Gerald Giam

Bus services rationalisation

The Public Transport Council’s latest annual customer satisfaction survey found that satisfaction with public transport services has fallen to its lowest level in six years. The survey showed that discontent with public bus services was a factor, with many commuters notably expressing dissatisfaction with bus waiting times.

These sentiments are similarly expressed by many of my residents living along Bedok Reservoir Road, where four bus services were cut or rerouted last December. This has resulted in my residents having to put up with longer waiting times, crowded buses and losing direct routes to their destinations.

Before removing or rerouting bus services, LTA should conduct public consultations with affected residents. If bus services are being rationalised due to low ridership, I would like to suggest that LTA first consider switching to smaller buses or extending their headways.

If bus services must be removed, the frequency of the remaining feeder services to bus interchanges or MRT stations should be increased to make up for them. Commuters should not have to wait more than 5 minutes during peak hours or 10 minutes during off-peak hours for feeder buses.

LTA should strive to retain trunk bus services. These serve many elderly and disabled residents who have trouble walking between bus stops or transferring from bus to MRT. Many of them do not mind longer bus rides if that allows them to walk less.

While LTA and the public transport operators strive towards efficiency, they must pay closer attention to the comfort and convenience of commuters. LTA should proactively monitor public feedback and be open to bringing back bus services if there is strong commuter demand.

This was my speech during the Committee of Supply debate for the Ministry of Transport, 8 Mar 2022.

Bird population control

My residents in Bedok Reservoir and Hougang have given me feedback on the nuisance caused by pigeons, crows, mynahs and even koels around their housing estates. The proliferation of the bird population is often a public hygiene, and in the case of crows, a safety issue, which worries residents.

The Aljunied-Hougang Town Council (AHTC) has been doing its part to combat this problem. AHTC puts up banners to caution residents against bird feeding and works with residents to identify and report feeders. It advises food stall operators on proper food waste disposal methods, and our conservancy workers regularly remove unattended food sources. The Town Council also conducts regular tree pruning and, as a last resort, pigeon culling.

Despite all these efforts, the bird nuisance problem has persisted. NParks occasionally sets up crow traps, but these are rather ineffective as crows are intelligent creatures and tend not to fall for these traps.

I believe this problem is not unique to Aljunied-Hougang town. A national level effort by MND and its agencies may be needed to combat it. This may include more public education to discourage bird feeding, setting up CCTV monitoring and stepping up enforcement actions against bird feeders.

It would be helpful if NParks could regularly share with Town Councils its research and recommendations on best practices for controlling the population of various bird species. It could step up efforts to trap and relocate birds in areas where they are causing a nuisance to the public.

Together with the efforts of Town Councils, MND’s stepped up involvement could help residents and our avian friends to co-exist more peacefully in our urban environment.

Speech in Parliament during the Committee of Supply debate for the Ministry of National Development on 8 Mar 2022.

Town improvement costs

Construction costs have skyrocketed since the start of the COVID-19 pandemic. The price of materials has shot up, wages have increased and the cost of bringing in foreign workers is also elevated. The construction industry’s confidence has been shaken of late, resulting in shorter payment terms and demands for higher upfront payments.

Against this backdrop, it is not surprising that recent bid prices for town improvement projects, like the Neighbourhood Renewal Programme (NRP), are up to 50% higher than pre-tender estimates. Yet HDB’s grants to town councils have not kept up with these price increases.

Some may suggest that town councils’ existing funds can be used to cover the cost increases. However, doing so will be unfair to the majority of residents, as each project mainly benefits residents living in a particular precinct. It is also unfair for residents in those precincts if the new projects are pared down to meet the original budget.

I have three suggestions.

First, can HDB temporarily increase its NRP grants to town councils to cover these short-term cost increases?

Second, can HDB provide contractors and subcontractors for town improvement projects some price protection for raw materials like steel and concrete, similar to that of HDB’s BTO projects. This will better ensure residents receive comparable amenities regardless of market conditions at the time of tendering.

Third, can the Ministry explore more measures to restore confidence among construction firms so as to ameliorate the need for onerous upfront payment terms. This could help to temper price increases across the industry.

This is a “cut” I made for the Ministry of National Development’s Committee of Supply debate on 8 Mar 2022.

