Speech by Minister Desmond Lee at the Committee of Supply Debate 2021 – Building a More Resilient, Inclusive and Sustainable City and Home

Mar 4, 2021

Introduction

Mr Chairman, this past year we’ve all had to wrestle with the challenges thrown at us by COVID-19.

It has not been easy. But through close cooperation between the Government, industry and community partners, we have made good progress. We provided significant support to firms in the Built Environment sector, through one of its darkest moments. We worked hard to get our BTO projects back on track, and assisted many buyers affected by inevitable construction delays.

For homeowners and public rental tenants who faced financial challenges, we helped them with their mortgage and rent payments. To assist businesses renting commercial or industrial properties, we put in place various cost-sharing arrangements and relief measures.

I’d like to thank all our partners, industry and the community, as well as many of our officers, both in the HQ and the frontlines, for the heavy lifting all these months.

But we are not out of the woods yet, and must remain vigilant. 

At the same time, we must keep our eye on the future, learn the lessons from this pandemic, and come out stronger from this experience. Our work to build an ever more resilient, inclusive, and sustainable Singapore must continue.

One major enterprise is the Singapore Green Plan. 

For these efforts to bear fruit, we need all Singaporeans to be actively involved. 

That is why, over the past few months, MND agencies conversed with Singaporeans through nine Emerging Stronger Conversations about our city, our home and our environment. We have heard many thoughtful suggestions and thank everyone who participated for their enthusiasm and passion.

And we will continue to reach out, in dialogue and partnership, to work with Singaporeans to realise their vision for our City, and turn their ideas into action.

Today, I will explain how we intend to do so, in three areas. First, we want to strengthen our Built Environment sector and transform the way we design, build and maintain our City. Second, we seek to design a new HDB housing model, to ensure that prime areas of our City remain diverse and inclusive, for Singaporeans from all walks of life. And finally, we want to pursue our goal of a City in Nature. 

My colleagues will thereafter cover other areas of MND’s core work.

Together, these are among MND’s key priorities for this term of Government, as we set out in our Addendum to the President’s Address, at the opening of Parliament last year.

Building a more resilient Built Environment sector

Let me begin with our plans for the Built Environment sector, which Members like Ms Poh Li San, Mr Xie Yao Quan, and others have asked about.

The sector was hit very hard by COVID-19. During the Circuit Breaker period, most construction work was suspended, and many companies struggled. Even when projects could resume, the challenges mounted – ensuring the health of our foreign workers, implementing safe management measures, and so on. 

There was tremendous uncertainty, and a lot of coordination and daily adjustments were needed on the ground, as the situation kept evolving.  In fact, in the early days of this crisis, we literally had daily meetings with our partners and our Trade Associations; every day, to adjust, to understand what was going on, and to work together.

Through it all, the Government had worked with firms to help them tide over these difficulties. We strived to ensure that no one segment of the value chain in the Built Environment sector bore a disproportionate share of the impact. 

To do this, we provided significant financial support, through a $1.36 billion Construction Support Package, waivers and rebates of the Foreign Worker Levy, and wage subsidies under the Jobs Support Scheme.

Through the COVID-19 (Temporary Measures) Act, we imposed a moratorium to protect affected firms from contractual lawsuits, and required developers to share in the costs of construction delays due to COVID-19. 

In response to industry feedback, we are working with the Singapore Contractors Association Ltd (SCAL) and other Trade Associations and Chambers to facilitate claims for prolongation costs.

We also extended the Project Completion Period and Additional Buyer’s Stamp Duty remission timelines, to mitigate the impact of COVID-19 on developers. At the same time, we provided protection to purchasers from developers, in cases where the purchasers had difficulties making their contractual payments on time.

It has been an extremely challenging time. But with the perseverance of our companies and government agencies and partners, we will ride through this together.

We now project that construction demand will recover to some extent in the next few years. This year, we expect $23 to $28 billion worth of projects to be awarded, up from $21 billion last year.

