SKILLS DEVELOPMENT LEVY (AMENDMENT) BILL

Order for Second Reading read.

The Minister of State for Trade and Industry (Mr Mah Bow Tan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The purpose of the Skills Development Levy (Amendment) Bill is to streamline the administration of the Skills Development Fund (SDF), to clarify the financial accountability for the Fund, and to appoint the National Productivity Board as the overall Administrator of the SDF.

Sir, the SDF was set up in 1979 as a Government fund under the Ministry of Finance to support worker training and skills upgrading. Operationally, the CPF Board collected the levy, the Accountant-General managed the Fund, the Economic Development Board administered the SDF programmes and the Revenue Division of the Ministry of Finance disbursed the grants for these programmes.

In 1986, the SDF and the NPB were both transferred to the Ministry of Trade and Industry (MTI) to consolidate resources for workers' training and productivity. The Skills Development Levy Act was not amended. As a result, six Government agencies and statutory boards are presently involved in administering the Fund, namely MTI, the Accountant-General, the Comptroller of Income Tax, the CPF Board, NPB and the SDF Secretariat. Sir, although the Act still specifies that the Comptroller of Income Tax collects the Skills Development Levy, the Comptroller does not report to MTI. Furthermore, MTI is accountable for the Fund even though actual grant disbursements are administered by the staff in NPB and SDF. Sir, the involvement of such a large number of agencies obviously results in a diffusion of financial responsibility. There is therefore a need to rationalise and to streamline the system so that financial accountability is more clearly defined.

In practice, the NPB has been assisting the SDF Secretariat in formulating new training initiatives since 1986. It is therefore logical for the NPB to be appointed the overall administrator of the Fund.

To effect this, the Skills Development Levy Act has to be amended:

(a) to appoint the NPB as the overall Administrator of the Fund and to delete references in the Act to the Comptroller of Income Tax and the payroll tax;

(b) to give the NPB the flexibility to appoint agents for the administration so that the existing machinery of the CPF Board and the Accountant-General need not be duplicated;

(c) to incorporate the relevant sections of the Payroll Tax Act and its associated Regulations in the Skills Development Levy Act so as to provide NPB with equivalent power to enforce levy collections; and

(d) to dissolve the SDF Advisory Council, as its functions will be taken over by the National Productivity Board.

The Ministry is aware of the dual role of the NPB as an administrator and user of SDF funds. In recognition of this, we have taken precautions to ensure that MTI will still hold the casting vote in the Fund. NPB will have to seek the approval of the Minister for any new direction or any new programme for SDF funding. The Fund's annual budget will still be vetted by MTI. Any major project requiring SDF financing will also have to be approved by MTI.

I am also introducing further amendments to the Skills Development Levy Act so that the SDF will remain a Government fund protected by the Government even though NPB is appointed as the Administrator. These are:

(a) to appoint employees of the NPB as "public officers" as defined in the Financial Procedure Act so that they will be held financially accountable to the Government for the Fund's monies;

(b) to stipulate explicitly in the Skills Development Levy Act that the NPB will submit the accounts annually to the Auditor-General and the Minister will present the audited statements to Parliament as is the present practice.

The continued presence of the Auditor-General in the SDF administration is an added insurance for the financial integrity of the Fund.

Mr Speaker, Sir, the Skills Development Levy will remain a key factor in building up our training infrastructure for post-employment training. The appointment of NPB as the Administrator of the SDF will provide a closer coordination between trainer and financier and will strengthen our post-employment training structure.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Mah Bow Tan].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clauses 1 and 2 ordered to stand part of the Bill.

Clause 3 -

Mr Mah Bow Tan: Sir, I beg to move,

In page 2, line 13, to leave out "Board" and insert "Government".

Sir, I have indicated in the debate on the NPB (Amendment) Bill that the intention is to preserve the status of the SDF as a Government fund. So any money outstanding in the Fund is therefore money owing to the Government.

Amendment agreed to.

Clause 3, as amended, ordered to stand part of the Bill.

Clause 4 ordered to stand part of the Bill.

Clause 5 -

Mr Mah Bow Tan: Sir, I beg to move,

In page 2, line 24, to leave out from "(3)" to the end of line 30.

Sir, the reason is that the Fund will continue to vest in the Government as a Government fund. There is therefore no need to transfer the Fund vested in the NPB.

Amendment agreed to.

Clause 5, as amended, ordered to stand part of the Bill.

