HEAD V - MINISTRY OF TRADE AND INDUSTRY

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Head V - Ministry of Trade and Industry (cont.) -

Resumption of Debate on Question [12th March, 2004],

"That the total sum to be allocated for Head V of the Main Estimates be reduced by $100." - [Mr Leong Horn Kee].

Question again proposed.

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Tourism

Ms Irene Ng Phek Hoong (Tampines): Sir, as I was saying yesterday, bar-top dancing, beach fun foam parties, reverse bungee jumping and foreign cabaret acts are not uniquely Singapore. Let us not pretend that they are. But I can see what STB is doing, targeting the youngish, hip cosmopolitan crowd and that is fine. But let us not forget families. I think one unique and natural niche for Singapore is to position itself as a fun family destination. It should ride on our clean wholesome image which we should be proud of. It need not be fuddy-duddy or boring. Club Med, for instance, positions itself as the family resort specialist and does a great job of catering to families with all-day activities for children of all ages. Yet, it is also a hip place drawing young couples and young singles. I know that Atlantis City is also seen as a family place although even it has a casino. But I wonder whether it would still be as successful without the casino. If yes, why not be a family place without the casino?

Sir, I believe firmly that in our quest to attract tourists, we should not forget what kind of community we are and what kind of community we want to be which leads me to this last point. Over the last few years, Singapore has been loosening up to position itself as a hip, cool cosmopolitan society and a good tourist destination for the young. It is good that Singapore is getting to be more relaxed and more fun, but it will be a sad day if, to attract the tourist dollar and the rich jet-setters, we have no compunction of going the way of Patpong or some of the seedier joints in the region to sell the city, albeit as a top-end, top-draw destination, a version of these destinations.

When we go to the airport, sometimes we see in different cities, they abbreviate "Singapore" to "Sin". I hope that next time, when people think of Singapore, it will not be a sin city. I hope we will also

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not want to become the Las Vegas of Asia, with big casinos and showgirls and compulsive gamblers coming to our shores. Not only is it shallow, it shows up our lack of creativity. New Zealand, to my mind, is a great example of one way to sell itself. Its greatest tourism act is arguably Peter Jackson's Lord of the Rings trilogy. His works convey to the world that New Zealand, a country of three million, is a creative place and also has beautiful landscapes that can pass off as Middle Earth. Malaysia highlights its famous actress, Michelle Yeoh in its "Truly Asia" advertisements and Hong Kong has actor Jackie Chan as its official tourism ambassador. These creative individuals personified what is special about their countries.

I would like to ask the Minister, in Singapore, what is our creative edge that we can show to the world as uniquely Singaporean and which we can be proud of as Singaporeans. I also want to ask the Minister: the Government has said no to casinos, why the change of mind now?

Mr Ang Mong Seng (Hong Kah): ( In Mandarin ): Sir, the number of tourists from China has increased significantly over the years. With the high economic growth of China, the people are getting more and more affluent. Every year, if we can attract 1% of China's 1.3 billion people to come to Singapore, we would have more than 10 million tourist arrivals in Singapore, much higher than the Singapore Tourism Board's target of seven million. This will certainly boost our tourism industry. In order to attract more tourists from China to visit us, I have a few suggestions to make.

First, we have to reduce the entrance fees of our tourist attractions. In the past, we had the Haw Par Villa and the Tang Dynasty Garden. But because of the high entrance fees, they could not attract enough visitors, and had to close down. Sentosa used to charge an entrance fee of

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$5. Two years ago, I raised this point in Parliament, and I am very glad that the entrance fee has since been reduced to $2. I think we should lower the entrance fees so as to attract more visitors. Now, we have two world-famous attractions, ie, the Jurong Bird Park and the Mandai Zoological Gardens. Last week, a Chinese tourist wrote in the newspapers that with the entrance fee of $12 per head, plus a plate of chicken rice and some drinks each, it would cost the family of four some $120. It is about $30 or about 150 renminbi per head. This is a bit high for the Chinese tourists. I think we should seriously look into these charges.

Secondly, we should have more Chinese signboards. In order to attract the Chinese tourists, we have to use their language so that they could feel at home when they are in Singapore. Recently, I went to Beijing and when I was flying on the SIA plane, I found that all the notices in the toilet were written in English. There was not a word in Chinese. As a result, the toilets were dirty and smelly. One air hostess came up with an idea and wrote two Chinese characters chong shui , meaning "flush water" on a sheet of paper and pasted it on the toilet wall. Immediately thereafter, the passengers began to flush the toilet after use, and the toilets became clean and no longer smelly.

When I arrived at the Changi Airport, I heard two tourists from China discussing which way they had to go. One said, "Let us turn left. If we cannot find the immigration checkpoint, then we turn to the right." The other one was smarter, and he said, "Just follow the others!" So they were actually groping in the dark. If we can have more clearly written indications in Chinese, this will help the Chinese tourists and they will feel more at home here.

Thirdly, we have to improve our service, particularly in our retail industry. I would like to cite an example. I went to

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a shopping centre to buy a pair of trousers. I asked the salesman whether he could shorten the length of the trousers for me. He said, "No problem. You go and pay for it first." After that, he handed me a form and asked me to write down my name and telephone number. I asked him why I had to do this, as I just only needed to have the length of the trousers shortened. He told me that the trousers would be ready only in one week's time. If this is the kind of service we offer, then I do not think we would be able to attract the tourists to shop here.

Mr Tan Soo Khoon (East Coast): Sir, last year, when I spoke on this topic, I suggested that we have to focus ourselves on developing a unique identity for Singapore, be it a product or a service or an experience that the tourist can get when he comes to Singapore. I am happy to note that STB has adopted the words "Uniquely Singapore" as a slogan for its new campaign. Likewise, the Minister said yesterday said that the development of Sentosa and the surrounding islands has to be uniquely Singaporean.