Interim rental housing

There are many residents who have approached me to request assistance in appealing to HDB for subsidised rental housing. Some have to sell their flats after a divorce or they have to move out of their current homes due to family issues. Most cannot afford to buy flats and face being homeless. The Minister said previously that “the overall stock of rental flats is sufficient to meet demand”. Unfortunately, problems remain.

First, some residents exceed the Public Rental Scheme income threshold but do not earn enough to afford rent in the open market. Others may be single unwed parents who do not qualify for the Parenthood Provisional Housing Scheme.

Second, applicants who qualify for public rental housing may still have to wait for between three to eight months before they can collect their keys. Many need a place to stay urgently as they don’t have family or friends who can take them in.

Could the Minister share, since 2020, the number of applications HDB received for rental flats under the Public Rental Scheme, the Interim Rental Housing Scheme and the Parenthood Provisional Housing Scheme? How many approvals were granted under each scheme and what were the main reasons for approvals or rejections under each scheme?

I urge the HDB to increase the number of flats supplied under the Interim Rental Housing scheme. The HDB could offer tiered rental rates that are higher than Public Rental Scheme rates but lower than open market prices. This will help the many families and individuals that fail the strict means test of the current rental schemes but are not earning enough to rent in the open market, yet need housing urgently to avoid being left homeless.

This is a “cut” I delivered during the Committee of Supply debate for the Ministry of National Development, on 8 Mar 2022.

Special needs education

Parents of children with special needs face a complex dilemma when making educational choices for their children.

A wide range of services is available at various price points, but parents are largely left on their own to identify the optimal ones. Could ECDA provide more one-stop advisory services for parents? This will help to ease the anxiety that many parents of special needs children feel.

For children who require medium to high levels of early intervention support, such services can be prohibitively expensive. While ECDA does provide subsidised support through the EIPIC programme, EIPIC centres have wait times ranging from three to 18 months and most provide a limited number of hours of intervention a week. This requires parents to turn to additional services that can cost thousands more every month.

Can ECDA work with EIPIC providers to increase the capacity and range of services provided so that children can receive all the early intervention support they require from the same centre? A centralised provision of early intervention services will bring economies of scale, which can reduce costs for parents.

Children who require lower levels of early intervention support can attend mainstream primary schools, but may still require supplementary support services like occupational therapy. Can MOE provide an integrated special needs support programme at mainstream schools? This will enable children with special needs to thrive in such environments and reduce the costs and inconvenience borne by parents for external support services?

I delivered this speech in Parliament during the Committee of Supply debate on the budget of the Ministry of Education, on 7 Mar 2022.

Medical leave for contract workers

Over the years, the length of service an employee must serve before qualifying for paid sick leave has been reviewed in Parliament. In 2008, the minimum qualifying period was reduced from six to three months, with the entitlement adjusted on a prorated basis. This was in response to an increase in short-term employment contracts.

Since these legislative amendments, short-term employment contracts have become even more commonplace. In 2021, 8.4% of the workforce was on fixed-term contracts, up from 7.7% in 2009. The percentage of workers on contracts of less than one year has also seen an upward trend.

Many workers find themselves transferred to new employers without even changing their jobs! This happens when their previous employer loses a cleaning or building maintenance contract, and they are transferred to the new contractor. When this happens, they are treated as new employees, requiring them to forgo paid sick leave for the first three months of the new contract.

I wish to propose that the legislation be amended to allow workers who complete one month of service to be entitled to two days of paid sick leave and eight days of hospitalisation leave. This could increase to four days and 10 days respectively after the completion of two months of service.

Concurrently, to protect the interest of employers, tax reliefs and public recognition could be extended to employers who implement these more progressive paid sick leave arrangements.

This also complements the Government’s stance of encouraging workers to isolate themselves and seek medical attention if they feel unwell.

I delivered this speech in Parliament on 4 Mar 2022 during the Committee of Supply debate on the budget of the Ministry of Manpower.

Use of CPF funds for housing

Many residents have approached me for help to appeal to CPF to allow more flexible use of their CPF for housing.

Some elderly residents have insufficient cash to complete the purchase of their 2-room Flexi Flats, because their CPF Ordinary Account (OA) monies were automatically transferred to their Retirement Account (RA) upon turning 55. As home loans are not available for Flexi Flats, the purchase of a $100,000 flat is often a strain on their cash flow.

