SINGAPORE MANAGEMENT UNIVERSITY BILL

Debate resumed.

Mr Simon Tay: Mr Speaker, I rise to support the Bill.

I, like many of the colleagues who had spoken before me, believe that the SMU can and will have a place in Singapore's education landscape. Before I proceed further, let me declare that I am an employee of the National University of Singapore.

Mr Speaker, much has been made of the idea that the SMU is to be a private university, different from the National University of Singapore and the Nanyang Technological University. Much has also been talked about the fact that it is a public company limited by guarantee. Let me briefly explain this concept.

Unlike its name, public company, whenever you mention that idea, it immediately invokes the idea that it is a listed company for private gain. A public company limited by guarantee is quite different. It is for public purpose, but in some ways, it is not part of the Government and it is ruled by the Companies Act. And in this form of structure, there are founder members who give a nominal guarantee for the financial credibility of the company. This form of incorporation has been used for several institutions such as the Institute of Policy Studies (IPS), the Singapore International Foundation (SIF) and a number of other entities which are clear public in character, but for some reasons, wish to have much more flexibility and freedom.

This is important in thinking about how the light management of the SMU can be done. I take the Minister seriously when he talks about this need for a lighter touch. There is a need therefore for a balance between the autonomy of this body, which by its constitution is governed by a Committee and the founder members and the accountability that might come to anybody that receives public money. With those thoughts, may I turn to the particular clauses of the Bill.

My first concern is clause 4. Here, the Minister has powers to appoint the entire Board. To me, this is quite a sweeping power if we are trying to keep this a private university, in the sense of understanding it to be driven not only by the Government but by its founder members and by the community as a whole. And here, I think the role of the Minister would then obviate the role of the founder members of this institution.

Secondly, when I turn to clause 5(1)(d), I am also concerned. Here, the Ministry must approve of any change to a constituent document of the SMU. For the earlier parts, (a), (b), (c), I am quite agreeable. If the company is wound up, or if the company has disposed of its properties or other major assets, I think the Government, having given it its land and money, needs to know this. But I think it is too wide indeed to require that any change receives the Minister's approval. It makes it just like a statutory body. It makes it just like amending the statute of the NUS or NTU and I think this moves away from the idea of a lighter touch that we seem to be looking for.

My third concern is clause 8 and this comes to the activities of the student bodies. And here again, the activities of the student bodies in the SMU are subject to the Societies Act and the Societies Act would allow the right to refuse certain applications and the right to view accounts, etc. Why is this needed if we want to give this body a greater autonomy?

The Minister has mentioned that a former Minister, Mr Lim Kim San, has accepted the appointment of Chancellor of the new SMU. I welcome this move. Mr Lim has enjoyed a tremendous reputation in Singapore, not only in the public sector but also in the governance of large public companies. However, I would like to remind us again that this is going to be a private university, and if it is truly to be private, I hope the Minister will clarify that the role of the Chancellor is clearly non-executive. The running of the SMU must be with its professional staff, such as the President and those under the Provost. I am reminded of this particularly because when the NUS started and, of course, the NUS is a state university, the then Minister and now Deputy Prime Minister Tony Tan was the first Vice Chancellor.

Let me move on to my last point, Mr Speaker, and this is in regard to the funding of the SMU. I take it seriously that the SMU is to be a private institution. And as a private institution focusing on business, it should be able, after a while, if it has enough reputation, to become privatised and more or less self-sufficient in terms of its funding. I would like to ask the Minister whether there are plans over time to reduce the amount of funding given to SMU and, with that, to reduce the amount of Government supervision over this new entity.

Mr Chiam See Tong: Sir, I am glad that a third university in Singapore has finally come to fruition. In 1984, the Opposition called for the setting up of a second university. When the Nanyang Technological University was formed, it called on the Government to start a third university. Now the third university is established, albeit a rather specialist one, confining itself mainly to the teaching of only disciplines confined to the subject of management.