Yesterday, Ms Irene Ng was a bit heated up over the fact that the Crazy Horse show is coming to Singapore. I too am quite excited about this but in a different sort of way. I will agree with her that there is nothing uniquely Singaporean about this and I do not think tourists will come to Singapore because there is a Crazy Horse show in Singapore and it is really exciting to watch. But I see this as part of an effort to spice things up in Singapore. It is often the case that visitors ask me what is there to do in Singapore at night after dinner. I must admit that the options are limited, unless, having been a Member of this House for so long, I am really out of touch with the nightlife in Singapore.

I do remember that some years ago, we had the old Bugis Street. I am not talking about the present Bugis Street. It

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was an attraction by itself. We still have visitors coming back to Singapore asking where is the old Bugis Street, because it has that type of vibrant nightlife. I am not advocating that we should develop the seedy type of nightlife that we find in places like Bangkok, but I think we should have that kind of places and the kind of attractions that will make visitors remember that they should come back because Singapore is a happening place. If we take a look at, for example, Lan Kwai Fong in Hong Kong, there is nothing oriental about the place. In fact, it is all western-styled pubs and watering holes. But that place has become an icon of night life in Hong Kong. In a way, it has become unique to that territory.

Sir, developing tourism has to be all-encompassing because there are all types of tourists, including families. Catering to the rich and famous, as we want to do now, is a good approach because it will help us double, if not treble, our tourism receipts in the years ahead. It will enable us to carve out this very important huge niche market. But we must not forget, at the same time, those who continue to come here with fixed budgets. I say this because with the growth of the low-cost carriers, the no-frills airlines, we can therefore expect a totally new market to grow. We can expect more people to come here looking for just simply, what I call, good deals. While we now switch our focus to an upmarket high spending type of customers, we must not forget that numbers count too. Much of our tourism infrastructure is geared towards the mass market, our lower priced hotels, small restaurants and not everybody is attracted to just the plush resorts or the spas. I hope that we will not forget to remember our focus on this.

Mr Low Thia Khiang (Hougang): ( In Mandarin ): There are people who said that when the China tourists come to

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Singapore, the moment they are left alone without a tourist guide, they become "handicapped people". Everywhere they go, they see all the road signs and signboards written in English only. They can see but are unable to understand, hence they are "blind". When they are in the MRT trains, all announcements are in English. They hear but cannot understand, hence "deaf". When they try to ask around for directions, most people they meet speak only English, but they cannot speak English, hence "dumb". When they try to roam about Singapore on their own, they find that the bus stops have no bus guide or directions in Chinese, and they just cannot go anywhere, hence "lame". They become "blind, deaf, dumb and lame", just like the physically handicapped people.

The next focused objective of the STB is to develop "self-service tourist package" to attract China tourists. Is such an environment helpful? In these few years, although the number of tourist arrivals in Singapore has gone up, actual income earned from the tourists has gone down. Hence, STB hopes to make tourists, especially China tourists, to stay longer and to spend more. However, if the environment does not improve, can we make China tourists stay longer here?

We often promote Singapore's uniqueness as a convergence between the oriental and western cultures. The STB Chief Executive Officer Mr Lim Neo Chian said that in the current and future tour promotional exercise, we want to use the emotional ties to attract the China tourists so as to make them feel more passionate in wanting to come here. After hearing the feedback I have just mentioned above, what would be their reaction?

I want to say that small details such as Chinese road signs and signboards alone cannot build up the emotional ties. I do not know when the Singaporeans who speak a little Mandarin but could not

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understand Chinese would benefit from our efforts to woo China tourists, and recover their healthy senses of the so-called convergence of oriental and western cultures. Of course, the authority could continue to offer lip service by saying they are going to "provide the convenience", but do nothing in substance citing principle and technical problems as excuses. The fact remains if the China tourists leave Singapore after their short stay here, they could only comment that Singapore is very clean and orderly. But down in their hearts, they may not want to come back again and they may even go home and encourage their relatives to opt for other travel destinations. This will certainly be a great economic loss to us.

Social Impact of Tourism

Mr Ahmad Khalis Bin Abdul Ghani (Hong Kah): Sir, what I wish to say has much been covered by my friend, Ms Irene Ng. We have seen discernible moves towards greater easing up of our social scene. The main reason for this easing up is to present Singapore as a more happening place to woo tourists and foreigners.

Sir, a number of my grassroots leaders have expressed concern over this signal transmitted by these moves. They are concerned that such moves promote the idea that sexual promiscuity is acceptable, and therefore, this may undermine our family values. They are afraid that this signifies a willingness, a readiness on the part of Singaporeans or the Government to go down the slippery slope where further down the society may no longer be able to or may not want to distinguish between entertainment and sleaze.

I understand that we need to be exciting and vibrant in order to woo tourists. But the signals we pass must be consistent with our overall values. It is untenable that we say one thing to Singaporeans but, at the same time, we

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say another thing in order to woo tourists in. I believe that with the rather optimistic picture painted by our Minister on our economic growth and the revitalisation of our tourist industry, we do not quite need bar-top dancing or such other types of items to woo more tourists and foreigners.

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Power Generation Companies

New Electricity Market

Vesting Contracts for Electricity

Mr Ong Kian Min (Tampines): Sir, the new electricity market commenced operation on 1st January 2003 with five active generation companies, five active retailers and about 250 large contestable customers, comprising 35% of Singapore's electricity demand, having exercised choice, and switched to independent retailers. By 31st December 2003, a very successful retail market had developed, where more than 80% of contestable loads or about 55% of Singapore's total electricity load had already exercised choice and were being supplied by independent retailers. The competitive and robust nature of the new market has seen generation companies compete to raise efficiency and bring down costs, with the ultimate beneficiaries being the customers. Pool prices were below the long-run marginal cost of the most efficient combined cycle gas turbine and retail contracts with large customers were well below SP Services' published tariffs. There was no supply interruption. The lights did not go out. There was no market suspension. There were clear price signals when there was a forced outage or fuel supply disruption. The market systems were operating successfully. Apart from the delay in the introduction of vesting regime, by all accounts, the Singapore wholesale electricity market and retail liberalisation roll-out is a successful model for other

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countries to follow. The Energy Market Authority and the Ministry of Trade and Industry must be commended for this.