Clause 6 ordered to stand part of the Bill.

Clause 7 -

Mr Mah Bow Tan: Sir, I beg to move,

(1) In page 2, line 36, to leave out "control and".

(2) In page 3, line 27, to leave out "appointments and delegations", and insert "appointment and delegation".

(3) In page 3, to leave out lines 30 to 32 inclusive.

Sir, the SDF will remain in the control of Government and not transferred to NPB. The second amendment is a grammatical correction and the third amendment is that since the Fund will be protected by Government, there is no need to define the limitation of the liability of the NPB.

Amendments agreed to.

Clause 7, as amended, ordered to stand part of the Bill.

The Chairman: The two consequential amendments will be made:

(1) In page 2, to leave out the marginal note to section 9, and insert -

"Administration of Fund.".

(2) In page 3, line 29, after "Gazette.", to insert close inverted commas and a fullstop.

Clause 8 -

Question proposed, "That clause 8 stand part of the Bill."

Mr Mah Bow Tan: Sir, it is the intention that this clause be deleted.

Sir, the unutilized accumulated fund of the SDF is currently placed as fixed deposits with banks. This practice will continue under NPB's administration. There is therefore no need to amend the clause on investment of SDF monies and the decision will continue to be made by the Minister.

Question put, and negatived.

Clause 8 accordingly disagreed to.

The Chairman: Consequential amendments will be made to the numbering of clauses.

Clauses 9 and 10 ordered to stand part of the Bill.

Clause 11 -

Mr Mah Bow Tan: Sir, I beg to move,

(1) In page 5, to leave out lines 34 to 36 inclusive and insert - "Application 16. The members, of Financial employees and agents Procedure Act. of the Board shall, in Cap. 109. relation to the administration of the Fund, be deemed to be public officers for the purposes of the Financial Procedure Act and section 20 of that Act shall apply to such persons notwithstanding that they are not or were not in the employment of the Government. Financial 17.-(1) The Board shall, statements. as soon as practicable but not later than 30th June in every year, prepare and submit the financial statements relating to the Fund in respect of the preceding financial year of the Board to the Auditor-General who shall audit and report on them. (2) As soon as the financial statements have been audited by the Auditor-General, a copy of the audited financial statements and the report of the Auditor-General shall be submitted to the Minister. (3) The Minister shall as soon as practicable cause a copy of the audited financial statements and of the report of the Auditor-General to be presented to Parliament.".

(2) In page 6, line 1, to leave out "Fund", and insert "administration of the Fund by the Board".

(3) In page 6, line 7, to leave out "Fund", and insert "administration of the Fund by the Board".

(4) In page 7, lines 12 and 13, to leave out "Second Schedule.", and insert "Schedule.".".

(5) In page 7, to leave out lines 14 to 30 inclusive.

Sir, the SDF is subject to the Financial Procedure Act and the Financial Regulations. The first amendment serves to appoint the employees of NPB as "public officers" as defined in the Financial Procedure Act. The remainder of the first amendment retains in the Act the existing stipulation that the annual accounts be audited by the Auditor-General and presented to Parliament through the Minister. These conditions were listed in the First Schedule on Financial Provisions in the Amendment Bill tabled in March 1991.

The second and third amendments are consequential.

Since the SDF will continue to be governed by the Financial Procedure Act and the Financial Regulations 1990, unnecessary to have a separate set of Financial Provisions in the First Schedule of the Amendment Bill tabled on 11th March 1991. The First Schedule is therefore deleted in the fourth amendment.

The fifth amendment deletes the transitional provisions which are not required since SDF will remain a Government fund.

Amendments agreed to.

Clause 11, as amended, ordered to stand part of the Bill.

The Chairman: Consequential amendments will be made to renumber sections 17 to 22 as sections 18 to 23, respectively.

Clause 12 -

Mr Mah Bow Tan: Sir, I beg to move,

(1) In page 7, to leave out marginal note, and insert "Repeal and re-enactment of Schedule.".

(2) In page 7, line 32, to leave out "Schedules", and insert "Schedule".

(3) In page 7, to leave out line 33 to line 39 in page 9 and insert -

" "THE SCHEDULE Section 23.".

Sir, as I have explained, the First Schedule on Financial Provisions is not required. So the three amendments erase the Financial Provisions in the First Schedule and replace it with the contents of the Second Schedule on the "Matters in respect of which Minister may make Regulations."

Amendments agreed to.

Clause 12, as amended, ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.