NANYANG TECHNOLOGICAL UNIVERSITY (CORPORATISATION) BILL

Column No : 1910

NANYANG TECHNOLOGICAL UNIVERSITY (CORPORATISATION) BILL: Order for Second Reading read.

6.35 pm

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

The House has just debated on the National University of Singapore (Corporatisation) Bill. The Nanyang Technological University (Corporatisation) Bill is similar to the National University of Singapore (Corporatisation) Bill and has the same objectives of effecting the University Autonomy, Governance and Funding (UAGF) recommendations. The Nanyang Technological University (Corporatisation) Bill is to effect the corporatisation of NTU as a not-for-profit public company limited by guarantee in mid-2006. My Ministry will continue to provide strategic directions to the University and ensure that NTU meets national strategic objectives. The rationale and considerations for the Nanyang Technological University (Corporatisation) Bill have been elaborated in the House's deliberationson the National University of Singapore (Corporatisation) Bill. I have nothing further to add.

Sir, I beg to move.

Question proposed.

Dr Lily Neo: Mr Deputy Speaker, Sir, what I spoke earlier on the National University of Singapore (Corporatisation) Bill is also applicable to the Nanyang Technological University (Corporatisation) Bill. Therefore, I would not repeat myself.

Mr Ang Mong Seng (Hong Kah): (In Mandarin) : Mr Deputy Speaker, Sir, since its founding in 1955, the Nanyang University has gone through many changes. It has undergone three phases of development. The first phase started when the Nanyang University was founded in 1955. It was a university which was fully funded by the people. People from all walks of life were very supportive in raising funds for the university. Hawkers, trishaw riders, coolies and businessmen alike, contributed generously their hard-earned money to fund the Nanyang University. It was a truly people's university. The people then had one common aspiration,ie, their children would be given the opportunity to be educated in a university with Chinese Language, culture and history background, so that when they graduated, they would be able to contribute to Singapore's development.

The second phase of the university started in 1981 with the inauguration of Nanyang Technological Institute. Ten years later, it merged with the National Institute of Education to become Nanyang Technological University, thus commencing its third phase of development. With the proposed corporatisation, it enters its fourth phase of development.

Many people are worried that, after corporatisation, the university would be listed on the Stock Exchange. I believe that even with corporatisation, the emphasis should be on education and not on profit-making. I hope that the Government will give the assurance that the university will not be listed on the Stock Exchange after its corporatisation. As a matter of fact, no university from any part of the world is listed. So we should not be an exception. After all, education is a long-term project. We should not put our focus on short-term interests alone.

On the standard of the university, it is something that we are concerned with. The Government should also continue to support the university financially to ensure that the university would maintain a certain standard. After corporatisation, the NTU willhave more autonomy and flexibility to determine its policies, direction of development, style of operation and methods of fund-raising. Of course, autonomy comesat a price. My main concern iswith the fund raising aspect. Although the Government will continue to support the NTU financially even after corporatisation, it has also stated categorically that the university should look for other sources of revenue to fund its operations. I am worried that NTU may not be able to attract enough donations to maintain its operations.

Normally, institutions of learningaresupported by their alumni and private enterprises. The question is: will the earlier batches of Nantah Alumni and NTU alumni enthusiastically support the NTU after its corporatisation? Therefore, I hope that the Government should continue to give more generousfinancial support to the NTU for at least the next five years so that it will be able to maintain its high level of academic excellence, in order that it will continue to enjoy its prestigious position internationally. I hope that the ranking of the university will be even better, after its corporatisation.

In future, will the university increase its enrolment to get more revenue? Although the university will be a non-profit organisation, even after corporatisation, I am sure it will be subjected to much more pressure to balance its income and expenditure. Many people are concerned that with an enlarged enrolment, whetherits standard would be affected.