Sir, Singapore is supposed to embark on a knowledge based economy. Yet, the number of universities that we have compared to Australia or New Zealand is very low. In those countries, they have one university for about 500,000 population. By the standard of those two countries, Singapore should have about six universities now and not three, since our population is about three million. I wonder if the Government is thinking of setting up more universities in the near future. I think it should as Singapore is also embarking on the policies of globalisation and attracting foreign talents. The globalisation policy will require more qualified Singaporeans to travel abroad and thus more university graduates. We should have enough graduates to buffer the impact of foreign talent or otherwise we shall be swamped by foreign talents coming to work here in Singapore.

On the question of foreign students, I understand that at present, the Government's policy is rather liberal on foreign students. I think this is a good policy. We must not shut out foreign students who qualify to be admitted into our universities. There are merits to encourage foreign students to study in Singapore. Having said that, at the same time, we must not deprive our local students from obtaining a tertiary education by making the entry point too difficult for them, or run short of places due to taking in too many foreign students.

Nowadays, studying abroad is not cheap. It costs quite a lot of money for a parent to send a child overseas to study. Not all Singaporeans are that wealthy. A middle class family may be able to send one child overseas to do a university degree, but to send two for the average middle class family is not possible. Therefore, provision to make enough university places for locals to study is most essential.

Recently, I saw a TV programme about a 50-year old Australian lady who is allowed to study in the NTU. I should say that we should also not put an age limit on Singaporeans who wish to pursue a university degree in our local tertiary institutions, even if they have passed the normal university entry age. We should not shut out mature students who have missed the boat in the first instance.

The next issue is we should ask ourselves what type of universities we like to establish in Singapore. I do not think we should establish another strictly controlled university, one where the majority of students dare not think independently. They are mostly to become yes men, and also they dare not dissent or join the opposition, although the opposition operates strictly by the Constitution. I do not think that we should set up another strictly controlled university, but a university that will produce students who dare to think differently and who are dynamic and who have leadership and entrepreneurial qualities. I am afraid the SMU shall not be one of those types of universities.

We can see that under this Bill, when it becomes law, it shall make the SMU totally controlled by the Minister. We see that the Board of Governors shall be all appointed by the Minister. If that is the case, the Minister surely shall appoint like-minded people to the Board, and like-minded people cannot promulgate new and daring ideas. There shall only be inbreeding of ideas and there is no cross-fertilisation of fresh new ideas. I urge the Minister to allow different sectors of the business community, the labour movement and other academic professionals to appoint independent trustees to the Board, so that daring new ideas can be introduced into the SMU to make it produce students who are not only technically competent but who are bold and daring to introduce new ideas and make Singapore a truly dynamic place to do business in.

Dr Wang Kai Yuen: Mr Speaker, Sir, may I be permitted to seek a clarification from Mr Chiam? He mentioned in his speech that in Australia, there is one university for every 500,000 population. That means if you look at the population of Australia which is close to 17-18 million, he is talking about a total number of 300 universities.

An hon. Member: 34 universities.

Dr Wang Kai Yuen: 34 universities. Sir, I withdraw my question.

Mr Chiam See Tong: My mathematics is not that bad.

RAdm Teo Chee Hean: Mr Speaker, Sir, as Members have observed, the Bill is, in fact, a minimalist one and it does not contain a lot in it. Dr Wang has asked where are the provisions governing the operation of the SMU. The provisions governing the operations of the SMU are, in fact, contained in the Memorandum and Articles of Association of the company. In fact, the Memorandum and Articles of Association contain how the company should be run, the responsibilities and the roles of the Chancellor and the other principal officers of the university, including the President, the Provost, Secretary, the functions of the faculty and the departments and so on. So the Memorandum and Articles of Association, in effect, functions like a constitution of the NUS and the NTU.

Since we are starting up a new university, we decided to adopt this new model so that we can leave many of the detailed issues in the governance of the university to the company rather than to incorporate them into the Act and have to come to Parliament if the company does want to change any of the ways in which it wants to govern itself.