Can I request that CPF RA funds which originated from their OA be allowed to be used for the purchase of 2-room Flexi Flats by default as long as the CPF member’s RA balance is above their Basic Retirement Sum (BRS)?

There should be a simple and clearly stated application process for this. For those whose RA funds fall below their BRS, I hope CPF can exercise greater flexibility so that elderly residents are not denied a Flexi Flat despite large balances in their CPF funds.

For the payment of the resale levy, can CPF consider allowing applicants who have sufficient funds in their RA or Special Account (SA) to take out an advance from one of these accounts, which must be returned, with interest, within a few years? The applicant could be required to show income documents to prove they are able to return the amount drawn.

This could smoothen the cash flow problem that might be preventing them from completing the purchase of their home, while ensuring they do not prematurely exhaust their retirement funds. It will help not just elderly flat buyers, but also divorcees who have to sell their matrimonial flat and have only half the proceeds to buy a new flat.

I made this speech in Parliament on 4 Mar 2022 during the Committee of Supply debate on the Ministry of Manpower.

Bank accounts for ex-offenders

I have increasingly been approached for assistance by residents who face problems opening personal bank accounts. Their applications were rejected by banks either because of their past criminal records, past investigations for financial-related crimes or are currently under criminal investigation resulting in their bank accounts being frozen.

Members of this House will agree that access to basic banking facilities is essential in today’s digitalised society. These individuals are deprived of basic banking activities such as receiving their salaries. Employers do not usually agree to deposit into their family members’ bank accounts and are unwilling to pay them in cash. They also have difficulty receiving Government cash benefits like GST Vouchers – Cash.

Individuals with past criminal records have paid their dues to society and such a deprivation can be an impediment in their efforts to turn over a new leaf. Similarly, individuals under investigation are deprived despite the operation of the maxim “innocent until proven guilty”. These investigations can take any time between several months to years, which is a long time to function without access to basic banking facilities.

I understand MAS (Monetary Authority of Singapore) has been working with the larger retail banks to open limited-purpose bank accounts for individuals that banks assess to pose a higher risk of being implicated in financial crimes.

Can I ask the Minister, what are the limitations on such accounts? Will the functions of such accounts vary on a case-by-case assessment by the banks? Additionally, will the pool of eligible individuals for these accounts include persons who are currently under investigation?

This may emerge as a growing problem owing to the increase in bank accounts being frozen during investigations into financial crimes. Owing to the time-sensitivity of this matter, can I ask the Minister what is the progress of the rollout of these limited-purpose bank accounts? Is it generally available to all affected applicants yet? If not, when will it be generally available?

This was a speech I made on 2 Mar 2022 during the Committee of Supply debate in Parliament on the Prime Minister’s Office.

Building a resilient Singapore

The Covid-19 pandemic serves as a reminder to all of us of the importance of national resilience. We are now moving towards life with Covid-19 as an endemic disease, a path which is bound to be fraught with unexpected challenges. The Russian invasion of Ukraine has been a stark demonstration of the fragility of territorial sovereignty in the face of aggression by a larger neighbour.

Building national resilience is a key effort we need to undertake to prepare for current and future challenges. It has to be a joint effort borne out of the partnership between the people, society, companies and the Government. It is vital that government policies must be supportive of the endeavour to build and strengthen resilience.

As I respond to the Finance Minister’s Budget Statement, I will talk about the Seven Pillars of Resilience I believe we need to continuously build up in our nation. These are resilient families, resilient environment, resilient infrastructure, resilient companies, resilient workforce, resilient society and resilient government.

Resilient families

Families are the building block of society. We must do all we can to increase the resilience of family units, whatever form they might come in.

I am concerned about the plan to raise the Basic Retirement Sum (BRS) by 3.5% per year for the next five cohorts turning 55 from 2023 to 2027. MOF said that eight-in-10 active CPF members turning 55 in 2027 will be able to set aside the heightened BRS. This means that 20% of them will not be able to withdraw more than a token amount from their CPF.

Currently some 435,000 Singaporeans aged between 55 and 70 are unable to meet the prevailing BRS. Many of them struggle with their living expenses and are not able to use their CPF for housing payments. I hope the MOF will give careful consideration to the needs of CPF members with lower balances before raising the BRS.

