STATUTES (MISCELLANEOUS AMENDMENTS) (NO. 2) BILL

Column No : 1845

STATUTES (MISCELLANEOUS AMENDMENTS) (NO. 2) BILL: Order for Second Reading read.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): MrSpeaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, as its title implies, this Bill contains a number of amendments to several Acts which are mainly technical in nature. Let me highlight the key ones.

Amendments due to changes in modes of commencement of court proceedings (clauses 1 to 9) [Part I of the Bill]

First, we have a number of technical amendments that reflect the Courts' initiative to simplify court procedures and promote the use of plain English in our laws. Currently, there are four ways to commence court proceedings in non-criminal matters, ie, (i) a writ of summons, (ii) an originating summons, (iii) an originating motion, and (iv) a petition. Different procedures and court forms are prescribed for each process. These different processes are procedural in nature and must be distinguished from the substantive law that decides the legal outcome of any case, which remains unchanged.

The intention is to amend the Rules of Court early next year to simplify court procedures by reducing the number of processes from four to two, by abolishing the "motion" and "petition" processes. Some Acts and subsidiary legislation prescribe how court proceedings are to be commenced for specific actions, eg, by writ or by petition to the court. These Acts and subsidiary legislation will be accordingly amended. These amendments will be policy-neutral and purely procedural in nature. In general, existing applications to court using the "originating motion" and "originating petition" processes will be converted to use the originating summons process. In addition, some archaic Latin terms will be substituted with plain English terms for clarity.

Amendments to the Computer Misuse Act and Criminal Procedure Code (clauses 14 and 15)

Sir, let me now go on to the next set of amendments, which is, currently, only section 15 of the Computer Misuse Act (CMA) provides specific powers for police officers and authorised persons to gain access to decryption "keys" in computer-related offences and other offences discovered in the course of investigations into computer-related offences. This power does not extend generally to non computer-related offences, including those relating to national security.

Sir, criminals are becoming more tech-savvy and are making use of information technology, eg, computers, to commit non computer-related crimes. Indeed, the international press haswidely reported that international terrorist groups are using computer networks to communicate with each other. If these criminal and terrorist elements use strong encryption, law enforcement agencies would face operational challenges and difficulties in gaining access to essential encrypted information for investigation and enforcement.

It is therefore necessary to amend the Criminal Procedure Code (CPC) to include several new provisions which provide for, firstly, access to decryption "keys" for the investigation of all seizable offences; secondly, empower the Public Prosecutor to issue a Decryption Order to allow the police and authorised persons to obtain access to decryption "keys" that can unlock encrypted information, including voice and fax encryption;thirdly, impose a penalty for disobeying a Decryption Order and, fourthly, impose a heavier penalty if there is evidence that the encrypted data was used to conceal evidence relevant to the planning, preparation or commission of a specified serious offence, such as a national security-related offence. Sir, the proposed amendments are intended to widen investigative powers where the police and authorised persons have to access computer and, in particular, decryption data.

Consequentially, section 15 of the CMA is deleted as that provision is rendered obsolete with the introduction of the proposed powers in the CPC.

Amendments to the Trade Marks Act (clause 21)

Sir, the third set of amendments under the Trade Marks Act(clause 21) makes several amendments to the Trade Marks Act. The definition of "Convention country" is amended to provide that "Convention country" includes Singapore. This clarification will ensure that Singaporean owners of unregistered well-known marks are protected under the Act.

Clause 21 will also enable the restoration of withdrawn trade mark applications. Currently, where Intellectual Property Office of Singapore (IPOS) has queries or objections to an application for the registration of a trade mark, the applicant has four months to respond, after which the application is automatically withdrawn. The applicant will then have to re-start the application process, pay application fees again, and lose his priority to register the mark. With the amendment, IPOS may restore the withdrawn application on request from applicants. Businesses will benefit from the resultant time and cost savings.

Miscellaneous amendments

Finally, Sir, let me briefly touch on a bunch of amendments which facilitate better administration of various Acts.

Amendments due to operation of Companies (Amendment) Act 2005 (clauses 10, 12, 13 and 19)

Under this category, first, the Companies (Amendment) Act 2005, passed by Parliament in May this year, abolished the concepts of authorised capital and par value shares. Consequential amendments are now proposed to the Architects Act, Professional Engineers Act and Companies Act, to align affected provisions with the new Companies (Amendment) Act 2005.

Amendment to the Interpretation Act (clause 16)

Next, clause 16 makes a technical amendment to the definition of "States of Malaya" in the Interpretation Act to clarify, for the avoidance of doubt, that the expression "States of Malaya" in our laws includes the Federal Territories of Kuala Lumpur and Putrajaya, as well as any other Federal Territory that may be established in the future from any part of the territory of any state in Malaya. The amendment does not expand the scope of the definition but merely serves to clarify the scope of the definition.

Amendments to the Building Maintenance and Strata Management Act and Land Titles (Strata) Act (clauses 11 and 17)

Next, clauses 11 and 17 make a number of consequential amendments, which are housekeeping in nature, to the Land Titles (Strata) Act and Building Maintenance and Strata Management Act arising from earlier amendments to the Land Titles Act, Land Titles (Strata) Act and the new Building Maintenance and Strata Management Act 2004. They will provide greater clarity and facilitate the operation of these Acts.

Amendments to the Probate and Administration Act (clause 18)

Sir, next, two amendments are made to the Probate and Administration Act. Firstly, a technical amendment is made to section 35(1) to bring it in conformity with the Subordinate Courts Act, which was amended when the District Court's monetary jurisdictional limit for probate matters was increased from $250,000 to $3 million.

The second amendment is necessitated by the privatisation, in September this year, of the Dependants' Protection Insurance Scheme maintained by the Central Provident Fund. With the privatisation of the Scheme, the monies payable by the insurers under the Scheme will form part of the deceased's estate and are no longer paid out together with CPF funds. The amendment clarifies that, for the purposes of administration by the Public Trustee, the monies payable by an appointed insurer pursuant to the Scheme will not form part of the $50,000 limit imposed upon the value of the estate of the deceased.This amendment will take effect from 17th September 2005 to ensure that the Public Trustee can continue to administer cases of up to $50,000 as before, even before the privatisation of the Scheme. So that essentially maintains the status quo.

Amendments to the Securities and Futures Act (clause 20)

And, finally, Sir, clause 20 makes a number of technical amendments to the Securities and Futures Act resulting from the change in the numbering of the provisions made by the Securities and Futures (Amendment) Act 2005. Consequential amendments are also made to two sections arising from the repeal of section 73 and the Companies (Amendment) Act 2005.

Sir, I beg to move.

Question proposed.

Mr Andy Gan Lai Chiang (Marine Parade): Mr Speaker, Sir, I stand in support of the Statutes (Miscellaneous Amendments) (No. 2) Bill.

I wish to speak on Part I of the amendments relating to certain court proceedings, in particular, the amendments to the Interpretation Act, the Supreme CourtJudicature Act and the Subordinate Courts Act where petitions and motions are converted to writs of summons, originating summons or a summons and whether these amendments should apply to divorce cases.

I have come across residents in my constituency during the meet-the-people-sessions where they relate to me the acrimony and bitterness they face in divorces, from unreasonable spouseswith unreasonable expectations and demands to recalcitrant and unrepentant spouses.Adivorce is an emotionally trying and difficult experience for the parties and families concerned. These types of cases must be handled sensitively and appropriately. We should strive to encourage people, having noalternative but to seek a divorce,to start their regrettable proceedings with the right attitude.

With the amendments, a person starts divorce proceedings with a writ for divorce (Third ScheduleNew Part X of Women's Charter, sections 92, 94 and 95) and the parties are called plaintiff and defendant respectively, like in normalcivil suits.Thisimplies that one spouse is suing the other for a divorce. By contrast, presently, a spouse formally asks the court to dissolve his marriage to his spouse by a petition.

We must not advocate a litigious society for divorce cases. Instead, we should try and help these parties resolve their marital problems and issues as amicably as possible. To say that one is suing for a divorce takes a different tone from a request of a court to grant a divorce. From the word "go" and from the very description of what the law calls them, it is inevitable that the parties may see themselves as combatants -on one side, a party suing for a divorce, and the other defending. This may lead to enhanced hostility and acrimony, making divorces hard to resolve amicably.

One can say that this change is not a serious matter as it is just a change in name and that the courts are well equipped to deal with contesting parties through counselling and/or mediation. And it is true that about 90% of contested divorces are settled through counselling and mediation. However, the courts already have a trying time, having to mediate and counsel parties in divorce cases based on petitions. At the moment, the mindset is not one where a spouse is suing the other spouse as in normal civil suits. The petition is a formal request to the court for relief. This is different from a party commencing proceedings to sue the other. It is possible that, with the change in descriptions and proceedings, the mindset will change and proceedings may start off even more acrimonious and hostile. This may make the task of the counsellors and mediators harder.

Only the US has adopted the writ process. In the UK, divorces are started by petitions and the parties are called petitioners and respondents respectively. In Australia, the person who applies for a divorce order is called an applicant and the other party is called a respondent. Likewise, the same applies for New Zealand.

Section 41A(7) of the to-be-amended Interpretation Act allows the Minister charged with the responsibility for law to determine whether the amendments should apply to divorce and family cases. In view of the social concerns, is it necessary for the amendments to apply to divorce cases?