The Ministry of Education is currently having a look at university grants and funding and governance with a view to granting more autonomy but, of course, with the accountability. The university's governance and funding committee will be ready to report its findings later this year. And the experiences that we have from the management of SMU and also the experiences that we will have from the management of NUS and NTU under any new structures or governance methods that we have will, of course, be applied to improve the governance of all three of our universities.

Dr Wang has also asked why we have set up the SMU in this way and whether or not this is optimal or the best solution for the university sector in Singapore. We have talked about this for quite some time and decided that if we set up three universities which were basically identical and comprehensive, then they would compete with each other to the detriment of the university sector in Singapore. Because all of them will be trying too hard to be like each other, and some would win and some would lose and that may not be the best positioning for the small number of universities that we have in Singapore. Hence, we decided that it may be a better competitive environment for the universities if each one could develop its own characteristics and niche areas of excellence, but with some overlap in the courses and programmes which each of the universities offers, so that there will be a good balance between competition as well as allowing each university to develop an area of specialisation and something which they become known for.

We had initially intended to start SMU out of the NTU Business School, as a seed for which to grow the university. But as we studied the matter further and as we were able to consider very close association with Wharton School, we felt that we would have the confidence to be able to start SMU afresh, on its own, and this would allow us to introduce many more new innovations and ideas than if we were to start SMU out of part of one of the existing universities. And so we chose to go in this direction.

Will SMU be too small? This is one of the questions that Dr Wang asked. We are starting SMU at a modest size with about 300 students in its first year, because we want to ensure that the intake quality is good so that SMU will start on a good solid footing. That also means that we can be quite selective about the staff that are recruited into SMU. That again will assure high quality of SMU. But we expect that SMU will grow over 5-7 years, perhaps to 3,000-4,000 students, and together with its executive programmes and its graduate programmes, that would be quite a nice size for a university already. In fact, NTU and NUS with 16,000 and over 20,000 students respectively are already quite a very large size and can be quite unwieldy to manage. So I feel confident that SMU will be able to develop into a university with enough critical mass to achieve excellence. And in the course of time, it will expand its course offerings into other areas related to business and management. I do not expect that SMU will begin to offer courses in heavy engineering or in esoteric areas in science and so forth, because that is not an area in which we foresee SMU developing its area of expertise. Hence, the name Singapore Management University.

Dr Wang and Dr Tan Boon Wan have also asked about standards of the university and the degrees. One of the things that is happening in Singapore today in which Members of this House and members of the public have to understand is that there is a variety of programmes in Singapore offering a variety of qualifications. We have NUS, NTU, SMU, OUDP and many other institutions offering twinning degrees of various kinds. As the variety and number of qualifications increases, we must understand that employers will eventually be the final arbiter of whom they consider as most appropriate for the job that they are looking for a person to fill. This eventually will have to be the situation. It is not possible for the Ministry of Education to become a giant accrediting agency that accredits all the university qualifications in the world. We already have enough trouble trying to maintain standards in our own universities. It would not be possible for us to try to check on the standards of universities all across the world over which we have no control. Hence, it is really a matter for the individual employers to decide what students and what graduates they would find most appropriate for the kinds of jobs that they have. That applies to the Government as an employer as well because Government has a range of jobs open and what one statutory board may look for in an employee may be different from what another Government department or another agency does. These are things which are best left to employers to decide and to settle. Students also have to decide for themselves whether to take up particular courses, whether it suits their needs or their career aspirations.

Dr Tan Boon Wan and Mr Iswaran have asked about competition for students and whether there is over provision of places for management and business students. The overall allocation of places which are subsidised and funded by the Government is settled at the National Manpower Committee chaired by my colleague, the Minister for Manpower, and in which the Ministry of Trade and Industry, the Ministry of Education, EDB and other interested parties are present. We try to estimate as best we can the types of manpower that we need in the future, and we will fund places in the institutions of higher learning to train such manpower. So there should be no danger of us willy-nilly increasing the training of business students way beyond what we expect the economy to be able to absorb or what the economy needs. As a matter of fact, both NTU and NUS have reduced their undergraduate intake and when SMU begins its first intake this year, we expect that we will continue to adjust the intakes of these three universities so that the numbers of business students who will receive funding from the Government in the form of subsidies to the institutions of higher learning will be within reason and within the bounds of what we expect the economy will absorb.

