Ministry of Trade and Industry Committee of Supply 2016 – Cuts by WP MPs and NCMPs

(Delivered in Parliament on 7 April 2016)

TPP and Singapore Businesses – Pritam Singh

Madam Chairperson, I first spoke on the Trans-Pacific Partnership (TPP) and its impact on Singapore businesses at the President’s Address in 2014. Then, I had asked the Government to flesh out the opportunities and pitfalls awaiting our local SMEs when the TPP is ratified. I also suggested going at this in a big way, beyond communication with chambers of commerce and business federations so as to encourage greater entrepreneurship amongst our people.

The TPP is likely to remain on the backburner at least until a new US President is sworn into office. However, the reality of not just the TPP, but all future trade agreements should be considered with the launch of SkillsFuture and the national drive towards lifelong learning. Trade agreements are sometimes conceived of as the domain of larger SMEs, MNCs, tax agents and other specialists. However it will be useful if the Government can identify areas of growth and greater access for enterprise under the TPP for Singapore so that Singaporeans with the passion for enterprise and business can align their careers and skills upgrading plans to reap the benefits of our trade agreements. I hope the Ministry can consider this and organise a webpage or a similar public resource for such a purpose.

Working Capital Loan – Leon Perera

Madam Chairperson, there are a number of government loan risk-sharing schemes. Budget 2016 has set up a new working capital loan scheme with 50% risk sharing. I would like to ask: is there any evidence the government can cite, and if not can a study be done to assess, if indeed these loan schemes are effective in inducing banks to lend to SMEs when they otherwise would not? Even partial risk sharing is still a risk to the bank and when there are other options for banks to use their capital, such as lending to large corporates, risk sharing may not be enough.  I have heard from some SMEs that even if the bank has to bear less than 50% of the risk, many banks still behave as if that is a significant risk. When applying for loans, many SMEs, even fairly large ones, still face high interest rates, small quantums, requests for personal security guarantees or outright rejection on grounds such as inconsistent revenues.

Is there any survey evidence to suggest that SMEs feel that they are out of the woods in terms to access to finance? There would not appear to be any. In fact the reverse is true. In an SBF DP Info survey last year, an index measuring expectations for access to financing fell to its lowest level since 2013.  The low risk appetite of banks and lack of credit information on SMEs appears to be one cause.

In Germany and Japan, countries with vibrant SMEs, links between regional banks and regional companies are critical to ensure access to capital. Other countries also have EXIM Banks (suggested by the Economic Strategies Committee in 2010).  An EXIM Bank with a clear mandate could help provide finance to SMEs to tap on the regional market of over 3 billion people to grow and become competitive.

The Workers’ Party has, in the past, called for the EXIM Bank idea to be re-examined, with a focus on SMEs. Access to capital is an issue that warrants more fact-based analysis and review of counter-measures including the EXIM Bank idea, if our SMEs, which account for two thirds of employment, are to maintain and create jobs for Singaporeans.

National Robotics Plan – Leon Perera

Madam Chairperson, the national robotics plan is one of the initiatives in Budget 2016. I would like to speak about social robots, which are robots designed for human interaction, company and assistance.

Social robotics is now a recognized field that has spawned industry conferences, global collaboration and much investment.

I am aware that social robotics is far from new to Singapore. Late last year, the NTU unveiled Nadine, a life-sized social robot. A*Star’s social robotics laboratory was launched in 2008. The NUS and other institutes have social robotics programs. But to the best of my knowledge Singapore has yet to bring to market a commercially successful social robot product to compete with, for example, Pepper, the iconic social robot from Japan that is now selling around 1,000 units per month.

Madam Chairperson, I wish to speak about the relevance of social robotics to two fields in Singapore where we are facing growing needs and which can provide test-beds for new products: our elder-care and our pre-school sectors.

In the elder-care space, I must stress that social robots should never replace genuine and loving human contact from family, friends and care-givers. Having said that, social robots could be designed to interact with older Singaporeans in various languages. They can also monitor vital signs, help dispense medicine, answer questions verbally, help connect phone calls, obtain emergency help, and so on.

In the pre-school space, social robots could complement the vital role of teachers in the classroom and provide an amusing way for children to learn and also receive classroom assistance. This might help raise the productivity and effectiveness of pre-school teachers. An example is Kaspar, a social robot designed by the University of Hertforsdshire in the UK to help children with autism learn responses from the robot through games and interactive play

Even though the Japanese seem to have a lead in this space, Singapore is well placed to prototype and test-bed social robots for the elder-care and pre-school markets in Asia, given the Asian, multi-ethnic and multi-lingual nature of our society.  I hope that this is an area that can receive attention and can be the subject of collaboration between local enterprises and our R&D sector.

Thank you.

Nuclear Energy – Low Thia Khiang

In 2010, MTI published the results from their Nuclear Feasibility Study. In it, they recommended that nuclear energy was currently not yet suitable for Singapore, but that we needed to “keep our options open for the future”.

Both Indonesia and Vietnam have mooted plans to build nuclear power plants. If Indonesia builds a nuclear power plant, there is always a possibility that an earthquake could cause a disaster on the scale of Fukushima and the weather patterns and ocean currents would bring the nuclear fallout to Singapore. Even without natural disasters, a nuclear plant located anywhere in the region would produce a large amount of nuclear waste that would need to be disposed of.

This waste is significantly radioactive and would take tens of thousands of years to be rendered safe. Extremely stringent security must be in place to ensure that this waste does not fall into the hands of terrorists. The waste can be used to make a so-called “dirty” bomb, which would be a very effective weapon of terror. Is Singapore prepared for such risk?

