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PARLIAMENTARY STATEMENT BY DEPUTY PRIME MINISTER AND MINISTER FOR

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PARLIAMENTARY STATEMENT BY DEPUTY PRIME MINISTER AND MINISTER FOR Powered By Docstoc
					                  PARLIAMENTARY STATEMENT BY
          DEPUTY PRIME MINISTER AND MINISTER FOR FINANCE
                       MR LEE HSIEN LOONG


         HELP MEASURES FOR SINGAPOREANS AND BUSINESSES

INTRODUCTION

The Singapore economy has still not fully recovered from the slowdown in the
first half of the year. The Iraq War and the SARS outbreak have taken a
significant toll on the economy. MTI now expects the economy to grow between 0
and 1% for the whole of 2003.

The CPF changes are an important step to make ourselves more competitive. It
makes a significant difference to employers, especially those in the labour-
intensive industries. In the short term, the lower CPF rate, together with wage
restructuring efforts, will help save jobs. It buys time for businesses to restructure
and Singaporeans to upgrade their capabilities. In the long term, a lower CPF
rate will mean a more flexible wage system. And the changes to the withdrawal
rules will make sure that Singaporeans set aside enough for their old age.

However, as many MPs have pointed out, while we make these strategic
changes to the economy, we should also not forget the more immediate worries
of Singaporeans. Some find it hard to service their mortgages. Low income
families are concerned about making ends meet. Workers are afraid of losing
their jobs. People who have been retrenched are anxious to find new jobs. These
are real worries. The CPF changes come on top of them, and will affect nearly
every Singaporean. The government will therefore implement a package of
measures to preserve jobs, help individual Singaporeans and businesses, and
promote new business activities.

The measures fall into six categories:
   a. Help with mortgage payments;
   b. HDB policy changes;
   c. Help for Singaporeans;
   d. Help for businesses;
   e. Acceleration of infrastructure projects; and
   f. Government cost cutting.

These measures will benefit Singaporeans, especially lower income earners and
the unemployed. Businesses will also gain, especially small and medium
enterprises. Let me elaborate on them.

HELP WITH MORTGAGE PAYMENTS

I can understand that many homeowners are concerned about the impact of the
CPF changes on their mortgage payments. Nobody welcomes lower CPF
contributions, and some homeowners will have genuine difficulties making ends
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meet. Several MPs – Mr Zainul Abidin, Mr Nithiah Nandan, Mrs Lim Hwee Hua –
have raised this concern.

Let me assure the House the great majority of homeowners can cope with the
CPF changes, either on their own, or perhaps with a little bit of help from the
Government. We have encountered and dealt with the same problem before. In
1999, when we cut the CPF by 10 percentage points, we accompanied the cut
with measures to help people who would not have enough to service their
mortgages. Very few people actually needed the extra help, but the schemes
gave comfort and reassurance to many. This time the problem should be smaller,
as the cut is only 3 percentage points. Nevertheless, we will make sure that help
is available to everyone who needs it.

We have studied how many homeowners with mortgages will be affected.
577,000 CPF members use their CPF for mortgages. Of these, currently about
218,000 (38%) experience shortfalls, i.e. their monthly CPF contributions are less
than their monthly mortgage payments. With the CPF changes, the number will
go up to 294,000 (51%) – or about 76,000 (13%) more. The average shortfall will
be about $350 per month. Most of the additional 76,000 home owners have quite
small shortfalls – less than $200 per month. It is the higher income group who
have the larger shortfalls, because their contributions to the OA are limited by the
CPF salary ceiling.

          Table 1 : Number of CPF members with monthly contributions
                      less than monthly mortgage payments

Amount of                      Number of members affected
Shortfall($)      Before CPF changes     After CPF changes              Increase
                      (1 Jun 2003)          (1 Oct 2003)

0-100                     64,976                      93,047             28,071
101-200                   43,176                      58,782             15,606
201-300                   29,365                      38,791              9,426
301-400                   20,121                      26,100              5,979
401-500                   15,480                      18,017              2,537
501 & above               44,732                      59,021             14,289
Total                    217,850                     293,758             75,908

However, a shortfall does not necessarily mean a problem. Many members with
shortfalls will be able to cope, because their monthly contribution to the Ordinary
Account (OA) is not their only source of financing. They may top up their
mortgage payments using their personal savings, from their take home pay, or by
dipping into their accumulated OA balances. This is what 218,000 CPF members
now do. After the CPF cut, their numbers will increase to 294,000, but most of
these members have sizeable balances in their CPF OA, especially the older
ones. About two-thirds of them have OA balances which can cover their shortfalls
for two years or longer.
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       Table 2 : Ability to cover shortfalls using accumulated OA balances

<6 mths       >6-12mths        >12-24mths       >24-60mths        >60mths

    17%             7%              10%               19%              47%

But unavoidably, a small proportion of homeowners will not have enough in their
OA, and may not have enough cash incomes to make up the shortfall. We are
taking several steps to help this minority group.

Firstly, in designing the CPF changes, we have made adjustments to lessen the
impact on borrowers. As the PM explained yesterday, with the lower overall
contribution rate, and the change in withdrawal rules at 55, we have lowered our
targets for the Special Account (SA) and Medisave Account (MA) contribution
rates. This will lessen the impact on the OA.

Secondly, 76% of the members experiencing shortfalls borrow from HDB. All they
need is for the loan to be restructured slightly, such as by extending the loan
period to lower their monthly mortgage payment. HDB will assist these
mortgagors, and exercise flexibility on a case by case basis. In cases where
homeowners are already in financial difficulties, HDB allows them to pay their
arrears by instalment, or to defer payments temporarily. The Minister of National
Development will elaborate on these later.

Thirdly, the CPF has measures to help from its end. CPF members can use their
SA to top-up the shortfall in their CPF mortgage payments, to the extent that
these payments are affected by the CPF changes. It will also extend bridging
loans to those facing shortfalls in mortgage payments resulting from the CPF
changes. I do not expect many to need bridging loans – the last time only 125
people signed up to borrow $227,000, and so far 45 have already paid back fully.

I am also glad to read in the papers today that the commercial banks are also
exercising flexibility to restructure their mortgage loans to help borrowers cope.
All these measures will ensure that very few homeowners will experience
difficulty servicing their mortgage payments as a result of the CPF changes.

HDB POLICY CHANGES

A main objective of the CPF is to provide a steady and sufficient income for
Singaporeans in old age. In the CPF scheme, saving for old age is intimately
linked to saving for home ownership. On the one hand, an HDB flat is the most
important asset of most families, an investment which should help provide for the
members’ old age. On the other hand, the flat absorbs a large part of the
members’ savings, leaving many members with only enough cash in the CPF for
a modest monthly sum in retirement, barely adequate for their basic needs. Even
the new Minimum Sum of $120,000, half of which is in cash, will yield a monthly
payment of only $378, if the money is to last until the member is 80 years old. We
need to find better ways for Singaporeans to benefit from the value of their HDB
flat.
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Subletting of Whole HDB Flat

The HDB flat is not a dead asset. A retiree should be able to use it to supplement
the monthly amount from his CPF, either by downgrading to a smaller flat, or by
renting it out. However, our rules on subletting of entire HDB flats are still quite
restrictive, for example until quite recently, the owner had to be working
overseas. In January this year HDB relaxed the rules to allow an owner to sublet
the entire flat provided he had not enjoyed any housing or mortgage subsidy on
his flat, had lived in it for 10 years and did not have any outstanding loan from the
HDB. But only a handful have done so.

HDB will now relax the subletting rules further. From 1 October 2003, flat owners
who have lived in their flat for at least 15 years can sublet their entire flat,
regardless of whether the flat had been bought with a subsidy, and even if they
still have an outstanding HDB loan. If the flat owner does not have an outstanding
HDB loan, then he can sublet his entire flat after occupying it for 10 years.

With this relaxation, about 250,000 HDB flat owners will become eligible to sublet
their flats. This will provide them with a source of income in old age. From the
perspective of people looking for housing, this will enlarge the HDB flat rental
market, and offer an additional housing option to young couples and budding
entrepreneurs, and others who are not ready or willing to commit to a flat
purchase.

Maintaining Home Ownership Policy

Encouraging home ownership remains a fundamental objective of the
Government’s public housing policy and a key purpose of the CPF. Home
ownership promotes rootedness and a sense of belonging among Singaporeans.
The HDB will price its flats such that 90% of Singaporean households can still
afford at least a 3-room flat, even at the lower CPF contribution rates. HDB will
continue to help low-income families to buy flats under its Special Housing
Assistance Programme.

Extending the Public Rental Scheme

Dr Warren Lee asked if the Government could offer other housing alternatives for
Singaporeans. He will be happy to know that HDB will relax its rules on rental
flats, but within the overall framework of promoting home ownership. Currently,
the household income ceiling to rent 1- and 2-room flats under the HDB Public
Rental Scheme is $800 per month. Many MPs have asked for this to be raised.
We have been reluctant to do so as we prefer to give more help to low income
families to buy flats and become homeowners, rather than have them become
permanent tenants in rental flats.

However, as our economy restructures, some households earning more than
$800 per month will have difficulty sustaining home ownership. No matter how
easy we make it for families to buy flats, there will still be some households at the
margins who are either not ready to buy flats, or who need affordable rental
housing on a temporary basis, perhaps for a year or two. To help them, we will
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raise the household income ceiling for renting flats under the HDB Public Rental
Scheme from $800 to $1,500 per month. However, households earning more
than $800 per month will receive a lower subsidy on their flat rentals than those
earning less than $800. They will thus pay higher rents, though the rents will still
be very affordable. This will encourage them to purchase their own flats as soon
as they are able to.

HELP FOR SINGAPOREANS

The Government will implement measures to help Singaporeans cope with the
slow economy and the CPF changes. We have implemented many such
measures since 1998, when we were first hit by the Asian Crisis. Last year, we
staggered the increase in the GST rate from 3% to 5% over two years, instead of
doing it in one step. But we still paid out the full amount of the first tranche of the
Economic Restructuring Shares, and thus more than offset the GST increase last
January. This year’s Budget also included further assistance to households, to
help pay utilities, service and conservancy charges and housing rentals.