We will continue to monitor industry demand closely, given the uncertainties of the pandemic. If needed, we will bring forward some of our planned public sector projects to help support the industry, as Mr Yip Hon Weng had suggested during the Budget debate.

We also recognise that the industry still faces serious challenges even though works have resumed. Safe management measures on worksites have affected productivity, while restrictions on the inflow of foreign workers have resulted in a labour crunch and higher manpower costs. We are aware of these issues and are working closely with our partners and our agencies to address them.

For example, with MOM and MOH, we are reviewing whether the safe management measures on worksites can be adjusted, but we need to balance this against a possible increase in transmission risks onsite – especially in the last few weeks, where we have seen cases again popping up in the construction sector. We are also working with agencies to see how we can ease the tight manpower situation for companies.

But above all, this experience has strengthened our resolve to accelerate the pace of change as set out in our Industry Transformation Map, and decisively transform the way we design, build and maintain our City, once and for all. We cannot go back to how we used to do construction in the past.

We have heard this conviction echoed more resolutely in many of our conversations with industry partners. 

We will therefore embark on three complementary strategies, to give a stronger push for the sector’s transformation. First, we will enhance Government support, to uplift the entire Built Environment value chain. Second, we will strengthen our regulations, to spur productivity growth and reduce reliance on foreign manpower. And third, we will step up our research and development efforts, to create and deploy innovative solutions in the Built Environment sector. 

Now let me speak about each of these in turn.

Enhance support for transformation

First, on enhancing Government support for transformation.

Now in the Built Environment sector, unlike many other sectors, there are heavy inter-dependencies among different stakeholders along the value chain. Developers work with builders and consultants on each project, who in turn rely on multiple tiers of contractors and sub-contractors for different aspects of the project. 

Given these inter-linkages, it is difficult for any one firm in the value chain to transform on its own. And this pandemic has shown that we are only as strong as the weakest link in the chain.

We will therefore enhance Government support to further integrate and strengthen the entire value chain holistically, through a new Growth and Transformation Scheme, or GTS, which DPM had announced in the Budget Speech.

This value chain approach differs from existing schemes in two important respects. First, unlike existing schemes that support individual firms, the GTS supports alliances of firms across the entire value chain, with the view of uplifting the entire Built Environment ecosystem.

Second, existing schemes focus on individual projects, which can result in contractors, sometimes operating at very thin margins to meet short-term targets, without the capacity to invest in long-term transformation. 

In contrast, the GTS supports firms in improving their capabilities, not just in completing specific projects.

Now, the Growth and Transformation Scheme will support the formation of strategic alliances among progressive developers, builders, consultants and sub-contractors across the entire value chain. 

Each alliance will develop a business plan of at least three years, showing how the alliance can increase productivity by using Design for Manufacturing and Assembly and the digital spine we call the Integrated Digital Delivery model. It should also seek to achieve sustainability targets, build better capabilities, develop our workforce, and improve business growth and strategic collaboration.

The alliance members will work together collectively for the outcomes committed to in their business plan. This is how the Built Environment sector works on projects and comes together to make it happen. 

In this way, the value chain approach will help alliance members forge long-term collaboration, reap mutual benefits, and build capabilities through knowledge sharing and transfer. This will help pave the way for the alliances to take on larger or more complex projects, or develop niche strengths in the future.

We will roll out the GTS with a few alliances first, and learn and improve the scheme along the way. Over time, the GTS should catalyse transformations throughout the Built Environment ecosystem, so that the sector can progress together, including our sub-contractors further down the value chain. 

With enhanced capabilities and a stronger track record, Singapore firms will also be better placed to compete in construction tenders both here and abroad. More details will be announced later this year.

Besides the Growth & Transformation Scheme, we will also enhance our other broad-based incentives to help firms accelerate their transformation, such as through the Construction Productivity and Capability Fund, or CPCF.

Strengthen regulations

Next, in tandem, we will strengthen our regulations, to spur greater productivity improvements.

