Saturday, 17 March 2018

Public Hearings on Fake News: 14 - 16 March 2018

Select Committee on Deliberate Online Falsehoods - Public Hearings

Eight-day hearing on how Singapore should battle online disinformation begins
By Nur Asyiqin Mohamad Salleh, The Straits Times, 14 Mar 2018

The fight against deliberate online falsehoods in Singapore is under way at Parliament House, with academics, legal experts and religious groups slated to speak on Wednesday (March 14) at the first public hearing on the issue.

At the opening of the hearing, chairman of the committee looking into the issue, Deputy Speaker Charles Chong, said: "Deliberate online falsehoods are a serious global problem, which many countries, including Singapore, have to grapple with. It is a complex problem, affecting us in many different ways."

The full-day session will first see academics Carol Soon and Shawn Goh of the Institute of Policy Studies, who have studied the impact of new media, as well as their colleague Mathew Matthews - known for his research on societal cohesion in Singapore - give their views on the problem of online fabrications.

Singapore Management University law school dean Goh Yihan, lawyer and former Nominated MP Shrinivas Rai, and cyber-conflict expert Michael Raska, an assistant professor at the S. Rajaratnam School of International Studies, are also slated to speak.

Representatives for the Roman Catholic Archdiocese, National Council of Churches of Singapore and the Singapore Buddhist Federation are scheduled to weigh in with their community's views as well.

These speakers will appear before the 10-member Select Committee, which was set up in January to look into how Singapore can tackle deliberate online falsehoods.

The high-level parliamentary committee will speak to a diverse range of individuals and organisations from Singapore and abroad to help it decide on its recommendations, which will be submitted to Parliament.

This will take place over eight days this week and the next two weeks. As the hearings go on, the committee will decide whether all the dates are needed.

It received a record 164 written submissions, toppling the previous high of 99 submissions to the 1988 Select Committee on the Parliamentary Elections (Amendment) Bill and reflecting the interest and anxiety sparked by the scourge of disinformation. These included perspectives from religious groups, traditional and alternative media, technology companies and academics.

A total of 79 individuals and organisations have been invited to speak - outstripping past Select Committee hearings. Said Mr Chong: "We may revise the witness list as the hearings progress."

He said the current committee’s decisions on the process so far have been unanimous and consensual. "This reflects our common intention to engage widely on our terms of reference."

The committee said in a statement on Tuesday: "This is an indication of the importance of these issues at stake, and the (committee's) commitment to consult widely."

Fewer foreigners, more locals in workforce last year: Labour Market Report 2017

Biggest drop in foreigners working in Singapore in 15 years: Manpower Ministry
Employment pass holders declined for first time in at least six years, MOM data shows
By Joanna Seow, Manpower Correspondent, The Straits Times, 16 Mar 2018

The number of foreigners working in Singapore fell by 32,000 last year - the biggest drop in 15 years - even as more locals were in jobs.

While the decline was mostly due to fewer work permit holders in the construction and marine shipyard industries, the number of skilled foreigners on employment passes (EP) also went down by 4,500.

This was the first drop in at least six years, according to the latest figures released by the Ministry of Manpower (MOM) yesterday.

Industries that employed fewer EP holders included the professional services and infocomm technology sectors. In tandem, they employed more local workers, the ministry said in its report.

The last time Singapore saw such a steep decline in the number of foreigners working here was in 2002, when it plunged by 43,000.

This time, weaknesses in both the construction and marine shipyard industries played a key role, said MOM, pointing to poor demand for oil rigs.

But observers also said there has been some success in the Government's effort to build a so-called "Singapore core" in the workforce - by both tightening foreign manpower policies and upgrading the skills of local workers.

"The policy measures have helped improve employment prospects for resident workers," said DBS economist Irvin Seah.

Overall, 21,300 more Singaporeans and permanent residents were in jobs last year than in 2016. As a result, they made up a slightly bigger share of the workforce - at 67.2 per cent, up from 66.4 per cent.

The workforce, excluding maids, stood at 3.42 million in December.

Thursday, 15 March 2018

ISEAS 50th Anniversary Lecture by Prime Minister Lee Hsien Loong

ASEAN must stand united amid tidal pulls on members as regional powers grow in strength: PM Lee Hsien Loong
By Joanna Seow, Manpower Correspondent, The Straits Times, 14 Mar 2018

ASEAN has to get used to new internal dynamics as each member - to a different degree - feels the influence of burgeoning regional powers, especially China and India, said Prime Minister Lee Hsien Loong.