Many MPs have urged the Government to do more to lessen the cost burden on
Singaporeans. The Government agrees, and will do so.

Utilities-Save Scheme

First, we will provide more help for low-income families. We will do so by
expanding the Utilities-Save scheme. We have already given Utilities-Save
rebates to households in this year’s Budget. The Government will now give a
further once-off rebate of $200 for those living in the 1- and 2-room HDB flats,
$100 for those in 3-room HDB flats, $50 for those in 4-room flats, and $30 for
those in 5-room flats. The rebates for the 1-, 2- and 3-room flats will be paid in
December 2003 and Feb 2004, while the rebates for the 4- and 5-room flats will
be paid in December 2003. These rebates cost $54 million.

                     Table 3: Additional Utilities-Save rebates

     HDB flat type       Rebate to be         Rebate to be        Total Rebate
                        given in Dec 03      given in Feb 04
        1-room               $100                 $100                 $200
        2-room               $100                 $100                 $200
        3-room                $50                  $50                 $100
        4-room                $50                   -                   $50
        5-room                $30                   -                   $30


Setting Up Public Transport Funds

Second, public transport. Mr Yeo Guat Kwang yesterday asked if the transport
operators could give vouchers to needy families to help them buy their monthly
tickets. This is a practical idea. LTA has been discussing this with the public
transport operators. SBS Transit and SMRT are working with the NTUC to set up
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a fund, to help the families of needy union members to top up EZ-Link cards or
purchase season passes. The CDCs have got together to set up a similar fund,
also with the transport operators, so that non-union members will also be
covered. This will help to keep public transport costs affordable for Singaporeans.
I believe that the NTUC, the CDCs and the transport companies will announce
the details soon.

Containing Healthcare Costs

Third, the Ministry of Health is getting its hospitals to go all out to save money for
their patients. The Cluster CEOs are personally championing this drive. There
are many ways to treat the same illness. There is a range of drugs, implants,
medical devices that we can use, at very different prices, often with similar clinical
outcome. By standardising surgical supplies, such as gloves, we save money for
hospitals and our patients. By centralising purchases of drugs, we gain bulk
discounts. By coordinating better when transferring patients between hospitals
and clinics, we cut out unnecessary X-rays, lab-tests and even repeat
prescriptions. If we take the economy drive seriously, at every level, there are
countless ways to cut out costs without affecting clinical outcome. That is why
MOH will be publishing hospital bill sizes of common illnesses so that hospitals
can learn from one another on how to render good reliable medical services at
the lowest possible cost.

People-for-Jobs Traineeship Programme

Fourth, older workers will need extra help, especially those who have lost their
jobs. These workers are more likely to be retrenched, and have greater difficulty
finding new jobs. We are lowering the CPF contribution rate for workers aged 50-
55 to address this problem. However, despite this, older workers will leave their
jobs from time to time, and then will often need extra help to make the transition
to another job.

Older workers have found it difficult to persuade employers to hire them,
especially in this current job market and if they have no track record in a different
industry. Mr Nithiah Nandan argued passionately that besides feeling for older
workers, the Government should take concrete actions to address their problems.
This is precisely what we have been doing.

The People-for-Jobs Traineeship Programme (or PJTP) gives financial support
and incentives to employers, to help local workers in their 40s or older to make
career transitions. Employers are expected to set up traineeship or mentorship
arrangements for the new workers, besides providing suitable job opportunities to
the workers.

There are currently 5,000 companies registered on the PJTP programme. 12,000
older workers, mostly with only secondary education or below, have been placed
in jobs. 44% of these workers have stayed on with their employers even after the
salary support ended. This shows that the scheme has been effective in helping
the older workers find new jobs.
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In view of the success of the PJTP programme, the Government will extend the
programme for another year until 31 Dec 2004, and will commit another $36
million to finance it.

Work Assistance Programme

Fifth, we will do more to help the unemployed. Unemployment numbers may go
up for the next 6 months, even though the economy is showing signs of recovery.
Beyond that unemployment should start to come down, but with restructuring
continuing, we cannot expect to go back to the 1% unemployment that we used
to enjoy before the Asian Crisis, when our economy was growing rapidly, and
restructuring was not yet a problem.

Mr Ang Mong Seng suggested a $2,000 unemployment benefit. I am sure
unemployed workers will welcome this, but the danger of course is that it will
encourage many more people to become unemployed and collect the $2,000!
The Government has to take a different, more practical approach: we will go the
extra mile to help you, but only if you are prepared to help yourself by getting a
job and improving your skills.

We have been providing help through the Community Development Councils
(CDCs). The CDCs provide short-term relief to individuals and families in
temporary hardship, such as when their sole bread winner is retrenched. The
CDCs administer an interim financial assistance scheme which has been quite
successful. They have the sensitivity and flexibility to personalise and customise
the assistance, so as to distinguish those who really deserve help from those who
should be able to fend for themselves. In FY02, the CDCs together spent $3.3
million helping some 10,000 people under this scheme. Within 6 months 97% of
the recipients no longer needed assistance.

To strengthen their efforts to help the unemployed, the CDCs will launch a new
Work Assistance Programme (WAP). This will provide financial assistance to
unemployed Singaporeans and at the same time help them to find jobs.

The Work Assistance Programme will integrate employment assistance with the
current interim assistance scheme administered by the CDCs. It will focus on low
income individuals who are fit to work. The amount of assistance will vary
depending on each applicant’s circumstances, but generally will not exceed $400
per month. Besides cash, the family may also receive targeted support, for
example schooling assistance for children or a utilities grant. Such targeted
support will address the most pressing needs of the family, and ensure that the
assistance is put to good use.

In return for the assistance, beneficiaries will have to fulfil specific conditions.
They must actively seek work. They must attend all job interviews arranged for
them, undergo training to acquire new skills and accept any reasonable job offer.
If they fail to secure jobs within 3 months, they will be assigned a case manager,
who will provide more intensive career counselling and help them overcome any
impediments to securing a job. The financial help will last for 3 to 6 months,
because within that time most recipients should be able to get back to work.
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Sometimes an individual may fulfil his obligations and cooperate with his case
manager and yet not get a job. For such exceptional cases, the CDCs may
consider extending the assistance beyond 6 months. We need to focus our help
on those who are doing their best to help themselves, and not allow the scheme
to become an automatic handout from the Government.

Some Singaporeans are unfit to work because of illnesses or disability. The
CDCs will also continue to give them assistance.

If unemployment goes up over the next few months, more unemployed workers
will need help. Therefore the Government will help the CDCs to expand their
Work Assistance Programme. We will allocate $40 million for this purpose.
However, the most important thing is for those who find themselves out of a job
not to lose heart, but to try to get back to work as quickly as possible.

Training for Employment Scheme

Sixth, to provide further help for unemployed Singaporeans, the Government will
pilot a new Training for Employment Scheme to facilitate the employment and
training of local workers. Under this scheme, the Singapore Workforce
Development Agency will help companies which have 20 or more job vacancies
recruit and train local workers. This way, companies will be able to deploy
workers to the job more quickly and the workers will be better-trained for the job.

The Government will set aside $2 million for the scheme, which will run for one
year from 1 Oct 2003. This will be used to absorb 80% of the training cost of the
workers. As a partner in this scheme, the Singapore National Employers
Federation will absorb a further 10% of the training cost for its members, so that
the employer only pays 10%.

More for Older Workers

Seventh, we will look after the older workers. The restructuring of the economy,
and especially the CPF changes, will affect older workers the most. Wage
restructuring often mean lowering wages for older workers, who are at the top of
their salary scales. They will experience the steepest CPF cuts to help them hold
on to their jobs. We are cushioning the impact on them by phasing in over two
years the reduction in their CPF rates. Nevertheless, it will still be difficult for
these workers.

We have to proceed with the changes, but we will not forget the older workers
who are hardest hit by economic restructuring. Hence the next time the Govern-
ment implements surplus sharing schemes, we will especially remember this
group of older workers, and will give them something extra.

HELP FOR BUSINESSES

Besides helping individuals, we will also do more to help businesses. Two sectors
especially need assistance: small and medium local enterprises, and also the
tourism and transport sectors.
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Assistance to Local Enterprises

Small and medium local enterprises form a significant part of the economy. They
employ more than half the workforce and make up more than 90% of the total
number of enterprises. We will help them to upgrade their capabilities and cope
with the current slowdown.

International Enterprise Incentive Scheme

Mr Heng Chee How rightly pointed out that besides cutting costs, companies
must pursue the right strategies to grow their businesses and so create more
jobs. We must see the rise of regional economies not only as a major challenge,
but also as an enormous opportunity. Our companies should respond to this
opportunity by venturing abroad to ride on the growth of our neighbours, such as
China and India. The Government will step up its efforts to help companies to do
so. The Trade Development Incentive Scheme has been relaunched as the
International Enterprise Incentive Scheme with a budget of $90 million over 3
years, from FY2003 to FY2005. This will help companies develop new markets,
build internationalisation capabilities, and encourage Singapore companies to
venture abroad as a cluster.

      Domestic Sector Productivity (DSP) Fund

We have set up a $45 million Domestic Sector Productivity Fund to help
industries like retail and construction upgrade their productivity and
competitiveness. These sectors lag significantly behind the developed countries
in productivity. Administered by SPRING Singapore, the DSP Fund will co-fund
industry-wide projects to catalyse improvements in business strategies,
operations and practices. The aim is to encourage domestic industries to exploit
economies of scale, adopt new technologies, and improve inter-organisational
efficiency through standardisation.