For our children, building resilience starts at home. All parents — myself included — view our kids as precious gems but we must be careful not to mollycoddle them. Let’s encourage our children to take part in competitions, whether in sports, games or the arts. Every competition will have only one winner and many losers. Let them learn to win with grace and remain resilient in defeat, by picking themselves up to fight another day.

Let our children take public transport to school instead of ferrying them everywhere by car. This brings an additional benefit of reducing traffic jams near schools. I commend schools that disallow parents from turning up at school with water bottles or homework that their children left at home. Occasions like these are opportunities for our children to learn to take responsibility for their actions and their belongings.

Resilient environment

Next, on building a resilient environment. I am glad to hear the Finance Minister announce that Singapore aims to achieve net zero emissions by or around mid-century. In order to realise this goal, Singapore must be prepared to make big investments in emerging green technologies and take decisive steps towards wielding the mantle of climate leadership, regionally and globally.

I would like to renew my call made in January for Singapore to launch a national hydrogen strategy and roadmap to spur the creation of a hydrogen economy in Singapore. This will set Singapore on a path towards being a global player in the hydrogen industry and benefit Singaporean workers.

NEA is now mulling the introduction of a mandatory plastic bag charge at supermarkets. I support the reduction of one-time use plastics. However, policies designed to achieve this must take into account the local context.

Most shoppers don’t throw away their plastic bags but use them to bag their trash before throwing it down their rubbish chute. If they don’t have enough plastic bags from supermarkets, they might end up buying plastic bags or, worse, throwing their rubbish directly down the chutes. Therefore any policy interventions should strive to encourage intrinsic attitudes towards conservation, not lead to people trying to work around punitive measures.

Instead of a per bag charge, has NEA considered requiring large supermarkets to offer a discount as an incentive for not using plastic bags?

Resilient infrastructure

Singapore’s rapid urban development and ascent on the global economic stage was made possible in large part due to good infrastructure.

Our public transport network has seen improvements in recent years, although the convenience and frequency bus services in some areas like Bedok Reservoir has been a bugbear for many commuters. This has shown up in commuter surveys which rate bus services the lowest among transport modes. I will speak more about this during the MOT COS.

Moving on to digital infrastructure, the prevalence of online scams points to the need for more resilient cyber infrastructure, not only at the back end but also at the front end, with efforts to detect attempts at social engineering and prevent people from falling prey to scammers. While public education is important, the financial institutions must redouble their efforts to use technological solutions to detect suspicious patterns of use and stop using SMS as a channel for sending passwords.

The world has entered an age where cyber warfare is a real threat, as demonstrated by Russia’s alleged cyberattacks on Ukrainian infrastructure long before the air, land and sea invasion began. Adversaries can potentially maliciously shut down or control critical infrastructure with the click of a mouse. Are our government agencies putting enough resources into countering this threat, and are critical infrastructure providers like water treatment plants, power grid operators, telcos and public transport operators ready to counter these threats?

Resilient companies

Our companies have seen challenging times in this pandemic. Many are still struggling to stay afloat. The pandemic has shown our over-reliance on our foreign workforce. We need to transform our economy to boost the attractiveness of local talent to companies.

MOM should watch out for companies that circumvent market testing requirements, for example by doing a token posting on MyCareersFuture when they already have a foreigner in mind to hire. Where there are instances of companies claiming that they are unable to find Singaporeans to take up open positions, we need to make a deeper qualitative assessment on why this is so. For example, are there gaps in our education system that are preventing our schools from producing market-ready graduates?

On a separate note, I believe that one of the brightest sparks about the pandemic is the mainstreaming of work-from-home arrangements. A large proportion of both employees and employers want to continue remote work, at least part of the time, even after the pandemic ends. We should build on these gains, and encourage more companies, especially the more traditional SMEs, to provide work-from-home options for their employees.

Good economic prospects and technological advances disproportionately benefit the highly skilled. To make our growth more inclusive, we should engage more Singaporeans economically, including people with disabilities and the elderly. Companies should extend work-from-home opportunities to engage and empower Singaporeans with mobility issues. Not only do they form a large untapped labour market with valuable experience to contribute, enabling them to work from home would help them to connect better with the society, improve their overall well-being and to strengthen Singapore’s social security. I hope MOM can consider ways to incentivise companies to extend work-from-home opportunities to this group of Singaporeans.