Assoc. Prof. Ho Peng Kee: First, I thank Mr Andy Gan for supporting the Bill. He expresses a concern whether or not the new procedures should apply to divorce and family-related matters, in particular, in the context of whether the way in which the divorce proceedings are started, which is currently by way of a petition, should be replaced by that of a writ of summons, so that the petitioner becomes the plaintiff and the respondent becomes the defendant.

But, as Mr Gan has himself said, it is really a change in nomenclature,achange in terms, because the parties, really, when they come to court, they are seeking the court's leave vis-a-vis the situation that has arisen before them. In some cases, there may be already acrimony. I do not think theacrimony there would be accentuatedby the fact that the petitioner is now called plaintiff and the respondent is now called the defendant, because, in substance, the law remains the same.

Andin terms of the court's approach, the court's approach would also remain the same. In other words, the court will still try to reconcile the parties, as they are doing now. There will still be mediation processes. So, in a sense, the process will not change.

We know that there is adjustment required on the part of many people. In fact, lawyers have to adjust to it and, in particular, lawyers were very used to the four processes. But as I have said, the need has come to streamline the process.Certainly, going into the future, with new generations of lawyers and, over time, even with a new generation of people who want to divorce, I think they will come to the courts seeking a divorce, whether they are calledpetitioner orrespondent, orplaintiff ordefendant. People on the ground, what is important to them is that they are coming to court to seek relief. The relief will not change. The process in which the relief is derived will not change. So I think we should not just be fixated on these terms and by association, because I know where Mr Gan is coming from. When you are a plaintiff in a civil claim, you are suing the defendant and, very often, you want something out from the defendant. So it is a matter of association. But let us take that association out and look at it from this standpoint. The starting standpoint is that we are simplifying andstreamlining the procedures, and, in a sense, like I have said, it is policy neutral.

It is not naturally evocative if you are a plaintiff. In the past, it could be so. But under the new process, depending on what you are coming to seek the court's help for, in the case of divorce andsome have contested, certainly, it would continue as it is.This has been thoroughly thought through and indeed the courts have already consulted with the present parties, including family law practitioners who are in the Law Society and Family Law Committee, and also the law academicsat the NUS and also, I think, briefings have been made to the GPC, not Home Affairs and Law, but GPC for Community Development, Youth and Sports, and indeed even women MPs and representatives of various women groups, like SCWO, SAWL and AWARE. So let us give the process an opportunity.

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.- [Assoc. Prof.Ho Peng Kee].

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

Column No : 1854

NATIONAL UNIVERSITY OF SINGAPORE (CORPORATISATION) BILL: Order for Second Reading read.

4.33 pm

The Minister for Education (Mr Tharman Shanmugaratnam): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

As Singaporeprogresses towards a knowledge-based and innovation-driven economy, our three universities- National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU) - will have a key role to play in producing graduate manpower, enriching our human capital by providing quality education, and excelling in research to create knowledge and wealth for Singapore.

Our universities are already well-recognised today. But the global university landscape is changing and changing rapidly. Our universities have to compete in this new landscape to get the best faculty and students, including the best Singaporean students. They also have to developworld-class capabilities in specific fields. To achieve this, a new model of governance for our universities is necessary, to give them the autonomy to chart new directions, to differentiate themselves, and to focus on developing excellence. We are not alone in moving in this direction. It is a global trend. For example,Japan, Denmark and Finland are reforming their universities by devolving more autonomy to them. Japan enacted the National University Corporations Law in 2003 to transform its national universities into independent administrative corporations with more autonomy. Denmark enacted a new University Act also in 2003 to transform the Danish universities into self-governing institutions, each with their own Boards of Directors and in fact with a majority of external members of their Boards (including the Chairpersons of the Boards) to advise and guide the university Rectors and management in the strategic development of the universities. This is quite unlike the traditional model of Boards in Europe where the majority of members of the Boards are internal members from within the university.

In April 2004, we initiated the University Autonomy, Governance and Funding review, what I will call the UAGF review,to find an appropriate model of autonomy for our three universities. The UAGF Steering Committee, chaired by then 2nd Permanent Secretary of Education, LG(NS) Lim Chuan Poh, released its preliminary report and recommendations in January this year. Its key recommendation was to corporatise NUS and NTU into not-for-profit public companies limited by guarantee, or in short, to make themAutonomous Universities. SMU, which was already established as a public company limited by guarantee, has always been an Autonomous University.

The Ministry's International Academic Advisory Panel (IAAP) met in January 2005 and discussed extensively therecommendations of the UAGF. It strongly endorsed the move to transform NUS and NTU into Autonomous Universities, just like SMU, to enable them to achieve teaching and research excellence, raise their international standing and enhance their students’ learning experience. The IAAP also made several useful observations. These included the need for university education at the three universitiesto remain accessible and affordable. There must also be greater accountability with increased autonomy. The IAAP endorsed the enhanced accountability framework for the Autonomous Universities, whichassures the public that the universities' missions remain aligned with our national strategic objectives and that the quality of university education continues to be enhanced.

Mr Speaker, Sir,Members of this House will recall that at this year's Budget debate, the Committee of Supply had deliberated on the UAGF recommendations. The Government announced its acceptance of the UAGF recommendations in April this year. The move to transform NUS and NTU into Autonomous Universities marks the beginning of the next major phasein our universities’ development.

As I shared at the Committee of Supply debate, we have good people in our universities, comprising the Chairmen and members of the university Councils, the key management in each of the universities, and thefaculty and staff. I am confident that, with these good people,the universities will also be able to develop an internalculture of collegiality that is characteristic of all top universities.

Our experience with SMU as an Autonomous Universityhas given us confidence that the proposed model of governanceat NUS and NTU will work. But the two larger and much more complex universities, NUS and NTU, will need time to change.

The change process has already commenced at the universities. Both the NUS and NTU Councils, together with their respective university management and faculty, have embarked onstrategic reviews to set their future directions in an era of autonomy.

The granting of autonomy to NUS and NTU will, fundamentally, not just be about a change in relationship between Government and universities butabout a change inthe internal cultureof our universities.Autonomy isthe catalyst forthe change in internal culture. It will bring greater collective ownership and more proactive participation from amongst all the university stakeholders - theCouncil (or what will soonbe calledthe Board of Trustees after corporatisation), the university management, faculty, staff and students and, quite importantly, the alumni of the universities.

The three Autonomous Universities will remainkey institutions in Singapore. The Government remains committed to providing themsubstantial funding. We want to ensure that they continue to contribute to the well-being ofSingapore and its people, not just by producing graduate manpower to support the economy, but also in propellingSingapore up the value curve of knowledge creation through a concerted investment in R&D. The new Acts for our Autonomous Universities will allowthe Ministry of Education to ensure that the university sector as a whole meets these national objectives. MOEhas the fundamental responsibility, and will work closely with the universities, to ensure that university education remains affordable and accessible and that the universities achievethe highest quality in teaching and research.

Next, the issue of accountability. It is critical that we strikethe rightbalance between autonomy and accountability.We have to giveour universities the freedom to set their own directions,to differentiate themselves and to forge their own distinctive cultures. In this regard, the NUS and NTU (Corporatisation) Bills are in line with the thrust of the existing SMU Act. The new legislation aims to safeguard the Government’s strategic interest in the university sectorbut give the universities the autonomy to be nimble and responsive in a rapidly evolving landscape.The Bills are crafted with this balance in mind. The approach we have taken is to retain those clauses from the existing NUS and NTU Acts which are still relevant, with some modifications in the new Acts where necessary, and to include new clauses arising from the UAGF recommendations. The internal governance structures of the universities and various operational matterswill beincorporated in the university company’s Memorandum and Articles of Association (M&A), which is alsothe case for SMU in the case of the existing SMU Act. As an additional safeguard, any amendment to the M&As would require the consent of the Minister for Education, as provided for in the SMU M&A today.

The NUS Bill also provides the legislative provisions to transfer NUS’ property, rights and liabilities to the successor university company, and will repeal the existing NUS Act which establishes NUS as a statutory board.

Mr Speaker, Sir, let me now highlight the key clauses of the NUS (Corporatisation) Bill.

Role of Government

It will remain the Government’s responsibility to steer the strategic direction of the overall university sector and ensure that our three universities meet strategic national priorities. This is provided for in clause 5. Itwill largelybe operationalised through the Policy Agreement that will be signed between the Ministry and the university, as part of the enhanced accountability framework that is being put in place.

Strong governance structures are critical to the success of the university. As such, the Minister for Education will continue to appoint the university’s Board of Trustees (BOT), as provided for in clause 6. We must appoint the right people as Trustees. They play several critical roles: firstly, to provide leadership and guidance on the strategic directions for the university; secondly, to appoint the President of the university and to appraise the President of the university; and thirdly, to ensure the responsible use of the university’s resources and maximise the returns on those resources.

Enhanced accountability

The enhanced accountability framework for the Autonomous University, as reflected in the new clause 4, will comprise the following:

Firstly, a Policy Agreement to be signed between each university, in the presentinstance,NUS,and the Ministry of Education that stipulates the key policy parameters articulated by MOE which the university must abide by in order to receive Government funding. Some of the policies include the tuition fee setting framework, the framework for admissions, andadequate cost control measures to ensure that resources are utilised optimally. The Policy Agreementwill not be cast in stone, of course, and from time to time, we willreview it tomake surethat it is suitable for the directions that the university itself is pursuing.