The vesting regime was implemented on 1st January 2004 based on 65% of the system demand being allocated to four generation companies. The vesting price for the month of January 2004 was set at $94.24 per megawatt hour. Almost immediately, the average pool clearing price dropped to $66.00 per megawatt hour. As a result, the wholesale price of electricity, which is the weighted average of the vesting price and the pool price, had also fallen to $83.74 per megawatt hour. This was certainly good news for the consumer. Business consumers had been lamenting our high electricity charges that add to the high cost of doing business in Singapore. It, therefore, came as a surprise to many of us when we read the 18th February 2004 Straits Times article with the headline, "Firms may pay less with new electricity contracts". But, it went on to state that, "Though wholesale power prices under deregulated system have eased by 10%, most firms are still locked into old pacts".

Sir, I am an independent external Director of Singapore Power Limited, one of the generation companies, but I do not intend to go into the technical issues here, as these are complex and can be best dealt with at other industry forum. Instead, in the interest of the lay consumers, I would like to ask the Minister three questions:

First, why, as reported in the said Straits Times article, although wholesale electricity prices had already dipped 10% since the start of the year, it was estimated that less than 1% of customers were paying these lower prices? How come so few customers were in the position to benefit from this drop in tariff? These are not small consumers who are

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ignorant or careless about what they pay for their electricity. They are our largest commercial and industrial customers, such as wafer fab plants, petrochemical complexes, factories, hotels and large buildings, some of whom paid as much as $1 million per month for electricity and many of whom have in-house M&E facilities managers to maintain their plant and equipment, or have engaged experts to advise them on their power consumption and tariff plan.

The concept of vesting is not new. It has been talked about since the start of liberalisation. One would imagine that if there was going to be such a long awaited market development, the majority of the more sophisticated market participants, if not all, would be able to do their sums and place them in a position to hedge their risk or benefit from the change. Could it be that not many people in the industry had foreseen the drastic drop in the pool clearing price and it caught both the regulator and the market participants by surprise?

That brings me to my next question. Was there sufficient disclosure and dissemination of market information for the consumers to make informed decisions? Perhaps EMA, as the regulator, could not give advice on the type of contract consumers should enter into. However, more forums, seminars and discussions could have been organised to educate those who are interested, and where experts could be invited to give their opinion on the different scenarios, the implications and consequences of the anticipated new development. It is then up to the audience to make their own judgment and decision.

Sir, for an efficient market, there must be adequate sharing of information, clear market signals, transparency about the rules, about developments and what the major industry players are doing. Any

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changes should be notified as early as possible. The need for transparency cannot be over-emphasised as we move towards full retail contestability, where not only large customers are involved, but the smallest consumer would also have a choice of who he buys his electricity from and how much he is going to be charged for it.

My third question relates to the small non-contestable residential household customers who are still being supplied by SP Services. This segment represents about one-quarter of Singapore's total electricity consumption. Every week, some of our residents come to us at our meet-the-people session because they could not pay their electricity bills and are in danger of having the supplies cut off. To supply to these small consumers, SP Services buy at the vesting price of $94.24 per megawatt hour. Compared to the present pool clearing price and the wholesale price, this now seems very high. Can SP Services take advantage of the fall in prices? And, when can the small consumers expect to enjoy lower electricity rates?

Consumer Protection

Mr Yeo Guat Kwang (Aljunied): The Consumer Protection (Fair Trading) Act (CPFTA) which takes effect from 1st March 2003 will bring about significant changes to the business and retail landscape in Singapore. The CPFTA is intended as a shield to protect consumers and not a sword to cut down the retailers. The business community does not need to worry that the Act will affect their business. In fact, CPFTA will help improve the business environment by weeding out errant business practices and dishonest traders who give the industry a black name.

With the new legislation, business associations should play an important role in educating their members and work with

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them to ensure that their practices do not break the law. I would like to know whether the Ministry has any plan to make the implementation of this legislation a success. What role would SPRING Singapore, the Retail Promotion Centre and the Singapore Tourism Board play in this area? What support would they provide to the retail and service sectors to educate the traders and facilitate the implementation of the CPFTA?

Sir, last year, during the Budget debate, I requested the Ministry to review the Hire Purchase Act to better protect the consumers. I would like to ask the Ministry to give us an update.

Next, I would like to move on to travel services. Sir, the nature of travel has changed rapidly in the past few years. With the Internet, travellers have access to an unprecedented level of choices at even more competitive prices. In some ways, the balance, so to speak, has shifted towards the consumers. But in other ways, we have not kept up with changes in the travel industry. One such area is the travel industry legislation.

Travel-related complaints consistently remain among the highest categories CASE receives. Local travel agents claim that they are just agents of overseas tour package suppliers when they sell travel packages here to avoid liability for non-performance by their overseas suppliers. On this issue of liability of travel agents, whether as the principal or non-principal agents, I found that the European Community has issued a directive providing consumers with one contract partner responsible for the execution of the contract. Moreover, the UK has implemented the directive via its "Travel Package, Package Holidays and Package Tours Regulations 1992". I urge the Ministry to consider similar guidelines for the travel industry to protect the consumers.

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Consumer Credit Laws

Miss Penny Low (Pasir Ris-Punggol): Sir, in Singapore, consumer goods purchased with credit arrangements by the merchants may be categorised into three main common categories. First, credit sales; second, conditional sales; and third, hire purchase. In all three types, the merchant either supplies the credit himself or arranges for a finance company to supply the credit. I may add also a fourth category, called the "credit sales", where the credit is arranged by both the consumer and the merchant independently of each other.