But this must not lead to a divided ASEAN, he said yesterday.

"We must accept the reality of these tidal pulls, without allowing them to lead to fault lines forming within the ASEAN group," he said.

New powers, especially China and India, are growing in strength and influence, creating new opportunities, he noted. At the same time, "countries have to take into account the policies and interests of new powers, while maintaining their traditional political and economic ties".

In the United States, the political mood has changed. But ASEAN hopes the world's biggest economy and region's security anchor remains active in South-east Asia.

"In this shifting environment, it is important that ASEAN works actively to maintain its centrality and relevance," the Prime Minister told about 500 people, including diplomats and students, at a lecture marking the 50th anniversary of think-tank ISEAS - Yusof Ishak Institute.

He noted that there is nothing to prevent other groupings or projects - such as China's Belt and Road Initiative - from being launched. "Amid this Darwinian process, ASEAN members must come together to maintain ASEAN's relevance and cohesion."

Thus, while each ASEAN member has its own domestic issues to manage, a unified front is key. PM Lee called on governments to invest political capital in the ASEAN project and to make a conscious effort to think regionally, not just nationally.

Singapore tops Global Smart City Performance Index 2017

Republic ranks first on use of tech solutions in areas of mobility, health, public safety, productivity in Intel-sponsored study by Juniper Research
By Navin Sregantan, The Straits Times, 14 Mar 2018

Singapore has triumphed over big guns like London and New York to top a global ranking of smart cities in 2017.

The ranking lists the top 20 cities in terms of the integration of Internet of Things (IoT) technology and connected services across the key areas of mobility, health, public safety and productivity. Singapore not only ranked as the top "smart city" but also came out tops in all these areas.

The study noted that Singapore's Smart Nation initiative and its position as a city-state make the country unique in its ability to execute its smart-city vision.

It found that the use of IoT-enabled infrastructure here, such as applied smart traffic solutions used by the Land Transport Authority, may save drivers up to 60 hours a year.

San Francisco and London were ranked second and third, respectively, in this area for their efforts to use technology solutions to curb mobility-related issues such as traffic congestion.

In healthcare, the study found that smart cities with connected digital health services, such as wearable apps that monitor blood pressure, can save individuals close to 10 hours a year. "Singapore and Seoul were notable in terms of their focus on addressing healthcare service provision for elderly citizens through a range of technologies, including digital service platforms as well as remote monitoring devices," said market researcher Juniper Research, which carried out the survey with help from Intel.

Mr Windsor Holden, Juniper Research's head of forecasting and consultancy, said: "We can't overlook the importance of the real human benefits that smart cities have. Connected communities, municipal services and processes have a powerful impact on a citizen's quality of life."

Monday, 12 March 2018

Test balloons on GST tax hike claim; Parliamentary Privilege: When is it abuse?

Robust debates in the House: How far is too far?
Parliamentary privilege allows MPs to speak without fear of being sued. But when does this cross into abuse of power?
By Ng Jun Sen, Political Correspondent, The Sunday Times, 11 Mar 2018

The Budget 2018 debate may be over, but one aspect still sticks in people's minds: the exchanges between Workers' Party (WP) leaders and several People's Action Party (PAP) ministers.

During the Budget round-up debate on March 1, WP chairman Sylvia Lim voiced her suspicion that the Government had intended to raise the goods and services tax (GST) immediately but that it backtracked after negative public reaction. While later acknowledging that her suspicion "may have been wrong", Ms Lim refused to withdraw her comment and apologise for it.

Her rationale: Her "honest suspicion" was based on a sequence of events - including the Government's non-denial of public chatter that a GST hike was imminent. In articulating it, she was doing her "duty as an MP to convey ground concerns, reactions and confusion". No one knew the truth of the GST hike except for the Cabinet, she added.

In response, Leader of the House Grace Fu said that in refusing to retract the comment and apologise, Ms Lim's conduct fell short of the standard of integrity and honour expected of members.

The Aljunied GRC MP had suggested that the Government was dishonest, and had tarnished the reputations of leaders who had earlier made it clear that tax revenues needed to be raised in the long run, said Ms Fu.