Secondly, a Performance Agreement, besides the Policy Agreement I just spoke about, which will be formulated by the university and agreed toby the Ministry of Education. This is the university's ex-ante declaration of what it is setting out to achieve in the areas of teaching, research, service and organisational development. This Agreement will be reviewed every five years. In addition, the Ministry and each university will work out and agree on the number of graduates to be trained by the university in broad clusters of disciplines on an annual basis. The performance of the university will be reviewed annually in the four areas of academic teaching and curriculum, research outcomes and training, contribution and service to the wider community, and organisation development matters. It would include such issues as the breadth of the curriculum that the universities are seeking to achieve, things such as the number of cross faculty modules that undergraduates are required to cover, andthe percentage of students that the universities intend to send foroverseas exposure throughexchange programmes.

Thirdly, the existing Ministry of Education's Quality Assurance Framework for Universities (QAFU) that includes an on-site external validation of the university's performance by an MOE-commissioned external review panel. QAFUalready exists. It is chaired by Dr Jennifer Lee and comprises a few eminent international experts, as well as senior members of the local corporate community. This validation will be carried out once in every three to five years. The process is in place and has been working well.

In order to ensure that the Autonomous Universities remain fully accountable for the use of public monies, the new clause 9 provides for the Ministry to have continued full and free access to all records relating to financial transactions of the university company, and to be able tomake such records available to the public.

The Minister for Education's consent would also have to be sought for the university's functions cited in clause 7 of the Bill, such as the disposal of property, winding-up of the university company, as well as the addition, deletion or alteration of the university company's constituent documents.

The Ministry is mindful that we want to give our universities the autonomy they need to excel, and not to be encumbered by unnecessary procedures and processes. I am confident that we will be able to find the right balance between autonomy and accountability, and that the processes of accountability will not be burdensome.

Transfer provisions

Parts III and IV of the NUS (Corporatisation) Bill provide for the transfer of property, rights, liabilities, employees and others, from NUS as a statutory board to the corporatised NUS. This is to ensure a smooth transition from NUS' statutory board status to its new identity as an autonomous university company.

Dissolution of Academic Staff Provident Fund (ASPF) Scheme

The First Schedule of the NUS (Corporatisation) Bill provides for the dissolution of the ASPF and transfer of the balance of the ASPF assets to the Central Provident Fund Board.

The ASPF started at a time when the CPF did not exist. For greater cost effectiveness for the benefit of the ASPF members, the NUS Council made the decision in October 2003 to dissolve the ASPF and merge it with the CPF. NUS will bear all costs relating to the closure of the ASPF and ensure that no member is disadvantaged. NUS has also sought feedback from current and past ASPF members, and the response has been positive.

MOE, NUS, MOM and the CPF Board have worked closely on this matter and the necessary legislative provisions for the dissolution of the ASPF and the subsequent transfer of balance of assets to the CPF are included in the First Schedule of the NUS (Corporatisation) Bill.

Mr Speaker, Sir, let me conclude. Our universities have done exceptionally well within a relatively short space of time - a short history. But it will take more for them to become great universities. The three University Bills to establish NUS, NTU and SMU as Autonomous Universities will lay the foundation and position our universities well to become leaders amongst universities in the Asia-Pacific and to be up to the best internationally in specific fields. This will allow our universities to be key strategic assets for Singapore, as we stake our claim in the knowledge-based economy.

As the universities enhance the quality of education, MOE, together with each university, will ensure that university education remains accessible and affordable to Singaporeans. No Singaporean admitted to the university will be denied a university education because of financial constraints.

Sir, I beg to move.

Question proposed.

4.52 pm

Dr Lily Neo: Mr Speaker, Sir, I stand to speak in support of the National University of Singapore (Corporatisation) Bill 2005. With globalisation, information revolution, diversification of training needs and demand patterns in the labour market, universities need to be more entrepreneurial and innovative to become quicker, more flexible and much more focused in reactions to expanding and changing demands. I hope the enactment of this Bill, and thus the autonomy given to our universities, NUS and NTU, will facilitate them to be more nimble to accommodate these changing needs. The desired outcome, of course, will be for our universities to be capable at competing globally with innovative training and research and with increased productivity, thereby receiving not only national but also first-league international recognition.

Sir, to be able to initiate and implement the process ofchange, there is a need for a steering core that has the steering capacity, especially on organisational structure, beyond the traditional mode. Structural changes that increase the pace and effectiveness of decision-making are required. But there is always dialectic underway between steering core or groups representing the interests of the total university versus faculty and departmental individuals or groups responsible for the welfare of a part of the whole. The question is whether our universities are ready for this new role. Is it a case of expecting a child to run when he has not even walked yet?

Sir, is an appropriate team of key leadership in place to chart the strategic direction, competent on new policies and efficient on management of resources? Just recently, NUS announced that it plans to borrow up to $1 billion in funds for running costs, new buildings, hostels and upgrading facilities. NTU also plans to borrow $800 million next year to fund the new facilities and services. The question is whether such large borrowings are prudent. Will such borrowings result in too heavy a burden on the universities with regard to the servicing of debt obligations? How does MOE ensure the proper use and accountability of university resources? For example, on the current issue, will MOE ascertain the wise use of funds in the case of NTU's intent, as reported in the Sunday Times on 13th November, to purchase 300 Herman Miller Aeron chairs or their equivalent costing up to $2,200 each? Will MOE still be able to ensure that corporatised universities are credible and accountable in all their dealings to maintain public confidence with the greater autonomy given to them?

Sir, I have three other areas of concern with regard to the corporatisation of our universities.

My first area of concern is on the affordability of fees for our university students. Universities will have the autonomy to set fees, albeit with limits set by MOE. It is the intention of our Government to reduce the subsidy and let students bear the greater portion of tertiary education cost. According to Minister Tharman Shanmugaratnam, it is a global phenomenon that the cost of higher education increases faster than general inflation. All these will only mean fee-hikes for university students and, thus, my concern on the affordability of fees for university students. Although there are loan schemes available, will it still be too onerous for students to pursue tertiary education? Should they be burdened with debt even before they find employment? Will the high costs deter people from pursuing tertiary education? It will be a sorry state, Sir, to both the individuals and to the nation, if we fall through to educate fully the next generation of citizens and leaders. This will go against our main aim of developing our students to their fullest potentials and, worse still, snubbing the potential of the most able students that usually qualify for tertiary education, the group that is important for our continued economic success. The concern is also for those less well-off bright students who have qualified for places. These students may have difficulty in raising the 10-20% minimum-payments before loans. Will the Ministry ensure that there will be enough scholarships or bursaries to assist them?

The other concern, Sir, is on the cultivation of knowledge of our students and the quality of education. In countries where universities have been corporatised, many classics departments, especially on the humanities, have been eliminated. Corporatisation always also means market-driven, ie, a new emphasis on market forces in higher education policy. The concern is that, as corporatised universities are expected to raise their own revenues, they may become beholden to the financiers on the skills required by them. Students may be deprived of a well-rounded education. The potential removal of certain disciplines due to a lack of market demand will necessarily lead to a streamlined focus on "hot" disciplines, neglecting others which are less in demand but which are essential to a balanced tertiary education and leading to lack of diversity in knowledge. University education should not only prepare students for the jobs of today, but also for jobs which have yet to be "invented". In the quest for raising revenues will corporatised universities accept more foreign students that pay higher fees at the expense of the places for the locals? Will corporatised universities accept students on the promise of donations to the universities despite the students being lesser qualified?

My next area of concern is for the staff of the corporatised universities. Will there be cutting back on costs that result in increasing casualisation, juniorisation and "churning" of academic staff? My concern is that, with any cost-cutting measures, more part-time staff and junior professors will replace tenure and senior academics which may affect the quality of education. The drive for non-continuing or limited-term contract appointments will point towards human costs to individuals and their families. The morale of the staff may take a toll, resulting in lower performance levels to the disadvantage of students.

Sir, innovative research and training are the driving components of increased productivity in our industry to compete globally and universities can contribute to this national industrial performance by engaging in areas in the market-driven research and market-sensitive products. But, this may bring its own side effects. Other corporatised universities in developed countries have responded to the market-place and raised revenues by exploiting commercial opportunities, especially in targeted research and joint ventures. Academics are also expected to change considerably to respond to corporatisation by engaging in the production and sale of educational services to a market in return for specific rewards. As faculty members increase their marketability and are given

more external counselling opportunities, faculty time would decrease and create conflicting demands for teaching versus research versus service. Universities may lose control over their faculty members. The credibility of its standards will be a problem by allowing marketplace to determine academic policies. There is a need to ensure that universities are dedicated to education, be interested in research and strong academic values. Consideration must be given to academics that are not best at bothcutting edge research and teaching, as some are brilliant in teaching, but are not good in research or in commercialisation needs and hence, the necessity for cross-subsidy across departments and faculties to minimise conflict and division.

Corporate work practices may accelerate the demand on staff to work as researchers, teachers, leaders and managers. This would mean impossible workloads for the majority of lecturing staff that invariably result in work stress.

This Bill does not address issues on academics with sidelines consulting arrangements, direct financial interests in the companies sponsoring research and in the publication of data from research. We have to address any area of conflicts in order not to corrupt the mission of the universities.