This is not a remote threat as PM Lee has revealed, at the Nuclear Security Summit in Washington, that Singapore authorities have intercepted cargo with nuclear material. It is good to know that the government has tightened its export control regime, upgraded radiation-screening technology at the ports and is building a border lab.

The National Research Foundation created a 5-year programme in 2014, to conduct research and education into nuclear safety, science and engineering. It aims to train about 10 people a year to produce about 100 nuclear experts at the end of 10-years.

However, in 2 years of operation, the research programme has only managed to train 9 people, which is far less then the target. Could the government give an update on the progress of the programme and the results?

Energy Security – Low Thia Khiang

Singapore is dependent on foreign imports for its energy needs. Over the years we have reduced our dependency on oil and have increased our use of natural gas for power generation, from 74.4% in 2005 to 95.5% in 2015.

While gas-fired plants are among the most efficient and gas is the cleanest fossil fuel, with more countries importing LNG, we are going to face more competition for LNG sources. This heavy dependency on natural gas opens us to risks of spikes in prices and disruption of supplies. In the medium- to long-term, what is the status of other energy options that we are looking at to further diversify our energy mix to improve our Energy Security?

The ASEAN Power Grid (APG) has been mooted in 1997 under the ASEAN Vision 2020, towards ensuring regional energy security while promoting the efficient utilization and sharing of resources. Would we be able to tap on these energy sources under the program? What is the current status of the APG project?

Currently, electricity tariffs are calculated based on fuel oil prices. In the past, when the rationale for linking our electricity tariffs to fuel oil prices, was that there was no distinct market in Asia for the price of natural gas, and indexing its price to fuel oil prices is the next best alternative.

Earlier this year, SGX started up a new index for LNG known as SLInG, which provides an industry pricing benchmark. Should we consider factoring in the LNG Price Index in our formula for electricity tariffs to better reflect the actual costs of power generation?

Energy Market Authority (EMA) – Low Thia Khiang


早在2007年,能源市场管理局就推出了电力预售系统的试验计划(Electricity Vending System)。到了2010年,又推行了智慧能源系统的试验(Intelligent Energy System),2012年在榜鹅新镇进行第二阶段试行。






Trade Bodies and Chambers – Leon Perera

Madam Chairperson, in Budget 2016 the government has pledged more funds to LEAD and LEAD Plus, will second up to 20 public officers to TACs and will partner TACs to drive over 30 industry-wide solutions over the next 30 years.

There has been much discussion about the uneven TAC landscape here. Some TACs are well organized, have full-time staff and add value while others are much less so, to the extent that some companies publicly say that there is little benefit to joining the TAC in their industry.

It is no doubt good that we aim to level up TACs to play more of a pan-industry role.

But I would like to sound a cautionary note.  TACs are generally run by an executive committee that consists of representatives from different companies. If there will be much greater involvement and communication with government agencies, it is the Exco, and staff reporting to the Exco, who will be on the front line of that communication. Those Exco members also have their own individual corporate interest.

In working with TACs, I urge MTI to take pains to ensure that communication efforts and engagement are as inclusive as possible towards all TAC members. This is so as to mitigate any risk that the Exco members will use, or be perceived rightly or wrongly to be using, any access to government resources or information for the benefit of their own firms rather than for the whole TAC membership.

Promptly circulating minutes of meetings between government and the TAC staff and Exco to all members would be one way to manage this.

Business Space and Rental – Chen Show Mao


Commercial and industrial rentals are a perennial issue for Singapore SMEs and have been for quite some time.

In 2013, it was reported that a survey conducted by the Institute of Certified Public Accountants of Singapore found over 8 tenths of respondents wanted measures to reduce rental costs as their top wish list item for businesses.  Recently, the economy appears to have hit a bad patch.  The Singapore Business Federation in their “Position Paper for a Vibrant Singapore” mentioned that even with increased supply and slowing demand for rental premises, rents are still a concern for many businesses.  This likely reflects their experience with higher annual increases over the longer term.

Over the longer term, access to low-rent premises has diminished following the corporatisation of JTC assets as well as the commercial pricing of HDB rentals.

Commercial and industrial rentals have risen substantially over the years. These now are significant expense items that breed insecurity for many small businesses.  We call on the government to not only keep commercial and industrial rental increases near or below inflation, but also keep their absolute amounts manageable, as part of a more serious effort to nurture SMEs as a third pillar.

This may require action to:

FIRST, Take a long term-view on reducing business rentals, and have JTC pick up (in part) their former approach of building lower-cost industrial and commercial property before many of the JTC properties were privatized.  Based on indications of strong demand for existing low-cost facilities like incubators, this would go a long way to stimulate the start-up and SME sector.

SECOND, Similarly increase the supply of HDB commercial space and lower rentals for HDB commercial properties, which have increased substantially over the past 20 years, in order to stimulate retail-oriented businesses in the SME and start-up sector and bring added diversity and vibrancy to our heartlands. This would be a welcome investment to nurture the SME sector, and the extent by which HDB commercial rentals should be lowered can be calibrated based on available Budget surpluses.

Sir, In keeping with the spirit of innovation if nothing else, I hope the Minister will consider seriously these suggestions, and perhaps test them out as solutions in  connection with the development of the Jurong Innovation District, or other special entrepreneurial zones made available to local SMEs through SPRING schemes to promote start-ups.