At present, all four types of consumer credit transactions are governed by different regulatory regimes. Credit sales and conditional sales are unregulated. Hire purchases are regulated mainly by the Hire Purchase Act under MTI. Credit card sales are regulated by MAS who exercises jurisdiction only over the banking institutions and, hence, the credit part of the transactions rather than the underlying sales transaction. The result is a confusing array of rules and regulations applying to different types of transaction and inconsistent protection to consumers. For example, consumers who wish to select the best form of credit to purchase the consumer goods cannot make comparisons that are meaningful enough for them to make a decision. As such, they are, in fact, at the mercy of the merchants and there is unfair advantage at work.

In the UK and Australia, such regulations have been reformed. In fact, they have rationalised some of these transactions so that the same regime applies to all three types of transactions. The areas that have been rationalised include linked-transactions and by this the sales and credit elements are conditional upon each other. They have also joint liability. This is especially important for

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hire purchase where consumers may have only one agreement with the finance company. Some hire purchase agreements are not governed by the Hire Purchase Act and it contains exemption clauses which severely limits liability for delivery and condition of goods.

Third, they also have similar regulatory regime to apply to all three types of consumer credits that include things like disclosure regime, method of calculating interest rates, restrictions on administrative default and penalty charges, advertising and marketing regime, etc. I suggest that the consumer credit laws be rationalised so that different parts of the consumer credit industry may compete on equal footing. The result would be a more efficient market and a much more level playing field for both the consumers, the merchants and finance companies at work.

Singapore Branding and CASETrust

Sir, the Singapore brand is a key competitive advantage which will help us to differentiate ourselves from our low-cost neighbours and make an impact in the international arena. Recently, the Singapore Tourism Board also launched the Uniquely Singapore Branding experience exercise. That is product differentiation at work. In the past, Singapore used to be a shoppers' paradise and I note from Minister George Yeo's comment that tourists still do shop in Singapore because of the top brands that are in town and because we sell genuine goods. I say we build on this competitive advantage that we have. Whereas in other countries which are cheaper options, they may not have the assurance to the consumers of giving them genuine goods or, in fact, a return policy.

In Singapore we can build on our premium reputation of trust and focus on

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areas like service delivery and product quality. In fact, on 1st March 2004, the Consumer Protection (Fair Trading) Act (CPFTA) was implemented. We can actually build on that and develop certain nationally recognised trust marks to accredit good business practices for consumer confidence. In fact, under CASE, there is a programme called the CASETrust to develop a trust mark for consumer goods and services, in both brick and mortar as well as cyber store fronts. Let me declare my interests as the Vice-President of CASE and Chairperson of CASETrust Advisory Council. Both are non-profit organisations. CASETrust is a quality mark which stands for quality, trust and a "be sure, not sorry" policy. CASETrust accredits and promotes companies with good and transparent business practice and service delivery - accredited companies display the CASETrust mark at their store front and websites to enable consumers to distinguish themselves from the rest of the pack.

Together with IDA, CASETrust also developed Trustsg to handle the vetting of Internet security practices. By this, we hope to build a Singapore Branding for Internet trading. CASETrust and Trustsg are part of Singapore Branding. The development of these trust marks generates benefits for Singapore far beyond the promotion of any single product or label. The intangible value of Singapore Branding spills over into spheres and industries. CASETrust and Trustsg can be a pillar for Singapore Branding. I urge the Government to give greater support to the development of CASETrust and Trustsg as part of the Singapore Branding strategy.

Corporate Social Responsibility

Mdm Halimah Yacob (Jurong): Sir, three years ago, on an ILO mission to evaluate a social dialogue project in a developing country, I visited two factories

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producing jute and garments. The jute making factory had very poor working conditions and was a serious health hazard. Jute dust swirled everywhere and even pregnant women were working there. On the other hand, the garment making factory was a modern air-conditioned factory which observed strict health and safety conditions. In fact, all the do's and don'ts on safety were pasted on the wall. The difference between the two was as stark as it was obvious.

The jute-making factory sold its products in the local market. The garment factory, however, sold 95% of its products to big labels like GAP in the USA and Europe , and they had imposed the do's and don'ts on environmental and labour standards on it.

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That, to me, was the clearest example of what CSR (Corporate Social Responsibility) and standards can do to protect the lives and limbs of working people and prevent environmental degradation. The western companies were under pressure from their own customers, unions, church groups and environmental activists to ensure that all along their supply chain standards were observed. So they established regular audits of their suppliers wherever they might be situated to ensure compliance.

Sir, that in a nutshell is what CSR is all about. It is about good corporate governance, observance of core labour standards and protection of the environment. It is all about sustainable development and putting people at the centre of economic development.

In Singapore , although we have hardly discussed about CSR, it does exist but much more needs to be done. Clearly, the Government alone cannot set the lead. In this respect, therefore, I am happy to inform the House that a tripartite task force comprising representatives

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from the NTUC, employers and other interested stakeholders has been established to actively promote CSR in Singapore . More details about the tripartite task force will be revealed later.

For now, Sir, I would like to ask the Minister the following questions:

First, how would he evaluate the progress of CSR in Singapore ? What steps have been taken to promote CSR among companies operating here, whether foreign or local, and among Singapore companies operating overseas? What initiatives will be taken to engage all the relevant stakeholders on this issue on a regular and ongoing basis? And will the Ministry consider allocating resources for the promotion of CSR, including providing stronger support from SPRING for the work of the tripartite task force?

Dr Teo Ho Pin (Holland-Bukit Panjang): Sir, as Singapore strives to be a global city, it is crucial that we encourage our firms to exercise corporate social responsibility (CSR). In July 2000, the Secretary General of the United Nations, Mr Kofi Annan, launched the Global Compact to advance responsible corporate citizenship to promote a more sustainable and inclusive global economy. To date, hundreds of companies are voluntarily engaged in the Compact. However, there is yet to be any Singapore company participating in this cause.

The lack of awareness and exercise of CSR among Singapore firms is of concern. Besides making profit, companies must understand their social responsibility, especially towards the community. Areas where companies can exercise CSR include environmental issues, community issues or best business practices. We must remake our business organisations to be active corporate citizens who can not only create value for shareholders but

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also social value. To achieve this, we need a network of institutions, businesses and organisations to promote good corporate citizenry. I urge the Government to play a more active role to promote CSR in Singapore .