My last area of concern, Sir, is on whether the corporatised universities, since they are expected to raise greater proportions of their own revenues, will adopt commercialisation and commodification of higher education and will enter into partnership with private business firms in the pursuit of wealth; with erosion on the long-term priority of higher education and mission and lowering of education standards. Education objectives may be formulated into producing marketable, saleable commodity to different segments of the customer or student population for the purpose of dispensing degrees and generating large numbers of "job-ready" graduates. Attracting as many students as possible and failing as few as possible will result in falling standards. Universities should remain first and foremost centres of learning and fulfilling cultural and ethical role for society at large. Will more funds be earmarked for commercial projects, rather than as general educational funds?

Companies may violate academic freedom or change the direction of academic research. Universities should have full and open disclosure of any contract with any industry and should fully respect the academic culture, protect academic freedom and do not permit the industry excessive control over research process or publication of the final results.

This Bill doesnot address the issue of universities holding equity in the companies that are sponsoring research. It also does not address the issue of royalties and other fees in the commercialisation of university research. Are patenting and licensing allowed? Should there be a third-party licensing body to assume the responsibility of technology transfer and commercialisation needs and leaving universities to concentrate on cutting edge research and teaching?

[Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

5.05 pm

At the expense of well-rounded and diverse education, corporatised universities may compete with other universities in the production and marketing of courses that attract mass participation of students that are seen as customers. Only two weeks ago, Mr Deputy Speaker, Sir, it was announced that NUS Business School will have a new $20 million building to accommodate its plan to nearly double its enrolment in the coming years. With so many other universities, such as SMU, NTU, INSEAD here offering the same courses, will it be a case of duplication and thus, the potential of diluting quality and too little differentiation?

Lastly, both NTU and NUS have indicated that they plan to issue bonds to borrow money. It would be important to reflect on the possible repercussions of a bond issue by the universities. The use of bond issues has been increasingly popular in the United States. Some, such as that issued by Harvard, have consistently outperformed against many of the benchmarks of asset classes, apart from real estate and inflation indexed bonds. This has allowed Harvard to deliver the appropriate returns to investors. However, Harvard's ability to do so is through its prudent management of its policy portfolio for the Harvard endowment.

Thus, the first question to reflect on is what steps Universities would need to take so that they can deliver the expected yields on investment made. In the case of Harvard, the Harvard Management Company issues an annual report to its investors tracking five-year and 10-year performance. Harvard has consistently outperformed in its results. However, it is a benchmark since it has a long tradition and its alumni donate generously to its alma mater whereas in Singapore, the culture of philanthropy is not as developed. Will our Universities be able to fulfill the performance targets?

Secondly, the success of a possible bond issue in attracting investors would be dependent on its ability to obtain a good bond rating. Agencies, such as Moody's would provide a positive outlook on a bond issue if it is able to secure its repayment obligations through unrestricted revenues. So the local universities that intend to issue out bonds would need to ask if they have the ability to attract strong student demand with high net tuition revenue per student. Similarly, these universities would need to ensure efficient operating performance. An increasing proportion of the repayment obligations incurred by universities that have issued bonds in the United States is sourced through robust fund-raising campaigns. Thus, we have to ask if our local universities have the people who are equipped to handle these kinds of activities to support their repayment obligations if they issue out bonds.

Mr Deputy Speaker, Sir, bond issues by local universities may result in accelerated fee hikes. This would be a negative consequence of a bond issue that I am wary of. In the United States, some universities that have issued bonds implemented fee hikes in stages for the specific purpose of funding bond repayment obligations. If universities are going to issue bonds here, it may be important to know what steps they intend to take and the impact of their decisions.

Sir, the salient point is how does our Government ensure that the corporatised universities are accountable to certain performance measures and transparent in their dealings, management and spending? Transparency in all these areas is essential to maintain public confidence. Will MOE attach certain performance measure for the continuation of Government subsidy? What kind of penalty will be attached to failure of accountability? Will the Quality Assurance Framework for Universities address all these areas?

I hope the Minister can address my areas of concerns.

Prof. Ivan Png Paak Liang: Thank you, Mr Deputy Speaker, Sir, for allowing me to join in this debate.

First, I should disclose that I am a professor of the National University of Singapore and an elected member of the Senate Delegacy.I would like address the same point to both the NUS and the NTU Bills. I support both these Bills. I have only one concern.

Mr Deputy Speaker, Sir, the cornerstone of the success of our universities is academic governance, and,in turn, the academic governance is founded upon the university's constitution. I think we are all aware of the sensitivity of the issue of academic governance, especially with regardto the recent decision of the University of Warwick not to come to Singapore. Sir, my concern is, with regard to the NUS and NTU Corporatisation Bills. Under these two Bills, theoriginal NUS and NTU Acts will be repealed. Along with the repeal of those Acts, the respective universities' constitutions will also be repealed.

My concern, Mr Deputy Speaker, Sir, is what will become of the universities' constitutions with the corporatisation of these two universities? Will the constitutions be incorporated into the new university Memorandum and Articles of Association? If not, how can we be assured that the academic governance of our two great universities will be continued to be safeguarded in the era of corporatisation?

Dr Geh Min (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to join in the debate.

The Minister for Education posed the question onwhat makes a university great. I believe that John DRockfeller asked the same question of the President of Harvard, Charles Eliot,who answered "$50 million and 200 years".This answer was given approximately100 years ago. I assume that the figures have changed. I am sure everyone will agree with me that it takes a lot more money now to make a great university. Hopefully, it takes less time, perhaps we can telescope the time with globalisation and IT. But I think with the new university autonomy corporatisation Bill, this is a question that we all should be asking ourselves, and especially the universities.I am sure they are doing that.

Since there have been some -in fact, no less thanthe Prime Minister himself - who havebrought up the issue of the X-factor with regard to Singapore becoming a great global city,I think it is relevant to ask what the X-factor is with regard to universities.Like all X-factors,when you see it, you recognise it,you know what it is. But it is very difficult to put in words. If you have not seen it, likea great work of art or agreat culinary dish, it is very difficult for someone else to transmit it to you second-hand. But I believe that all ofus must have experienced it in some way or another. If Imay be permitted, I would like to describe my own experience.

When I was admitted into NUS as a medical undergraduate, I remember that in our first year, we did a survey - I thinkthiswas spontaneously initiated by the students -we did a survey of all the medical studentswho had gone in to find out what was the mainmotivating reason that we were doing medicine. At that time, of course, there was no careerguidance. There was no interview system.So it waspurely on grades.

Themajority of the students said that they went in because they thought that medicine gave them a degree which wouldprovide a respectable and secure job. In other words,they went in for thatpaper qualification. The second largest group said that they went in - and I am sorry to say that I belonged to that group - mainly because of parental or family pressure. But presumably, the parental and family pressure was for the same thing, the paper qualification, but we did not have the ability to think it out ourselves. And only a very small minority said that they went in out of love for medicine, either the ideal of practisingas a doctor or the pursuit of medical knowledge. I do not think there was any fine distinction because it was such a small group. This does not sound very good,not just for the medical profession, but for medicine in Singapore.

I am glad that the Minister for Health is not here.

But what happened to all of us? I think if a survey had been done in our final year, we would have responded differently, because the X-factor had, I believe, touched all of us, which is that we were exposed to teachers, professors, clinicians who were passionate about the way they practised medicine. They had an uncompromising pursuit of excellence, both in the practice of medicine and the pursuit of knowledge. Although not all of us - in fact, most of us did not turn out as perfect products - at least, I think, all of us were touched by this inspiration. So this is what I consider the X-factor that all universities must have and thisis why you have to have a person-to-person contact. This is why universities cannot just convert totally to IT. This is what makes a university great. If you put in a lot of money and even if you had 200 years, if you do not have this X-factor, I do not think you would get the maximum benefit of the money and time.

How do we create an environment that allows this X-factor to flourish? The University Autonomy Governance and Funding (UAGF) Report has quite correctly identified - and the Minister has touched on this - that the culture of ownership is very important. I quote:

"For autonomy to succeed, we need to nurture a culture of ownership by stakeholders in the university. This requires a mindset change which will take time and will be difficult to achieve if there is no overt change in the status of the universities."

I presume this is one of the justifications for autonomy.

A culture of ownership, however, must have the following. It must have autonomy, it must have trust and it must have continuity. The autonomy should include freedom to make choices by the university, including mistakes, in order for them to develop a full sense of responsibility.The trust, presumably, is mutual trust between allstakeholders, which I think should be manifested by a free flow of information and opinions. And, of course, continuity allows for the time for all these to develop.

I would now like to refer tothe National University of Singapore (Corporatisation) Bill. Clause 4(1) and (2) is on accountability and quality assurance framework that is described in the Bill.As itstates, this framework is an agreement in writing between the university company and the Minister. Clause 4(2) states, "... the performance of its activities in accordance with such quality assurance framework as the Minister may determine."

Now, too many conditions, restrictions and guidelines by MOE would tend, in my opinion, tocreate a perception of a lack of autonomy and a lack of trust between the university and the Government. I hope thatthis framework, which I acknowledge should exist, should be seen as a light, flexible and, hopefully, temporary scaffolding largely constructed by the universities themselves, and this should be seen as a framework to enable the universities to scale to greater heights and to create new edifices. It should not be regarded by the universities as a case that restricts their growth and constrains academic freedom.

The same with the External Review Panel (ERP) and policies on Higher Education (HE). Our Minister has said, if I heard him correctly,that the External Review Panel will be appointed by the Ministry of Education. This seems to me rathera lack of trust, and also going contrary to allowing the universities to have more autonomy. Should not the Government consider taking a backseat on the ERP? And does the same apply to the Higher Education policies?