At the moment, the enrolment of NTU is 26,000, which is rather high. Let us compare it to, say, Oxford and Cambridge University of the UK. Each of theirenrolment is only 17,000. Harvard University has an enrolment of 19,000, and MIT has only 10,000. Apparently, the top-ranking universities in the world normally do not have enrolments of more than 20,000. So if NTU wants to be one of the top universities in Asia and maintains its standard of excellence, I think it should be very careful if it wants to enlarge its enrolment, and ensure that it will not lower its academic standard. After corporatisation, if the university has to enlarge its enrolment to ensure that it has the financial resources to sustain its operation, I suggest that NTU reserve more places for local students. As I know, many students in Singapore are unable to get into the local universities and they have to go overseas to study. This will result in a loss of talents and, more importantly, it will make the financial burden of their parents even heavier. We must ensure that there are enough places for our local students. This should be one of the top priorities of the NTU.

One other point is that if the NTU is able to attract more foreign students who come here and pay unsubsidised fees, they will generate a lot of revenue for the university. At the moment, university fees paid by foreign students are only about 10% more than what our local students are paying. Local students pay $5,650 and foreign students are paying only $6,220. The difference is only 10%. This means thatSingapore is subsidisingthe foreign students very generously. According to statistics given by the university, the average subsidy per student, local or foreign, is about $13,000 per year. With 20% of NTU's students being foreign students, it means about 5,000 foreign students are being subsidised by the Government to the tune of $65 million per year, and that is certainly a lot of money! I hope that some adjustment could be made to reduce our subsidies for foreign students, and give better subsidies to our local students. This way, our local students would be paying lower fees.

Let us compare the fees charged by other universities around the world for their foreign students. From the table I circulated earlier, we can see that in the United States, foreign students pay very much more than their local students. In Oxford and Cambridge Universities, foreign students pay

£12,000and local students pay only £3,000. It is four times more. In Melbourne University, Australia, local students pay about $9,000 while foreign students pay as much as S$30,000. The difference is more than three times. I suggest that the Ministry of Education review the fee structures for foreign students.

After corporatisation, NTU will have more space to develop its strong points and specialities. However, the university should also be looking after its interest, not just the financial interest, but also its curriculum anddisciplines that it offers. In order to increase its revenue, the university may increase more places for the money-making or popular subjects, at the expense of less popular subjects such as Chinese, sociology, psychology and the other humanities.

Take Chinese Studies, for example, Nantah was well-known for its teaching of Chinese and it has a very strong historical background in the teaching of Chinese. With the Chinese language becoming more and more important today, I think NTU should leverage on its forte and competitive edge, and promote the learning of Chinese. With China's rapid economic development, Chinese is getting more and more important and economically significant. People from all over the world are learning Chinese. Since Chinese is NTU's speciality, it should go on to develop disciplines related to Chinese, so as to satisfy the needs of the international market for the learning of Chinese, thereby making Singapore a regional hub for the teaching and learning of Chinese.

Another thing that worries me is the increase in university fees. After corporatisation, the university can increase its fees by up to 10% every year. Even if the increase is less than 10%, it will be a heavy burden to the students and their parents. Some of them may have difficulty affording it. So I would urge the Ministry of Education to increase the fees only once in three years rather than once every year. Our inflation rate is about 3% per year, so 10% in three years is a reasonable adjustment. Most families should be able to afford it.

Finally, with the aging of our population, I hope that the Government will provide the university with some incentives to encourage the university to provide some courses suitable for the senior citizens to realise the ideal of "lifelong learning". Some relevant subjects like law, social sciences, health, etc, should be offered to our senior citizens. In Taiwan, there is a so-called "university-in-the-air". This will provide people from all walks of life with the opportunity to experienceuniversity education. Recently, when I was in Australia, I observed that they had this so-called "University of Third Age". In NTU, if we have such courses for the senior citizens, I am sure it would attract a lot of former Nantah graduates and some of its supporters who had contributed significantly to the founding of Nantah during their younger days, and provide them with the chance to realise their dreams. It would also build up the sense of belonging to the university. This will be helpful for the university’s future fund-raising activities. At the same time, the university will be able to repay the alumni and the supporters for their past support.

I support the Bill.

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I would like to thank Mr Ang Mong Seng, firstly, for his comments and observations and, secondly, for the specific queries that he has raised on the NTU (Corporatisation) Bill.