"I must put the honourable member on notice, and the rest of the House too, that if she repeats such dishonourable conduct and abuse parliamentary privilege, I'll refer the matter to the Committee of Privileges," said the minister in charge of order and procedure in Parliament.

A spokesman for Ms Fu said yesterday that the Government had sought the advice of the Attorney-General's Chambers (AGC) on the matter.

She said Ms Fu had made her statement in Parliament last Tuesday - asking Ms Lim to withdraw her comments and apologise - "after taking AGC's advice". She did not say what advice the AGC gave.

The Committee of Privileges looks into alleged breaches of parliamentary privilege. Being referred to it is no small deal - punishment ranges from, at the very least, a reprimand or admonishment by the Speaker, to being fined up to $50,000, to being suspended and even jailed during the duration of a parliamentary session.

Insight looks at what parliamentary privilege is, and where the line is drawn between allowing MPs to raise suspicions in a relatively unfettered way and abuse of that privilege.

Sunday, 11 March 2018

CPTPP: Singapore inks new Trans-Pacific Partnership trade pact with 10 other countries

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) keeps door open to new members
New trade grouping vows to bring deal into force as soon as possible
By Charissa Yong, Regional Correspondent, The Straits Times, 10 Mar 2018

Fresh from signing the revised Trans-Pacific Partnership (TPP), ministers from the newly formed trade grouping vowed to bring the agreement into force as soon as possible.

The club is also open to new members, the 11 countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) underlined.

The CPTPP was signed in Santiago, Chile on Thursday afternoon (yesterday morning Singapore time), hours before United States President Donald Trump - who pulled America out of the trade deal in January last year-signed off on steep tariffs on steel and aluminium imports.

The signing of the agreement sends a "powerful message" against trade wars, Chilean Foreign Minister Heraldo Munoz said. The agreement, he added, is a strong signal "against protectionist pressures, in favour of a world open to trade, without unilateral sanctions and without the threat of trade wars".

Minister for Trade and Industry (Trade) Lim Hng Kiang said the signing is "a concrete demonstration of the signatories' commitment to the collective goals of greater trade liberalisation, regional economic integration and better opportunities for our people." The pact, he added, sets out "a new regional standard for future free trade agreements".

Canadian Minister for International Trade Francois-Philippe Champagne said: "We're proud... to show the world that progressive trade is the way forward, that fair, balanced and principled trade is the way forward, and that putting citizens first is the way forward for the world when it comes to trade."

In a joint statement, trade ministers from all 11 CPTPP members said the agreement demonstrated their "collective commitment to an effective, rules-based and transparent trading system which is open to all economies willing to accept these principles". They welcomed the interest shown by a number of other economies wishing to join the bloc, which accounts for 13.5 per cent of the world's gross domestic product.

The 11 CPTPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Saturday, 10 March 2018

2018 Committee of Supply Debate Highlights: MCCY, MOH, MOT, MSF, MND, MEWR, MCI, MOF

MPs debated budgets over 52 hours - the longest in five years
By Joanna Seow, Manpower Correspondent, The Straits Times, 9 Mar 2018

As the eight-day debate on the Government's spending plans for the coming financial year drew to a close, history of sorts was made.

The 530 questions prepared by MPs were allocated 52 hours in all, the longest in the past five years.

The achievement underscores the "breadth and gravity" of the issues that Singapore faces, Leader of the House Grace Fu said yesterday in her speech wrapping up the marathon session.

Job security remained a hot topic even as economic growth made a recovery last year, but this year's debates also saw a keen focus on social inequality and fostering a more caring society.

For instance, a recent Institute of Policy Studies survey, which showed a concentration of social networks around class differentiators like housing type and schools attended, as well as sociologist Teo You Yenn's book on inequality, were cited several times.

"As we embrace globalisation and technology to expand opportunities for our businesses, to transform industries and build deep capabilities, how do we ensure that we move forward together and leave no one behind?" said Ms Fu, who is also Minister for Culture, Community and Youth.

She noted that a lot of time was spent debating the budgets of the Manpower, Trade and Industry, and Culture, Community and Youth ministries.

Parliament spent 21/2 days debating the national Budget, and the rest of the time on the 16 ministries' budget debates.

Questions raised included how to support more vulnerable segments of the workforce, how to help enterprises stay competitive and create good jobs for locals, and how to strengthen social cohesion across race, religion and class lines.

MPs also asked about dealing with external threats, such as extremism and and cyber-security issues, as well as domestic challenges such as housing for young couples and regulating personal mobility devices, said Ms Fu.