The question here is: does the Government view the university as a trusted partner and equal? Also, perhaps more importantly, how do the universities view the Government? It has been said very often that universities alreadyhave a considerable amount of academic freedom and autonomy. But when one questions academics, you get a very varied spectrum of responses to this question, even in the press. This may not be a black box but I think it is a grey area where many academics andstudents have a perception of a lack of autonomy, and I think this should be addressed at this point. If the universities are going to go on to the next stage and have real autonomy, perhaps the Government might like to state what their OB markers are, where they would not interfere with university autonomy.

One area I would like to specifically address here -and I say that I have no vested interest in this - is in relation to the retirement age of academics. Will universities be allowed to change this, now that they are corporations?

I now refer to clause 6 on the appointment and removal of trustees by the Ministry of Education. I believe that this too will infringe on the university's autonomy and detract from its sense of ownership, particularly since the Minister mentioned that the trustees have an important role, including on theappointment ofthe President. The Ministry of Education appoints the trustees. The trustees appoint the President and make important decisions in the university, then it is still going to be a very, very top down approach.Instead, perhaps we could have an independent national agency, somewhere along the lines of the Australian University Quality Assurance (AUQA) agency. I quote:

"This is an independent national agency to monitor, audit and report on quality assurance in Australian higher education... It operates independently of governments under the direction of an appropriately structured Board of Directors."

If I may say so again, if Singapore universities are to become internationally recognised for excellence, it is the international academic community that should decide this. An endorsement by a government saying that the university possesses certain standards does not really hold much water in the academic community. I believeNUS was ranked 18th in the Time Education Supplement ranking, it later dropped four points. I thought it dropped to 22. I do not think this is relevant. The actual position is relevant. It dropped because of the lack of peer review. This was the impression that I was given.

So, the question here is: will this amendment Bill give the university autonomy in the areas that will really make it improve as a university - academic freedom? Or will it just transfer additional financial responsibilities on the universities without giving them the necessary freedom? Dr Lily Neo expressed some concerns about universities becoming over commercialised, becoming for-profit universities and private corporations using the universities for their ends. I think this will happen if the universities have the responsibility of raising their own funding without autonomy in the academic arena.

As the Minister has also indicated, and in the UAGF too, the autonomy should not be just a transfer of power from top down- from Government to universities. It should permeate right down to faculties and students. I believe that it should also be a bottom up movement. Students should initiate moves which would move up to the top of the university hierarchy. And there should also be a lateral movement between universities and the larger community that they exist in. Faculty and students should therefore not be divorced from national issues whether big or small. I believe that for students especially, this is a critical time which determines many of their future affiliations to people, places, ideals, concepts, and how they develop and strengthen their bonds within the university and the larger community will impact on their sense of ownership and belonging in Singapore itself.

On the issue of foreign students and academics who have temporarily made Singapore their home, they have made a commitment- maybe a temporary one - but I think it is the responsibility of our community and our universities to make them feel as comfortable and to develop as strong a sense of belonging as possible. If we do not do so, they will use our universities as a stepping stone for greener pastures. But since they have made this temporary commitment, I think that we should give them the same ability and the same sense that they can participate, analyse and criticise national issues as well as issues within their discipline.

Here again, I know we are in a grey area. Somepeople think that there is total freedom, but a lot of academics are still very dubious. There are certain areas that they feel they would rather not venture into because, as one academic said to me, it is a high-risk low-reward area. I thinkwith this new Bill, the Government perhaps should define clearer OB markers. Otherwise, we will lose out on many valuable perspectives that will help us build the big picture, and we will also lose out on talent, both local and foreign.

What is our desired goal? I believe ownership and autonomy are just means for us to combine within the university framework our global aspirations and local needs in one. I do not see this as mutually exclusive but complementary. Although I agree that certain choices have to be made, I think excellence and affordability can be seen as two sides of the same coin. It is thesame with teaching and research or the balance between local and foreign students. I believe that each adds value to the other. And a coin should be seen in its whole entity as currency ofvalue. We should not be obliged to choose between one side and theother side. It is understandable that governments regard universities as an investment. Of course, the Minister has said as much- an investment of our resources, both monetary and human, for the future of our nation. But I feel that this talk of investment sometimes leads to misinterpretation or misrepresentation by some people. It should be realised

that there are serious limitations in applying an economic model to the university, both in the way it is run and the desired outcomes that cannot be measured in economic terms alone.

First of all, people and knowledge cannot be regarded or treated like dollars and cents. And, therefore, universities cannot be run like business corporations, or a good university should not be. A global university should not be seen as a multinational corporation.

Secondly, I believe that too much dependence on numerical and mechanistic criteria, such as rankings, awards or numerical KPIs - key performance indices, the number of publications in top journals -all these,they are worth something, but I do not think over-emphasis on them would be productive in assessing the value of the university.

Finally, I believe that this investment is far too long-term. It may not be200 yearsbut, definitely, I think, it is 25, 50 years or more.Therefore, it is far too long-term for any reliable forecasts to be made by policy makers, industry players, economists or even academics themselves.

I think the best thing that we can do is to go for diversity and quality, and universities, of course, you have to be discipline-specific, but the purpose- as I mentionedabout the X factor -should be teaching students how to learn and how to think, rather than how to perform within a particular discipline and nothing else.

In a knowledge-based economy,I think it is highly dangerous if we are too discipline-specific, especially at the undergraduate level. Therefore, I would like to say that this Proposed Graduate Output Funding Model, which is described in the UAGF Steering Committee's review, sounds to me a very, very obsolete way of doing things. I quote paragraph6.20 on page 59: "We propose that MOE fund theuniversities based on graduate output numbers rather than enrolment." This, I believe, is a new development. Conceptually, in such an output-based funding model, the universities can be viewed as suppliers of graduate manpower. The Government, as a buyer, then funds theuniversities to produce a predetermined number of graduates in the different disciplines.

I am not an economist, but this does not seem to make economic sense to me although it seems to have a narrow economic target. It also detracts obviously from the universities' autonomy because, if you cannot determine the product, where is the autonomy?And I believe that, most important of all, it works both against our national interests and our global aspirations.

Perhaps a more workable compromise would be to involve universities more closely in the manpower process, but not to pay them based on outputs which are discipline-specific. You could ask universities to make their manpower projections,give them the necessary data and information to enable them to do so, and,importantly, you could fund them for manpower studies in areas decided either by them or Government, or jointly, but I do not think the funding should be dependent on Government's projections of manpower outputs, especially such short-term ones. I believe that this is going to be done on an annual basis. So where is the long-term vision in this?

On a broader sense, I would echo again what Dr Lily Neo said,I am concerned here again with these manpower projections and with autonomy too on the neglect of the humanities. To quote a well-respected former civil servant, Mr Ngiam Tong Dow, "Many Singaporeans lack cultural DNA due to educational neglect to teach history and literature." I presume that Mr Ngiam was not just referring to university education but to schools as well. But I think universities do set a standard there and there is a trickle-down effect. If you do not emphasise or value itatthe university level,how do you expect schools to value the humanities?

The question here is: where will our future leaders come from? If we want to have universities of excellence locally, I hope that one of the aims is to produce future leaders of Singapore. Surely they should not come from just the top universities abroad. Also, what disciplines should they come from? Surely they should not just come from business, science and technology-oriented disciplines. I would like some leaders who come from the humanities.

But, as I have said, it is not just discipline-specific but the fact that every student should be exposed to as broad a number of disciplines as possible. I remember, as a university student, one of the best bits was when we went over - at that time the medical campus was separate -and had some interaction with the arts and humanities students. That, I felt, was a great education.

Sir, in conclusion, may I say that, as Minister said, the universities are our key strategic investment for the future. But the most important stakeholder is not the Government but future generations of Singaporeans.I believe that the best way that this University Corporatisation Bill can add value to this investment is to give the universities autonomy where they need it.

Assoc. Prof. Ong Soh Khim (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to speak on this Bill. I would first like to declare my interest. I am presently an associate professor at the National University of Singaporeand I am also an elected member of theUniversity Senate Delegacy.

Sir, I welcome and support this Bill on NUS corporatisation. The corporatisation of NUS will allow it to compete effectively and to excel in this fast-changing and uncertain landscape. I would, however, like this House to consider certain points. And, unfortunately, being the last speaker on this Bill, a few points have already been raised earlier byhonourable Members, but I would still reiterate them.

Point 1: Integrity of university education

First,on the standard and integrity of university education. Sir, in simple terms, corporatisation means that universities are assumed to be very similar to large business organisations and, therefore, capable of being run as businesses. Corporatised universities are expected to raise a much greater proportion of their own revenue, enter into business enterprises, acquire and hold investment portfolios, encourage partnerships with private business firms, compete with other universities in the production and marketing of courses to students who are now seen as customers, and generally engage with the market for higher education.

The corporate university has the predominating characteristics of being an institution that pursues technical excellence and as one that would follow a supplier-and-customer model of the basic educational relationship.

Ina corporatised university, students are seen as customers or clients, a concept which follows logically from the visualisation of a university as a business producing and marketing knowledge in the form of vocationally-oriented courses. While not intrinsically a non-academic procedure, critics of the system have noted that over-use of student evaluations undermines academic standards by creating a need to please and to give ever-higher grades. In addition, there is the consequence that they can be used to undermine the integrity and even existence of disciplines to the extent that there is a threat to the traditional subject of university education.

