SINGAPORE BUSINESS FEDERATION (Membership drive)

Mr Tay Beng Chuan asked the Minister for Trade and Industry (1) whether it is his Ministry's ultimate intention to compel, by legislation, all or only the more successful companies to join the proposed Singapore Business Federation (SBF), to the extent of hindering the membership drive and growth of several hundreds of our local and foreign business chambers and trade associations; and (2) what meaningful role does his Ministry expect the three ethnic Chambers of Commerce and Industry to play in the SBF bearing in mind that the SBF will be out to compete with them in membership recruitment and service delivery.

Mr Tang Guan Seng (for the Minister for Trade and Industry): Mr Speaker, Sir, the formation of the Singapore Business Federation (SBF) as the apex business chamber in Singapore was a proposal from the Singapore Federation of Chambers of Commerce and Industry (SFCCI). SFCCI's five constituent members, which include the Chinese, Malay and Indian Chambers, agreed that a strong apex organisation like the SBF would help co-ordinate and promote Singapore's private sector interests both locally and abroad. SBF will strengthen representation by our business sector in key domestic, bilateral and multilateral forums such as the National Wages Council, ASEAN, APEC, ASEM and our bilateral business councils.

MTI supports the formation of such an SBF. It will benefit our business community. My Minister has stated publicly and in this House that MTI will introduce legislation to require larger companies to be members of the SBF. This is necessary to ensure that the SBF garners sufficient support and adequate funds to carry out its objectives.

Only companies with paid-up capital of more than half a million dollars will be required to be members of the SBF and contribute to it. The great majority of our companies including most SMEs will be exempted from the SBF contribution. It is hence unlikely that the membership of our existing local and foreign chambers and business associations will be threatened.

Moreover, many of our chambers and business associations serve the specific needs of their members. Many of them organise trade missions to help their members expand their business overseas. Others offer sector-specific activities for their members to network and collaborate with one another. Membership in these organisations will therefore continue to be strong as long as they continue to run programmes and provide services to benefit their members.

Our chambers and associations form a rich matrix of industry networks that will help support and strengthen the SBF. To be an effective and representative apex chamber, SBF needs to engage not just the individual companies but also the ethnic chambers, other local business and trade organisations and foreign business chambers.

The ethnic chambers are especially important in this matrix as our local small businesses tend to be aligned according to the different ethnic groups. The ethnic chambers will fulfil a valuable and unique role in the SBF by representing these ethnic business communities. It is for this reason that the Chinese, Malay and Indian chambers will have a permanent place in the SBF Council and therefore have an influence in the direction and activities of the SBF.

Ultimately the success of the SBF depends on the support of the individual business chambers, associations and companies. The SBF Council will be structured such that it includes the key stakeholders - both business associations and companies - in its decision-making. This will ensure that the SBF caters to the needs and reflects the voice of the wider business community.

Mr Ravindran: Sir, there is a serious concern among the chambers of commerce, particularly the ethnic-based chambers of commerce and the business community, that once the SBF is set up, it will become the premier business organisation in Singapore and representing Singapore both locally and overseas. So there is a serious concern that the ethnic chambers of commerce will lose their importance and many may even stop joining this organisation as members and, instead, join the SBF directly, particularly the bigger organisations. In fact, it is these big business organisations ---

Mr Speaker: Mr Ravindran, could you ask your question?

Mr Ravindran: Sir, the question is whether the Ministry, in moving the legislation to set up SBF, would consider making provisions whereby membership is through the existing chambers of commerce or other business organisations and whether, if such a set-up is allowed, membership fee to SBF can be given on a discount basis, perhaps 30% or 40% discount, to those who are members of the existing chambers of commerce. If they want to join SBF, they will be given a discount in the membership fee so that the existing chambers of commerce can be relevant and many will continue to remain as members or join as members.

Mr Tang Guan Seng: As I have said just now, there are roles to be played by ethnic chambers. Each chamber will have to provide services to their members. His question is whether we would legislate for the members to join SBF through the ethnic chambers. I think this is not necessary because, at the moment, our thinking is that SBF will provide general services to represent Singapore in international forums and also to be a partner to work out national policies on economic matters. So it will provide general services to its members. But ethnic chambers will play a slightly different role. For example, the Chinese Chamber of Commerce and Industry can organise missions to various parts of China, whereas SBF may not be interested in doing so. So I would think that if various ethnic chambers can set up their activities and improve their services, they would be able to retain and recruit more members to join them.

His next question is whether consideration can be given for a discount in membership fees to members who want to join SBF through the chambers. We would leave it to the various chambers to decide how they would like to work it out because we would not disallow dual membership. They can join as a member of the ethnic chamber and, at the same time, join SBF. Whether the respective ethnic chambers would like to give a discount, we will leave it to them to decide.

Mr Ravindran: Sir, I think the Senior Parliamentary Secretary has missed the point. The point is that, under the proposed legislation to be put up by the Ministry, membership of the SBF will become compulsory. So companies whose paid-up capital is more than $1 million do not have a choice. They must join as a member. Naturally, the question that will arise when these companies join as members is why do they join another organisation like the Chinese Chamber of Commerce or the Malay Chamber of Commerce or the Indian Chamber of Commerce. So by making it compulsory, I think that is something which is of concern to members. That is why the concern in the business circle is whether the existing chambers of commerce can be members of SBF.

The second point is with regard to membership fees. It is something that SBF, in its legislation, has to provide whether such a discount can be given when one joins as a member of the existing chambers. If the matter is not resolved at the outset, it would be very difficult for these matters to be decided subsequently when SBF is set up with full legislation.

Mr Tang Guan Seng: I would like to clarify a point made by the Member. Our thinking is to require companies with paid-up capital of more than half a million dollars, not a million dollars, to join as members of SBF. For ethnic chambers, their catchment is quite big. Under the proposed legislation, we do not require sole proprietary or partnership companies to join as members of SBF. So they are not affected. They can still continue to be members of the ethnic chambers. For companies with over and above half a million dollars paid-up capital, they can decide on their own. They can still remain as members of the ethnic chambers and, at the same time, become members of SBF under the new arrangement.

Our thinking is that, as I have said just now, if the chambers of commerce can provide relevant services to their members, they would like to continue because they have different needs. I hope that arrangements can be worked out so that the various ethnic chambers can deal with this dual membership problem, whether by giving discounts or through some other measures. As I have said just now, ethnic chambers can play a very important role and they provide the matrix of the apex organisation, which is SBF.