Resilient workforce

In his Budget Statement, the Finance Minister introduced a $500 a month minimum income requirement to qualify for the Workfare Income Supplement (WIS) from 2023. This could potentially impact up to 46,600 employed residents, inclusive of part-timers, who earn less than $500 a month. It will disadvantage workers who have extremely low incomes, are forced to work reduced hours through no fault of their own or have unpaid caregiving responsibilities.

The Minister said that this is to encourage part-timers and casual workers to take up regular, full-time work. However, I fear it will result in the exact opposite. Workers may decide to drop out of the workforce because their income cannot even cover their travel expenses. I appeal to the Minister to rescind the minimum income requirement so that all low wage workers will benefit from Workfare. This was a call made by the Leader of the Opposition yesterday as well.

We must ensure that every working Singaporean receives a decent minimum wage. I welcome the requirements for all local workers to be paid at least $1,400 a month if their companies employ foreign workers, or the workers are in a Progressive Wage Model (PWM) sector or occupation. I am cheered that the Government is going to co-fund the pay increases for lower wage workers over the next five years.

Building on this approach, would the Minister consider also co-funding for five years the pay increases of all Singaporean workers who are taking home less than $1,300 a month, including those who are not in sectors or occupations covered by the PWM. This will help companies adjust to paying their workers a minimum wage and bring Singapore closer towards implementing a national minimum wage, something that the Workers’ Party has been consistently advocating for.

In addition to strengthening our workers’ rights, we also need to build more resilience in our local workers. Some employers have lamented to me about local employees quitting when they are made to work long hours, in contrast with foreigners, whom they claim have no qualms about working overtime. We shouldn’t be dismissive of those who may have genuine domestic responsibilities like taking care of children or elderly parents. However, for those that don’t, including many younger local professionals, I feel it doesn’t hurt to “piah” a bit more during your first job, so you can establish your career and compete more effectively with the global workforce. Of course, do this without sacrificing your mental and physical health!

Resilient society

A vibrant local sports scene contributes towards building a resilient society. The Suzuki Cup football tournament was a great demonstration of how sport can promote national unity. I experienced it myself when I took my son to see one of the matches. However, cheering for the Lions once every two years is not enough. Our sporting talents are playing in international tournaments throughout the year. They should be better featured.

For example, Loh Kean Yew’s historic victory at the 2021 Badminton World Championships could only be watched “live” on a cable channel. Non-subscribers had to wait almost a week to watch it on free-to-air TV. Featuring more of our local sporting talents on free-to-air TV or local online channels like meWatch will not only imbue a greater national spirit, but will also inspire a generation of young sports enthusiasts who may go on to become future champions.

Resilient government

Finally, I believe we need a resilient government. A sizable presence of Opposition MPs in Parliament will keep the Government on its toes and responsive to the needs of the people, and increase the resilience of our government.

The other side of the coin is an efficient and effective Civil Service. I commend our public servants for demonstrating great resilience in helping our nation through the pandemic. I was once a civil servant and, to this day, I hold close to my heart a piece of advice my permanent secretary gave to me when I first joined the Service. He told me he expected me to be the subject matter expert on issues covered by my desk. He said it was my responsibility to provide objective recommendations in the policy submissions I put up to senior management and Ministers. This was sound advice.

Civil servants should not second guess what their political masters want or implement instructions blindly just because the Minister said so. They must also not be afraid to respectfully point out policy errors made by political office holders, as it is in Singapore’s interest that the best possible policies are advanced. The Civil Service must also remain politically neutral.

GST hike

The final point that I wish to raise to register my concerns over the planned hike in GST rates in 2023 and 2024. I understand the budgetary pressures that come with an ageing society and I support moves to socialise more provision of more public welfare services, especially for the elderly.

However it remains my belief that a consumption tax hike should be a last resort to increasing revenue. This is because the GST is an inherently regressive tax, to which the poor pay a higher percentage of their income compared to the rich. In Singapore, only a portion of GST paid is returned in the form of GST Vouchers. The GST Offset Package meant to help households adjust will only last for five to 10 years. However, the GST hike will be forever.

The Ministry of Finance should consider other more progressive sources of revenue besides the GST hike. Yesterday, MP for Sengkang, Assoc Prof Jamus Lim, did a deep dive into the Workers’ Party’s alternative levers for raising revenue. These include higher taxes on carbon emissions, multinational corporations and wealth; using a portion of land sales; and increasing the investment returns contribution, which can more than make up for shortfalls in revenue brought about by higher social spending, without having to increase GST.

