SPEECH BY MS LOW YEN LING, PARLIAMENTARY SECRETARY (MINISTRY OF TRADE & INDUSTRY AND EDUCATION) AT THE PEP-SBF AWARDS, 25 NOVEMBER 2015, ORCHARD HOTEL SINGAPORE, 10.00AM
Mrs Ow Foong Pheng, Deputy Chairman of the PEP and Permanent Secretary of the Ministry of Trade and Industry
Mr Lawrence Leow, Honorary Treasurer of SBF and Chairman of the SME Committee
Colleagues and friends
Introduction
1. It is a pleasure to be here at the 2015 PEP-SBF Awards Event. This annual event, jointly organised by the Pro-Enterprise Panel and the Singapore Business Federation, has been held since 2012 to recognise the collaborative efforts of the public and private sectors to enhance Singapore’s pro-enterprise environment.
Enabling businesses through smarter regulations
2. As part of our economic development, Singapore has paid particular attention to building a trusted business environment to provide a stable and robust framework for companies and businesses to operate. In keeping with Singapore’s positioning as an open economy which facilitates the growth of capable businesses, the Government has placed priority on having an effective set of rules and regulations that is pro-business, transparent and predictable.
3. The theme of this year’s event is “enabling businesses through smarter regulations”. This reflects our conviction that regulations should not remain static. To be relevant, rules need to be regularly reviewed and adapted to the current environment. To this end, we have engaged businesses and considered their feedback and suggestions to ensure that government regulations are facilitative, and enable our businesses to grow and be competitive.
Benchmarking agencies through the Pro-Enterprise Survey
4. Over the last 15 years, the Pro-Enterprise Panel, or PEP for short, has served as a platform that businesses can leverage to provide feedback and suggestions on the rules and regulations that they would like the Government to review and adjust to better serve businesses.
5. The PEP has worked with agencies on more than 1,800 suggestions since its inception. Over half of them have led to rules changes that help businesses remain competitive, innovative and productive as they navigate the new challenges brought about by globalisation and technological developments.
6. To ensure that we are continually reviewing how we can improve, the PEP surveys businesses annually to get their views on the pro-enterprise performance of our Government regulatory agencies. The Pro-Enterprise Index (PEI) is computed based on the scores from the survey, and serves as a benchmark of the overall regulatory performance of our agencies, in terms of how their business stakeholders see their responsiveness and pro-enterprise orientation. I am encouraged that the PEI has been on the upward trajectory, reaching 76.4 in 2015 compared to 74.2 in 2014 and 71.7 in 2012. I am also encouraged that our government agencies have continued to push the boundaries in improving their performance. For the past four years, the Maritime and Port Authority of Singapore (MPA) has been ranked 1st in the Pro-Enterprise Ranking survey. They have achieved this through an agency-wide focus on ensuring that their regulations are forward-looking, anticipate businesses’ needs, and how they run their processes and manage stakeholders is pro-enterprise in orientation.
7. This system of proactively identifying areas where rules can be simplified for businesses is key to ensuring that the Singapore business environment stays competitive. Overall, Singapore is recognised as being one of the easiest places in the world to do business. For the past 10 years, Singapore has ranked top in the World Bank’s Annual Ease of Doing Business Report. For example, in the area of dealing with construction permits, the Building and Construction Authority (BCA) and partner agencies (URA, SCDF, LTA, PUB, NEA and MOM), have collectively made significant improvements over the years. A company constructing a warehouse would have to seek approval from various government agencies, including written permission from URA, structural and building plans from BCA, fire safety from SCDF, and water and sewage connection from PUB. BCA and partner agencies have worked to reduce the time needed to obtain the approvals by more than half from year 2006 to 2015. Key to this was the CORENET system, which provides an integrated platform for online applications to the relevant government agencies for construction-related permits. Workflows among agencies were also streamlined and restructured to enable parallel processing and concurrent clearances involving the government agencies responsible. As a result of these improvements, Singapore now ranks first in terms of the ease of obtaining construction permits in the World Bank Ease of Doing Business Report, ahead of countries like Hong Kong and Australia.
8. However, we cannot take our lead for granted. With a more challenging economic environment, and stronger external competition, it is important for Government agencies to continually sharpen our toolkit to ensure that our business environment, particularly our regulatory framework, supports our businesses in improving productivity and staying competitive.
Collaboration between businesses and the Government
9. Today’s event recognises the efforts of both the private and public sectors in enabling an environment which is conducive to businesses. This includes the business community which has provided feedback and collaborated with agencies on the changes.
10. An example of smarter regulations which have been recently implemented through consultation with the business community is that of Singapore Customs. Since 2012, Customs has been consistently ranked among the top 10 agencies in the annual Pro-Enterprise Ranking (PER) Survey. In 2014 and 2015, Customs engaged air express companies (AEC), which had been incurring business costs due to late shipment arrivals. Working together with the AECs, Customs developed a framework to track and identify shipments whose permits may have expired due to reasons such as delays at other ports. With this process in place, such shipments would not be classified as “imports without permit” and subject to penalties. This initiative has saved air express companies about $150,000 per year. Customs has also benefited through manpower savings of at least 4,500 man-hours a year.
11. The Energy Market Authority (EMA), one of the three most improved agencies in this year’s PER Survey, has also been proactively initiating smarter regulations. In 2014 and 2015, EMA introduced two initiatives that benefited businesses. First, EMA introduced a lifetime licensing scheme. This has benefitted more than 5,000 existing licensed electrical, gas and cable detection workers who no longer need to spend a total of $80,000 a year renewing their licences every one to three years. Second, EMA initiated a review of its regulatory framework to facilitate the entry of intermittent generation sources such as solar power. It is now easier and faster to connect these installations to the power grid. The review has also facilitated new business models, making it easier for businesses to sell excess solar power back to the power grid, and hence, reduce their electricity bills further.
12. Running a business is a complex endeavour. Businesses need to be constantly on the look-out for new opportunities to grow top-line and be competitive, while watching out for the bottom-line and business costs. Businesses are therefore the best sources of inputs on the specific areas where Government regulations may need to be reviewed to facilitate growth, and reduce pain points which are raising compliance costs. For example, among the private sector awardees today is Mr Alex Ng from Alstron Singapore Pte Ltd, who provided feedback on how IRAS’ Major Exporter Scheme could be reviewed to reduce compliance costs for businesses with low turnovers. IRAS considered his input and extended the validity period for renewal applications under this scheme from 3 years to 5 years. Arising from the revision, at least 1,700 businesses in eight industries now save about 40% of their compliance cost.
13. Another example is a suggestion by the motor industry for LTA to relax its requirements for export processing zone (EPZ) operators so as to encourage more businesses to operate EPZs, leading to lower costs for user businesses. LTA assessed the feedback and halved the security deposit required, lowered the minimum required number of vehicle lots from 400 to 300, and reduced the required size of each vehicle lot with effect from 1 April 2015. Since the change, LTA has received several enquires and one proposal by businesses to join the sector.
Conclusion
14. The recognition of agencies and businesses at today’s event underscores the need for continued partnership between the public and private sectors in ensuring that Government regulations stays ahead of the curve in supporting capable and productive companies. The event today offers a good opportunity for businesses and government regulatory agencies to network and share their views and perspectives with one another. I hope that such exchanges are a regular part of the interactions between our agencies and the businesses, through broader platforms like today’s event as well as through dedicated discussions between agencies and businesses to zoom in on specific areas for improvement. This collective effort will be key to ensuring that government regulations continue to be relevant and forward-looking, and underpin a sound business environment where Singapore continues to keep our edge as the easiest place in the world to do business.
15. Thank you.