We will review our foreign manpower levers in the construction industry. As announced at MND’s COS in 2019, we intend to remove the Man-Year-Entitlement, or MYE framework in the near future, and replace it with a system that incentivises more productive off-site work. We are also studying the reduction of the construction Dependency Ratio Ceiling, to support more manpower-lean construction. 

We are aware that changes in these regulations will impact the construction industry, and are especially mindful of the current economic climate. We will continue to consult our industry partners before making any major moves.

We will also be enhancing our Buildability Framework to raise productivity standards, and make Design for Manufacturing and Assembly (DfMA) the default method for larger projects.

In the short term, these moves may cause some pain, as many industry players accept. But as we have learnt from COVID-19, these structural changes are necessary, so that we can build greater resilience in our industry.

Step up research and innovation

Third, we will be investing more resources to support our local industry’s research and innovation efforts. By developing and deploying transformative technologies, we can spur industry growth and improve our firms’ competitiveness. 

Beyond productivity and resilience, we also want our Built Environment sector to be even more green and sustainable, in line with the Green Plan, and we talked about it earlier, during the segment on the Green Plan. 

My colleague MOS Tan Kiat How will elaborate on our plans to transform the Built Environment sector later, in greater detail.

Keeping public housing inclusive

So I’ve talked about the built environment transformation. Now, let me move on to another key priority for us – public housing.

Mr Leong Mun Wai expressed concern about possible shortages in housing supply. Let me assure Members that we closely monitor housing demand and calibrate supply accordingly, to meet Singaporeans’ housing needs. 

For public housing, HDB adopts a comprehensive approach in planning new flat supply, taking into account demographic and socio-economic trends, prevailing market conditions, and the supply of resale flats on the open market.

But our approach to public housing goes beyond matching supply to demand, and putting a physical roof over people’s heads. Public housing is also an integral part of the social fabric that keeps our nation together. It serves important social objectives that are fundamental to the idea of Singapore.

Unlike almost anywhere else in the world, here in Singapore we provide public housing for the vast majority of our people. When we live next to diverse neighbours along the same corridor or in the same estate, we share common experiences and we grow a sense of identity and community.

So we must do our best to keep public housing diverse and inclusive, to nurture and strengthen this community spirit.

Take the Ethnic Integration Policy, or EIP, for example. It is a unique policy, and an intrusive one, almost impossible to replicate anywhere else. But as Mr Saktiandi Supaat emphasised, the EIP remains important to promote social integration, by ensuring a balanced racial mix in our HDB blocks and neighbourhoods.

So it is an important strategy, but it works together with other community building strategies to ensure that our multi-culturalism is never taken for granted. 

At the same time, some flat owners may find it more challenging to sell their flats when the EIP limits are met. Members have referred cases to us from time to time. We must take care to ensure that they do not bear a disproportionate share of the EIP’s impact. 

Many of these owners are eventually able to sell their flats to buyers from the eligible ethnic groups. But for those who continue to face difficulties, HDB can give them more time to sell their flat, or exercise flexibility on the EIP in truly extenuating circumstances. We will look at appeals closely on a case-by-case basis, and continue to monitor the situation carefully.

I will now talk about how we will keep public housing inclusive, by keeping flats affordable and meeting the diverse needs of Singaporeans. I will then touch on our efforts to streamline processes for home seekers.

Keeping flats affordable

One important way we keep HDB estates inclusive is by keeping flats affordable, so that Singaporeans of different income levels can access home ownership, and live in the same neighbourhoods. That is why we sell new HDB flats at subsidised prices, and provide generous grants for first-timers buying both new and resale flats. These subsidies keep flats affordable for most buyers. 

For example, for most of the first-timer buyers in the non-mature estates, their monthly mortgage payment does not exceed one-quarter of their income. So they can pay their monthly instalments mostly through their CPF contributions, with very little or even no cash outlay.

Moving forward, as we have said, we will also build public housing in very prime locations, like the city centre and the Greater Southern Waterfront. Ms Nadia Ahmad Samdin had asked us about these plans.