Conclusion

Mr Speaker, the pandemic has precipitated societal and political upheavals in many countries. Singapore has, thankfully, been largely spared the kind of widespread rifts in society caused by measures to deal with the pandemic. Nevertheless, we must anticipate that future challenges will only get harder. Let us take the necessary steps now to build a more resilient Singapore so that our next generation will be better prepared to weather any storm that comes.

This was my speech in Parliament on 1 Mar 2022 during the debate on the 2022 Budget Statement.

Electricity price hikes disproportionately affect SMEs

Several business owners in my constituency, including kopitiam operators, shared with me their shock at seeing their electricity bills jump more than threefold since October 2021. This was despite their efforts to reduce electricity usage. Many are facing difficulties managing the sky high electricity costs.

SMEs are disproportionately affected by the exit of electricity retailers and the drastic increase in the wholesale electricity price. They are not offered fixed tariff price plans by SP Group, and most retailers are not offering such contracts at this time.

On 14 February 2022, I asked the Minister for Trade and Industry for an update on EMA’s Temporary Electricity Support Scheme (TRECS). TRECS was oversubscribed when it was launched in January 2022.

I also asked whether EMA will consider working with electricity retailers to provide a 12-month fixed electricity plan for smaller business consumers, specifically SMEs with a monthly consumption between 4,000 and 20,000 kWh.

I further asked if EMA could extend TRECS for another six to 12 months beyond May 2022, in view of the current economic situation and energy supply situation. If this was not possible, I asked if EMA could allow these SMEs to buy electricity at the regulated tariff instead, so that their operational costs do not skyrocket.

This is the full text of my question and exchange in Parliament with the Minister:

UPDATE ON TEMPORARY ELECTRICITY CONTRACTING SUPPORT SCHEME AND IMPACT OF EXIT OF ELECTRICITY RETAILERS ON SMES AND SUPPORT AVAILABLE

The following question stood in the name of Mr Edward Chia Bing Hui –

41 To ask the Minister for Trade and Industry (a) to date, what is the take-up rate of the Temporary Electricity Contracting Support Scheme (TRECS); (b) what is the number of companies not supported by TRECS; (c) what is the cost delta impact on these companies and the reasons for not being supported; and (d) whether the Ministry intends for TRECS to continue for an extended period of time.

42 Ms Sylvia Lim asked the Minister for Trade and Industry (a) what is the Ministry’s assessment of the effect of the exit of various electricity retailers in 2021 on the electricity bills of small and medium enterprises (SMEs); and (b) how is the Government monitoring or managing the capacity of the remaining retailers so as to facilitate SMEs having options to manage their electricity costs.

43 Ms Jessica Tan Soon Neo asked the Minister for Trade and Industry in light of five electricity retailers ceasing operations last year and many small and medium businesses (SMEs) having to shift back to SP Services’ wholesale electricity plan, what support can be extended to these SMEs to provide more certainty to manage their business costs against very high increases in their monthly electricity charges, particularly those with average monthly electricity consumption of 4,000 kWh and above.

44 Mr Gerald Giam Yean Song asked the Minister for Trade and Industry (a) whether he can provide an update on the Temporary Electricity Support Scheme (TRECS) since it was introduced in December 2021; (b) whether the TRECS will be extended beyond February 2022; and (c) whether EMA will consider working with electricity retailers to provide a 12-month fixed electricity plan for smaller business consumers, specifically SMEs with a monthly consumption between 4,000 and 20,000 kWh.

45 Ms He Ting Ru asked the Minister for Trade and Industry (a) what support is available to SMEs; and (b) what are the options available to affected businesses, when their utilities costs have increased by large factors due to the insolvency of their previous utilities retailers.

Ms Jessica Tan Soon Neo (East Coast): Question No 41, please.

The Second Minister for Trade and Industry (Dr Tan See Leng) (for the Minister for Trade and Industry): Mr Speaker, may I have your permission to answer Question Nos 41 to 45, as well as the Parliamentary Question filed by Mr Saktiandi Supaat1 that has been scheduled for a subsequent Sitting?

Mr Speaker: Yes, please.