      Second Tranche of Loan Insurance Scheme

One of the problems that SMEs face is access to financing. Last year we piloted
the Loan Insurance Scheme (LIS) with 6 participating financial institutions (PFIs).
Under the scheme, the Government shares the cost of the insurance premium
against loan default. The scheme has been well received and has helped many
SMEs. To date, the scheme has helped to insure $16 million worth of loans. We
will launch a second tranche of LIS. This will involve more financial institutions
and is expected to facilitate about $500 million in loans to SMEs over 5 years. It
will cost the Government $8 million.

      Local Enterprise Finance Scheme

In recent years, we have progressively enhanced the Local Enterprise Finance
Scheme (LEFS) to help SMEs cope with the challenging economic conditions.
The changes include increasing the default risk borne by the Government from
50% to 80% and reducing the LEFS fixed interest rates. In view of the continued
                                                                                 10


economic weakness, we will extend the LEFS enhancements for another year till
30 June 2004. This will cost the Government $25 million.

      Bridging Loan Programme for all SMEs

During the SARS outbreak, we introduced a Bridging Loan Programme under
LEFS for tourism-related SMEs. Under this scheme, each SME in the tourism-
related sectors can borrow up to S$100,000 of working capital. As other SMEs
may also find this programme useful, we will now open up the Bridging Loan
Programme to all SMEs. This will cost the Government $5 million.

Helping the Tourism and Transport Sectors

A second group of businesses that need help are those in the tourism and
transport sectors. Tourist arrivals have rebounded strongly since the low in the
second quarter of this year. By the end of August, tourist volumes should be
about 85% of pre-SARS levels. But this is partly because affected industries have
cut hotel room rates and airfares significantly. Additional assistance from the
Government will help to speed up the full recovery of the tourism and transport
sectors.

      Tourism Recovery Fund

The Government will set aside $100 million for a Tourism Recovery Fund. This
includes the $50 million for the Global Recovery Programme that STB announced
in June 2003 to bring tourists back to Singapore through confidence building
programmes, overseas travel promotions and global advertising campaign.
Another $50 million will be used to develop four key tourism segments: leisure
travel, business travel and MICE (meetings, incentives, conventions and
exhibitions), healthcare and education services.

      Rebates for Non-gazetted Hotels

As part of the SARS relief package, we provided a higher additional property tax
rebate of $2,000 plus 30% of the balance of property tax payable in 2003 for
gazetted tourist hotels. This will now be extended to non-gazetted hotels as well,
as contrary to our initial expectations they too suffered the effects of SARS.
Similarly, we will extend the 100% rebate of TV licence fees to the non-gazetted
hotels. These two extensions for non-gazetted hotels will be back-dated. They
will save the non-gazetted hotels $1 million.

      Statutory Life Spans of Omnibuses and Taxis

Bus and taxi companies were also badly hit by the SARS crisis. One practical
way to help them is to extend the life of their fleets and ease their depreciation
costs. The current statutory life span for omnibuses is 15 years, and for taxis 7
years. With advances in vehicle engineering, stricter inspections and better
maintenance, these vehicles can stay roadworthy longer. We will therefore
extend the statutory life spans of omnibuses from 15 to 17 years, and for taxis
from 7 to 8 years, with effect from 1 Sep 2003. This will apply to both existing and
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new omnibuses and taxis. Bus and taxi companies are expected to save about
$7 million and $10 million a year respectively in depreciation expense, at no cost
to the Government.

       Diesel Tax Rebate for Taxis

Diesel tax is imposed on taxis to close the gap between the fuel cost of diesel-
powered taxis and petrol-powered private cars. As part of the off-budget package
in 2001, I reduced the diesel tax for taxis from $5,100 to $4,700. In the Budget
Statement this year, I extended the reduction by six months, till the end of 2003. I
will now extend this reduction by another six months, till 30 June 2004. This will
cost the Government about $4 million. The $2,000 diesel tax rebate granted as
part of the SARS Relief Package will, however, not be extended beyond 31
December 2003 as the earnings of taxi drivers are now back to pre-SARS levels.

       Taxi Operator Licence Fee

As part of the SARS relief package, the taxi operator licence fee of $25 per taxi
per month was waived till 31 December 03. LTA has since reviewed the
regulatory requirements. To reduce the burden on taxi companies to the lowest
possible level, LTA will absorb most of its regulatory costs rather than pass it on
to taxi companies. Nevertheless, it still needs to charge taxi companies a small
licence fee. The revised fee will be 0.1% of the taxi company's annual revenue
from taxi operations. This works out to only about $2.80 per taxi per month, a
small fraction of the original $25 fee. The revised licence fee will take effect from
January 2004. This is a small example of how we are keeping Government rates
and fees as low as possible.

ACCELERATION OF INFRASTRUCTURE PROJECTS

The last few years have been especially wrenching for the construction industry.
The industry has experienced 9 consecutive quarters of decline. In 1997, total
contracts awarded were worth $24 billion. In 2002, it had dropped to $14 billion.

This adjustment was inevitable as the construction industry had to resize and
consolidate after the excesses of the property boom in the 1990s. The Govern-
ment has not tried to boost the construction sector with massive public works
programmes. It is not realistic to try to sustain the old levels of activity. Also
pump-priming will not work in our small and open economy. However, it is
worthwhile to bring forward infrastructure projects that we intend to undertake
anyway within a few years. This will not only help to create some jobs, but will
also let us take advantage of the current low prices to get better value for our
money.

Government agencies have identified more than 60 public sector infrastructure
projects that can be advanced. In total, contracts amounting to more than $600
million will be brought forward and awarded in FY2003 and FY2004. These are
projects worthy in themselves such as development and improvement works for
roads, schools, community clubs, parks, and drainage and sewerage systems.
Most of the projects are small, and so are likely to benefit local contractors and
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create spin-offs for local sub-contractors and suppliers. The Minister for National
Development will elaborate on measures for the construction industry later in the
debate.

GOVERNMENT’S COST-CUTTING INITIATIVES

Many MPs have asked the Government to do its part to cut fees and charges,
and not rely solely on wage and CPF cuts to reduce the cost of business. This is
a legitimate request. The public sector is always looking for ways to cut costs.
The Ministry of Finance has launched a civil service wide Economy Drive, to
review all our discretionary expenditure. Everything from development projects to
expenditure on manpower to day-to-day expenses is placed under scrutiny. The
idea is not so much to cut overall government expenditure, but to effect savings
which can be redirected to new initiatives and higher priority areas.

One measure which we should be finalising in the next two months is the review
of civil service salaries for new recruits and in-service officers to bring them more
in line with the private sector.

Miss Indranee Rajah and Mrs Fang Ai Lian have called for a pro-business civil
service, one that operates with more ‘common sense’. I assure members that
common sense is not so uncommon in the civil service. There is a reason why
many civil servants enforce rules so strictly. It is because at the operational level,
flexibility to exercise discretion can tempt officers to offer favours. So strict and
transparent rules are by design a trademark of our honest and clean
Government. Members want civil servants to exercise discretion in their
constituents’ favour, but they also want the rules to be transparent. It is hard to
have both.

I am not suggesting that it is good for our civil servants to be rigid bureaucrats.
We have to make a bigger effort to operate more flexibly and cut red tape. We
need to increase convenience and reduce costs to businesses and to the general
public. We have some successes, for example, 57 (33%) of all the 173 statutory
declaration requirements by the government will be removed by the end of this
Financial Year. There is a Pro-Enterprise Panel (PEP) whose task is to follow up
on suggestions and complaints from businesses to change or remove rules. Out
of a total of 1011 suggestions received thus far, nearly half (46%) have been
accepted. So we are quietly making progress, even though perhaps not quickly
enough.

It is not possible to change the mindset of the civil service overnight. But by
driving this effort right from the top, we send a signal across the service, and over
time, the approach will percolate down the ranks and we will slowly but steadily
clear the red tape away.

Many MPs have called for greater economy and less waste in the civil service.
Given the success of the Pro-Enterprise Panel, I have decided to set up another
group – the Cut Waste Panel. It will include members from the private and people
sectors. The Panel will be chaired by the Head of Civil Service, who also chairs
the PEP. Anyone who has any suggestion of where the government can cut
                                                                                13


waste or remove frills is welcome to put the idea to the Cut Waste Panel. By
cutting waste, the civil service will reduce its cost of operations. The lower the
cost of operations, the lower the fees can be.

The Cut Waste Panel cannot cut everything to bare bones. Recently one
newspaper columnist suggested that we should reduce the size of the civil
service by 30%, and so avoid reducing the CPF rate. This was a particularly
absurd proposal. But the Panel can demand that unnecessary costs be cut,
unnecessary rules be removed, unnecessary programmes be stopped, and
unnecessary fees and charges be reviewed. I encourage MPs and members of
the public to contribute actively to both the PEP and the Cut Waste Panel. The
more proposals come to the Panels, the more effective they can be.

GOODS AND SERVICES TAX

The PM has announced yesterday that the one percent point increase in GST
scheduled to take place on 1 January 2004 will proceed as planned. Let me
explain why we cannot delay this increase.

 The GST increase is to raise revenue to compensate for the cuts in the company
and personal income tax rates. MOF planned the income tax cuts on the basis
that GST would be raised to 5% on 1 January 2003. The phasing in of the GST
increase has already created a significant revenue shortfall. A 4% GST rate will is
not enough to offset the lower income tax collections. We need to remedy this as
soon as possible.

Our budget this year is very tight. We are likely to run a much bigger deficit this
year than anticipated. Revenues have come down in the first half of this year due
to the income tax cuts and slower economic growth. In the Straits Times
yesterday, one letter writer asked how the Government is going to spend its
savings arising from the CPF changes. To put the numbers in perspective, the
Government is saving about $175 million a year from the CPF changes. This
year in the Budget Statement I had already projected a deficit of $1.2 billion.
Now, with lower tax revenues than expected and this new help package, even if
we take into account the CPF savings, we still expect to run a deficit of $2.3
billion. Next year we are projecting an even larger deficit. Deferring the GST will
make the deficits even worse.