Left solely to the private market, these prime areas would likely be used for exclusive, high-end housing developments that only the rich can afford, given their attractive locations and attributes. 

We see this in many other cities, from New York to Hong Kong, and many others, where housing is much more expensive in certain choice neighbourhoods compared to others, and average families either have to pay very high rents to live in these prime locations, or move further out of the city or to less desirable parts of the inner city, to buy an affordable home. 

There are very powerful social and economic forces at work, that drive stratification and gentrification of cities, that can divide communities. But we are determined to do our best to resist them, so that our society does not become fragmented over time. 

We therefore need bold and decisive action, to ensure that these prime areas of Singapore continue to reflect the openness and diversity of our society, and allow Singaporeans from diverse backgrounds to live together and interact.

That is why, even in these very prime locations, we will strive to include public rental housing, so that lower-income households can live in these estates too, and be served by the facilities and services that they require.

We will also design and introduce a new housing model, to keep new HDB flats that we will build in these areas affordable for young families and Singaporeans of different backgrounds. 

This will not be easy, as there are many factors to consider. 

For example, to keep flats in these prime areas affordable, our new housing model will have to provide additional subsidies, on top of the generous subsidies that we already provide for BTO flats today. So not just the general subsidies that everyone else gets, but for people who are buying flats in these very prime locations, to keep it affordable, we have to give additional subsidies. 

But these additional subsidies also cause difficulties, because they could lead to more capital gains for owners when they sell their flats on the open market, compared to other HDB flat owners. Hence, for fairness, we may need a way to recover some of the extra subsidies provided for flats in very prime locations.

We must also ensure that these future estates remain affordable and inclusive over time, and not just at the point when HDB sells it to the first buyer. Otherwise, they may transact at extremely high prices in the resale market, and only the better-off can buy them over time. 

In short, as a social policy, we have to act against the instinct of the market. Now, many ideas have surfaced during our engagements and there have been a lot of commentaries in the media and in professional groups. For example, imposing a longer minimum occupation period, or restrictions on renting out these flats, or ringfencing the pool of subsequent buyers.

We also received many other very good suggestions from experts, commentators, researchers, professionals, sociologists, members of the public, and so on. And we welcome people to continue sending in these ideas. 

But even these ideas, the authors themselves recognise, may create complexities too. For instance, they may exacerbate the burden on homeowners who may run into unforeseen circumstances or financial difficulties. And some acknowledged that there would be no certainty that some of the measures that are suggested would actually be able to maintain affordability over time.

So it is a balancing act, and we are still carefully studying the possibilities. We will continue to engage Singaporeans to find the right balance, before announcing more details.

But what I want to stress is that at the heart of our approach is our deep conviction: that our public housing estates must remain inclusive and accessible to Singaporeans.

Again, this is a unique approach, that very few other cities would be willing to attempt to do. But we are pursuing it, despite the challenges, because we firmly believe that it is right and necessary, to keep Singapore an open and egalitarian society.

Meeting diverse housing needs

Next, we also keep public housing inclusive by meeting the diverse housing needs of different groups of Singaporeans.

In many cases, this goes beyond just providing a form of shelter. As I said, public housing serves important social objectives. It is also about connecting residents to a wider community – building bonds among them, promoting well-being, building identity.

For example, one group that we take special care of are our seniors. Last month, together with colleagues from the Ministry of Health, we launched the first pilot for the Community Care Apartments in Bukit Batok. MND, HDB and MOH worked closely to design this new typology, to meet not just the housing or shelter needs, but also the social and care needs of seniors, and help them to foster social bonds as well. 

Public feedback on this pilot has been very encouraging, and my colleague MOS Faishal Ibrahim will provide a fuller update later. 

Another group that we look after is our lower-income households in public rental flats. Again, this is not just about basic shelter. We want to help them overcome the various complex challenges they face, and uplift their lives. 

For instance, we have a dedicated Home ownership Support Team in HDB to support public rental households who aspire to home ownership. And through ComLink, government agencies and community partners work together to provide customised and coordinated support to public rental families with children, beyond just tackling their housing needs. Again, shelter or housing with social support. 

