SINGAPORE PRODUCTIVITY AND STANDARDS BOARD (AMENDMENT) BILL

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

The Productivity and Standards Board (or PSB) was formed in April 1996 through the merger of the National Productivity Board (NPB) and the Singapore Institute of Standards and Industrial Research (SISIR), with the mission of raising Singapore's productivity. Its focus then was on three key areas: productivity; standards and metrology, and small and medium enterprises.

Over the last 20 years, PSB has spearheaded the nation-wide Productivity Movement as a key part of our economic strategy. Going forward, there is a continued need to champion productivity, as it will determine how competitive we are, and how fast our living standards can rise.

However, as Singapore progresses from an investment-driven to an innovation-driven economy, we should refocus our productivity strategy. The emphasis has to be on increasing Total Factor Productivity (TFP), in other words, getting increases in output through better use of resources and better ways of organising firms' and industries' operations. There is a limit to how much we can raise productivity through greater capital investments alone. While capital investments remain critical for economic growth, gains in productivity will increasingly come from new ideas and quality improvements.

PSB has thus revised its mission to focus on increasing our TFP by promoting innovation. It will help our workers and enterprises build up their capabilities to innovate and create higher value. PSB will help upgrade our domestic non-tradable sectors to make them more productive and resilient. It will also pay particular attention to the development of our local SMEs, whose productivity lags significantly behind the larger companies in Singapore, as well as that of SMEs in the developed countries. In addition, PSB will continue to promote standards and quality to enhance productivity, to ensure product safety, and to promote market recognition and acceptance of our products.

PSB's new name, SPRING Singapore, encapsulates these changes in its mission and functions. SPRING stands for Standards, Productivity and Innovation for Growth. It connotes innovativeness, dynamism and renewal - all attributes needed for future competitiveness and economic success.

The amendments to the PSB Act reflect this new name, and the enlargement on the mandate, powers and functions of SPRING Singapore. Let me now move on to the key aspects of the Bill.

Clause 5 of the Bill renames the Productivity and Standards Board as the Standards, Productivity and Innovation Board, and enables it to carry out its functions under the business name "SPRING Singapore", or any other business name as the Minister may specify. This will give the Board the flexibility to change its business name as and when circumstances require, without having to change its legal name - Standards, Productivity and Innovation Board.

Clause 7 expands the functions and duties of SPRING Singapore. The new functions include:

(a) raising total factor productivity through the promotion of innovation;

(b) promoting the development of the domestic sector;

(c) being Singapore's national accreditation authority to accredit conformity assessment bodies; and

(d) administering the Weights and Measures Act, which PSB took over from the previous Weights and Measures Office in April 1999.

Clause 6 provides for wider representation in the constitution of the Board. Section 5(1) of the current Act stipulates that the Board shall consist of members representing the interests of the Government, employers, trade unions, professional and academic staff of the institutions of higher learning in Singapore. Clause 6 amends this section to allow Board members to come not only from these bodies, but also from any other sectors or classes of persons, such as the business community. This will provide greater flexibility in the selection and appointment of Board members.

Clause 14 amends section 42(3) to increase the maximum penalty for offences under regulations made under the Act. It raises the maximum fine from $5,000 to $10,000, and the maximum imprisonment term from 6 months to 2 years. This is principally aimed at aligning the penalty for non-compliance (by conformity assessment bodies) in the testing and assessment of controlled goods, with the penalty under the Consumer Protection Act for the supply of non-registered controlled goods. Both offences result in the same consequence, that is, the supply of unsafe controlled goods, but at present the penalties under the PSB Act are much less than those under the Consumer Protection Act.

Mr Speaker, Sir, the proposed amendments to the PSB Act address the fundamental need for Singapore to progress up the innovation ladder in order to remain competitive. We need to help local SMEs, in particular, to anticipate and adapt to emerging trends, discard models and practices that have outlived their usefulness, and reinvent themselves. We need to usher in a new SPRING of fresh ideas, new capabilities and creative initiatives in the workplace and in the business environment, in order to propel our economy to greater heights.

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 Tharman Shanmugaratnam].

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