She highlighted how Nominated MP Kuik Shiao-Yin and Mr Murali Pillai (Bukit Batok) had spoken about the need for both pragmatism and ideals to take Singapore forward.

Agreeing, she said: "To tackle the problems of today and prepare ourselves for tomorrow, we must be bold and embrace change. We must have that grit and bias for action that makes us an exceptional nation. This would not be the case if we had no ideals."

Calling on Singaporeans to help build the "ideal Singapore", Ms Fu said that while the Government plays the role of an enabler through the Budget, success depends more on individuals taking ownership of the nation's future, amid the challenges of income inequality, disruptive technology and an ageing society.

The support of Singaporeans of all ages will be needed to nurture a strong society which dares to be entrepreneurial - "a smart nation with a heart", she said.

Friday, 9 March 2018

New Integrated Shield Plan riders must incorporate a co-payment of 5%

New policyholders will eventually have to pay at least 5% of bill, but amount will be capped
By Salma Khalik, Senior Health Correspondent, The Straits Times, 8 Mar 2018

You can no longer go to an insurer and buy riders that pay your entire hospital bill, as the Government is rolling back a regime that threatens to make health insurance unsustainable.

Anyone buying a new rider from today will need to eventually pay at least 5 per cent of his hospital bill. But the total amount a policyholder has to pay can be capped at $3,000 a year, although insurers are free to set a higher threshold. This is to give people the peace of mind that they will not have to dig too deeply into their pockets, whatever the size of their hospital bill.

However, the $3,000 cap applies only if patients are treated by doctors on the insurer's approved panel, or if they had received prior approval from the insurer. Otherwise, they have to pay the 5 per cent, with no cap on their share.

These measures were announced in Parliament yesterday - the same day that The Straits Times reported that insurers had asked the Ministry of Health (MOH) to get people to pay at least part of the bill.

MOH has agreed to this for new riders. However, it has not mandated any change for the 1.1 million people who already have full riders for their Integrated Shield Plans (IPs) - which means they pay nothing for hospital bills.

MOH is giving insurers until April 1 next year to come up with new riders that include the co-payment and cap. At that point, no full riders for IPs can be sold.

Meanwhile, anyone buying a rider from today has to switch to the new scheme by April 1, 2021, at the latest.

Elaborating on the scheme, Senior Minister of State for Health Chee Hong Tat said: "Any pre-existing conditions that are covered prior to the switch will not be excluded."

This should also apply to people with full riders who want to switch to the new scheme. Mr Chee said: "We expect the new riders to have lower premiums than full riders, so the switch will result in premium savings for policyholders."

As for those who already have riders, Mr Chee said: "We recognise that existing rider policies are commercial contracts between insurers and their policyholders.

"If insurers intend to make changes to their existing policies, they should consider the interest and well-being of all policyholders, as they seek to keep premiums affordable for everyone in the longer term."

Health Minister Gan Kim Yong told Parliament that co-payment is an integral part of healthcare schemes as zero payment "dilutes the personal responsibility to choose appropriate and necessary care".

It would "encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us", he said.

Wednesday, 7 March 2018

Bicycle Sharing Operators to be licensed to curb indiscriminate parking

Parking Places (Amendment) Bill tabled to license bike-sharing firms to curb illegal parking
Firms can apply for licence by middle of year; their fleet size to be reviewed every 6 months
By Adrian Lim, Transport Correspondent, The Straits Times, 6 Mar 2018

To tackle the growing problem of shared bicycles being parked indiscriminately, rental operators such as oBike, ofo and Mobike look set to be licensed.

Under this proposed scheme, the size of their bicycle fleet will be reviewed every six months, based on how well they manage the problem of illegal parking and how often their two-wheelers are used.

There are an estimated 100,000 dockless shared bicycles in Singapore owned by six operators. But only about half are actively used.

The Land Transport Authority (LTA), in explaining the proposed move yesterday, said: "The indiscriminate parking of shared bicycles has caused significant social disamenities despite LTA's efforts to increase parking infrastructure and encourage bicycle-sharing operators to operate responsibly."

The LTA statement also said it will start accepting licence applications by the middle of this year, and will award them by year's end.

Details of the licensing system were spelt out in the Parking Places (Amendment) Bill, which was introduced in Parliament by Senior Minister of State for Transport Lam Pin Min yesterday.

