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Alternative proposals for a better Singapore

Net Investment Returns Contribution


I asked the Finance Minister this question during the 14 April 2014 sitting of Parliament to find out if the Government had been using the full 50% of Net Investment Returns (NIR) to supplement the Budget, as is provided for in the Constitution. While it is widely assumed that 50% of the estimated long term annual returns from investing our Reserves is contributed to the Budget each year, the Constitution actually allows for “up to 50%”, which means it could be less than 50%.

Indeed, the Finance Minister revealed that the Government had in fact been using about 47% of NIR on average over the past 5 years. This works out to almost half a billion dollars less each year in the Budget than what the Constitution allowed for. However, for FY2014, the Government plans to top up the Budget with the maximum 50% of NIR.

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Mr Gerald Giam Yean Song asked the Deputy Prime Minister and Minister for Finance what percentage of the Net Investment Returns (NIR) on the net assets managed by Government of Singapore Investment Corporation (GIC), Monetary Authority of Singapore (MAS) and Temasek Holdings is contributed to the Government’s Budget as Net Investment Returns Contribution (NIRC) for each of the last five years, given that NIRC comprises up to 50% of the NIR on the net assets managed by GIC and MAS and up to 50% of the investment income from the remaining assets (which includes those of Temasek Holdings).

Mr Tharman Shanmugaratnam (Deputy Prime Minister and Minister for Finance): The Net Investment Returns (NIR) framework allows the Government to tap the investment returns of our reserves for budgetary spending in a sustainable way. Under the framework, the Government can spend up to 50% of the long-term expected real return from the net assets managed by GIC and MAS, and up to 50% of the net investment income from Temasek and other assets.

The Government generally budgets to take in 50% of Net Investment Return Contribution (NIRC) at the start of each Financial Year (FY). The actual NIRC taken in at the end of the FY may vary due to changes in the fiscal position and to differences in the actual outturn for the maximum NIRC compared to what was budgeted at the estimates stage.

From FY2009 to FY2013, the actual NIRC taken in has been close to the maximum 50%, with the Government taking in on average slightly above 47% of the NIRC. We expect to take in the maximum 50% of NIRC in FY2014, in view of an expected overall budget deficit.

The NIRC has been able to supplement the Budget by $7 billion to $8 billion annually. Our approach to taking in NIRC reflects a prudent approach to fiscal spending. We should spend to achieve desired outcomes, rather than spend to the last dollar available.

Further, our government spending needs will increase over time, and the NIRC will remain an important source of revenue over the long term. It is therefore vital that we spend in a disciplined way, and ensure sustained benefits from the returns on our reserves.

Source: Singapore Parliament Reports (Hansard)

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Health screening (COS – MOH)


Parliament, 12 March 2014

Madam,

Age-appropriate preventive health screenings have been recognised as a cost-effective way to identify health problems before they develop further and end up being more costly to treat.

However, many are reluctant to undergo health screenings because of the inconvenience, cost or fear that it will reveal health problems, whose treatment may be beyond their ability to pay for.

More resources should be invested in promoting regular health screening on a wider scale. High risk groups should be identified and greater efforts should be made to reach out to them.

To encourage greater adoption of health screening, I propose that all Singaporeans who reach age 40 be provided with one set of free health screening tests for common chronic conditions and cancers under HPB’s Integrated Screening Programme. This should include the cost of the doctor’s consultation.

Subsequent health screenings should be provided at subsidised rates, and patients should be allowed to use their Medisave to pay for the remaining cost.

Having more Singaporeans in high risk age groups undergo regular health screenings could reduce overall health expenditure, as diseases are detected earlier, hence requiring less costly interventions.

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MediShield Life


Parliament, 12 March 2014

Madam,

I would like to make a few proposals regarding MediShield Life before it is introduced next year.

First, I would like reiterate my call for premium subsidies to be extended to all vulnerable groups of Singaporeans, including elderly persons with low savings and not only members of the Pioneer Generation; people with disabilities; those who have exhausted their Medisave; and those who already qualify for government financial assistance schemes like Medifund, Public Assistance, ComCare and CHAS (Community Health Assist Scheme).

