the coming months, and the time that has taken to allow the grass to grow, we have already seen significant improvements in the pitch. This is something that is being done for the interim, for the Suzuki Cup. Beyond that, there is now a process of going through some of the earlier test results all over again – just to ensure that the solution that is being proposed is truly robust. And this is again a process which we have asked SHPL to undertake. They will do a series of experiments and tests to assure all stakeholders that they have a robust solution for the medium and long term. They will be sharing the results with the Government, with Sports SG. We are also asking our own experts, for example, from the National Parks to look at the results and to satisfy ourselves that whatever the solution as proposed by SHPL is a robust one.
On the private and public use, the public use will pertain to events like the National Day Parade, for example. Not that it is going to be happening next year in the Stadium, but if something like that were to happen, that would be an event that is for public usage. So, in the near term — between now and December or early next year — we have no public events that are in the calendar.
Mr Pritam Singh (Aljunied): I would like to thank the Minister for his reply. Mdm Speaker, page 58 of the Ministry of Finance’s Public/Private Partnership Handbook states that the misallocation between the PPP provider, in this case, SHPL, and the Government procuring entity namely Sports Singapore, is complex and Sports SG must be careful that operational risks are not passed back to them.
Separately, there was also the media statement from Sports Singapore suggesting non-payment if the condition of the pitch does not improve – I believe this was issued shortly after the Brazil-JapanFriendly match.
I have three supplementary questions for the Minister. First, what is the annual payment that Sports Singapore pays to the Sports Hub under the PPP framework and how are the payments structured over the re-payment period? Secondly, under what circumstances can Sports Singapore contractually withhold annual payment to the Sports Hub and how much can it withhold for non-performance? And finally, in view of the Suzuki Cup ticket prices that were released yesterday, what role does Sports Singapore and the Sports Associations play to determine the pricing of events with potential mass appeal and what recourse does Sports Singapore have to ensure that ticket prices are not out of reach for the mass public?
Mr Lawrence Wong: Madam, with respect with the questions, on the annual payment, I do not have a figure at hand but I would say that the annual payment is over a stream of a period of time which eventually would amount to the overall cost of the project. The overall cost of the project is something at a region of $1.3 billion.
As a PPP, instead of forking out $1.3 billion upfront, the Government does not do that. It is done by the private sector but we instead, pay an annual stream of payments over the 25-year period for the usage of the stadium; of the facilities within the Sports Hub. That is how it is designed and constructed.
Within the project agreement, there is indeed a provision for deductions in the availability payment in the event of non-performance or non-availability of use. And this is quite standard in a PPP arrangement. Even in a mature PPP in other countries, you will often find deductions being made in the event of a non-performance by the private partner. This is something that Sports SG will carry out in accordance with the provisions in the project agreement.
On ticket prices, that is something that would be set by event organisers, not necessarily by Sports Hub itself because the events that are taking place in the Sports Hub may be put up by a National Sport Association, it may be put up by Sports Singapore, it may be put together by a private events promoter. These are not regulated prices; these are left to the market. So, the property owners and the event organisers, which are usually commercial organisers, would then have to decide what is the appropriate price range to set these prices.
I would say if you look at the experience so far, and compare with what we have seen in Jalan Besar Stadium, what we have seen in the old national stadium for the events and for the sporting activities that we have had in the Sports Hub, I think they are within a comparable range. For example, the Brazil-Japan match ticket prices were comparable to what was in the old national stadium when Liverpool came to play in the old national stadium. We have had many sporting events within the new Sports Hub organised by our National Sports Associations where ticket prices are very affordable and accessible to all Singaporeans.
This Bill comes four years after the Singapore Academy of Law’s Law Reform Committee released a report on online gaming in Singapore in July 2010. The Law Reform paper noted that Singapore had begun to host gaming and gambling events with more frequency referring to the Betfair Asian Poker Tour, and through statutory exemptions to the Common Gaming Houses Act for organisers of private events to organize gambling activities in Singapore. In the words of the report, these developments suggested a more open state policy towards controlled and revenue-generating gambling activities, with similar implications for online gambling, even though the local Courts have generally taken a more conservative approach with regard to the public policy considerations about gambling.
This Bill will clarify the law on online gambling especially since the four key statutes that govern gambling in Singapore, namely, the Common Gaming Houses Act, the Betting Act, the Private Lotteries Act and the Betting and Sweepstakes Duties Act do not adequately address the legal regime surrounding online or remote gambling. With regard to online gambling till date, the Common Gaming Houses Act and the Betting Act are generally differentiated with the former dealing mainly with casino-style online gambling and the latter with sports-type online betting.