Dr Tan Boon Wan also asks about competition for professors. If the economy has a demand or need for graduates of this type, we will have to try to train them to fulfil this need. If necessary, we will recruit professors worldwide, not just from Singapore, who can augment whatever teaching and professorial resources we have in Singapore. This has always been the approach in our institutions of higher learning. I do agree with Dr Tan Boon Wan that there needs to be a good balance between teaching and research in our universities so that one does not suffer because we have over emphasised the other.

If I may move to funding. Mr Iswaran asks about funding for the SMU. Yes, Government will fund capital and recurrent expenditure of the SMU, including its start-up costs. Our intention is to fund it basically on the same basis as similar courses in NUS and NTU will be funded. Is there a time frame to phase out public funding? We have not established such a time frame. We want to give the university a good start up so that it will be able to offer courses of high quality. Of course, we will be very happy if the university proves that it can raise a lot of funding and I will be more than happy to reduce the funding to the university if it is able to fend for itself.

Dr Tan Boon Wan raised a number of issues with regard to personnel deployment and management, professorial salaries and so forth. These are matters which I will leave for another time to answer when we have finished our studies on university governance and funding.

Mr Simon Tay asks why clauses 4 and 5(1)(d) are needed. Basically, it is because we provide substantial public funds to the SMU and we have provided land and buildings and recurrent funding to the university for a public purpose. If I were not able to influence the direction of the university, and I am providing funds to them, one of these days Mr Simon Tay may well call me to account and ask me why I have not been running the university properly and why is the university wasting money and so forth. So the Minister for Education has a responsibility to make sure that while public funds are being provided to the university, persons of good reputation who are able to run the university well are put in charge of the university and that the funds that the university is given are well expended for the purposes which we have set out.

He has also asked about clause 8. Why is it necessary to have this clause for the student bodies. This clause is also contained in the NUS Act and the NTU Act and the purpose of this clause is to ensure that all student bodies are registered with the Registrar of Societies who is granted the power to refuse to register societies if the rules of the society are insufficient to provide for its proper management and control, or if the society is likely to be used for unlawful purposes or it will be contrary to the national interest for the society to be registered. So this is not something different from NUS or NTU. We basically want to make sure that the universities do not have student bodies that are formed for purposes prejudicial to public peace, welfare or good order in Singapore. But within those parameters, the universities, as you know, NUS and NTU, have been organising all kinds of activities. Mr Chiam, for example, has spoken there a number of times and I am sure that if he has something new and interesting to say, the students will be happy to invite him back again.

Mr Chiam also raised a number of issues. If only starting a university were as easy as calling for it to be started, but it is not easy to start a university and we have had to think very, very carefully about starting up SMU and how to start it, because a university lives and dies by its quality and its standard. You can start a university but if it does not have the quality and standard, then it is not worth starting one up.

Mr Chiam also makes a mistake in comparing the number of universities to population, as though that is the most important thing. The most important thing to compare is what is the cohort participation rate for higher education, and not the number of universities. What percentage of the cohort is able to attend higher education. That is the key number. In Singapore, we have 20% going to universities today. When SMU has reached full capacity, we expect that to be 25%. We also have 40% going to our polytechnics, adding up to some 60% to 65% of a cohort going for higher education. This is one of the highest percentages in the world. In the United Kingdom, they converted all their polytechnics to universities and they have attained 35% of a cohort going to university. We have kept our university and polytechnic sector separate and we are attaining 60% to 65% already today. In Hong Kong ---

Mr Chiam See Tong: Mr Speaker, Sir, can I have a clarification?