I understand the visceral reaction of Singaporeans against any GST increase. At
this time, any additional burden must be unwelcome. However, we should try to
understand the problem rationally. Deferring the GST increase is actually the
least effective way to help low income Singaporeans. By design, the GST covers
almost all types of goods and services, consumed by all income groups. Hence
the benefit of a lower GST is spread widely and evenly. Only a small part of the
revenue lost actually benefits our target groups, namely the low income families,
or unemployed Singaporeans, or older workers. It is far better to proceed with
the GST increase, so that the Government will have more resources to help
these deserving groups.
                                                                                14


We will therefore proceed with the GST increase and give out the second tranche
of ERS shares on 1 Jan 2004 as planned to help the low-income families with the
transition. The ERS shares will amount to $900 million compared to the extra
$650 million that will be collected in GST in 2004. So pressing on will actually
make nearly all households better off in 2004.

CONCLUSION

The measures I have set out will help ease the pain for Singaporeans making the
transition, lower the costs for businesses, help companies build capabilities and
stimulate demand for the domestic sector. Ministries will be providing further
details of the measures under their charge over the next few weeks.

The help package to Singaporeans and businesses amounts to $1 billion. The
Clerk will now distribute a summary list of the measures. The package is almost
equal to the CPF savings to employers. This package will help Singaporeans and
businesses tide over the downturn and ride the path to recovery.

However, this package by itself cannot restore our economy to steady growth.
We must continue to upgrade our capabilities and improve our competitiveness.
We must make Singapore an attractive place for businesses, investments, talent
and tourists. We will have to move vigorously and decisively to attract all of them
here, while retaining and growing as much as possible of what we already have.
If we can do that, then Singapore will be brought firmly back to the path of
recovery and growth.
                                                                                        15



                                  SUMMARY OF MEASURES
S/n Measures                                                             Impact ($mn)
Help with Mortgage Payments
1    Lessen impact on Ordinary Account (OA) in the design of the CPF         -
     changes
2    HDB loan restructuring on case-by-case basis                            -
3    Special Account (SA) to be used to meet mortgage shortfall              -
4    Bridging loans                                                          -
HDB Policy Changes
1    Relaxation of rules on subletting of whole flat                         -
2    Keeping HDB purchase flats affordable
3    Extension of Public Rental Scheme                                       -
Help for Singaporeans
1            Utilities-Save Scheme for the low income                        54
2    Setting up Public Transport Funds for the low income                     -

3    Savings on healthcare costs                                              -
4    People-For-Jobs-Traineeship Programme for older workers                 36
5    Work Assistance Programme for the unemployed                            40
6    Training For Employment Scheme                                           2
7    More for older workers in future surplus sharing schemes                 -
Help For Businesses
1            International Enterprise Incentive Scheme                      90
2            Domestic Sector Productivity Fund                              45
3            Second Tranche of Loan Insurance Scheme                         8
4            Local Enterprise Finance Scheme                                25
5    Bridging Loan Programme for all SMEs                                    5
6    Tourism Recovery Fund                                                  100
7    Rebates for non-gazetted hotels                                         1
8    Extending statutory life spans of omnibuses and taxis                  17
9    Diesel tax rebate for taxis                                             4
10   Lower Taxi Operator Licence fee                                         -
      Construction Industry
1    Acceleration of infrastructure projects                                600
      Government’s Cost Cutting Initiatives
1    Review of civil service salaries                                        -
2    Cut Waste Panel                                                         -

      TOTAL                                                                1027


                         ADDITIONAL UTILITIES-SAVE REBATES

       HDB flat type          Rebate to be              Rebate to be     Total Rebate
                             given in Dec 03           given in Feb 04

           1-room                       $100                 $100           $200
           2-room                       $100                 $100           $200
           3-room                       $50                  $50            $100
           4-room                       $50                    -             $50
           5-room                       $30                    -             $30
                                                                             16


                                                                     Factsheet

               ASSISTANCE MEASURES FOR CPF MEMBERS
                     AFFECTED BY CPF CHANGES

Use of Special Account savings for Housing Instalments

From November 2003, CPF members who bought their properties before 1
October 2003 will be allowed to use their Special Account savings to meet the
shortfalls in their monthly housing payments, to the extent that these payments
are affected by the CPF changes.

Those who are currently using their CPF to service their monthly housing
payments do not need to apply to use their Special Account savings. The CPF
Board will automatically deduct from their Special Account savings to meet the
housing payment shortfall when the member’s Ordinary Account savings are
exhausted. The Board will keep CPF members informed when the first deduction
from the Special Account is made.

As a concession, the use of the Special Account would also be extended to
members who are unemployed and the self-employed even though they are not
affected by the CPF changes. These members can use their Special Account
savings for monthly housing payments if they have used up their Ordinary
Account savings, subject to a cap of $100 per month. For those who are earning
less than $1,600 per month, they will also be allowed to withdraw up to $100 per
month from their Special Account to meet the shortfall in housing repayments.

CPF members who have used up both their Ordinary and Special Accounts may
apply for additional financial assistance under the Government Bridging Loan
Scheme.

Government Bridging Loan

The Government Bridging Loan is a short-term loan offered by the Government at
a concessionary interest rate to help Singaporeans and Permanent Residents
affected by the CPF changes meet the shortfall in their monthly housing
payments, to the extent that these payments are affected by the changes. This
scheme applies to properties bought before 1 October 2003 using CPF. To
qualify for the assistance, the applicant’s savings in the Ordinary Account and
Special Account must be fully utilised first.

Public Enquiries
Members with enquiries may call the CPF Board at 1800-327-1168.
                                                                               17


                                                                       Factsheet

                 HDB FINANCIAL ASSISTANCE MEASURES

During the 1999 CPF cut, HDB put in place several measures to help HDB
mortgagors who are in financial hardship to service their monthly housing
instalment payments. HDB will continue with these assistance measures. They
are:

            a.     Payment of housing loan arrears by instalment
                   Mortgagors will be allowed to settle their housing loan
            arrears by instalments within a reasonable period.

            b.     Rescheduling of housing loan
                   Mortgagors can reschedule their housing loan term up to the
            maximum repayment period of 30 years according to their eligibility,
            subject to a 65-year age limit.
            c.     Reduced Repayment Scheme
                   Mortgagors can pay a lower monthly housing instalment of
            between 50% and 75% of their normal instalment (depending on
            the mortgagors’ financial situation) for a maximum period of two
            years, subject to six-monthly reviews.

            d.   Deferment of housing payment
                 Mortgagors in severe financial difficulty can opt to defer
            payment of their monthly housing instalment for an initial period of 6
            months, with a further extension of another 6 months if necessary.

            e.     Inclusion of working family members as joint owners
                   Mortgagors can include one or more eligible working family
            members as joint owners so that their CPF monies can be used to
            settle the arrears and/or service the monthly housing instalment
            payments.


FAQ for HDB Financial Assistance Measures

Question:   How do I apply for HDB’s financial assistance measures?

Answer:     Mortgagors who have difficulty servicing their mortgage payments
            can call the toll-free HDB Branch Office Service Line at 1800-866
            3030 for advice on the financial assistance measures that best suit
            his or her needs. They can also approach their HDB Branch Office
            managing their flats for assistance.

HDB PUBLIC ENQUIRY HOTLINES

All enquiries concerning application of flat
Sales/Resale Customer Service Line at 1800-8663066
Operating hours :
                                                                              18


Weekdays: 8:30am - 5:00pm
Saturdays: 8:30am - 1:00pm

All enquiries on lease matters (after sale)
Toll-free Branch Office Service Line: 1800-8663030
Regardless of where you live, or which Branch Office you would like to reach, you
can call our toll-free Branch Office Service Line at 1800-8663030 during our
operating hours, and our Customer Service Officer will assist you.
Operating hours :
Weekdays : 8:00am - 5.00pm
Saturdays : 8:00am - 1:00pm

Contact for Other Government Agencies
HDB measures:
Sum Foong Yee (Miss)
Senior Executive Public Relations Officer
Housing and Development Board
Tel: 64901152
Email: sfy1@hdb.gov.sg
Pager: 92674181
                                                                           19


                                                                   Factsheet

                        UTILITIES SAVE SCHEME

Background

As announced in the 2003 Budget Statement, households of 1- to 5-room
HDB flats will get 1 to 6 months of utilities rebates at $35 per month,
between July 2003 and May 2004.

To alleviate the burden of Singaporeans who are badly affected by the
poor economic situation, the existing U-Save scheme is expanded. The
government is giving an additional one-off rebate of $200 for those living in
1- and 2-room HDB flats, $100 for those living in 3-room HDB flats, $50 for
4-room HDB households, and $30 to 5-room HDB households. For the 4-
and 5-room HDB flats, the rebates will be paid out in December 2003. For
the 3-room and smaller flats, it will be given in December 2003 and
February 2004. The cost to provide the rebates is $54 million and Table 1
provides a summary of the package.

                  Table 1: Rebates in Dec 03 and Feb 04
               HDB flat    Rebate     Rebate      Total
                type       Given in   Given in   Rebate
                           Dec 03     Feb 04
               1-room       $100       $100       $200
               2-room       $100       $100       $200
               3-room        $50        $50       $100
               4-room        $50         -         $50
               5-room        $30         -         $30

Table 2 shows the schedule of the rebates from July 03 to May 04:

                 Table 2: Rebates from July 03 to May 04
Month             1-room      2-room      3-room      4-room      5-room

July 03             $35         $35         $35         $35         $35
August 03            ---         ---         ---         ---         ---
September 03        $35         $35          ---         ---         ---
October 03           ---         ---        $35          ---         ---
November 03         $35         $35          ---         ---         ---
December 03        $100        $100         $50         $50         $30
January 04          $35         $35         $35         $35          ---
February 04        $100        $100         $50          ---         ---
March 04            $35         $35          ---         ---         ---
April 04             ---         ---        $35          ---         ---
May 04              $35         $35          ---         ---         ---
                                                                           20



Public enquiries
The public can call Singapore Power Services at 1800-235 6841 for
clarifications on the scheme

Questions and Answers

Q1)   Who are eligible for the grants under the Utilities Save Scheme?