Point 2: Education becomes a commodity

Second, Sir, with the corporatisation of the universities, and students are now being seen as customers or clients,the university education will become a commodity. Sir, are we running the risk of commercialising the education process, and making university education a privilege of the rich? Sir, this is the question on the minds of many Singaporeans, especially those in the middle-income level and below. Many are worrying that they will no longer be able to provide their children with a university education.

With the corporatisation of these universities, I hope the MOE can share with this House on how it plans to work with the universities to ensure and enhance the quality of education and to prevent university education from being commoditised, to ensure that university education remains accessible and affordable.

Third, technical excellence. As mentioned earlier, the corporate university has the predominating characteristics of being an institution that pursues technical excellence and as one that would follow a customer-and-supplier model of the basic educational relationship.

Technical excellence would appear to be a suitable criterion for the purposes of a university, but the problem that arises is that the use of 'excellence' as an absolute standard has the effect of placing techniques above ends or values. The result of this predominance of techniques over values is the decline of classical disciplines, which Dr Lily Neo has earlier mentioned, which can be seen occurring on a global scale. In the American context, this process has been recounted by many observers and has been repeated in many other universities. In the countries where universities have been corporatised, many classics departments have been eliminated but this has not been restricted to the humanities alone as it is also occurring in the classical science disciplines of chemistry, physics and mathematics, where, again, the pure is giving way to the applied.

The removal of disciplines from university curricula follows automatically from the conception that a university produces a 'product' that can be 'consumed' and, if this particular productive unit has no buyers for its product, then logically it should not continue to exist.

But, Sir, the process of allowing the market to determine academic priorities does bring with it problems of the credibility of standards. So we need to neutralise or minimise these harmful aspects of the corporatisation process by rejecting the idea that a university should follow market trends and reaffirm its special role as an institution dedicated to the pursuit of significant knowledge and lasting values.

Fourth, Sir, national and social responsibility. We only have four universities in Singapore, unlike in USA where there are both state-run and private universities. Our universities are responsible to our Government and Singapore, and they should be training first-class human resources for the country.

With the corporatisation of the universities, it means that the universities have now cut off their apron strings from MOE andthe Government and can now shake off their social responsibility towards Singapore. Sir, does it mean that the corporatised universities can now decide on their own ratio of intake of foreign students to local students? In this respect, can MOE share with this House on what will be the ratio of foreign students to local students intake after the corporatisation, and what are the measures that will be put in place to ensure that any change in this ratio of foreign students to local students intake by the universities will not be at the expense of local students?

Fifth, on university fees, Sir, I have spoken on this topic during the COS debate this year and I would like to bring it up again. After corporatisation, NUS would have the freedom in deciding its own fee structure.In January this year, SMU, a corporatised university, announced that their undergraduate tuition fees will be increased by 15% this August. After the corporatisation of NUS, the most concerned question on the minds of most students is whether the university is going to raise its fees.

Sir, I spoke to a number of students and asked them what is their view of corporatisation with respect to how it affect them, and the most common answer that I received was: "As long as the fees do not increase during my course of study in NUS and the lecturers who teach us are good in their teaching so that we

understand the materials being taught, corporatisation does not really matter a lot to us as we are only with the university for at most three to four years."

Sir, MOE mentioned that after the corporatisation of the universities, they would have the liberty to increase their fees yearly, but capped at 10% over the previous year's fees. I hope that MOE could share with this House on what are the kinds of percentage increases in university fees and the frequency with which the fees will be increased that students can expect after the corporatisation of the university.

If the fee increase is significant and the frequency ofincrease is high, I would urge the Ministry to consider scaling down the percentage of the fee hike allowed and stating that students once admitted into a programme in the university will not be seriously affected by a fee hike during their course of studies and stipulate this clearly in the Policy and Performance Agreement with the universities for avoiding the freedom of fee hike and increased burden on the undergraduates.

Point 6: Review criteria for financial assistance

There are currently a number of scholarships,bonds, loans,bursaries, financial assistance schemes as well as "study while you work" opportunities, to ensure that no qualified students will be denied entrance due to financial constraints. However, many students do not qualify for the bursaries and study loans and have ended up taking commercial loans, such that many of them are actually debt-ridden upon graduation.

Currently, eligibility of bursaries and study loans depends on the combined income of a household. However, the combined income does not represent the true affordability as the older siblings in a family could all be paying back their study loans. As a result, many students could be denied of their financial assistance. Sir, the keywords here are "usable income".

Sir, I hopeMOE and the universities will review the current criteria for eligibility for bursaries and study loans.

Point 7: Concerns of supporting staff in the universities

Lastly, I would like to highlight the general concerns of the supporting staff towards the university corporatisation. Sir, I recall that I attended the very first dialogue session that the university corporatisation committee held with the university staff. This very first session was attended mostly by the support staff with teaching staff forming only a very small percentage. When the Provost opened the session for Question and Answer, the very first question came from a supporting staff and the question was, "Will there be more outsourcing after the university corporatisation?" Other questions from the supporting staff are whether the more senior or mature staff will be retrenched after the corporatisation when it becomes more cost-conscious.

Sir, one main concern of the supporting staff is the likelihood of being retrenched in a cost-conscious corporatised university. Many of the support staff are concerned that the style of management in a corporatised university would differ significantly from that of the traditional universities and move towards a more robust or even cut-throat style, known as managerialism, suchthat senior staff after 30 or 40 years of service to the university, would be retrenched after the corporatisation.

The other main concern of the support staff is the emphasis of a corporatised university on short-term employment leading to a possible increasein outsourcing, where more temporary staffare being hired and used when necessary. Sir, with more temporary staff, it would be difficult to enhance a sense of ownership of these staff which are a stakeholder of the university towards the university. With an increase in outsourcing, this may lead to a drop in the service quality of the university. So I hope that MOE will work with the university to address these concerns of the supporting staff in the university.

Sir, in conclusion, I support this Bill.

5.50 pm

Dr Loo Choon Yong (Nominated Member): Mr Deputy Speaker, Sir,I am not as pessimistic as some of the previous speakers, but I share some of their concerns. Before that, I would like to declare that I am a member of the Board of Trustees of SMU, one of the corporatised universities.

To me, the role of universities is to produce graduates for commerce and industry and, also, to provide thought leadership for the country and the society. It should be a home for ideas, a cradle for creativity and, of course, in today's world, hopefully the home which produces a lot of intellectual property with which our economy will benefit from. We must remember that we have inherited a legacy of state-funded, state-run, and often state-employee kind of university. In that sort of environment, it is understandable that a lot of rigidities andbureaucracy would creep in and have crept in.

I have been a product of NUS or Singapore University. I had seen what it was like. I was a very active student. I have also served on the Board of SMU, a start-up university, starting from borrowed premises and have seen what innovationcan do.Many of you have talked about academic freedom. The Board of Trustees, in essence,has the confidence of MOE and has greatfreedom to innovate and test ideas.

For the next lap, and forusto survive as a people, as a society in a knowledge economy, we face a global competition for talents. I wonder whether people know that we have lost some of our brightest and best over the years to the Ivy League Schools and Oxbridge, and some of them have found jobs, settled down, never to return.We have lost some of these talents and our economy is worse off for it.

How do we have universities that will be innovative and responsive to the demands of society and of the world so that we can offer a good education that our own brightest and best will choose to stay, choose to study here and be trained here, perhaps do their post graduate overseas andreturn to work here, to live here, to sink their roots here? I hope that our universities, when they are empowered through this corporatisation, will enable Singapore to achieve that, perhaps even attract some of the brightest and best from other countries, from the region, and that will improve our talent pool and, some would say, even our DNA pool. We must ensure that our universities are free to compete, free to innovate and be able to respond in whatever way necessary. We should not tie their hands. We must enable the universities to be relevant to society andrelevant to commerce and industry. I am not so sure our state-funded and state run universities have done all that they could. If we were to free them up, I think they can do a lot more.

SMU has experienced a lot of changes in the five years since a group of private sector people who knew very little about professorial matters, but all successful in their private sector businesses, got together and with a lot of common sense and goodwill under the able chairmanship of the Chairman, Mr Ho. I think we have done well. In the first year, we were all very concerned. Nobody needed to tell us. All of us went to meet our grassroots and the students. We had many meetings andlunches to interact with the students. We interacted with the parents. Many of the trustees actually took classes. SMU is the only place where students could meet the likes of Kwek Leng Beng, Simon Israel and many others whom people only read about in the papers, who have been successful business leaders, and they are all better for their experience.

I would suggest that if the Government were to concentrate on appointing the right type of people to the Board, empowering them and giving them freedom to act, select them well-right thinking people, people with a deep sense of responsibility attached to Singapore, people who want to see Singapore do well, then I think these people would be prepared to spend time, and maybe work harder at their volunteer work than their real jobs, to make sure that our NUS and NTU will be excellent universities. And whether it is financial sustainability, academic freedom, staff retention and many, many other issues of a strategic nature, I am sure that a good group of people, Singaporeans, maybe in future the alumni of these universities,would be able to providethe leadership andsolution. I actually think that betting on a Board of maybe 20 Singaporeans with a heart for Singapore is safer than betting on one Education Minister, even one that is as able as the current one, or one Permanent Secretary, or one Vice-Chancellor, or one University President.