Sir, may I ask the Minister the following questions:

(1) Are there plans by the Ministry to promote CSR in Singapore ?

(2) Will the Ministry consider developing a CSR index for firms in Singapore ?

The Minister of State for Trade and Industry (Dr Vivian Balakrishnan): Sir, I would like to thank Members for their many useful comments on tourism. Despite the impact of SARS last year, our tourism sector has actually bounced back and recovered very well through the joint efforts of both the private sector as well as STB. If we exclude Malaysian land arrivals, last year, we had 6.1 million visitors. For this year, STB aims to achieve 7.6 million visitor arrivals. This will be a 24% increase from last year if we succeed. These are very ambitious targets and all the more so because competition is intensifying.

Let me just quickly spell out the four prongs of STB's strategy to achieve this objective. Firstly, to strengthen market promotion; secondly, to grow new visitor segments; thirdly, to develop compelling products; and, fourthly, the rebranding exercise.

Let us come back to the first prong. Our key high growth markets are India , China and ASEAN. Their fast-rising middle class together with the emergence of low-cost carriers, as Mr Tan Soo Khoon has alluded to earlier, means that there is a huge surge of potential travellers within a 7-hour flight radius. To pursue this, STB has opened new offices in Medan ,

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Jakarta , Chennai, Kuala Lumpur and Ho Chi Minh City within the past 12 months alone. And we will open another two more regional offices over the next few months.

China is a particularly important market for us. Outbound tourists from China are projected to increase six-fold between 2002 and 2020. And this number is estimated to grow up to 100 million annually. As Mr Ang Mong Seng said, we want to capture a slice of that pie. But we are not alone in vying for that slice. Just last month, the 12 EU-member countries were awarded the "approved destination" status by the Chinese government. And this means we need to compete with the rest of the world for Chinese visitors. Specifically, to tap the growing Chinese market, STB is taking a few steps.

First, we will make it easier for Chinese tourists to come to Singapore . We have relaxed our visa rules. We have lengthened the visa validity period for social visitors from three weeks to five weeks, and the period of stay from 14 days to 30 days. We will also make available more channels for visa applications in China . 43 travel agents, with more than 320 branches, are now able to facilitate the application of Multiple Journey Visas (MJV) for independent Chinese visitors. And STB also plans to increase the number of authorised travel agents to 60 by this year.

Second, we will step up marketing in Chinese regional cities in Zhejiang , Fujian and Yunan to build awareness for Singapore . To reach out to the high spending PRC tourists and business visitors, STB has launched a promotion scheme with VISA for their Gold and Platinum credit card members. STB is doing the same for members of airlines' frequent flyer schemes.

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Third, we will also make Singapore more visitor-friendly to Chinese tourists. STB will work with key agencies such as CAAS, LTA and the attraction operators to install more multi-lingual signages to help Chinese visitors get around. I agree wholeheartedly with Mr Ang Mong Seng and Mr Low Thia Khiang that we do need to make it easier for them to move around in Singapore .

We will encourage the hotels to provide more Chinese TV stations and Chinese in-room directories. To enable PRC visitors to enjoy more of what Singapore has to offer, we will be introducing more value-for-money packages by bundling together more attractions.

I also take the point that, where possible, we need to lower entrance fees and the package fees. But I also hasten to add that at the end of the day, tourism is a business. We can lower fees but we must ensure that the businesses remain viable.

India is another country that presents vast opportunities for us. Indian visitors already rank among our top five highest spenders in Singapore . We intend to attract a greater number of Indian visitors to Singapore and encourage them to stay even longer by offering high quality tour packages. In the coming months, STB will be working with the travel industry in India to introduce more travel products that offer fun, educational and leisure experiences and which will appeal to families.

To guide us in our tourism marketing efforts, STB has formed a Marketing Advisory Council comprising leading figures from Indian tourism, business, media and academic sectors.

In May, Singapore will host the prestigious International Indian Film

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Academy awards. This is the Bollywood equivalent of the Academy Awards. Over 400 celebrities and film-makers from India and other parts of the world will gather in Singapore to honour the biggest names in Bollywood. Many of you may not be aware but Indian superstars like Amitabh Bachchan and Shah Rukh Khan have the same drawing power as Tom Cruise or Ricky Martin, among the millions of devoted Hindi-movie watchers. This event will be beamed to 167 countries and is expected to reach more than 250 million households, mainly in the Asian region. The marketing value of this event to Indian nationals is incalculable. And we will leverage on more of such platforms to market Singapore in India and in other parts of Asia .

The second prong is to grow new visitor segments. I think Members are aware that we intend to grow new visitor segments among international patients, students and business travellers. STB has therefore launched roadshows marketing our healthcare and education services in key overseas markets like Indonesia , India , Malaysia and China . To reinforce our position as a premier destination for business meetings, incentives, conventions and exhibitions, STB has also launched a $15 million global campaign to target event and conference organisers. Just last October, we had 11,000 international Herbalife delegates visiting Singapore at one of the largest-ever corporate meetings. And we will work to attract more of such corporate meetings to Singapore .

The third prong is to develop compelling tourism products and attractions. We need to create, improve, remake and to widen the range of tourism products in Singapore . STB is drawing up a tourism development roadmap in consultation with industry partners. This roadmap will serve as a blueprint for the

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development of new attractions and infrastructure in the next 10 years. Minister George Yeo yesterday outlined the exciting plans to develop Sentosa and the Southern Islands . This roadmap will also look into remaking Orchard Road into one of the greatest shopping streets in the world, and to upgrade the Singapore River precinct into a thriving waterfront promenade.

Apart from new attractions, anchoring high profile signature events will also be another key thrust of this roadmap. The aim is to have something exciting happening every weekend, all 52 weekends of the year. These will cover performance arts, cultural, music and sports events. For example, in October last year, Singapore hosted the F1 Powerboat Race 2003, an event watched by 70,000 spectators. Also, we had a stellar cast of celebrities like Mariah Carey who gathered in Singapore last month for the MTV Asia Awards 2004, and this was beamed to 1 billion viewers across Asia . STB will continue to bring in more of such events to Singapore so that we will become the definitive events capital of Asia .