The Bill targets all forms of remote gambling activity – and it covers individuals and corporate entities from gamblers to betting agents and operators. The law will apply so long as part of the gambling activity takes place in Singapore, regardless of where the bet is placed or where the remote gambling operator is located. It also gives authorities the power to block payments between illegal gambling sites and financial institutions and block local access to gambling websites that facilitate or advertise remote gambling. All of these are very far-reaching measures.
The Bill’s Key Issue: Exemptions
Madam Speaker, a reading of the Bill in isolation sends a signal that the state subscribes to a restrictive and socially responsible attitude towards remote gambling. This is however only until the exemptions from clauses 26 to 30 to the Bill kick in and this aspect of the Bill is the focus of my speech.
The Minister can issue a certificate of exemption to any operator if it is in the public interest to do so. Clause 28 lists the conditions that the Minister may refer to when deciding to issue a certificate, although these are not exhaustive, and because the Minister has wide powers to add to, delete or modify the conditions governing the issuance of a certificate of exemption.
I have a few clarifications for the Minister in this regard. While I am supportive of a clear legal regime to deal with remote gambling, I am concerned that the prospect of a certificate of exemption issued to one or more local operators will increase the prospect of gambling in Singapore per se, as there is no clarity as yet on the means by which an operator would seek to contain and control the potential of remote gambling to cause harm to all Singaporeans not just to young persons and vulnerable persons. I will cover four main areas in my speech.
First – Is it inevitable that a total ban will cause remote gambling to go underground?
It was noteworthy that in the National Council on Problem Gambling (NCPG) consultation exercise report on the regulation of remote gambling dated 6 March 2014– some stakeholders advocated a complete ban on remote gambling on the grounds that there were sufficient gambling outlets available to Singaporeans, and to prevent easy access to remote gambling especially among youth who are usually more tech-savvy and potentially at greater risk.
The often-heard argument about remote gambling is that a total ban will drive activities such as internet gambling underground. This is often is the same argument used for the regulation of other vices. In the absence of relevant data and information, I am not convinced that these concerns wholly apply to remote gambling precisely because gamblers can still get their fix at land-based outlets and some remote gambling options provided to gamblers by operators currently, and it is not as if gambling per se is being banned. If so, wouldn’t that suggest that rather than gamblers going underground and operating illegally, most gamblers would just go to the existing land-based outlets such as authorised 4D/TOTO shops which are completely legal and regulated? Separately, even if some remote gambling does go underground, there is already some acknowledgement by the Minister that even with the passage of this Bill into law, there remain loopholes such as Virtual Private Networks or VPNs that can be set up to circumscribe the some restrictions in this Bill and gamblers could still get their fix through international online gambling sites. I would be grateful if the Minister could inform this House whether his Ministry will be open to look into the efficacy of a total ban on online gambling and not issue a certificate to any operator, especially since the public does not know how restrictive or liberal the remote gambling regime will be in practice, or whether it will increase the prospect of compulsive gambling in Singapore.
Second – Information on Remote Gambling in Singapore
The NCPG consultation exercise report on the regulation of remote gambling saw some stakeholders calling on the Government to commission more local research on remote gambling to study the nature and extent of remote gambling in Singapore. I am of the view that access to this information would better equip members for this debate, rather than to rely on analyst reports projections from third parties. I hope the Minister can share more information on remote gambling in this regard, for example, details on the numbers of the remote gamblers in Singapore, the frequency of their betting activities and preferred betting activities i.e. sports betting or conventional casino-styled gambling, so that parliament can ensure that the social safeguards with regard to remote gambling are set at an appropriate level.
Third – Remote Gambling exempt operators: Taxation and Proceeds?
In a USA Today editorial dated 25 Sep 2014, it was reported that the state of New Jersey was looking to the Courts to allow sports betting and the concern was that online sports betting would follow suit accordingly. This may not just mean bets on the eventual results, but live-betting as well (such as the number of red and yellow cards in soccer game for example), raising the prospect of attendant social ills such as increased sophistication in match-fixing for example. The fear is that if pressures begin to mount of the bottom-lines of exempt operators and even the state as a tax partner, there may well be a desensitization towards relaxed remote gambling restrictions as a solution. The Bill gives wide powers to the Minister to decline or revoke the issuance of a certificate and I hope the Minister can let this House know what measures are in place to ensure that such a slippery slope does not occur.