Let me first reiterate what I have said in connection with the NUS Bill,thatcorporatisation will not lead to institutions aimed at making profit. These will be not-for-profit institutions. That will be unchanged in their mission of serving the public andSingapore's strategic objectives. So there is no prospect anytime in the future of them being listed on the Exchange. They will continue to receive substantial public funding. But through autonomy, we think there is amuch better chance of them being able to retain and build on their stakeholders' support, including, in particular, the alumni, whom Mr Ang Mong Seng has referred to.

Next, on the issue of fees and whether we should be trying to garner more fees from foreign students. First, let me say that the Ministry and the universities are indeed reviewing tuition fees for foreign students. But we have to make sure that we remain competitive, that we are able to attract the quality of students that we want. I certainly hope for the day in which the universities will be able, through their reputation and branding, to attract the best foreign students with the fees that MIT and Harvard charge. But we are not there yet.So we will have to make sure we move in sensible steps,make sure that we are able to attract the best students and charge a price that the market is able to bear.

But the fundamental point,thepoint that I will have to restate,is that it serves the interests of our local students for us to have NUS and NTU taking an international orientation, so that we can get the best students who in turn get the best faculty, who in turn give the university the reputation and quality that local students deserve. This is a fundamental point. If we have a closed-door policy or a policy that prices out all but the richest foreign students, it is local students and Singaporeans who will be the worse for it.

Our local students' fees are, in fact, very competitive by international standards. I am not just comparing this withthe foreign student fees of various universities.Even if you compare local students' fees in Australia, UK or the United States, Singapore universities charge far less.Since Mr Ang Mong Seng circulated a table, I will give some data of my own in this respect. If you look at American state universities-and I am not even talking about the private universities -for students who are within their own state, the average cost - and this is an average amongst a broad dispersion of universities -is about S$8,400. If you come from outside Michigan and you want to attend the University of Michigan, you pay about US$20,000, which is a far higher sum.Those are American citizens whocome from outside the state. And these are state universities. For private universities, a different order of magnitude altogether. Typically, you are talking about US$25,000-US$35,000 a year, regardless of where you come from - in state, out of state, foreign or national. Those are the US rates. For Australia, foreign students, of course, pay a very substantially higher fee than what we charge here. Their local students also pay a higher fee ofabout S$7,800, and this is despite the fact that Australia makes it a priority to subsidise its local students. In the United Kingdom, starting from next year, it will be about S$9,000 for their local UK citizens. So we are not expensive by international standards, and the reason for that is that the Government funds 75% of the cost of an undergraduate education, and we intend to continue doing so.

We also intend to continue ensuring that the universities have internal processes that ensure discipline on cost increases, andthey are able to justify fee increases based on real increasesin costs and improvements in quality.We are not going to take our eye off this ball.

Mr Ang made useful points on the importance of maintaining this tradition in NTU, in particular, of Chinese studies. This also applies to some extent for NUS which sees this as anopportunity - building up links with China and developing expertise on China. But for NTU in particular, I think it allows it to draw on the tradition andsupport from a community that is already with NTU. NUS has already formed some meaningful programmes of exchanges and joint programmes with Chinese universities, and NTU is doing the same. Quite apart from their partnerships with Chinese universities, they are also developing their internal curriculum. The Confucius Institute at NTU, which was jointly established by the Ministry of Education in China and NTU -in fact, it isthe first example of collaboration involving the Chinese Government witha Singapore university - is up and running, conducting short-term courses, and it will be officially launched when it moves to its new premises at One North in July next year.

Basically, this is something which we will have to leave the universities to judge, as Autonomous Universities, but they know that there is market demand, there is advantage in maintaining some specialisation in China, which is emerging to be a major player in Asia.

Mr Ang also suggested that NUS and NTU set up special courses forsenior citizens or mature students in general, like some universities abroad have done. I think this is a useful suggestion which the universities should look more carefully at. Again, this is something which they will have to decide on using their autonomy. But I think it is a useful suggestion for them to look at.

So, Mr Deputy Speaker, I think I have addressed the main points.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam].

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