Mr Speaker: Order. Are you giving way, RAdm Teo?

RAdm Teo Chee Hean resumed his seat.

Mr Chiam See Tong: We have kept our cohort going to university at 20%. Can the Minister say that, in fact, there are more than 20% who would want to go to university in Singapore?

RAdm Teo Chee Hean: Sir, everyone would want to go to university if he could. So I can quite safely say that there are more than 20% who would want to go to university. It is also very easy for Mr Chiam to say that we should have more universities and it is easy for me, at the stroke of a pen, to allow 100% of a cohort to go to university and issue them with degrees. But the question that Mr Chiam needs to answer is: what are the degrees worth? That is the ultimate question when you look at the university qualification or university degree. NUS and NTU are held in high standing. Our polytechnics are held in very high standing.

Mr Chiam See Tong: Sir, can I have another clarification from the Minister? The Minister asks how much is a university degree worth. This question has been debated many, many times. In other words, do you just want a university degree? What is the purpose of a university degree? People say that the university is a training ground, not just to get a degree. But the point is the end result of going to university is not just getting a university degree. The fact that one goes through three years of training, one may do 100, 200, 300 or 400 assignments, essays, reports, what have you. Just like in the United States, they reason that a student going through such training will gain something for life regardless of what sort of degree he gets in the end.

RAdm Teo Chee Hean: I would not like to attend the university which Mr Chiam starts, Mr Speaker. But as I have explained, we already have 60% to 65% of a cohort going to higher education. Our polytechnics are extremely high quality institutions. If you take a comparison again, for example, Hong Kong too converted its polytechnics to universities and its participation rate in universities today is 18%. We have a very, very high participation rate in higher education, and by keeping our universities as universities, and our polytechnics as polytechnics, we have been able to provide education which is suitable for the aptitudes of a wide cohort of our students while maintaining an extremely high quality in both types of institutions.

Mr Chiam also asks about foreign students and he supported the Government's policy of admitting foreign students in our institutions. I am glad that Mr Chiam does support this. As I have explained, we have increased the number of students and the cohort participation rate of our local students in higher education consistently over the years. In 1980, there were only 5% of the cohort going to universities and 8% to polytechnics, ie, 13%. In 1999, 20% were going to universities and 40% were going to polytechnics. So there is no shortage of places for students who can qualify for these institutions and who can benefit from this education even with the intake of foreign students.

Mr Chiam also asks whether we would allow mature students to go to university. The answer is yes. We allow students to go to university by a number of routes today. In fact, out of the 8,600 students who were admitted to NUS and NTU last year, 900 of them came from the polytechnics. In the new university admission system, we have explicitly laid down three different routes by which students can qualify to go to the universities: (1) from JCs and "A" levels; (2) through the polytechnics; and (3) from mature students, taking into account their SAT or reasoning test results and their work experience or whatever other qualifications they have.

Sir, I believe I have answered most of the questions that have been raised by Members. I would like to thank them for their interest in the subject.

Mr Simon Tay: If I may ask the Minister for a clarification. The Minister, in reply to me, has pointed out why clauses 4 and 5 are necessary to retain public accountability. But the other end of my question was: how does this allow SMU to indeed be autonomous, have a lighter touch and be a private university? How is it different from NUS and NTU?

RAdm Teo Chee Hean: It is different from NUS and NTU in the sense that it is operating in a company framework and company environment rather than in the environment of an Act of Parliament. So they have quite a lot more flexibility to manage the company in the way that they deem fit, and also it is easier to change the M&A of the company. Even though I have to approve, it is easier to change the M&A of the company than it would be to change the Act where we have to come to Parliament. So there will be considerably more autonomy and freedom of action and flexibility on the part of the Board of Trustees of the SMU than there will be for the Board of Governors or the Council of NTU and NUS.

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. - [RAdm Teo Chee Hean].

Bill considered in Committee; reported without amendment; read a Third time and passed.