I hope the Government will clearly and unstintingly assure Singaporeans, and this is something which I share deeply with my colleague who has spoken earlier, that university education will always be affordable and accessible to as many Singaporeans as possible. We can be creative. We can have partial scholarship, half scholarship, three-quarter-scholarship, or whatever. We can have private scholarship. Many of us in this House, and many of us who have made it in Singapore, have made it because we have got subsidised education.

With that, Sir, I support the Bill.

5.55 pm

Mr Tharman Shanmugaratnam: Mr Deputy Speaker, first, I would like to thank the Members who have spoken - Dr Lily Neo, Dr Geh Min,Assoc. Prof. Ong Soh Khim and Dr Loo Choon Yong - for their very useful observations and for their support of the Bill.

Before I address their specific concerns and queries, perhaps I should just make a general pointonthe concerns about what this ogre of a corporate university amounts to, what it implies for product andcommercialisation, and so on. Let me start by saying that the best universities in the world by international acclaim are not corporatised universities, but private universities, much more than corporatised universities. They are private, havetheir Boards of Trustees, are typically not for profit, and entirely autonomous of Government. Whether we will eventually get there or want to get there is something we will decide several years from now. But we are making an intermediate step, a step which may very well be appropriate even for the long term, towards state-funded autonomous universities.

We are borrowing some of the lessons we have observed in the best universities in the world, which are private universities, but putting them in a framework of state-funded universities, publicly fundedandmeritocratic. Afather cannot give a phone call to the Chairman of the Board of Trustees so thathis son gets a place - that is the Singapore system.But we see no reason why we cannot, in a mainstream, publicly funded system, import the best practices of private universities, which are typically from the United States.There is no hint in these private universities, no hint amongst the alumni or students, or faculty, or employers thatthey are producing a commodity, or that they are commoditising their product.If they were to try to do that, their reputation would ebb.They know it will destroy their very attraction and reputation if they will try to commercialise their product. They know that the essence of the university lies in the quality which is difficult to measure, as Dr Geh Min says.They know that.

So we too will strive in various ways - whilst being efficient infinancial processes, whilst having to recover their costs -we strive to maintain that complete focus on quality,of faculty andstudents,teaching and research.We are moving away from an old model which I think has served us very wellfor our first phase of national development, but principally served us in achieving quantitative objectives, producing the technical and managerial manpower required for a rapidly growing economy, moving from that model to one that isgoing to better suit our objectiveof developing quality.As we move fromquantity to quality in education, in this instance,university education, we need a new model of governance. Because achieving that single-minded focus on quality will not be well served by a model in which the universities have to depend on the Government for key decisions and approval on a variety of issues concerning university governance. That is the essence of it.

We are taking a step that is bold enough to be meaningful, but we are not leaping into a yawning chasm. We are going in with our eyes wide open and there are lights along the way.We know this is the right direction to take. And, as we build up confidence, we will see how much further we can go in granting even more autonomy.

It is a process. Dr Lily Neo and Dr Geh Min raised various issues to do with this. Ultimately, many of their questions deal with this balance between accountability and autonomy, and we will evolve that balance. But we must start with the presumption that, as Dr Loo says, there are legacies. There are legacies of depending on Government directions and instructions and, more importantly, internal legacies that come about because of that external relationship between Government and university, and one cannot wish them away on Day One. We have to evolve.

That is why the Minister for Education has to appoint the Board of Trustees, to make sure that the right people are in place. Mr Ho Kwon Ping, Dr Loo and all the other extremely capable and motivated members of the SMU Board of Trusteesare there because we appointed them to their positions. And the same would be the case for NUS and NTU. We retain public trust in this process of evolution in the universities if the Government is appointing the right people to these positions. And I agree fully with Dr Loo that 15 or 20 good people on these Boards of Trustees will do a better job than the Government, either the Minister or a set of bureaucrats. And that is the whole idea.But they are not private universities. They are publicly-funded. So we have to ensure thatthe public trusts that its money is being well spent in the service of the nation.

Dr Lily Neo askedwhether the leadership teams are ready, and whetherthey are up to the task. The short answer is yes. In fact, we would not have made this major move of putting this legislation through Parliament if we did not feel we have good people in place. We have strong and active chairpersons on all our three university boards- Mr Ho Kwon Ping at SMU, Mr Koh Boon Hwee at NTU and Mr Wong Ngit Liong at NUS, all highly respected for their achievements in the corporate sector and as leaders in the general sense of the term. They haveenergetic, enthusiastic and passionate Council members andcapable management teams. One can already sense the buzz in the faculty as wemove into the autonomy phase.The people are in place. But that is not good enough. We need to forge a new culture. There is work to be done within the universities to forge a new internal culture, with the right interplay between top-down strategic initiatives decided on by the top management and the Board of Trustees, and the bottom-up ideas that have to bubble up from the staff or,as Dr Geh Min says, even from students. We have to find that right interplay, and each university will have a different model of the mix between top-down and bottom-up initiatives that will define its own culture. But it takes time to evolve that. And I am confident that the people we have in place are keen to evolve that culture, now that we are freeing them up from the direction of the Ministry.

What are the key components that we will have to look atand craft very carefully in achieving this right balance between autonomy and accountability?

First, the Policy Agreement which sets out the Ministry's strategic vision, overall directions for the development of the university sector, that will guide the universities. It is not there to cramp the universities, otherwise we will just be defeating the whole purpose of this exercise. It is really there to provide signposts for each of the universities, signposts that they would use when they formulate their own strategic goals and objectives. This will make sure that thepath is well lit as they go forward.

MOE will work together with the three universities in articulating the policy parameters in the Policy Agreement within which the universities must operate, such as the admissions framework, tuition fees framework, how MOE will fund the universities both for teaching and research, and so on. The Policy Agreement sets out policy objectives which MOE cannot run away from. The Government cannot run away from this because we are funding the universities 75% of undergraduate education costs. We are not just talking about the private universities, but very few of the state universities internationally, eg, the Australian universities that one or two speakers mentioned, the American state universities, few come anywhere close to receiving 75% state funding. And it puts the responsibility on the Ministry to ensure that this is public money that will achieve national objectives. So, we need this Policy Agreement, and the challenge is to craft it in a way that does not cramp the universities but keeps them focused on our ultimate objectives.

Beyond what we specify in the Policy Agreement, it is for each university to set its own institutional priorities and strategies and, most critically, how it will manage its academic affairs, that someMembers have touched on.Howfaculty members are hired, fired and promoted, whom to collaborate with internationally, both for student exchanges and research, etc. The whole range of academic issues that arethe flesh and blood of a university are really matters for the universities to decide, under this new policy framework. They will also have to decide on operational matters, such as the merits of whether to buy expensive chairs which have a 10-year warranty period versus less expensive chairs that have a shorter warranty period. These are matters for the universities to decide, not matters for the Minister to direct them on. If the Minister were to get into each and every one of these micro matters, then again, we are defeating the whole purpose of the exercise.I am confident that the universitieswill be able to work outa sensibleprotocol, a financial, managementand internal accountability protocol, to make sure that they are on the right track.

The university's performanceis reviewed annually, andthat is, again, good practice. It is not unique to us when we look at some of the small European countries that are moving in the same direction. There is a 5-year Performance Agreement that is set out which gives the universities latitude toforge their own policies and directions, but it is subject to annual review because we are talking about substantial amounts of public money at stake. We fund the universities 1%of GDP. That ismore than most, or any other country I can think of.

We will make sure that the way we craft these agreements on specifics, ie, Policy Agreement as well as the Performance Agreement, will not be cumbersome.I agree with Dr Geh Min that we should not be too focused on a narrow metric. It is useful to have some metrics. We cannot have the whole thing unmeasurable and look for something called an "X-factor" which we have to guess at. We need some measures. But we do not need to beexcessively focused on them, whether it is on publications ornarrow measures of research performance, for instance. We have got to allow for some fuzziness in interpreting the data. I quite agree with that. But we do need to measure some things and need annually to decide how well they are doing relative to the targets which they have set and know whattheir plans are to address gaps or to even go beyond their original targets. That is a useful process.

MOE will not craftthe Performance Agreement on its own. We will do it jointly. In fact, the universities take the first crack. This is what they propose, these are their ambitions, they come to us and we then have to agree to it.It is a joint process and there will be a lot of consultation involved.

The Quality Assurance Framework for Universities (QAFU), which I mentioned earlier, is not something new. It is in place. It is not unique to us. It is in place in the best universities around the world, including state universities. But there are different models, and theAustralian model is somewhat different from what we see in the UK and Europe. And I think we have a workable model in Singapore. It will assure Members for me to say that the universities themselves have found the QAFU process - so far, just NUS and NTU have been assessed or evaluated - to be extremely valuable. It has allowed them to take a step back and look at what they are doing, look at their priorities and the gaps in quality. We usually need someone coming in from outside to take a fresh look at things topoint out whatwe do not notice because we are looking at them every day. The university management and their boards have found this to be a very valuable process, as has the Ministry. So, I am confident that it is working well. Again, we have chosen the people on QAFU ourselves. The Minister appoints the members of QAFU because we wanted to make sure the right people were there - eminent, independent, credible internationally and locally.

It may well be that, some time to come, we could do something like the Australianmodel where the Minister does not appoint the members of QAFU. Let us see how well the process works first, so that we have got enough public trust and confidence in this process of autonomy.At this point, our processes are working quite well.