Ms Irene Ng is right when she said yesterday that food is a very important attribute of Singaporeans. What makes us unique is not the individual dishes that Singapore is famous for, but the fact that we have an astounding array of cuisine, served in a variety of settings, from posh restaurants all the way to your hawker centre in Tampines. STB will capitalise on this to promote interesting food tours and specially packaged food gifts. This will cover the full range that we have available. For example, the Peranakan culture is indigenous to Asia , not just to Singapore . But we can package it as one of the key diverse experiences which visitors to Singapore can experience through artefacts, demonstration of traditions and food.

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The fourth prong is rebranding Singapore . You will recall that we used to have the slogan called "New Asia". This concept was, in fact, slightly ahead of its time in 1996. But we have been so successful in creating awareness of the transformation which is occurring in Asia that many other countries have leapt on to this same bandwagon. And it is now losing its edge as a distinctive theme. As the world evolves and Singapore adapts, we need to refresh our destination appeal and to highlight the unique Singapore experience that our visitors can expect. This is the genesis of the "Uniquely Singapore" destination branding, which was launched a few days ago by Minister George Yeo.

Ms Irene Ng is right that there is nothing particularly unique about reverse bungee jumping on its own or bar top dancing or crazy horses. In fact, in Singapore , we have few attractions which are purely unique in themselves. But what makes Singapore truly unique is our ability to mix and match,

to create unique diverse packages that appeal to people from diverse corners of the globe. Each tourist, whether he be from China, India or from the West, comes with a different expectation of Singapore. But we must ensure that we will package for him or her a unique package which will leave him or her emotionally fulfilled, but not fully satiated, because we want them to come back again.

11.45 am

"Uniquely Singapore" is therefore a unifying theme to capture the special mix of traditions, cultures and history of Singapore, and it is a platform to showcase different aspects of Singapore to different segments of visitors.

In this respect, STB is working hard to customise and position ourselves for this. If we want to do this well, we need first to understand what our visitors want,

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what does the market want. It will also require us to be sensitive to the nuances of languages, traditions and cultures of our target market. For instance, let us come back to China. The Chinese view Singapore as the "daughter who is married out of the family" - a different surname, a different household, making our separate way in the world, but still related. Chinese visitors, therefore, expect Singaporeans to show them a certain familiar warmth, the warmth that you reserve for relatives. This link, both at an emotional and historical level, must be kept in mind.

Two weeks ago, I visited the Sun Yat Sen Villa. Whilst browsing, it struck me that this was the nerve centre of Sun Yat Sen's revolutionary movement in South East Asia. It played perhaps a small but a critical role in the creation of the modern Chinese nation. Consequently, we should not be surprised that Chinese visitors find this resonates with their history and at an emotional level for them. So we need to look in the whole of Singapore and find much more of such gems which will appeal and attract our visitors, wherever they come from.

India, for example. The Indian tourists like Singapore because they find that we are cosmopolitan, modern and have a clean and safe environment. We have an interesting and varied cuisine that suits the Indian tastebuds. Some of my Indian friends tell me that they want to come here because there is such a great variety of Indian restaurants, sometimes even greater than what you can find in any single city of India alone. They like our shops because there is such a wide range of jewellery and electronic products at competitive prices. Mohd Mustafa is a household name even in India. But beyond food and shopping, you must understand that Singapore captures the Indian imagination because they see Singapore as a working example of what a future modern Indian metropolis can be.

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Historically, we used to be part of the East India Company, governed out of Calcutta. But, today, when an Indian comes to Singapore, he says, "Hey! I can do that back home." And that is why if you visit India today, if you go to Hyderabad or Bangalore, certain aspects of it are familiar, because they have modelled what we have in Singapore.

The "Uniquely Singapore" branding platform is therefore a very important initiative and one in which there will be controversy. For instance, I know that there has been some discussion in the Chinese press that our Chinese translation for the brand name - so far, I think, it is called 如 此 独 特 新 加 坡 (ru ci du te xin jia po) - does not have emotional impact. And I will say, yes, this is just a working example, a work-in-progress, and we will certainly seek the opinions of the Chinese press as well as the Chinese intelligentsia to come up with a label that resonates with the Chinese. I promise this House we will not create another "Hungarian Ghost Festival"!

Turning next to the comments of Ms Irene Ng and Mr Ahmad Khalis on social values, I agree with them that as we step up efforts to promote tourism, we must not lose our values, and we must not lose our compass. There was an article that Professor Richard Florida wrote, entitled "The Rise of the Creative Class". This was reviewed in the Harvard Business Review and also in the Straits Times recently. His research found that cities which are able to embrace diversity are able to attract and foster a bigger creative class. These are key drivers in a knowledge-based economy. The larger lesson for us in Singapore is that we need to shift our mindset so that we can be more tolerant of diversity. To achieve this, we have begun to take small but important steps to signal that we need a new respect for diversity and openness to

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ideas. So these examples that the Members cited, eg, night spots to open 24-hours, bar-top dancing, and bungee jumping, are just part of that signalling process.

Last year, the International Advisory Council for Tourism in Singapore fed back to us. And they said, "You know, the problem for Singapore is that Singapore is so middle-of-the-road that it is in danger of being bypassed; the cheese has moved on for Singapore."

I agree with Mr Tan Soo Khoon that we do need to be bolder, and allow experimentation at the edges. But we will ensure that even as we do so, there are sufficient safeguards to minimise any domestic social impact or erosion of moral standards. For example, the 24-hour licensing for night-clubs only applies to clubs that are located within designated zones, away from residential areas. While there is some flexibility in censorship for plays and cabarets, these events ultimately have a limited reach, and we will ensure that they do not offend racial, linguistic and religious sensitivities. We will continue to have safeguards, such as artistic merit requirements, setting of minimum age limits, restrictions on location, as well as compliance with rules on advertising and promotion. We want to be a family-centred attraction, but we want to be one with the full spectrum of attractions which can appeal and address different needs, different tastes. We need to learn to live and let live, and to accept that different people will have different tastes, different strokes.