A1) HDB flat owners/tenants must have utilities accounts on the first of
each month to qualify for the grant in the following month. For example,
you must have a utilities account on 1 June 2003 to receive the grant in
July 2003. Moreover, the flat owner or his essential occupier* must not
own any private properties.

[* Essential occupier is one who forms a family nucleus with the flat owner]

Q2)   How will the eligible account holder receive the grants?

A2) The grant will be paid directly to the utilities account and used to
offset outstanding utilities charges. The account holder need not pay any
utilities charge if the grant is more than the utilities charge for the month.
In addition, the balance will be credited to the account and used to pay the
utilities bill in the next month.

Q3)   Why are utilities rebates not given to Permanent Residents?

A3) The Utilities Save is a scheme designed specifically to help lower
and middle income Singaporeans with their utilities bills. The rebates are
given only to Singaporeans as such rebates are a way for the government
to redistribute some of the wealth to the citizens. Such rebates can be
viewed as a privilege of citizenship.

Q4) When an utilities account is closed, why are the unused rebates
forfeited and returned to the government?

A4) The objective of Utilities Save is to defray the utilities bill of a
household. When the account is closed, any Utilities Save balance would
be used to offset the account holder’s final bill. If there were any remaining
balance, it is reasonable that it would be transferred back to the
government, as the objective of the scheme has been met.
                                                                       21


Factsheet

            PEOPLE FOR JOBS TRAINEESHIP PROGRAMME

About the Programme

First launched as a pilot programme in June 2001, the PJTP offers employers
an incentive in the form of wage support in return for putting in place
traineeship/mentorship arrangements to help newly recruited workers who are
40 years and above with no relevant experience to fit into new jobs and work
environment.

The programme was scaled up and extended for one year from 1 Nov 2001
with enhanced wage support as part of the Government's Off-Budget
measures in Oct 2001. This enhancement was intended to also help displaced
executives and professionals besides the lower skilled workers. This
programme has since been further extended for another year from 1 Nov 2002
to 31 Oct 2003.

      i.     FINANCIAL SUPPORT UNDER PJTP
Currently, for every PJTP worker aged 40 to 49 years, the monthly wage
support is 50% of monthly gross salary or $2,000 per month, whichever is
lower, for a period of up to 6 months. For those workers who are 50 years old
and above, there is an additional 3 months of wage support (ie 7th to 9th
month) at 25% of gross salary or $1,000 per month, whichever is lower.

      ii. EFFECTIVENESS OF PJTP
As at end Jul 2003, there were 5,026 companies registered under the
programme, and 12,070 older workers placed in employment (details at
Annex).

A survey conducted in December 2002 showed that out of every 100 workers
placed under the programme, 44 workers were found to be still in employment
after the end of the wage support period. The survey also indicated that PJTP
tend to reach out to the more vulnerable group of workers as 90% of the
workers placed have only secondary education or below. In fact, 1 out of every
2 PJTP workers placed has only primary education. The bulk of the workers
placed under the programme worked in either the Wholesales & Retail Trade
or Real Estate, Renting & Business sector. These workers worked in positions
such as retail assistant, cashier, security guard and cleaner. One reason was
that these positions were easier to fill by job seekers who had no relevant
experience compared to other positions offered in the manufacturing sector
which usually required relevant experience and some skills set.

Public Enquiries
Public with enquiries may call the MOM One Call Centre at 6438 5122.
                                                                                                          22


                                                                                                ANNEX A

                      PEOPLE FOR JOBS TRAINEESHIP PROGRAMME

                         (CUMULATIVE NUMBER OF PLACEMENTS
                            AND PARTICIPATING COMPANIES)

     NOV 2001 – OCT 2002
                Nov     Dec   Jan      Feb        Mar        Apr        May     Jun     Jul       Aug       Sep    Oct 02
                01      01     02      02          02        02         02       02     02        02        02
Number of       707     813   950     1,116      1,324      1,931      2,511   3,083   3,822     4,699     5,602   6,558
Placements
Number of       116     194   265     346        460        703        1,049   1,371   1,732     2,160     2,514   2,876
Participating
Companies



     NOV 2002 – JUL 2003
                       Nov     Dec        Jan        Feb        Mar       Apr      May      Jun            Jul
                       02      02          03        03         03         03       03       03            03
Number of             7,318   7,905      8,578      9,088      9,723     10,490   11,183   11,692        12,070
Placements
Number of             3,133   3,493      3,858      4,034      4,277      4,541    4,773       4,909     5,026
Participating
Companies



                                                       Q&A

     HELPING OLDER WORKERS

     Q.   What is the re-employment rate of older workers? How does
     Government intend to facilitate the re-employment of older workers?

     A.      The overall re-employment rate within 12 months after retrenchment
     for 2002 is 72.4%. The re-employment rate amongst workers aged 50 and
     above is 63.7%. The figure for workers aged 40-49 is higher at 70.9% but
     still lower than the overall rate. So indeed older workers do have more
     problems finding re-employment. This is why the government introduced a
     People for Jobs Traineeship Programme in Nov 01. This programme had
     been extended twice since then and Government will be extending it again.

     The PJTP has proven useful in helping older workers to get new jobs. As
     at Jul 03, there were 5,000 participating companies and 12,000 older
     workers had been successfully placed since the inception of the
     programme.
                                                                        23


                                                                 Factsheet

                  WORK ASSISTANCE PROGRAMME

Government injects $40 mil to help low-income unemployed
Singaporeans transit back to work

      With effect from 1 October this year, the government will launch a
Work Assistance Programme (WAP) to help low income Singaporeans tide
over periods of retrenchment and get back to work quickly. Successful
applicants will receive both employment and financial assistance. The
government has set aside $40 mil to fund this programme until end-2004.

The Community Development Councils (or CDCs) currently administer an
interim financial assistance scheme that provides short-term relief to
individuals and families affected by temporary hardship such as
retrenchment of the sole breadwinner. Last year, the government spent
$3.3 million helping about 10,000 people under this scheme.

The Ministry of Community Development and Sports, in collaboration with
the Ministry of Manpower, has restructured and enhanced the current
interim financial assistance scheme into WAP. It will be administered
through the 5 Community Development Councils, similar to the current
scheme. WAP will focus on helping low income individuals and families find
employment as soon as possible and provide them with interim short-term
assistance. The needs of each family will be assessed and an appropriate
package of assistance put together. The quantum of assistance will vary
depending on the circumstances of the family. The help given to the
individuals and their families will include some or a combination of the
following:-

•   Job placement services
•   Case management services
•   A monthly allowance of up to $400
•   Schooling assistance for the children
•   A grant to help payments with utilities and service and conservancy
    charges

WAP recipients will have an obligation to actively seek jobs while on the
programme. This means attending all job interviews and undergoing the
appropriate training or retraining courses to acquire new skills as advised
by the job placement officers. They must be realistic, understand the job
situation and their own skills level and be prepared to take job offers as
they come along.
                                                                               24


WAP recipients will be given the necessary support to help them find work.
Once on the programme, a job placement officer will be on hand to help
the recipient identify employment opportunities and arrange for suitable job
interviews. Those who are not successful in securing jobs within 3 months
and are deemed suitable for case management will be attached to a case
management officer. The case management officer will provide job
counselling and help the individual make systematic plans towards
employment.

WAP assistance will be provided for 3 months in the first instance.
Extension of assistance will be conditional on whether the individual has
fulfilled his obligations. With the additional resources provided, we hope
the individuals under WAP will get back on their feet quickly and transit
back to the workforce within 3-6 months.

Members of the public who have enquiries on WAP can call 63548276
during office hours or e-mail: siti_mariam_SELAMAT@mcds.gov.sg



WORK ASSISTANCE PROGRAMME (WAP)

The Work Assistance Programme (WAP) will come into effect from 1
October 2003. The objective is to help low income Singaporeans tide over
periods of retrenchment and get back to work quickly.

Question : Who is eligible for WAP?
Answer : Individuals who are unemployed but who are medically fit for work will
be eligible for WAP. This includes those who have been retrenched and those
who have stopped work for sometime but would like to get back to work.
Assistance will be given on a needs basis. Every applicant will be assessed
based on his family circumstances to determine their eligibility for WAP.

Question : What kind of assistance can I expect under WAP?
Answer : If an individual is assessed to be eligible, he will receive a short-term
allowance and employment services. Depending on his family circumstances, the
recipient may also receive assistance to help pay for schooling and utilities
expenses. The individual will be required to actively seek work as a condition for
receiving the assistance.

Question : When will applications be opened?
Answer : Applications for WAP will open in October 2003.

Question : I am interested to apply for WAP? Where can I apply for it?
Answer : You can apply for the scheme at your nearest Community
Development Council from October 2003 onwards.
                                                                               25


                                                                      Factsheet

                 TRAINING FOR EMPLOYMENT SCHEME

ABOUT THE SCHEME
The Singapore Workforce Development Agency (WDA) under MOM will be
launching a new “Training for Employment Scheme” (TFES) on 1 Oct
2003. This scheme is to provide financial support to employers to train
new local workers they recruit under a customised training regime. The
TFES will be piloted for 1 year from 1 Oct 2003 at an initial budget of $2m.
Previously, “Place and Train” programmes were for specific industries.

This TFES scheme applies the concept more generally. The TFES will
support all training relevant to effective performance in a particular job. In
order to serve as an effective incentive tool, some flexibility will be built into
the duration, curriculum, structure and cost of training to be supported. In
this way, the TFES will complement various existing training assistance
schemes supported under the Skills Development Fund in enhancing
employability and facilitating employment.

The Singapore National Employers Federation (SNEF) is a key partner in
this scheme. SNEF will be the programme manager for this scheme. SNEF
will set up an industry standing committee to review and evaluate the
training methodology and cost reasonableness proposed for funding under
TFES

FUNDING SUPPORT UNDER TFES
The TFES will cover 80% of the actual training cost, or 80% of that deemed
by the standing committee as a more reasonable and appropriate sum
after evaluation, subject to funding limits at industry level.