In addition, the NCPG consultation exercise on remote gambling proposed that the proceeds of remote gambling products offered by not-for-profit entities should go towards charitable and community causes. This point is made in clause 26 on the factors the Minister may consider before issuing a certificate of exemption. I would like to ask the Minister if the Ministry has determined what percentage of proceeds from remote gambling would go towards such causes and the operators respectively, and how remote gambling will be taxed. Will this figure will be made public in due course, and would an expectation of a percentage of proceeds be a criteria for the issuance of a certificate, in addition to the conditions specified in clause 28?
Fourth – Responsible Gaming Regulations for Remote Gambling
According to a speech made by the Minister at the 3rd Singapore Symposium on Casino Regulation and Crime last year, the total revenue of the global remote gambling industry in 2012 was estimated at US$35b, with an expected annual growth rate of about 9% – about five times the expected growth for conventional land-based gambling.
The Minister for Social and Family Development – in a reply to a parliamentary question on the implementation of responsible gaming measures adopted by the two Integrated Resorts in October 2013 with respect to the Casino Control (Responsible Gambling) Regulations which came into effect on 31st May 2013 – said that a casino operator must submit its responsible gambling programme to the authorities for prior approval with some measures including whether the operators had committed a dedicated committee to oversee responsible gambling efforts, set-up a pre-commitment facility for patrons to limit their gambling expenditures, and other broad measures such as responsible gambling ambassadors providing patrons with information and to assist those who display signs of anxiety or distress.
These measures have not been raised by this Bill but would conceivably be similarly raised in subsidiary legislation. However, as the drawing up of such legislation is not subject to parliamentary debate, it would be important for the Minister to flesh out the contours of responsible gaming regulations relevant to remote gambling in parliament, so that members can be assured that remote gambling options as offered by exempt operators do not end up making it more convenient to gamble as Singapore is already one of the most wired and connected countries in the world. There is also a legitimate concern that responsible gambling regulations specific to land-based gambling are not easily portable to the remote gambling realm precisely because land-based gambling outlets are viscerally better placed to introduce social checks and monitors, for example through entry levies. In view of the ubiquitous nature of remote gambling, the integrity and online security of gambler/gambling-related information and specifically, the greater difficulty to police and influence online activity, can the Minister please share what measures and regulations the Ministry deliberated upon to ensure that widespread online gambling does not begin to take root in Singapore because of online or remote mediums through regulated operators who have been issued a certificate of exemptions?
Separately, in its press release dated 29 Nov 2013 on proposals to restrict remote gambling, the Ministry stated that in addition to the changes promulgated in the Bill before the House today, the Ministry will also strengthen public education with regard to remote gambling and gambling simulation games. Can the Minister share how the Ministry intends to do so, how different its public education program would be for remote gamblers as opposed to the land-based gambling, and how it plans to gauge the effectiveness of such measures in view of the privacy afforded to a gambler by the Internet, and as iterated earlier, given the nature of the online medium in particular.
In conclusion Madam Speaker, a number of international studies warn how remote gambling activities can be more dangerous than conventional ones that are already present in Singapore. The British-based Global Betting and Gaming Consultants (GBGC) estimated that the remote gambling industry in Singapore will rake in US$416 million (S$526 million) in 2014, up by more than 50 per cent from the US$271.58 million in 2009. More worryingly, according to the Psychological Assessment Journal, it was reported that 40 per cent of online gamblers tend to overestimate their winnngs and underestimate their losses. Separately, NCPG statistics from 2011 showed that those who participated in online gambling were found to have the poorest self-control, gambling longer, more frequently, and spending more money than planned.
Mdm Speaker, the phrase, the devil is in the details is an often heard cliché. This Bill essentially sees the Government proposing a largely restrictive regime governing remote gambling which is a positive development in principle. To that end, I support the Bill. However, the Bill is also one where the details – of how the Government will ensure remote gambling through exempt operators will not lead to an increase incidence of gambling, especially among the vulnerable groups – are not sufficiently clear. As this is a significant aspect of the Bill with far reaching implications on gambling norms in Singapore, I ask the Minister to put this Bill before a Select Committee so parliament can receive additional feedback from Singaporeans, industry experts, and in particular, operators that would potentially qualify for a certificate of exemption, with a view to scrutinise clauses 26 to 30 of Bill more closely. Thank you.