MOF Committee of Supply Debate 2019 by Second Minister of Finance Ms Indranee Rajah28 Feb 2019
A. USE RESOURCES EFFICIENTLY AND EFFECTIVELY
A1. Mr Chairman, I will now address Members’ questions on how Government manages our spending, and how we support businesses.
A2. Ms Foo Mee Har and Mr Saktiandi Supaat asked how the Government manages our infrastructure and info-communications technology (ICT) spending in the long run, and how we ensure that these programmes deliver value to citizens and businesses.
Manage Infrastructure and ICT Spending
A3. Over the past five years, total development expenditure amounted to $91 billion. This was 26% of the Government’s expenditure. On average, we expect that development expenditure will increase in the coming decade as we continue to invest in public infrastructure and adopt ICT to meet citizens’ needs and support our economy. We therefore place significant emphasis on identifying opportunities for cost savings and achieving better outcomes in these areas.
A4. Before we embark on a project, there is a robust process to consult stakeholders, and assess the need for the project, the broad scope and timeline, and the balance of benefits over costs. For a major project like the Changi East development, the Cabinet must first be satisfied of the need for the project before it can proceed further. We also conduct public consultations on our future infrastructure plans, such as the URA Master Plan and the Land Transport Masterplan.
A5. All public infrastructure projects above $100 million are also carefully reviewed by a team of architects and engineers within MOF, before approval is granted by the Development Planning Committee or DPC comprising three Cabinet Ministers. Projects above $500 million are put through the Gateway process, where they are subject to additional scrutiny by the Development Projects Advisory Panel that includes senior public officers, academics and industry practitioners with deep technical expertise. Over the past 5 years, these reviews have led to design improvements and generated savings of about $3 billion or 6% of the initial estimated value of the projects reviewed.
a. In one review, the design for an MRT station was improved such that two proposed underground links and entrances could be brought to ground level, yet without compromising the objectives of commuter accessibility and connectivity. This redesign reduced the amount of utility diversions, underground excavation, and tunnelling works required, leading to estimated cost savings of $54 million.
A6. All major government ICT projects are reviewed by a committee of experienced public sector officers and ICT practitioners before approval. This committee reviews the project scope and system design to ensure that our ICT projects are cost-effective and well-integrated across the Public Service. This has helped us save almost $800 million, or over 5% of our ICT spending, over the past 5 years.
Improve Existing Services and Programmes
A7. Besides reviewing projects before granting approval, the Government also monitors existing services and programmes post-implementation. We actively seek ways to enhance cost-efficiency and outcomes. Improvements can arise by leveraging technology, improving processes, and collaborating across agencies.
a. For example, the National Library Board now uses robots and automatic sorting machines to help staff and volunteers with shelving work. Library users can also check out books without queuing by using a mobile app, and pick up reserved items at self-service lockers outside library operating hours. These have helped to achieve cost savings of $2 million annually, in addition to bringing convenience to citizens.
b. Agencies also tap on each other’s expertise to co-develop and co-deliver programmes that bring about better outcomes for citizens. For example, PSD mentioned in its COS that agencies at Our Tampines Hub (OTH) will be coming together to cross-train counter staff for better service to citizens. Besides counter services, People’s Association, Sports Singapore, and the Health Promotion Board are also collaborating on joint programming opportunities at OTH. Just last Sunday, they organised “The Greater Singapore Workout” for more than 200 participants of all ages, achieving community bonding and healthy lifestyle promotion objectives simultaneously.
Build Strong VFM Capabilities and Culture
A8. Finally, we are deepening capabilities in our agencies to ensure that spending translates into good outcomes, and building a stronger culture where every public officer contributes towards better use of resources.
a. Such efforts are bearing fruit, with agencies seeking ways to achieve greater value-for-money in their work. For instance, when constructing the Thomson-East Coast Line, LTA officers worked with the Management Corporation of a condominium to use some space within the condominium’s perimeter temporarily, so as to reduce the number of traffic diversions required from ten to three. Residents experienced less inconvenience as construction time was shortened by 2 months, and this also generated cost savings of about $3.6 million. Such collaboration between public agencies and citizens is a good example of partnership at work.
b. Value-for-money lessons learnt from one agency are shared across the Public Service so that they can be applied by others. MOF also guides agencies in applying different methodologies to quantify costs and benefits of their programmes, and setting outcome-based indicators to monitor their effectiveness.