Second, can the $70,000 annual claim limit be removed for MediShield Life? For the affected policyholders, it would be financially crippling if their insurance cover were removed when they reach the claim limit, since they would already have spent a lot of their savings on the co-payments. Fewer than 0.1% of policyholders reach the policy year limits each year. Continuing to cover them should not result in significantly higher claims or premium burdens, but would provide tremendous peace of mind for them.

Third, MOH should ensure that MediShield Life does not follow the practice of some private insurers, which sometimes reduce coverage after policyholders are diagnosed with the an illness, to prevent them from claiming again if they suffer a relapse. This should also apply to the Integrated Shield Plans that ride on MediShield Life.

Fourth, can we have better coordination of MediShield Life with private and company health insurance to ensure that they do not overlap? This will avoid unnecessary premium payments, which benefit no one but the insurers.

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Properly incentivising providers (COS – MOH)


Parliament, 12 March 2014

Madam,

Traditionally, we contain healthcare costs by curbing patients’ demand for healthcare. We do this by making patients co-pay, so that they think twice before seeing the doctor or requesting for more diagnostic tests.

However, most times it is the doctors who decide on the course of treatment for the patients. Therefore healthcare providers, not patients, drive the bulk of healthcare spending. If we want to control costs, we need more focus on the providers.

Can MOH explore alternatives to the current fee-for-service payment approach? Fee-for-service payment tends to give providers a perverse incentive to boost revenue by increasing patient throughput, rather than keeping patients healthy and out of hospital.

Instead, MOH should better incentivise providers to contain the overall growth of healthcare costs across the continuum of care – from primary to acute to step down care.

Doctors and healthcare providers should be given greater financial flexibility to redesign care delivery, so that proven and cost effective services can be reimbursed. For example, we could reward providers for efforts to enhance patients’ medication compliance, monitor patients’ weight gain or blood sugar levels in their homes, or perform follow-up consultations using web conferencing.

Second, different providers should be better integrated and made collectively responsible for providing coordinated care for patients. GPs, acute hospital specialists and step down care professionals should be rewarded for cooperating and sharing information to improve quality and control costs, not simply by the volume or class of patients they treat.

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Increasing adoption of telehealth (COS – MOH)


Parliament, 12 March 2014

Madam,

Telehealth is a mode of healthcare delivery that uses technology to enable the remote diagnosis, consultation, treatment, education and care management of patients. It includes the use of home monitoring of chronic diseases, remote consultations between patients and providers, and videoconferencing between doctors in different hospitals.

Telehealth has the potential to reduce healthcare costs, increase the level of convenience for patients, and improve patient outcomes.

One key barrier to a greater adoption of telehealth is the absence of an agreed-upon reimbursement model. If doctors cannot get paid for telehealth consultations, they are more likely ask patients to come to the clinic for a face-to-face consultation. Similarly, if patients cannot use their Medisave or receive subsidies to pay for telehealth consultations, they would be more likely to choose to make the trip down to the clinic.

Given the cost savings, improved outcomes and improved patient satisfaction that telehealth has the potential to bring, the Ministry should look into ways to increase its adoption in Singapore.

These include providing the infrastructure and support to healthcare providers and patients in acquiring telehealth technologies, reforming reimbursement models for telehealth, and revising any legislation that unduly inhibits telehealth adoption.

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Use of Medisave (COS – MOH)


Parliament, 12 March 2014

Madam,

The restrictions on Medisave withdrawals sometimes result in patients facing financial difficulties even though they still have balances in their Medisave accounts.

Medisave should be allowed for all medically necessary treatment that is of proven value and is cost effective. MOH should greatly expand the list of approved outpatient treatments under the Chronic Disease Management Programme (CDMP). While 15 chronic diseases are now in the list, there are many others which are not, but which require long-term medication and frequent consultations, which can be very costly.

The expanded Medisave withdrawal list should be updated regularly by an independent panel consisting of doctors and healthcare researchers.

In addition, patients above age 75 should be allowed to use their Medisave without being subject to annual limits. This will ensure that they are not deterred from seeking treatment because of high cash payments.

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Fare increases and quality of service (COS – MOT)


Parliament, 11 March 2014

Madam,

In January, when the Public Transport Council (PTC) approved hikes in bus and MRT fares, many commuters asked why fares were being raised when they had yet to see satisfactory improvement in service reliability.