Dr Tan See Leng: Mr Speaker, the world has been facing a global energy crunch since September last year. The price of LNG, or spot Liquefied Natural Gas, rose significantly and remains elevated at more than three times the levels as at the start of 2021.

While our piped natural gas (PNG) supply typically helps to moderate the impact from higher LNG prices, there was a series of disruptions and planned depletions to our PNG supply since the second half of 2021. This confluence of factors has resulted and caused increased volatility in wholesale electricity prices. Since October 2021, EMA, or the Energy Market Authority, has implemented a set of measures to enhance Singapore’s energy security and stabilise the SWEM, or Singapore Wholesale Electricity Market, prices.

Nevertheless, some market participants were adversely affected by the volatility. Between October and December 2021, six electricity retailers exited the market and another two retailers prematurely terminated some of their customers’ contracts. As a result, about 9% of all electricity consumer accounts were affected.

All affected households and businesses with an average monthly consumption of less than four megawatt hour (MWh) can switch to Singapore Power’s regulated tariff at any time. Some businesses consuming four MWh or more managed to secure plans with other retailers.

There remains about 11,000 business consumer accounts – accounting for about 1% of consumers – which have to buy electricity directly from the Singapore Wholesale Electricity Market, or SWEM, and are thus exposed to more volatile electricity prices.

To help these businesses, EMA worked with the generating companies or gencos to offer monthly fixed price plans under the Temporary Electricity Contracting Support Scheme, or TRECS for short, in January this year – that is last month. The TRECS plans were fully subscribed for January. For the month of February, the initial offering of TRECS was also fully subscribed. In response to requests for more such contracts, EMA worked with gencos and electricity retailers to offer about 645 megawatts of TRECS and other plans with significant fixed price components. At least 200 megawatts of the contracts are still available and we are extending TRECS for March, April and May.

We encourage all consumers without a retail plan to consider taking up these contracts for greater certainty.

Mr Speaker, let me now turn to the issue of electricity prices. Singapore imports all of our energy and cannot be fully insulated from developments in the global energy market. Well, let me make a correction – Singapore imports a vast majority of our energy, not all of our energy. We still have some from solar. The higher fuel prices feed into our electricity bills to reflect the higher costs of electricity production.

As I had mentioned during the Committee of Supply debates last year, we had been enjoying artificially low electricity prices for several years, because this is due to an over-investment in capacity and fuel by the generation companies. I have also alluded to the fact that that was also below the cost of generating electricity; and thus, it was not sustainable. In fact, if Members of the House remember, I also put up a chart that clearly demarcated and showed that the cost of generation was higher than the cost of the electricity tariffs at that time.

An electricity price correction was therefore unavoidable and the current global energy crunch has precipitated and exacerbated this correction.

Again, Members of this House would have asked what help is therefore available for the affected businesses. Household and small consumers which need help with their electricity bills can apply to SP Services for instalment payment plans. Businesses which need financing support can also make use of ESG’s programmes such as the Temporary Bridging Loan and Enterprise Financing Scheme SME Working Capital Loan.

The 11,000 or so business accounts without a long-term retail contract bear the brunt of the electricity crunch. To help them weather the storm, EMA has worked with gencos and electricity retailers to reduce the volatility and lower the cost of buying electricity through TRECS, additional monthly contracts offered by gencos, and on the wholesale market for businesses, as I had mentioned earlier. For example, Sembcorp Power Pte Ltd is offering one-month fixed price plans at preferred rates to consumers with average monthly consumption of between four and eight MWh.

EMA will also continue to monitor closely market developments, including heightened geopolitical tensions and their potential impact on global energy prices, and put in place the necessary measures to secure our energy supply, enhance stability and ensure the orderly functioning of the market.

Mr Speaker, Singapore has an open and competitive electricity market where prices will rise and fall depending on demand and supply conditions and developments in the global energy market. Over the last 20 years, our energy market has served us well. Our electricity supply is one of the most reliable and price competitive amongst major developed cities.

Our energy market is now being tested by unprecedented shocks and volatility in the global energy markets. Nevertheless, we are committed to ensuring that Singapore’s power supply remains secure and reliable, and to supporting our vulnerable customers during this period.

My only exhortation and urging is for all consumers to use energy prudently and to adopt energy conservation as a way of life. We will also learn from this episode to see how we can strengthen and fortify our energy reliance, resilience and our electricity market. And I am confident that together, we will emerge from this stronger.