Let me move on to the issue of market liberalisation in the electricity market, brought up by Mr Ong Kian Min. There has been much progress so far. We separated the grid, which is a natural monopoly, from the competitive power generation and retail components. Starting from July 2001, we began retail competition in phases. We set up a real-

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time wholesale electricity market in January 2003, and introduced vesting in January 2004 to curb market power of the generation companies.

The outcome so far has been positive. Within a short span of two to three years, 70% of our electricity market is contestable. Competition has incentivised the generation companies to install more efficient gas plants, which have resulted in significant reduction in the wholesale price of electricity. Using gas plants is only the first step. The generation companies are still looking for other technologies and squeezing productivity gains in order to stay competitive. In the long term, this will put, we hope, a downward pressure on prices and it can only be good for consumers.

What is critical in a competitive market is that we must allow price signals to come through, unimpeded by regulatory interventions or the exercise of market power by players. Price level must rise when supply runs short, because this signals the need for new investments. Similarly, price level must fall in a market with excess supply, and this signals the need to trim capacity.

Mr Ong Kian Min commented that the introduction of vesting has resulted in the wholesale price of electricity falling by about 10%. It appears that this may not have benefited all large consumers, and a lot of people are asking themselves why. When consumers began negotiating contracts with electricity retailers in 2003, they had several choices. They could opt for a contract where vesting credits and debits were passed on to them, in other words, a variable contract. Or they could opt for fixed price contracts that gave certainty. Or they could opt to buy directly from the wholesale electricity pool. There are three options. And the option that you choose is one which each company has to make on commercial considerations.

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Of the contestable companies, 50% opted to buy from the wholesale market, and today they are enjoying the benefit of the lower wholesale price at the pool. However, those who chose the contracts indexed to vesting today are bearing the cost of the vesting debit pass-through. I want to emphasise it is not vesting per se that caused a price increase for these companies. Vesting does not mandate the pass-through of these debits to the customers. It is up to the customers and the retailers to negotiate the terms of the contract on a commercial basis, and whether or not they accept the pass-through is something for them to decide, not for EMA to stipulate. Consumers must shop around for the best deal in a competitive market.

A number of companies caught with higher electricity bills have approached us for help. I would state that it would not be right for EMA to intervene in commercial contracts entered into on a commercial basis - willing buyer, willing seller basis. But EMA has approached the electricity retailers to see whether they would be prepared to be flexible, and some retailers have indeed been flexible. With the correct pricing signals from the pool, companies will negotiate future contracts with the competitive wholesale price as a reference point. They can then decide which retailer offers the most competitive package, or opt to buy from the pool at the wholesale price, which is currently cheaper but potentially more volatile.

The second question Mr Ong raised was whether there was adequate market information. I agree with him absolutely that education and timely sharing of information are invaluable. We need to be as transparent as possible in order for a market to function. Companies were informed by EMA about vesting in early 2003, and they were briefed by retailers on the types of contracts that were available and the implications of these

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contracts. EMA also conducted several seminars to address concerns raised in November 2003 by consumers about the contracts they had entered into. But more can be done, and we will be improving the level and quantity of communication between all the stakeholders in the electricity market. EMA is going to review the quantity to be vested in 2005, and I have asked EMA to ensure that any revisions will be announced by the third quarter of this year, so that all stakeholders will have adequate time to prepare their contracts.

I would now turn to the Member's third question on the impact on non-contestable small households. This group of consumers faces a very different set of economics in the electricity market. While there are many of us, about 1.1 million small accounts, we only comprise 25% of total electricity sales. Individual households do not have the same bargaining strength to secure favourable retail prices from the electricity retailers. It is also more expensive for electricity retailers to service the hundreds and thousands (actually 1.1 million) of small individual customer accounts, compared to a single customer using a large amount of electricity. Hence, we need to do this very carefully. The market design must allow small customers to aggregate demand so that they will achieve economies of scale as well as bargaining clout.

EMA is working on the details of opening the remaining segment of the market to contestability. This approach is likely to be an opt-in voluntary system and allow for demand aggregation. The system will need to be developed, rigorously tested, and tried out for smooth roll-out to the general population. Full implementation is likely to take place about three to four years.

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Mr Ong asked whether ordinary households can be allowed to buy from the pool. I think this would be very risky because of the volatility. You just need one large buy to wipe out all your potential savings. I think the more important point is that in the liberalised electricity market, households have already benefited, as electricity tariffs have come down by 9.5% compared to December 2001, keeping oil prices constant. At the same time, the system of SP Services buying at vesting price for households protects them against undue fluctuations in pool prices. Remember, the vesting price is set to recover the total cost of operations of the generation plant using the most economically efficient technology available. In this way, consumers are already benefiting from the presence of new and improved technology as and when it comes along.

I will quickly move on to consumer protection. Mr Yeo Guat Kwang has asked what roles SPRING, STB and the Retail Promotion Centre would play in making the Consumer Protection (Fair Trading) Act a success. I think Members are aware that the Act was passed in November 2003 and came into force on 1st March this year. STB and SPRING have worked very closely with the various business chambers and associations

to educate the traders. A business guide on CPFTA has also been produced and, generally, we are satisfied with the progress so far.

12.00 noon

Mr Yeo asked for an update on the Hire Purchase Act. This was announced at last year's Committee of Supply debate. MTI has established a Taskforce to gather industry and consumer feedback, and to advise on the review. It is chaired by MTI, and comprises representatives from CASE, as well as relevant business associations and Government agencies. The Taskforce is

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expected to complete its work next month and, thereafter, MTI will study the recommendations and propose any amendments to the Hire Purchase Act in Parliament by the third quarter of this year.