The Bill also requires operators to share data, including the locations of all their bicycles, with the LTA, and remove those parked indiscriminately in a timely manner.

Operators are also required to temporarily ban users who repeatedly park indiscriminately from renting the bicycles. The duration of the ban has not been decided.

Bike-sharing operators that fail to comply with LTA's standards and conditions will face sanctions such as financial penalties of up to $100,000, reduction in fleet size, suspension or even have their licence cancelled.

Committee of Supply 2018 Debate Highlights: MOM, MOE, MHA, MINDEF, MFA, MTI, MinLaw, PMO

Tighter rules to support Singaporeans and raise quality of foreign workforce
Rules on employing foreigners to be tightened
More opportunities for locals on Jobs Bank; qualifying salary for S Pass to be raised
By Joanna Seow, Manpower Correspondent, The Straits Times, 6 Mar 2018

Rules on the hiring of foreigners are being tightened, in a move to give Singaporeans a fair shot at more and better jobs.

More companies will have to give locals a chance to apply for higher-paying jobs by advertising them on the national Jobs Bank for at least 14 days before they can hire a foreigner for the role.

This rule will be extended from July 1 to cover firms with at least 10 workers and for jobs paying under $15,000 a month, Manpower Minister Lim Swee Say said yesterday. Currently, it applies only to firms with at least 26 workers and for jobs paying under $12,000 a month.

The ministry did not provide the share of jobs posted on the Bank that eventually went to locals, but noted that the local share of net growth in professional, managerial, executive and technician employment has increased - to 78 per cent on average from 2015 to last year, up from 68 per cent on average in the previous three years.

Meanwhile, companies will have to pay semi-skilled foreigners more for them to come to Singapore under the S Pass scheme. For the first time in five years, the minimum qualifying salary will be raised. It will go up from $2,200 to $2,400, with the hike taking place over two tranches, on Jan 1 next year and one year after.

The moves are part of efforts to raise the quality - and productivity - of foreign manpower in Singapore while ensuring locals get access to good jobs, said Mr Lim.

This is especially critical as Singapore's manpower growth slows. From 2015 to last year, net job growth was under 10,000 a year on average, down from over 100,000 a year in the previous three years.

"Probably one of the most critical challenges is to ensure that slower growth of our Singapore workforce will not become the bottleneck in the future growth of our Singapore economy," Mr Lim said during the debate on his ministry's budget.

He outlined how it navigates the tightrope in considering the competing demands of companies and Singaporeans. "Employers say they cannot find enough locals who have the skills and are willing to do the jobs," he recounted. "To them, MOM is not pro-business enough.

"But on the other hand, we hear (on the) ground feedback that there are still too many foreigners, too much competition here for jobs."

Foreigners, numbering 1.1 million, make up about a third of Singapore's workforce of 3.4 million.

Mr Lim said foreign manpower policies have to be open enough to support business growth, yet tight enough to enhance local employment growth. "We are pro-business, but only to those who are pro-worker."

For instance, the ministry has over the past two years placed 500 companies that unfairly favour foreigners in hiring on its watchlist. Such firms have a harder time getting Employment Pass (EP) applications approved.

Tuesday, 6 March 2018

Prepare for public housing supply avalanche as ageing HDB flat owners die

By Ku Swee Yong, Published The Straits Times, 5 Mar 2018

Our rapidly ageing population is very much in the news, with the ongoing debate in Parliament on the Budget and the impact of an ageing society on public finances.

Singapore reaches a population milestone in 2018: The total number of senior citizens at 65 years and older equals the number of young people at 15 years and younger.

Singaporeans are not merely ageing fast. The number of deaths each year is expected to increase rapidly as baby boomers advance into their 80s. By the year 2030, the total number of citizen deaths per year is likely to exceed the number of births.

The large cohort of baby boomers, defined as those born in the post-World War II economic boom period of 1945 to 1964, coupled with steadily falling birth rates in more recent decades, has resulted in an inverted population pyramid. Today, that generation of baby boomers is aged between 54 and 73.

Assuming that both the fertility rate and the mortality rates of the various age categories of Singaporeans remain constant, we will reach a milestone where deaths exceed births in the year 2030.

So far, the discussion on an ageing population has largely been focused on the costs of healthcare and social support. It is time to consider the impact on another area - public housing. The increasing deaths and a reducing base of young people have huge implications for public housing.


