Speech By Mrs Lim Hwee Hua, Minister Of State For Finance And Transport At The Singapore National Co-Operative Federation's New Year Reception On Thursday, 25 January 2007 At 7.15 Pm At The China Club

Mr Seah Kian Peng

Chairman, SNCF Executive Council

Pak Adi Sasono

President, Dewan Koperasi Indonesia (Dekopin)

Distinguished Guests, Ladies and Gentlemen

Good evening and Happy New Year to all of you. Thank you for inviting me to this year's New Year Reception organised by the Singapore National Co-operative Federation (SNCF).

Humble Beginnings

2. Much has changed for the co-operative movement since the first co-operative, in the form of a thrift and loan society, was established in Singapore 82 years ago. Over the years, co-operatives have evolved from offering its members loans on reasonable terms to providing members with services ranging from childcare, insurance, housing, supermarkets and food courts. In some areas, for instance supermarkets, the co-op is even regarded as one of the major players in the industry.

3. This expansion in the services provided by co-ops in turn fuelled the growth in their memberships. So, from a mere 32 members back in 1925, the co-operative movement can now boast of a membership exceeding 1.8 million.

Social Roles of Singapore Co-operatives

4. While co-ops have grown, the spirit of the co-operative movement has remained largely unchanged. Today, I still see the same values that help make Singapore the nation that it is today, namely the values of self-help, self-responsibility, democracy, equality and solidarity. It is especially heartening to note that over the years, the co-operative movement has moved beyond helping its own members to helping the community at large.

5. A good example would be the lead taken by the co-ops in the NTUC sector in 1994 to help cushion the impact of the Goods and Services Tax to Singaporeans by stabilising the prices of daily necessities.

6. The Government will be undergoing another exercise to increase the GST rate from the current 5% to 7%. The decision to increase GST is not an easy one and is motivated by the need to prepare for an aging population, provide greater assistance to our lower income citizens, and at the same time invest for our future. It will also provide us with the flexibility to reduce direct taxes, for example corporate tax, so as to remain competitive.

7. There is naturally no good time to increase taxes. We are doing so now when the economy is doing well since this enables the Government to ease the transition to a higher GST rate by providing measures to alleviate the effects of the increase. Notwithstanding this, we will like to see once again, the NTUC co-ops taking the lead to stabilise the prices of daily necessities to prevent any potential profiteering from using the GST increase as an excuse to jack up prices.

8. Besides the efforts undertaken by the co-ops to moderate the cost of living, co-ops have also undertaken specific initiatives to alleviate the hardship of the less fortunate in our society. For example, I want to commend SNCF for your efforts in helping the Singapore Amalgamated Services Co-operative Organisation, or SASCO Senior Citizens' Home in running its dementia health programmes. It is my hope that more organisations would follow SNCF's example and contribute to the sustainable development of their communities.

Corporate Governance for Co-operatives

9. With the rapid expansion of co-ops, both in terms of size and services provided, the concept of peer accountability of closely affiliated members becomes less applicable and relevant. Not surprisingly, members and stakeholders are demanding greater accountability and transparency from co-ops.

10. The SNCF had recognised this and had chosen to meet this challenge head on by championing the Code of Governance for Co-ops and promoting greater self regulation. This is a step in the right direction and co-ops should take care to focus more on the spirit of the Code than on the form.

11. At its core, good governance is about good ethics. Any code of conduct can only succeed if it is internalised in the culture and ethos of the organisation. Leadership is thus critical to setting the right tone in each co-op. Along with good ethics, there must then be a sound internal control framework to ensure compliance and accountability.

12. The journey to achieving governance excellence may be full of hidden perils and potential pitfalls. However I am confident that co-ops, with SNCF providing the necessary guidance and education, would have no problem achieving the objective.

Conclusion

13. In conclusion, as we usher in New Year, I would like to wish SNCF and the Singapore Co-operative Movement success in all your future endeavours. Indeed, with SNCF at the helm, I am confident that the co-operative movement will continue to thrive and grow, not only locally and regionally but also internationally.

14. With that, I wish you all an enjoyable evening ahead. Thank you.