I take note of Ms Penny Low's comment that the various consumer credit transactions in Singapore are regulated under various pieces of legislation. We would need to study this very carefully to ensure that the relevant legislation is carefully crafted before we make a decision on whether to rationalise or consolidate them, because we have to take its impact on businesses into consideration. The Hire Purchase Act Review Taskforce is currently looking into the pros and cons of linking credit and sales transactions, and providing for joint liability of merchant and financier. It will take into consideration Ms Penny Low's inputs before putting up its recommendations.

Mr Yeo asked about guidelines for the travel industry. The STB is working with the National Association of Travel Agents (NATAS) to implement a Code of Business Practice among travel agents, and this will be closely aligned to the Consumer Protection (Fair Trading) Act. In cases of commercial disputes with travel agents, consumers may take up the case with NATAS or CASE, and where necessary, to the Small Claims Tribunal in Singapore .

I agree with Ms Penny Low that the value of trust marks is critical for the Singapore Brand name and this is an area which we would support the various agencies out there who are issuing trust marks and which would encourage and promote better behaviour by vendors in Singapore.

Let me quickly touch on corporate social responsibility. The first duty of a company is to be viable and to make money for its shareholders. But we also

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expect companies to do so in a way which is socially responsible to its workforce and also take into account its impact on the environment. Singapore is a small densely packed country. It is one in which the company's behaviour beyond the economic realm has great impact. Secondly, as a country which trades with the rest of the world, we are also very mindful that we do not want to allow CSR to become an excuse for the erection of non-tariff barriers.

Having said all that, I want to remind this House that Singapore actually has an excellent record in CSR, way before the term was coined. We have shown the world what tripartism means, that employers, unions and Government working together can ensure a viable business model in which workers' interest are cared for and in which the environment is looked after. So for those who are asking how much we have done, I would say we have already done a lot.

Secondly, the Member asked about our companies going overseas. The International Labour Organization (ILO) establishes international labour standards, and the level of adoption varies from country to country. But in helping our companies invest abroad, IE Singapore will provide market and country information, including the labour laws and practices of the country. And we would encourage our companies to adopt good corporate social responsibility practices, because it will enable them to gain greater trust and acceptance as they establish themselves overseas. At the end of the day, this is about enlightened self-interest. And we encourage our companies who behave so well in Singapore to behave the same way overseas. That is part of the Singapore brand name and the value to a Singapore company overseas.

Dr Teo Ho Pin asked about the initiatives to promote it in Singapore . I would say again, back to my earlier

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answer, because we have already been practising this, and we have been practising it successfully through a tripartite model, we do not believe that legislation is necessary at this point in time. But I would encourage CASE, the NTUC as well as the Centre for Corporate Social Responsibility to continue their good work to raise the profile of CSR in Singapore .

I think with growing awareness and advocacy, I am confident that more companies in Singapore will appreciate the need to be socially responsible and to be environmentally conscious as they make money for their shareholders.

The Chairman: Mr Leong, do you want to withdraw the amendment?

Mr Leong Horn Kee (Bishan-Toa Payoh): Sir, I think most, if not all, questions have been answered. But I do not know who asked the question about "Hungarian Ghosts". Anyway, I would like to thank the Minister and the two Ministers of State for their very comprehensive answers. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Wee Siew Kim. You have got three cuts, take them together. Anyway, you have got four minutes left for all three.

Informal Economy

Mr Wee Siew Kim (Ang Mo Kio): Sir, I beg to move,

That the sum to be allocated for Head V of the Main Estimates be reduced by $10 in respect of Code VA 1500.

I will jump straight to informal economy. Systematic and predictable,

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that is Singapore . That is how most visitors would describe Singapore . Singapore has an informal economy but it has moved indoors. Street hawkers, pau hong chia are all things of the past. Tuition teachers, piano teachers, gardeners, cleaners, baby sitters still thrive. It appears that as long as it is performed indoors, it is okay. Now, a new group of rather young, meaning 40-plus years, structurally unemployed has emerged. As much as we hope to keep training, skills retraining on them, you may have to accept that it is sometimes very difficult to teach old dogs new tricks. As such, I have seen so many of these people and their spouses seeking for an opportunity to be financially independent by being hawkers, small storekeepers and peddlers.

While it is well worth preserving the external order that we have, I hope the Minister would devote some resources to study whether we could move towards a liberalisation of rules for hawking and street peddling. We should have more hawker centres, fresh markets, flea markets. We may have to tolerate some messiness with some more sidewalk peddlers. Done well, this may be something that STB may even promote. Tough work it is, but it returns to many their self-esteem. Beyond the old lady selling evening papers, or the blind man selling Big Sweep tickets, could the Minister initiate a movement that draws our informal economy outdoors and thereby create livelihood for a group of people that probably have no other relevant and employable skill sets.

The Chairman: You should give time for some answers.

The Minister for Trade and Industry (BG George Yong-Boon Yeo): Sir, I am in full sympathy with the points raised by Mr Wee Siew Kim. Last night, after dinner at the hawker centre in the East Coast, my wife and I passed by a little stall selling

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chestnuts. It was very fragrant and my wife bought two packs. I watched the operation. I do not think it was legal, and I wondered how long he would be allowed to continue selling those lovely chestnuts. Then I ask myself, "Why should it not be made legal?" if it was indeed illegal. After all, people were there on the beach, and chestnuts added to their experience. So the consumers benefited. The vendor also benefited. The GNP will go up, GDP will go up. I would say, selectively, we should allow and promote more of the activities which Mr Wee recommended. They come under other authorities, not MTI, mostly Environment Ministry. But on this issue, I assure Mr Wee that MTI is an advocate of more such informal activities.

The Chairman: Mr Wee, you want to withdraw your amendment?

Mr Wee Siew Kim: I thank the Minister for the hope that he has given us. I beg leave to withdraw the cut.

Amendment, by leave, withdrawn.

The sum of $370,710,550 for Head V ordered to stand part of the Main Estimates.

The sum of $3,926,193,500 for Head V ordered to stand part of the Development Estimates.