To understand the impact of the ageing population on public housing, some background is important. The Housing Board's housing programme was ramped up quickly in the 1970s and 1980s to supply more than 550,000 flats over these two decades to meet the needs of a million baby boomers who were setting up families.

By the 1990s, the percentage of Singaporean families living in HDB flats shot up to 87 per cent, from 35 per cent in 1970s. Private residences, though slower off the mark, were developed rapidly from the 1990s.

Today, about 80 per cent of Singaporeans live in HDB flats and 90 per cent of households own the homes they live in. A large proportion of baby boomers own and live in HDB flats that are 30 years or older. When they die, their flats may be inherited by their beneficiaries or resold on the open market.

However, with 90 per cent home ownership, most of the beneficiaries would already be HDB flat owners. Under current HDB rules, they are not allowed to inherit the flat from their deceased parents. In cases where there are multiple beneficiaries, they might opt to sell the flat and distribute their inheritance as cash.

Hence, the number of flats put up for resale will likely escalate as cohorts of baby boomers age and die. Estimates from the latest population data and mortality rates show that the number of senior residents dying will exceed 30,000 per year by 2030, about 21/2 times the number in 2016.

While the number of new flats released by the HDB can be controlled, the supply of resale flats is something that policymakers have little control over. By 2030, flats made available for resale due to the deaths of the owners may make up more than 8,000 units.

That is equivalent to about 40 per cent of the number of resale transactions per year in 2016 and in 2017.


The increased supply of resale HDB flats faces another challenge: slowing demand from young couples. Birth rates have trended down since 1998.

ITE a place of choice for alumni to teach

They can guide students better, having faced similar issues
By Janice Tai, Social Affairs Correspondent, The Straits Times, 5 Mar 2018

Some used to joke that ITE stands for "It's the end", but the growing number of Institute of Technical Education students who go on to further their studies or helm successful careers has challenged this perception.

Far from being a school of last resort, it is now a place of choice, and not just with secondary school students. More former ITE students are returning to ITEs to do something they once thought unlikely: teach.

As of last year, one in four of the teaching staff at ITE was a former student. This means 394 of its teaching staff possess ITE qualifications, a 35 per cent increase from 292 a decade ago in 2007.

These teaching staff fill a range of positions, from lecturers to course managers to teaching associates.

ITE said it does not give its former students priority for teaching positions but sees the value in having them guide the younger generation, as some have gone through similar struggles and can relate better to the students.

Ms Vicnesvari Sengily, 42, opted to enrol in ITE back in the 1990s as it allowed her to earn allowances that would help with her household expenses.

Her father had liver problems and her mother juggled two jobs as a cleaner and factory operator. At ITE Balestier, she studied business and office skills and later, building and drafting. The courses enabled her to go on paid internships that kept her financially afloat. After school, she also had to help care for her brother, who has polio.

"It was hard for me to focus on my studies because of all these issues," said Ms Vicnesvari, now an environmental services lecturer at ITE College East in Simei.

Her experiences have deepened her sense of empathy for her students. Some of them do not go to school as there are days when they cannot afford the bus fares. Others are unable to shower at home because their parents did not pay the utilities bills for their rental flats.

"So I give them $10 each time if they need it, but I also teach them the value of money. They do pay me back whenever they can," she said.

Her students feel comfortable enough to confide in her because they know she has had her share of rough patches in the past. She shared with them how she used to play truant in school, for instance.

Besides providing emotional support, Ms Vicnesvari also shapes her lessons to suit her students' learning styles.

Monday, 5 March 2018

The Singapore way of calculating budget balances

Instead of one operating balance sheet, Singapore's prudent approach breaks the Budget into three chunks: the primary balance, the basic balance and the overall balance.
By Chia Ngee Choon, Published The Straits Times, 3 Mar 2018

Budget 2018 is consistent with the "Singapore way", namely being sustainable, pro-active and forward looking.

The "Singapore way" to ensure fiscal sustainability is to monitor our finances over both the near term and long term. This departs from conventional budgetary accounting laid out in the International Monetary Fund's (IMF) Government Finance Statistics, a point picked up by some on social media.

In the IMF's accounting standards, emphasis is placed on a single headline fiscal indicator - "gross operating surplus". This surplus is obtained by taking total revenue minus total expenditure and reflects the total change in government net worth in a year.