ENHANCE POLICIES AND PROCESSES TO SUPPORT BUSINESSES
B1. Mr Henry Kwek and Mr Liang Eng Hwa asked how government procurement policies support innovation and enterprise in addition to ensuring value-for-money in government spending.
B2. Achieving value for money remains an important criterion in government procurement decisions, but it does not mean awarding contracts only to the lowest quote. The Government has adopted price-quality evaluation as the default approach in tenders, where a balance of price and quality factors are considered. Today, about half of government tenders are not awarded to the lowest bidder.
B3. The Government has also stepped up the adoption of more outcome-based procurement, where tenderers have more flexibility to propose innovative solutions to meet the desired outcomes.
a. For example, JTC adopted an outcome-based security contract for one of its business parks.
b. As a result, JTC achieved better security coverage for the estate, alongside 25% security manpower reduction and projected cost savings of up to 40% over the contract period.
B4. Apart from being open to good ideas and solutions, we also continually seek to make it easier for SMEs to participate in government procurement.
a. Last year, we removed the requirement for companies with less than $5 million turnover to submit audited accounts when applying for Government Supplier Registration (GSR). We will now accept unaudited financial statements if the company’s Director certifies that their financial statements are accurate and true. About 3,900 GSR registered suppliers have benefited from this.
b. This year, we will increase the upper limit for Quotations from $70,000 to $90,000. Smaller companies and start-ups without GSR can capture higher-value government projects through Quotations, which come with simpler contractual terms and conditions and tend to be processed more quickly. We hope that many among the 12,000 suppliers who participate in quotations but not tenders will benefit from this.
B5. I agree with Mr Kwek and Mr Liang that the key here is balance. Government procurement can help to give a boost, but fundamentally, for companies to grow and be competitive, they must be innovative and offer value for money solutions.
Corporate Regulatory Environment
Digitise and Simplify Business Processes
B6. Mr Liang asked how Government taps on digital technology to streamline corporate regulatory requirements. The Government has continued to simplify and digitise corporate regulations. Over the past two years, a number of improvements have been made.
a. For example, we reduced the number of steps in the annual returns filing form for eligible companies. The simplified form is available on ACRA’s mobile app and the online BizFile+ portal. Company directors and secretaries can receive SMS reminders to file their annual returns and meet statutory obligations on behalf of their companies.
B7. Mr Liang’s suggestion on virtual Annual General Meetings (AGMs) is a good one. Fortune 500 companies like HP Inc and PayPal have adopted virtual AGMs, citing reduced cost. This year, we will review the Companies Act to expressly provide for the use of digital means for companies to conduct meetings and interact with stakeholders.
Raise Businesses’ Awareness of Statutory Obligations
B8. Mr Liang also asked how Government can help small enterprises and freelancers understand their statutory obligations.
a. ACRA’s Directors Training Programme has helped new and aspiring company directors understand their statutory obligations under the Companies Act.
b. In April 2018, ACRA worked with CPF Board, Enterprise SG, IRAS, MOM and the Singapore Institute of Directors to provide an online training programme for directors.
c. Company directors can access the online programme anytime, anywhere, and more than 2,500 have done so since its launch. We have received positive feedback that the programme has helped company directors better understand their roles and responsibilities.
B9. Some businesses may prefer to receive help in person. The Taxpayer and Business Service Centre located in Revenue House offers businesses government services by co-locating taxpayer services, CorpPass, ACRA and Enterprise Singapore services together. Businesses can meet staff from ACRA, IRAS, Enterprise Singapore SME Centre and CorpPass there for help with their questions about regulations and tax obligations, amongst other issues.
B10. Mr Saktiandi asked about Research and Development (R&D) spending. We take a portfolio approach. We support research, development and innovation through different schemes, where we also require co-payment in order to keep them relevant. Where the innovation has a long horizon, are higher risk, or involve manpower development like PhD training, then the Government takes a bigger role. In R&D, we invest in areas that support current and future competitiveness, like digital technology, advanced manufacturing, urban solutions and sustainability, and health and medical solutions.
C1. So in conclusion, Mr. Chairman, the Government will keep its focus on ensuring fiscal prudence, using resources efficiently and effectively, and enhancing our policies and processes to support businesses. We will continue to partner citizens, businesses and the community to achieve good outcomes, with the resources entrusted to us.