…

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Thank you, Sir. Several businesses in my constituency have shared with me they are shocked at seeing their electricity bills jump threefold or more despite their efforts to reduce electricity usage. Businesses with the consumption of more than four MWh, but less than 20 MWh, which include many neighbourhood kopitiams, have to buy electricity from SP Group at the wholesale electricity price, which is very elevated and volatile now. They are also facing difficulty buying electricity from retailers because many retailers are not offering contracts until later in the year or even next year.

Can EMA extend TRECS for another six to 12 months beyond May 2022, in view of the current economic situation and energy supply situation? If this is not possible, can EMA allow these SMEs to buy at the regulated tariff instead, so that their operational costs do not skyrocket?

Secondly, Minister mentioned that TRECS was fully subscribed for the months of January and February. How many businesses applied for, during these two months under TRECS, but were not able to obtain contracts? Are there plans to expand the number of slots in TRECS available for those who need it?

Dr Tan See Leng: I thank Mr Gerald Giam for his questions. Can I answer the second question, and then I will go back to the first one? For TRECS, in January, it was oversubscribed. As I have shared, earlier on in my main PQ reply that for February, there still remains about 200 megawatts, and I was encouraging, many of these SMEs to consider going into this particular retail plan.

As far as the extension of TRECS for another six months is concerned, we have now extended for March, April and May. That is three months. Our estimates also tie in generally with the consultants, and these are global market consultants, who look at the trend of energy prices. Of course, we hope that the situation in the Eastern Europe, I think namely that between Russia and Ukraine, does not get worse. But once winter is over, we are cautiously optimistic that natural gas prices will ease somewhat. So, we may not need to extend TRECS beyond six months.

At this particular point in time, we are monitoring the situation very, very closely. In fact, we do not monitor on a month-to-month basis, but we monitor it on a weekly basis, and sometimes, even on a daily basis.

I hope that answers the Member’s question.

Today, TRECS will be extended for March, April and through to May. But other than TRECS as a scheme, we are also now working to see whether there are any other assistance measures that we can roll-out to help. So, I hope that answers the Member’s second point,

For his first question, in terms of the assistance, we have worked with electricity retailers and gencos to lower the cost of buying electricity through eligible contracts to support those businesses that have been affected. I do not have the data for how many businesses have not been able to subscribe to TRECS in January, but as a follow-up, what I can do is to try and get the statistics and then answer that either as another PQ that the Member can file later, or I will see how to get that answer across.

We are also contemporaneously working with gencos to see if they can offer additional temporary discounts at their end.

I just want to also manage expectations. These offsets will not be able to help account for the price increase completely. Because, as I have said before in the past, this has gone up by threefold since the start of 2021. But, I think certainly it will go some way to help companies to adapt to the sudden surge in prices. I hope that clarifies.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song: There is one question which I think was not answered, which is, is it possible for EMA to allow SMEs to buy – I am talking about SMEs who use between four MWh and 20 MWh of electricity of month – at the regulated tariff, instead of at the wholesale electricity price?

Dr Tan See Leng: I think the reason why we created TRECS was because we took into consideration the fact that, to expect SP to suddenly open it up to everyone for them to buy, I think SP may have difficulty in supplying all that incremental needs in a short run.

So, I think we need to also understand how the market works. Electricity which is offered through the regulated tariff is purchased by Singapore Power or SP through existing long-term vesting contracts with the gencos. SP has contracted a limited quantity of such long-term electricity contracts and we have to reserve them for households, for small business consumers, who traditionally do not have the bargaining power to negotiate for better retail prices.

If we allow for large consumers to switch to the regulated tariffs, then this means that the SP group will now have to contract for additional supply with gencos at higher prices and/or buy additional electricity supply from the SWEM at the prevailing Uniform Singapore Electric Price, or USEP. This will then cause the regulated tariffs to rise. So, all households and small consumers, who are, today, on the regulated tariff would then have to bear the costs of price stability for the large consumers. This may not necessarily be fair to the household consumers and the small business owners.

Hence, as a result of that we wanted to make sure that we can segregate it and protect the existing consumers, of which many of them are your residents as well, by making sure that we move and negotiate for a new scheme, TRECS, to help those that are in the four MWh to 20 MWh range. I hope this answers the Member’s question.

Source: Singapore Parliament Reports, 14 Feb 2022