The total revenue includes all government receipts, tax and non-tax revenue and capital receipts. In Singapore's context, the latter would have included sales of land and the returns and earnings of investments from Singapore's reserves.

Under Singapore's Constitution, the Singapore Budget Statement shows only revenues that the Government is allowed to spend. Land sales revenue is thus excluded in the Budget Statement. Land sales revenues that are invested together with other returns and earnings from reserves are reflected in the Budget Statement as Net Investment Returns Contribution.

Instead of the IMF standard of calculating surplus, Singapore uses three different measures of fiscal balances: the primary budget balance, basic budget balance and overall budget balance. This is a uniquely Singapore way to track fiscal positions to meet its near-term and long-term needs.

Sunday, 4 March 2018

Singapore's defence spending: A case of too much or not enough?

By Graham Ong-Webb, Published The Straits Times, 3 Mar 2018

Singapore's public spending is under increasing pressure as its population and infrastructure age. An ageing society means higher health and social spending, while infrastructure needs require the nation to set aside vast sums to maintain and upgrade old systems and build new ones.

Naturally, other sectors of the national Budget will come under increasing scrutiny. One such sector is defence.

In some quarters, there is a nascent perception that Singapore's defence spending - in the current absence of external military aggression - has not only ballooned, but is also excessive. The rising query has become, "Are we spending too much on our defence?"

Interestingly, as a proportion of total government expenditure, defence spending is going down, not up. At its height around the mid-to late 2000s, spending by the Ministry of Defence accounted for nearly a third of total government expenditure.

With the modernisation of the Singapore Armed Forces (SAF), defence spending as a proportion of government spending has fallen to around 19 per cent from 2015 to last year.

At the same time, social spending increased from 35 per cent of total government expenditure in 2006 to 40 per cent in 2016.

Questioning if too much is spent on defence is not unique to Singapore. European countries belonging to Nato caved in to public pressure to slash defence spending in the 1990s, after the demise of the Soviet Union that threatened them with military aggression. It is only very recently that European countries such as Germany, facing rising threats including an increasingly belligerent Russia, are increasing spending to meet their defence and security requirements.

The evolving threat landscape also requires countries to devote more to defence. Traditionally, countries have militaries to protect their countries' sovereignty and territorial integrity. Today, militaries are increasingly called upon to deal with "non-traditional" threats such as terrorism, cyber security, counter-proliferation, biological pandemics and natural disasters. Taking on more of these additional missions raises operational costs for the military, but their contributions to security are significant.

For example, the SAF Army boosts the coverage of the Home Team's ground patrols by deploying soldiers alongside our police officers. More costs are incurred to train soldiers to respond to terror threats, and to procure equipment to deal specifically with terrorism incidents (rather than conventional warfare).

In addition to terrorism, the SAF must deter and respond to cyber threats that may be posed against it. The SAF depends on computer networks to perform its operations, without which it is unable to defend Singapore. Protecting these networks requires additional resources and skills that will cost more money.

As threats evolve, defence spending has to keep up with needs. In any case, spending on national defence is essential to create a stable social and economic environment for economic development.

Singapore's tiny geographic size means that deterrence is its best defence. The most credible deterrence requires strong military capabilities. Ironically, the outcome of credible deterrence is that a country will have a military force that is very unlikely to be deployed in traditional hostile action.

Thus, observers who ask why Singapore acquires significant numbers of advanced tanks, ships and aircraft - when there are no wars to fight - are missing the plot. In a deterrence context, an adequate acquisition of arms is actually inversely proportional to their use.

Friday, 2 March 2018

Budget 2018 debate in Parliament

Singapore Budget 2018 approved by Parliament, with Workers' Party MPs voting against it

GST hike responsible way to fund spending needs: Finance Minister Heng Swee Keat
WP votes against Budget, the first time in three decades, following heated debate
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 2 Mar 2018

Windfalls and one-off gains - like the ones that led to the unexpected Budget surplus of $9.6 billion in the last financial year - cannot form the basis of prudent fiscal policy, Finance Minister Heng Swee Keat said yesterday.

That is why the goods and services tax (GST), a broad-based tax, has to be raised - to fund expenses in healthcare, education and security long into the future, he said. Given Singapore's ageing population and the need to counter the terror threat, this spending is likely to recur year after year.

"The responsible way for us to fund such spending is to raise taxes. As Dr Lee Bee Wah pithily reminded us, you don't fund recurrent spending needs by hoping to strike 4D," said Mr Heng.