Applicant employers must have at least 20 vacancies to offer and must
commit to employing at least 80% of the trainees. The vacancies must be
for the same type of position. If the employer does not have 20 vacancies
in the same position but the aggregated demand from several employers
meets this threshold, SNEF can put together a training programme and tap
on TFES funding.

Trainees will be bonded to the applicant employers for 12 months. The
applicant employer must provide justifications to SNEF and seek approval
to release the employee before the bond is fully served. SNEF will be
responsible for placing the employee released with another employer.

Public Enquiries
Public with enquiries may call the MOM One Call Centre at 6438 5122.
                                                                                              26


                                                Q&A

Q1. What is the objective of the Training for Employment Scheme
(TFES)?

A1. The objective of the TFES is to help companies recruit and train local
workers under a customised training regime. The scheme will be piloted for
1 year, commencing from 1 Oct 2003.

The TFES will be implemented according to a Programme Manager
approach with the Singapore National Employers Federation (SNEF) as
the programme manager.

Q2.     Who is eligible to apply for the scheme?

A2. The scheme is open to locally based companies in Singapore which
are members as well as non-members of SNEF. Applicant employers
must have clearly defined plans for growth (i.e. increased revenue targets,
market share penetration, local/regional growth ambitions) and the
requisite manpower capabilities (i.e. job scope and skills required for the
various positions they intend to hire) in order to be considered for the
scheme. Employers will not be allowed to tap on multiple training
assistance schemes for the same worker applied.

Applicant companies must have at least 20 vacancies1, and have a
demonstrable track record in either established internal OJT programmes
or training their employees to a basic skill level of Intermediate NITEC or its
equivalent.

Q3.     What is the level of financial support?

A3. The TFES will cover 80% of the supported training cost incurred for
a period of up to 90 days2, subject to funding limits3. For employers who
are members of SNEF, SNEF will contribute another 10% of funding and
the employer will absorb the remaining 10%. Non-SNEF members will not
be eligible for SNEF funding and they will have to fork out 20% of the
supported training cost on their own.


1
  The vacancies involved must be for the same type of position in order for a company to be able
to apply for training assistance under TFES. If the company does not have 20 vacancies in the
same position but the aggregated demand from several companies meets this threshold, SNEF
will help organise a training programme and the programme is eligible for funding under TFES.
2
  The training can extend beyond 3 calendar months, so long as the total duration of training is
capped at 90 days.
3
  Funding limits will be applied by industries. The limits may differ amongst different industries
because of the varied nature of training. The standing committee formed for each industry will
propose an appropriate funding limit for WDA’s decision.
                                                                                                  27


As the TFES is an industry-targeted initiative, it will be implemented in
specific industries selected based on the employment opportunities they
offer4.

Q4.       How will the scheme benefit unemployed Singaporeans?

A4. Employers can only apply for training support under the TFES if the
trainees are citizens or permanent residents of Singapore. The trainees
must also not be existing employees of the applicant employer. The
training is to commence after the start date of employment of the trainee.

Applicant employers must also commit to employing at least 80% of the
trainees.

Q5. How to enforce the commitment from employers to hire and the
commitment from trainees to stay after training?

A5. Employees shall be bonded to the applicant employer for a period of
12 months. The bond period shall commence from the start date of
employment of the employee.

The applicant employer must provide justifications to SNEF and seek
approval to release the employee before the bond is fully served. SNEF
will be responsible for placing the employee released with another
employer.

In addition, the funding will be on a reimbursement mode.             The
reimbursement for supported training expenditure incurred will be made in
2 tranches - 80% after the training period and the remaining 20% after the
1-year bond period.

Q6.       What will happen to the scheme after the pilot period ends?

A6. WDA will track and evaluate the effectiveness of the TFES. If the
scheme is successful, WDA will consider extending it beyond the pilot
period.




4
    For a start, the target industries are logistics, electronics, F&B, infocomm and transport.
                                                                        28


                                                                 Factsheet

INTERNATIONAL ENTERPRISE INCENTIVE SCHEME

The International Enterprise Incentive Scheme (IEIS), formerly known as
the Trade Development Incentive (TDIS) was re-positioned as an
internationalisation fund to assist companies to upgrade and develop their
core competencies/capabilities to enable them to compete effectively in the
competitive global economy.

The Government will increase its efforts to help companies reach out to
markets outside Singapore with a budget of $90 million over 3 years, from
FY2003 to FY2005, to help companies develop new markets, build
internationalisation capabilities, and encourage Singapore companies to
venture abroad as a cluster.

a)    Capability Development program: To support efforts to build
      capabilities that will strengthen them for global markets. This
      includes International Manpower program to enlarge and develop
      critical human capital needed to support the internationalisation of
      companies.

b)    Marketing program: To support initial/pioneering efforts to penetrate
      a new market.

c)    Strategic program: To support projects with industry-wide benefits
      undertaken by a cluster of companies, trade associations or
      chambers.

d)    International Partners (iPartners) Program: To encourage Singapore-
      based companies to band together (hunt in a pack) when pursuing
      international projects.     The anchor company (or mothership
      company) will spearhead the group of Alliance Partner companies.
                                                                        29


FAQ

Q.    How do I apply? What are the eligibility criteria?

A.      The grant scheme is one of various incentive tools to support IE’s
ISC (Internationalisation of Singapore Companies) programme and is
awarded to Singapore incorporated or registered companies on a cost-
sharing basis subject to a cap. The amount of cap and supportable
activities        differ     among          different        programmes.

To qualify, companies under IE Singapore’s Internationalisation of
Singapore Companies programme have to meet minimum qualifying
criteria such as:
        Total annual business spending
        Total annual sales turnover
        Employment of managerial staff
        Demonstrate good financial record
        Sound management team
        Performance of at least 3 HQ functions in Singapore.
        Companies who have already built up a track record in the domestic
        market and have or starting to venture overseas to expand their
        markets.
        (Note:- list is not exhaustive)

Decision to support application is evaluated on a case-by-case basis.

1. Enquiries

Please contact: Ms Wendy Loo, Asst. Director
International Enterprise Singapore
Corporate Planning Division
Tel: 64334852
Email: wendy_loo@iesingapore.gov.sg
                                                                             30


                                                                    Factsheet

DOMESTIC SECTOR PRODUCTIVITY FUND

Objective

The Domestic Sector Productivity Fund (DSPF) aims to encourage
companies within an industry or value-chain to collaborate on industry-wide
projects to implement fundamental or radical changes in strategies,
operations or practices, leading to significant gains in productivity and
competitiveness for the industry as a whole.

Eligibility Criteria

All Singapore-registered business enterprises and organisations including
industry associations and bodies participating in the transformation project are
eligible to apply.    Business enterprises are defined as proprietorships,
partnerships or companies.

The proposed project must meet the following criteria :

a. Project should represent a major or critical part of an overall industry
   transformation plan.

b. Project should involve the introduction of new or vastly improved
   practices, activities, facilities and/or systems in one of the following
   aspects :

  •              Business scope (i.e. change/extension into new, higher
                 value add activities)
  •              Business processes
  •              Information architecture
  •              Organisation architecture
  •              Resources management (i.e. people, land, materials,
                 energy, etc.)

c. Project should lead to specific deliverables/outcomes that will upgrade
   the industry to be among the best-in-class internationally according to
   specified practices and performance parameters such as reduced cycle
   time, reduced costs, increased revenue, higher value added per worker,
   etc.

d. Project should involve at least 3 companies working together to achieve
   economies of scale and greater impact.
                                                                             31


e. Project should have the expressed support and commitment of the
   applicant companies. Where relevant, the expressed support of an
   industry association or any formal company grouping representative of
   the industry or relevant government agency would be useful.

f. Results achieved must be shared with other companies in the industry
   during the mass adoption phase.

g. Project must not have commenced at the time of application.


FAQs

1. How do I apply?

      All applications for DSPF should be made on the prescribed form fully
      completed and received by SPRING Singapore before the commencement of
      the project. All applications should be accompanied by a project proposal.

2. What is the scope of support?

The DSPF provides assistance through grants to cover up to 50% of the
qualifying cost of the project. The major allowable cost items include:

(a)            Manpower-related costs
      •          Salary of project members (excludes CPF and bonuses)
      •          Airfare (economy) and Cost of Living Allowance
      •          Training Costs

(b)            Equipment & materials
      •          Equipment
      •          Materials/Consumables
      •          Software

(c)            Professional Services
      •           Consultancy
      •           Subcontracting

(d)            Intellectual Property Rights
      •           Licensing/Royalties/Technology Acquisition


Enquiries
Enquiries on the Domestic Sector Productivity Fund (DSPF) can be made at the
SME First Stop Hotline at 6898 1800.
                                                                                 32


                                                                        Factsheet

LOAN INSURANCE SCHEME

Objective

SPRING Singapore introduced the Loan Insurance Scheme (LIS) on 1
September 2002 to complement the existing Local Enterprise Finance Scheme
(LEFS). The LIS is administered by SPRING Singapore and is offered through six
Participating Financial Institutions (PFIs). It will provide an additional form of
financing for SMEs. The scheme allows more flexibility for financial institutions to
package attractive loan facilities to SMEs based on their risk profile. A portion of
the loans will be insured against default risks. The insurance premium will be co-
shared between the government through SPRING Singapore and the SMEs.

A second tranche of LIS will be launched with loans amounting to $500
million over 5 years and more Participating Financial Institutions will be
involved in this tranche.

Eligibility Criteria

To be eligible, a company must satisfy the following conditions :

a. It must have at least 30% local shareholdings.
b. Its fixed asset investment (at net book value) must not exceed $15
   million*.
c. If it is in the service industry, it must also have an employment size not
   exceeding 200 workers*.

* Computed on a group basis i.e. checking up to 3 levels for corporate
shareholders holding 20% or more of the total shareholding of the
company and 1 level down where the company holds 50% or more of the
total shareholding in a subsidiary company.