There is a set of issues which Dr Lily Neo and, to some extent, Assoc. Prof. Ong Soh Khim have raised on access and affordability. I will make the general point that we should notfear this corporatised animal too much. It is not a drive towards commercialisation or commoditisation. In fact, on the contrary, the highest quality in the world is found in the private universities, and what we are doing is borrowing some of those lessons. I am not sure we call it an "X-factor", but there are very useful processes to be borrowed, and to do it in a publicly-funded university framework, which we think we can. But I would assure Dr Lily Neo and this House that the Ministry is committed to ensuring that there are enough university places for all qualified Singaporeans, even as NUS and NTU join SMU in becoming Autonomous Universities. We are committed to that objective, and it will be reflected in our Policy Agreements with the universities.

As for foreign students versus local students, there will be no trade-off, because wewill keep to our commitment to providing sufficient places for all qualified Singaporeans. On top of that, the universities will want to take in foreign students. Why do they do it? Because it has something to do with the "X-factor". It has something to do with the diversity and richness of the student body that is essential to becoming a great university. Our universities are Singapore universities, whose objective is to serve Singaporeans and our national priorities. But in order to do so, they need an international orientation. In order to serve Singapore and Singaporeans, they will need to source for the best faculty and the best students they can find internationally, on top of providing adequate places for all qualified Singaporeans. It is a very important point.

Firstly, if we do not take this international orientation,we willnot be able to attract the best Singapore students to begin with.

Secondly, we will not attract the best faculty, Singaporean or foreign. And if we do not attract the best faculty, our reputation as a university will go down. That is almost a mathematical identity. And if our reputation as a university goes down, the Singaporean students who go to the university will be badly served.

So we have got to open ourselves to the best Asians, the best people from all over the world,eastern Europe, Iran, wherever. So they come in and provide their diversity and richness that benefit the Singapore students, spur them on, attract the best faculty, and give the university something that we think is part of the X-factor that Dr Geh Minspoke about.

I would emphasise also, although it is obvious, that the corporatised universities will be not-for-profit institutions. Their fundamental missions would be unchanged. If you look at MIT, for instance, a private university, its mission is not about making profit butserving the United States. As a private university, they take it upon themselves to serve the interests of the United States. And they do so by attracting the best students from all over the world. That is the way they do it. Our three universities will be not-for-profit institutions, unchanged fundamental mission. And their mission is toserve the public and national interest.

I do not see them having to raise tuition fees excessively. In fact, I do not see a correlation between being corporatised and raising tuition fees. Whether they are corporatised or not, they would have to grapple with natural cost increases that happeninhigher education all over the world. But they willhave to justify their fee increases based on cost increases as well as improvements in quality. And they willnot be able to take in less qualified students who are prepared to donate or pay their way in. This is something that would be enshrined in the Policy Agreement - that admission willbe based on merit.

On financialassistance,we have a whole array of schemes present. In fact, there are about 20 financial schemes presently in our universities for financial assistance. The question was asked about very needy students. They are also served, quite apart from the Tuition Fee Loan scheme which a significant proportion of students,over a third of our students, take advantage of. We also have students who cannot pay the remaining20% -but from next year, we are going to raise the Tuition Fee Loan to 90% of fees sothey only need to pay the remaining 10%- there will be some needy students who do not have the resources to pay that remaining 10% and they can apply for the Study Loan scheme, which allowsthem to fund the remaining 10%.On top of that, we have got bursaries available to students on a means-tested basis.We also haveschemes outside the universities offered by foundations, various professional organisations as well as schemes that operate at the local community level. So we will make sure that there is no lack of financial schemes and resources available for qualified students to be able to further their university education even if their parents cannot afford it.

We are improving some of our processes. Each of the universities is now putting in place a dedicated student financing office to help to look at each student himself or herself, what is the family situation, how can we help them, whether they should do some work in the university to earn a little money while giving them a loan ora bursary. We will look at the package in entirety.This is the way the best universities do it as well- a dedicated student financing office.

Willthe universities be burdened by the servicing of their loans and bond issues, a question which Dr Lily Neo posed. The basic reason why we have moved towards a framework in which the universities, like other statutory boards, go to the capital market to fundcapital expenditures is one of efficient use of capital. It allows Ministries and the statutory boards to take into account the market pricing of the cost of capital, and it leads to a certain discipline. The Ministry will continue to provide a grant for a portion of all the universities’ strategicprojects.40% of the cost of theseprojects will be funded by the Ministry’s grant and the remaining portion they will fund by having to borrow. The universities have embraced this newfunding arrangement and are now adopting good market practice in borrowing tofinance the capital cost of their building and infrastructure projects. But there will not be undue financial burden on them in repaying the loan because MOE will, through our recurrent funding, continue to fund the universities for a substantial portion of the loan repayments and interest charges. So we are subjecting them to the discipline of the capital markets, something which provides us useful information as well, giving them the incentive to get the best possible rates on the market, but a good part of the servicing cost will continue to be funded by the Ministry.

Prof. Ivan Png has askedwhat happens toall the academic governance provisions that are currently in the NUS constitution once we rescind the constitution. Let me just clarify that immediately. The First Schedule of the existing Constitution, which comprises all these academic governance provisions, will be transferred, with some modification, to the M&A of the universities. So we are not getting rid of all these provisions. It is just that there is no need to put them in the new Acts.

Academic governance is a key issue. Dr Geh Min and others talked about it. In fact, this isprobably at the heart of what makes a great university. Having faculty membersthatenjoy interacting with students, including undergraduate students, and are passionate about the work they themselves are doing, is at the heart of a great university.

These will be matters that the universities will have to decide for themselves and find the right internal culture for.There are several key issues. First,what you teach and howyou teach it. These are key issues for the Senate, for the top management, for the Deans and the faculty members to work out. Some universities have decided in a fairly top-down fashion, in others, bottom-up. They have to find their own identity in this respect. But the key issue, which relates to one of the questions that Dr Lily Neo posed, is how do you assess the faculty and how do you promote them.That is a critical success factor in the best universities in the world. If you look at the top American universities, a highly disciplined system of tenure, with considerable selectivity on who gets the tenure, is the source of their reputation andsuccess in attracting good faculty - in motivating young, bright faculty, who know that they are not lookingup at anold seniority-based structure, but one based on merit and merit alone,and in ensuring that they then attract the best students to come because they know that here is a vibrant faculty being renewed - by giving some assurance of stability to the best minds. So developing this disciplined system of tenure is a critical area for the universities to decide and this is an area not just for the Senate,the management and the faculty of the universities, but also for the Board of Trustees.

Thirdly, another very important issue and one where there is no iron law isthe question of whether you develop your own faculty or whether you hire from outside, mid-career.There are different models. If you look at Harvard, it thrivesona model of attracting the best from wherever they come from, mid-career. MITis a very different model. It develops its own junior faculty, hires very bright young people to join its faculty, and then tries to keep them and develop them. Our universities will have to find the right model themselves - this balance between developing their own talent and recruiting mid-careerpeople from other universities.

Prof. Ivan Png mentionedWarwick.Frankly, I would not wring my hands on this issue. Academic governance was not the key issue at all in Warwick’s decision not to respond to EDB’s offer. It was essentially financial issues that they were concerned with. A few faculty in Warwick were worried about academic freedom which of course makes very good noise in the international media.

I would say, quite categorically, that our universities facecompetition for talent. They will not succeed in this competition for talent, for faculty as well as students if they do not respect academic freedom. Because people can move.

How are they doing? Not too badly. Over half of our universities’ faculty are foreigners. And this applies as well to the social sciences whichI think is the area where we have got more of the grey issues that Dr Geh Min referred to, compared to medicine or sciences or engineering. In fact, 62% of NUS’ social sciences faculties comprise foreigners. I dothink the rankings are relevant. Yes, they are not the core of whatwe are trying to achieve. But the rankings cannot be so far divorced from the X-factor. And I think it is really impressive how NUSis amongst the top three universities in Asia, together withBeida and Todai in Japan. It does mean something. In fact, in the social sciences, it ranked number one in Asia.I agree that we donot look at it year by year,and bea bit too fast about the number. But they are doing very well andthey are the top social science university in Asia, ahead of ANU, and University of Tokyo. It must mean something.They willnot be there ifthey did not have academic freedom in the social sciences.

Academic freedom is not about something imposed on the universities,it is not something which the universities urge the Government to accept, but is an obvious essential if we want to make universities great. It is not an absolute. And I say thatquite straightforwardly, without any defensiveness. Race and religion are matters in which we will not want to see either academics or any member of the public stirring up discord. I am not sure we call it an OB marker, butwe have always been very clear about thisand it has not bothered the universities. They have understood that this is a fundamental tenet of Singapore society. It is what allows us to escape the problems we see in more parts of the world than we would have thought possible, and we intend to keep it that way.The universities need not be defensive about respecting these fundamental tenets even as they become Autonomous Universities.

Can we improve? I think we can. I do not think there is enough policy research on economic and social policy issues in Singapore. I think that the quality and calibre of policy research can be improved. It does not require a liberalisation of boundaries or new rights and freedoms to be given to the universities. They have it. I will be very keen to see how we can develop a higher quality of research on policy issues. But they are doing well so far. I really must emphasise that, whether it is in the arts and social sciences, and quite obviously, in the sciences and engineering, they are doing well,and they are internationally recognised as such.

6.28 pm

Mr Deputy Speaker: Order. Mr Tharman, I have to interrupt you to move the exempted business motion.