But the GST issue provided unexpected drama, with the Workers' Party (WP) saying it could not support a future hike without more information. For the first time in three decades, it cast its votes against the national Budget.

This came after WP chairman Sylvia Lim (Aljunied GRC) initially said the party intended to support the Budget when the vote was called, but not the announcement of a GST hike to take place some time between 2021 and 2025.

But Mr Heng made it clear that the Budget presented the Government's overall financial policy - both spending and financing options, including the GST increase.

He called on the WP to "square" its position. Mr Heng said: "Do you support all those increased spending? Or are you contradicting all your MPs' position yesterday where everyone spoke about doing more? Where is the money going to come from, and would a 2 percentage point increase help us in some ways?"

Ms Lim responded tersely: "To make it clear, we are unable to support the announcement on the GST hike."

The eight WP MPs present yesterday proceeded to vote "no" when a division - a formal recording of votes - was called.

To MPs who questioned the need for a GST hike despite the large Budget surplus, Mr Heng said it was largely due to one-off, exceptional factors. "We cannot fund our plans to secure Singapore's future on the basis of episodic windfalls," he said.

Instead, the only sustainable way to finance this was to raise taxes, he said. And a broad-based tax like the GST was deemed the most suitable.

Mr Heng reiterated that this hike would not cover expenditure needs, but would only make the fiscal gap more manageable.

On other financing options, he said the wealthy are already being taxed more, as are buyers of more expensive property.

Drawing on the reserves would not be responsible, he said, as these are needed to help Singapore weather economic storms. That left borrowing as a viable option for long-term infrastructure projects, and GST to meet recurrent needs.

Things began heating up in the House when Ms Lim voiced her suspicion that the GST hike might have been among this year's measures if the public had not reacted so negatively when the idea was floated.

"And I rather suspect myself that the Government is stuck with that announcement. Otherwise, perhaps we would be debating a GST hike today," she said.

This triggered a rebuttal from Law and Home Affairs Minister K. Shanmugam, who said Ms Lim was "basically making an accusation that the Government is behaving willy-nilly, dishonestly".

Ms Lim said she did not make any such accusation and was merely raising an "honest suspicion".

To this, Mr Shanmugam said: "Does Ms Lim agree it doesn't accord with the standards of a First World Parliament and honest debate for someone to come here and start talking about (how) 'this is my suspicion. I cannot back it back'?"

Mr Heng stepped back into the debate, noting he and Ms Lim were both former police officers. "Now, I want to present myself as your witness because I have been working on this ever since I became Finance Minister," he said, adding that the GST hike was based on an honest assessment of Singapore's fiscal position.

In a Facebook post last night, Prime Minister Lee Hsien Loong said that with the passing of the Budget, the Government has laid out its mid-to long-term plans clearly.

Travellers using Changi Airport to pay higher fees and charges from 1 July 2018 to help fund major expansion plans

Higher fees for airport users to fund Changi's expansion
New rates kick in on July 1; funds collected to help pay for growth, which includes Terminal 5
By Karamjit Kaur, Senior Aviation Correspondent, The Straits Times, 1 Mar 2018

Passengers and airlines using Changi Airport will have to partly fund its major expansion plans by paying higher fees from July 1.

The Government sees the massive investment in the airport as key to cementing Singapore's status as an aviation hub. However, industry players such as the International Air Transport Association (IATA) yesterday again opposed the model of getting users to pre-fund facilities before they utilise them.

From July 1, passengers who now pay $34 to fly out of Changi will have to fork out an extra $13.30.

Transit passengers will have to pay $3 more for each flight, with all hikes to be included in their fares.

Airlines will also have to pay more in aircraft parking and landing fees, the Ministry of Transport, Civil Aviation Authority of Singapore (CAAS) and Changi Airport Group (CAG) said yesterday.

The fees will rise each year until 2024, the authorities said. By April 1, 2024, the total departure fee for passengers departing from Changi Airport will climb to $62.30.

The total bill for the Changi East development, which includes Terminal 5, is expected to run into tens of billions, the Government said. Even the possibility of borrowing from the capital markets for such projects has been flagged. So far, the Government has committed more than $9 billion to the project, and CAG another $3.6 billion.

The extra fees to be collected from airlines and passengers from July are expected to yield more than $4 billion.