FAQs

What is the difference between the Loan Insurance Scheme (LIS) and
the Local Enterprise Finance Scheme (LEFS)?

   Unlike LEFS where the funds for the loan facilities are from the
   government and the interest rates are fixed by SPRING Singapore,
   financial institutions participating in the Loan Insurance Scheme will use
   their own funds and set their own rates for their SME clients. A portion
   of the loans will be insured against default risks by a private credit risk
   insurer. The Government co-shares the insurance premiums with the
   SMEs. With the risk insured and more flexibility to package loan
   facilities for SME clients based on their risk profiles, it is hoped that the
                                                                             33


   Participating Financial Institutions will be encouraged to lend to more
   SMEs.

What is the total loan subscription amount under the second tranche
of Loan Insurance Scheme?

   The total loan subscription amount for the second tranche of LIS is $500
   million over five years. That for the first tranche is $30 million a year for
   five years. Applications to the Participating Financial Institutions under
   LIS will be approved on a first-come-first-served basis.

Who are the Participating Financial Institutions under LIS?

   There are 6 Participating Financial Institutions for the first tranche of
   LIS. Applications are to be sent to any of the following Participating
   Financial Institutions :

     DBS Bank Ltd
     GE Commercial Financing (Singapore) Ltd
     Hong Leong Finance Ltd
     Malayan Banking Berhad
     Oversea-Chinese Banking Corporation Ltd
     United Overseas Bank Ltd

How can I get more details on the second tranche of LIS?

   SPRING Singapore will announce further details on the loan facilities
   offered under the second tranche of LIS and the insurance premium
   charged with its launch.

Enquiries

For the Local Enterprise Finance Scheme (LEFS), Bridging Loan Programme,
and Loan Insurance Scheme (LIS), enquiries can be made at any of the
Participating Financial Institutions or the SPRING Singapore’s SME First Stop
Hotline at 68981800.
                                                                             34


                                                                    Factsheet

LOCAL ENTERPRISE FINANCE SCHEME

Objective

The Local Enterprise Finance Scheme (LEFS) is a fixed interest rate
financing programme designed to encourage and assist local enterprises to
modernise and upgrade their operations. The scheme is administered by
SPRING Singapore and is offered through its network of 17 Participating
Financial Institutions.

In 2001, the Government enhanced LEFS to help local businesses cope
with the economic slowdown. The enhancements to LEFS include lower
interest rates for both new and existing loans, higher Government risk
sharing for new LEFS loans as well as coverage for medium-sized
companies for LEFS short-term loans. The enhancements were intended
to last till 30 June 2003. In view of the uncertain economic outlook, the
Government will extend the LEFS off-budget measures by another year till
30 June 2004. The LEFS enhancements will provide the added boost
needed to help SMEs gain access to financing and lower their business
costs.

Eligibility Criteria

To be eligible, a company must satisfy the following conditions :

a. It must have at least 30% local shareholdings.
b. Its fixed asset investment (at net book value) must not exceed $15
   million*.
c. If it is in the service industry, it must also have an employment size not
   exceeding 200 workers*.

Companies with at least 30% local shareholdings, fixed asset investment (at net
book value) of between $15 million to $50 million and employment size of
between 200 to 300 workers (for service companies) will be eligible to access
LEFS short-term loans such as factoring and working capital facilities.

* Computed on a group basis i.e. checking up to 3 levels for corporate
shareholders holding 20% or more of the total shareholding of the company and
1 level down where the company holds 50% or more of the total shareholding in a
subsidiary company.

FAQs

What are the type of facilities offered under the Local Enterprise Finance
Scheme (LEFS)?
                                                                             35



   The types of loan facilities under LEFS are as follows :
   • Factory loan
     • Machinery term loan
     • Machinery hire purchase
     • Working capital loan
     • Factoring loan

Is there a maximum loan limit that I can borrow under LEFS?

   Yes, the maximum loan limit per enterprise under LEFS is $15 million
   and this is inclusive of a maximum $8 million for short term loans not
   exceeding 4 years.

How do I apply for a LEFS loan? What are the supporting documents
necessary to support my application?

   Applications for LEFS loans should be made on prescribed form
   (available at any of the 17 Participating Financial Institutions), fully
   completed and submitted to the respective Participating Financial
   Institutions. Before submitting the application form, it is best that the
   company meet up with the preferred Participating Financial Institution
   first to discuss its loan requirements.

   SME will need to provide the following information to support its LEFS
   application :

   • RCB printout
   • Detailed financial statements and bank statements
   • Other documents as required by the financial institutions to
     substantiate the loan applications e.g. list of customer
     contracts/sales orders etc

Who are the Participating Financial Institutions under LEFS?

   LEFS is offered through 17 Participating Financial Institutions. Applications
   are to be sent to any of the following Participating Financial Institutions :
     DBS Bank Ltd
     GE Commercial Financing (Singapore) Ltd
     Hongkong & Shanghai Banking Corporation Ltd
     Hong Leong Finance Ltd
     Indian Bank
     International Factors (Singapore) Ltd
     International Factors Leasing Pte Ltd
     Malayan Banking Berhad
     OCBC Finance Ltd
                                                                          36


     Orix Leasing Singapore Ltd
     Oversea-Chinese Banking Corporation Ltd
     Sembawang Capital Pte Ltd
     Sing Investments & Finance Ltd
     Singapura Finance Ltd
     Standard Chartered Bank
     United Overseas Bank Ltd
     Vickers Capital Ltd

Enquiries

For the Local Enterprise Finance Scheme (LEFS), Bridging Loan Programme,
and Loan Insurance Scheme (LIS), enquiries can be made at any of the
Participating Financial Institutions or the SPRING Singapore’s SME First Stop
Hotline at 68981800.
                                                                            37


                                                                    Factsheet

BRIDGING LOAN PROGRAMME

Objective

The Bridging Loan Programme under the Local Enterprise Finance Scheme
(LEFS) is a fixed interest rate financing programme that was launched in April
2003 to help small and medium enterprises in SARS-affected tourism-related
sectors gain access to short-term working capital so as to alleviate their
immediate cash-flow problems. Eligible SMEs can borrow up to $100,000 to
augment their working capital needs. The programme will now be extended to all
SMEs and the facility will be offered up to 31 December 2003. The programme is
administered by SPRING Singapore and is offered through 14 Participating
Financial Institutions.

Eligibility Criteria

To be eligible, a company must satisfy the following conditions :

a. It must have at least 30% local shareholdings.
b. Its fixed asset investment (at net book value) must not exceed $15
   million*.
c. If it is in the service industry, it must also have an employment size not
   exceeding 200 workers*.

              * Computed on a group basis i.e. checking up to 3 levels for
       corporate shareholders holding 20% or more of the total shareholding of
       the company and 1 level down where the company holds 50% or more of
       the total shareholding in a subsidiary company.

FAQs

What are the type of facilities under the Bridging Loan Programme and
what can it be used for?

   The Bridging Loan Programme is a working capital term loan facility.
   Companies can make use of the bridging loans to augment their
   working capital needs like operational or business restructuring costs.

Is there an administrative fee for the loan?

   Yes, the Participating Financial Institution may impose an administrative
   fee for the processing of the loan. Please refer to the Participating
   Financial Institutions for more details.
                                                                          38


How long will it take for the loan to be approved?

   The Participating Financial Institutions will generally take about a week
   to process the loans, provided all supporting documents for the loan
   applications are provided.

How do I apply for the Bridging Loan Programme? What are the supporting
documents necessary to support my application?

   Applications for the Bridging Loan Programme should be made on
   prescribed form (available at any of the 14 Participating Financial
   Institutions), fully completed and submitted to the respective
   Participating Financial Institutions. Before submitting the application
   form, it is best that the company meet up with the preferred Participating
   Financial Institution first to discuss its loan requirements.

   SME will need to provide the following information to support its
   Bridging Loan application :
   • RCB printout
   • Detailed financial statements and bank statements
   • Other documents as required by the financial institutions to
      substantiate the loan applications e.g. list of customer
      contracts/sales orders etc

Who are the Participating Financial Institutions under the Bridging Loan
Programme?

The Bridging Loan Programme is offered through 14 Participating Financial
Institutions :

   •   DBS Bank Ltd
   •   GE Commercial Financing (Singapore) Ltd
   •   Hongkong & Shanghai Banking Corporation Ltd
   •   Hong Leong Finance Ltd
   •   Indian Bank
   •   International Factors (Singapore) Ltd
   •   International Factors Leasing Pte Ltd
   •   Malayan Banking Berhad
   •   OCBC Finance Ltd
   •   Orix Leasing Singapore Ltd
   •   Oversea-Chinese Banking Corporation Ltd
   •   Sing Investments & Finance Ltd
   •   Standard Chartered Bank
   •   United Overseas Bank Ltd
                                                                          39


What is the maximum loan that I can borrow under the Bridging Loan
Programme?

Eligible enterprises can borrow up to S$100,000 under the Bridging Loan
Programme subject to the credit evaluation of the Participating Financial
Institutions. Each enterprise is subject to a maximum exposure of
S$100,000 (inclusive of loans approved under the Bridging Loan
Programme and the Micro Loan Programme).

I have an existing Micro Loan of S$50,000. What is the maximum loan that
I can borrow under the Bridging Loan Programme?

   Eligible enterprises can borrow up to a maximum of S$100,000 under
   the Bridging Loan Programme (including previous loans approved under
   the Micro Loan Programme). Hence in this case, the enterprise can only
   avail itself of another S$50,000 under the Bridging Loan Programme.

Is there a validity date to the Programme?

   Yes. The programme is valid till 31 December 2003.