The PTC chairman acknowledged that service reliability needs to improve, but said that this issue should be kept separate from fare raises, which are to cover rising costs for operators.

This is quite baffling for most commuters, myself included. In most service industries, customers will demand good service before they even agree to pay. But for public transport in Singapore, we seem to be expected to pay more just to get satisfactory service.

Can the Ministry consider revising the fare review formula to incorporate service reliability as one of its components? This will create is a direct link between service quality and fare adjustments, and will better align the incentives for transport operators with the interests of commuters.

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HDB flats approaching end of lease (MND – COS)


This speech today was a follow up to a Parliamentary Question I asked in January, regarding the value of HDB flats at the end of their 99-year lease. I will post the Minister’s reply next week once it is out on the Hansard.

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Madam,

Government leaders have, over the years, frequently told Singaporeans that their HDB flats are an asset which they can monetise during retirement. However, less frequent are the reminders that, as a flat approaches the end of its 99-year lease, its asset value will depreciate to zero.

While most Singaporeans know that their flats are on a limited lease, many assume that HDB will not let their assets become worth nothing, or that their flats will eventually go through an “en bloc” before their leases expire.

The Minister told me in a reply to my PQ in January that the selection of sites and the pace of SERS (the Selective En Bloc Redevelopment Scheme) will depend on factors such as their redevelopment potential, and the availability of replacement sites for rehousing, and other resources.

Can the Minister confirm whether all old flats will eventually be replaced through SERS before they reach their end of lease? If not, what proportion will be not be replaced?

Other than SERS, what are the Government’s plans for HDB flats that approach their end-of-lease? For example, will their leases get topped up, and will the topping up cost be borne by HDB, or the lessees?

There are now over 31,000 flats which are more than 40 years into their lease. I’m sure many young couples are still buying these resale flats, which would mean that the leases may end within their lifetimes.

If the Government does not have any specific plans for flats when their leases expire, I think it should make this clear to the public, so that buyers can factor this in when choosing a resale flat, and they don’t pay too high a premium for older flats.

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Trans-Pacific Partnership FTA (COS/MTI)


6 March 2014, Parliament

The Trans-Pacific Partnership (TPP) is an ambitious free trade agreement (FTA) involving 12 Asia-Pacific countries, including the US and Japan. Its scope goes beyond removing tariffs, to tackling broader environmental, labour and intellectual property (IP) rights issues.

The IP rights chapter in the TPP has raised much concern among the negotiating countries. The US’ proposals reportedly seek a much more stringent level of IP protection than WTO (World Trade Organisation) standards, or even the US-Singapore FTA. They are said to strongly favour American industries and big corporations.

There are worries that the TPP may extend the scope of pharmaceutical patents and delay the sale of generic drugs. These could raise prices of pharmaceuticals in TPP member countries, including Singapore.

Can I ask the Minister:

1. Will the TPP directly or indirectly cause an increase in the price of medical drugs in Singapore?

2. Will our patients have to wait longer to obtain affordable, life-saving generic medicines?

3. And what are the concrete steps our negotiators are taking to protect our national interests in this area?

As a major trading nation, it is important for Singapore to be part of the TPP. However, I hope the Minister can assure us that the strategic and macroeconomic benefits of the TPP to businesses will not come at the expense of ordinary Singaporeans.

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Use of NSmen resources (COS/MINDEF)


Speech in Parliament during the Committee of Supply debate for the Ministry of Defence on 5 March 2014.

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For most NSmen, annual in-camp training (ICT) involves long hours away from work and family. There is often a lot of waiting time in between the action, hence the adage, “hurry up and wait!”

Commanders, however, are much busier throughout the ICT because they are often engaged in planning while the men wait. Yet for the sake of equity, units usually issue call-ups to all involved NSmen for the full duration of the exercise. This incurs a huge cost in terms of the NSmen’s time and Make-up Pay – which is based on the NSmen’s civilian salary.

To better utilise NSmen resources, could non-commanders be recalled for a shorter ICT duration or fewer ICTs? To address the inequality, key appointment holders and commanders could be rewarded with extra pay or benefits to compensate them for the additional sacrifices they make for our nation.

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