Enquiries

For the Local Enterprise Finance Scheme (LEFS), Bridging Loan Programme,
and Loan Insurance Scheme (LIS), enquiries can be made at any of the
Participating Financial Institutions or the SPRING Singapore’s SME First Stop
Hotline at 68981800.
                                                                                       40


                                                                              Factsheet
TOURISM RECOVERY FUND

Since the outbreak of SARS in late March, visitor arrivals to Singapore plunged
by 67% in April and 71% May compared to a year ago. Although visitor arrivals
are gradually rising over the past few months (June visitor arrivals have
registered a more moderate year-on-year decline of 47% and July posted a fall of
21%), the total number of visitors from Jan-July 2003 is still 30% lower compared
to the same period last year. There is therefore a need to redouble our tourism
promotion efforts to bring back visitors.

The Government will set aside a $100 mil Tourism Recovery Fund to assist in the
sustainable revival of the embattled tourism sector. It will target 4 main segments
of the travel industry: leisure, healthcare, education, and business & MICE
(Meetings, Incentives, Conventions & Exhibitions).

The $100 mil Tourism Recovery Fund will include the $50 mil that STB has
committed to the Tourism Recovery Programme that was launched with tourism
industry partners in June 2003. A global marketing campaign, “Singapore Roars
Again” was the cornerstone of the recovery programme.

To intensify overseas marketing efforts, a further $10 mil from the Tourism
Recovery Fund will be devoted to stepping up travel promotions in overseas
markets so as to drive leisure traffic to Singapore.

To revive the flow of international patients and students and to realise the ERC’s
recommendation to make Singapore the region’s healthcare and education hub,
part of the Tourism Recovery Fund will be set aside to build longer term
marketing and promotional capabilities in these two areas as well as develop
overseas networks to establish Singapore’s presence in key markets.

Singapore’s reputation as a business and MICE capital was also severely
affected by the SARS outbreak. Many events in the 2nd quarter of 2003 were
cancelled or postponed, with some diverted to other countries5.

To prevent the long term erosion of Singapore’s lead in the Business & MICE
segment, the Tourism Recovery Fund will also provide for the implementation of
core programmes targeted at reversing the outflow of MICE events, generating
more visitors to attend confirmed shows in Singapore, and anchoring a critical
number of MICE events here over the next two to three years.

Enquiries

For further inquiries, please contact the STB Press Duty Officer at 98631503




5
 Some of the prominent tradeshows that were cancelled included CommunicAsia/Broadcast Asia
2003, scheduled in June 2003 and Tax Free World Association Meeting 2003, scheduled in May
2003.
                                                                           41


                                                                  Factsheet

REBATES FOR NON-GAZETTED HOTELS

Background

             The SARS Relief Package was announced on 17 April 2003. For
gazetted hotels, the relief measures included:

(a)    an enhanced property tax rebate of $2,000 plus 30% of the property tax
       payable net of the current rebates; and
(b)    full TV licence fee rebate of $82.50 per room per year.

Both gazetted and non-gazetted hotels are licensed by the Hotels
Licencing Board. There are currently 100 gazetted hotels and 106 non-
gazetted hotels in Singapore, accounting for 30,000 rooms and 5,000
rooms respectively.

About 65-70% of the patrons of non-gazetted hotels are tourists. Like
gazetted hotels, they too have been severely affected by the downturn in
visitor arrivals. As such, the Government has decided to extend the
enhanced property tax rebate and full TV licence fee rebate to non-
gazetted hotels as well.

Enhanced Property Tax Rebate

All commercial properties currently enjoy a property tax rebate of $4,000
plus 30% of the property tax payable for the first half 2003 and $2,000 plus
15% of the property tax payable for the second half of the year.

Like gazetted hotels, all non-gazetted hotels will be given a higher rebate
of $2,000 plus 30% of the property tax payable, after the existing rebates.
However, this will not apply to the F&B outlets and retail shops in hotels.

TV Licence Fee Rebate

All hotels currently pay a TV licence fee of $82.50 per room per year,
regardless whether the room is occupied.

In view of low occupancy rates, a 100% rebate of TV licence fees payable
by non-gazetted tourist hotels will be granted for the year 2003.

FAQs

Q.     Who will qualify for the enhanced property tax and TV licence fee
       rebates?
                                                                         42


A.    All establishments (both gazetted and non-gazetted) with a hotel
      licence issued by the Hotel Licensing Board will qualify.

Q.    How can owners of non-gazetted hotels apply for the rebates?

A.    IRAS will be mailing out the revised property tax bills, revised GIRO
      instalment plans and refunds of any excess property tax to all
      owners of non-gazetted hotels. Owners paying their property tax
      through GIRO will have their GIRO instalments adjusted and credit
      balances will be refunded where appropriate.

      Owners of non-gazetted hotels applying for the TV licence fee rebate
      should contact the Media Development Authority Licensing Division.
      Contact details as provided below.

Enquiries

For further queries on enhanced property tax rebates, please contact:
Ms Nang Peck Yan
Inland Revenue Authority of Singapore
DID: 6351 2344
Patrick Yeo
Inland Revenue Authority of Singapore
DID: 6351 2338

For further queries on TV licence fee rebate, please contact:

Ms Ho Tan Chee
Manager (Operations & Agency Management)
Licensing Services Division
Media Development Authority
DID: 6478 5332
FAX:6738 4142
Email: ho_tan_chee@mda.gov.sg
                                                                             43


                                                                    Factsheet

EXTENSION OF STATUTORY LIFE SPAN OF TAXIS AND OMNIBUSES

The statutory life span of taxis and omnibuses will be extended to 8 years
and 17 years respectively, with effect from 1 September 2003. The
extension will apply to both existing and new taxis and omnibuses.

The life span extension will allow operators to extend the life of their fleets,
and lessen their depreciation expense. In the long term, taxi and bus
operators are expected to save $7m and $10m a year respectively in
depreciation costs.

The extension of statutory lifespan of taxis and omnibuses is now possible
with the improvements in technology and better vehicle repair and
maintenance regimes. This has allowed such vehicles to be road-worthy
over a longer period of time. These vehicles will also undergo stringent
maintenance regimes and mandatory inspections during their extended life
span to ensure that they remain road-worthy.

Background

Currently, taxis and omnibuses have a statutory life span of 7 years and 15
years respectively. A statutory life span is imposed on such vehicles to
ensure that they remain road-worthy and provide safe and comfortable
rides for commuters.


Public enquiries
The public can call Ms Martha Yew, Supervisor Customer Relations, Land
Transport Authority at DID: 65535222.
                                                                              44


                                                                     Factsheet

            REVISION OF TAXI OPERATOR LICENCE (TOL) FEE

LTA has reviewed the TOL fee and has reduced it significantly by about 90%.
The revised fee will be pegged at 0.1% of the taxi operator’s annual revenue
generated from its taxi operations.

The original TOL fee, at $25 per taxi per month, was determined based on the
cost of regulating the taxi industry and monitoring the service standards of taxi
operators. In view of the current economic downturn and feedback from the taxi
industry, LTA has reviewed the regulatory requirements in order to reduce cost,
and hence the TOL fee. In addition, LTA will absorb a large part of the reduced
cost to lower the burden on taxi operators. This has allowed LTA to reduce the
TOL fee to a small fraction of the earlier $25 fee.

As part of the SARS package announced in May 03, the TOL fee was waived till
end December 2003, to help the taxi industry, which was badly affected by the
SARS outbreak. The revised TOL fee will take effect from 1 January 2004.

Background to TOL

Since 1 Jun 03, LTA has opened the taxi industry to new companies. Any
company that wishes to operate a taxi service must obtain a Taxi Operator
Licence (TOL) from LTA. This new framework was announced by LTA on
27 January 2003, following the passing of the Road Traffic (Amendment)
Act in Parliament. This is to allow greater competition within the taxi
industry and improve taxi services for the benefit of commuters.

Public enquiries
The public can call Ms Martha Yew, Supervisor Customer Relations, Land
Transport Authority at DID: 65535222.
                                                                         45


                                                                  Factsheet

BRIEF ON ADVANCING PUBLIC SECTOR PROJECTS

Annual construction demand has fallen significantly, from a peak of $24
billion in 1997 to about $14 billion in 2002. MND/BCA and MOF are
working towards advancing the implementation of some public sector
projects to boost the construction industry. About 60 public sector projects
of more than $600 million worth will be brought forward in FY03 and FY04.
These projects cover development and improvement works for
roads/expressways, schools, community clubs, parks, and drainage and
sewerage systems. As most of the projects to be advanced are small, they
are likely to benefit local contractors and have spin-offs to local sub-
contractors and suppliers.


Enquiries on Advancing of public sector construction projects:
Ms Lo Yen Lee
Manager, Economics Research Section
Business Development Division
Building and Construction Authority
Office No: 63255167
HP: 98723671
E-mail: lo_yen_lee@bca.gov.sg
                                                                                                              46


   Supplementary Factsheet


              CHANGES IN PROPERTY AND LAND PRICES (1994-2003)
                                (Index 1994 = 100)
   Year           JTC       JTC          Private   Office Shops Residential
                flatted  prepared      Industrial
               factories industrial     factories
                            land
   1994           100        100           100      100    100     100
   1995           104        109           133      122    110     110
   1996           105        120           146      122    112     116
   1997           106        128           141      109     98     101
   1998           104        125            97       76     77      67
   1999            78        81             92       75     70      90
   2000            78        81            108       96     81      89
   2001            78        81             90       75     72      78
   2002            75        81             82       63     70      77
2003(latest)*      67        75             78       59     68      76

   *2nd half 2003 for industrial properties, and 2nd quarter 2003 for other properties

                      160


                      140                            Private industrial factories


                      120                                 JTC prepared industrial land


                      100
     Index 1994=100




                       80
                                        Residential                                   Shops
                                                                                      JTC flatted factories
                       60
                                                                                      Offices

                       40


                       20


                        0
                        94

                              95

                                    96

                                           97

                                                 98

                                                        99

                                                               00

                                                                     01

                                                                           02

                                                                                 03
                       19

                             19

                                   19

                                         19

                                                19

                                                      19

                                                             20

                                                                    20

                                                                          20

                                                                                20




                                                        Year

				
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