MSF will elaborate more about this during its COS. In the same spirit, we are always looking for ways to better support our public rental households, including single tenants who find it difficult to find a flatmate or to live with one, and larger families with children. MOS Faishal Ibrahim will share more details about our initiatives for these groups.

One more group that we take care of are young couples looking to start their families. Mr Cheng Hsing Yao suggested a BTR - not a BTO - a Build to Rent model. While Mr Leong Mun Wai suggested letting millennials rent, not buy. 

We are always open to studying different housing typologies, but for now, our focus is to help Singaporeans achieve their aspirations of home ownership. Home ownership gives families a more stable long-term housing arrangement, and also a concrete stake in Singapore’s progress. 

That is why, as I mentioned, we offer generous grants to help young families afford their first flats. We also provide other assistance, such as by giving them more ballot chances and setting aside more flats for them in HDB’s sales exercises.

After booking a new flat, most families waiting for their flat to be completed continue staying with their families, while some choose to rent on the open market. HDB also has the Provisional Parenthood Housing Scheme, or PPHS, as Mr Louis Chua pointed out, for those who may need an alternative. HDB has been working to add more PPHS flats in recent years, and we are studying how we can provide more options for such families. 

We will continue to keep public housing inclusive for other groups as well, such as persons with disabilities or special needs, as Ms Cheryl Chan and Ms Denise Phua have frequently highlighted in this House.

My colleague, Senior Minister of State Sim Ann, will share more about our efforts to foster an even stronger sense of community in our HDB estates, by involving Singaporeans in building a caring and vibrant neighbourhood.

Harnessing technology to streamline processes

Now let me turn to how we are harnessing digital technology to make the home buying process more convenient for flat buyers. 

I think this last year, we have achieved in one year a significant acceleration in the digitisation of many aspects of the economy, of work, of society. And so too we have to keep up. 

We have made improvements over the last few years. For instance, we introduced the HDB Resale Portal in 2018, the open booking of flats in 2019, and the HDB Flat Portal in January this year.

Through our engagements with Singaporeans and with industry, we have planned some new initiatives this year.

First, we will combine HDB’s eligibility assessments for flats, for loans, and for grants into a single service touchpoint. Currently, buyers’ eligibility for these three components is assessed separately.

We will streamline these eligibility checks into one online application, made through the HDB Flat Portal. Where possible and with the applicants’ permission, HDB will then link up with other government agencies backend, to retrieve the details needed for its assessments. 

This reduces the need for applicants to manually enter their particulars or submit supporting documents repeatedly. The outcomes will be sent to applicants in a single document: the HDB Flat Eligibility letter. This HFE letter will notify applicants of their eligibility to buy a new or resale flat, and how much of an HDB housing loan and CPF housing grants they can qualify for.

This provides upfront clarity and holistic information on their housing and financing options, to facilitate their housing choices.

Second, we will introduce a new digital platform in the HDB Flat Portal, to guide new flat buyers throughout their flat buying journey, from flat application to key collection. 

The platform will consolidate all relevant information and present it to buyers at the appropriate milestones, because sometimes buying your first flat can be quite daunting, with lots of processes and information here and there. The platform will align it together and guide flat buyers through the process in a family-centric, client-centric way, and enable them to book the necessary appointments seamlessly.

Third, we will extend the loan-listing service in the HDB Flat Portal, and enable home seekers to apply for housing loans from participating financial institutions, directly through the portal, instead of having to do so separately.

HDB will provide more details on these initiatives later this year.

Transforming Singapore into a City in Nature

Finally, let me touch on yet another important priority for us: transforming Singapore into a City in Nature, as part of our Green Plan. 

Greening our city has always been a part of Singapore’s DNA, which we must continue to steward for generations to come. This will also help to mitigate the effects of climate change and urbanisation, and improve the living environment for all Singaporeans.

Since we announced our City in Nature vision at COS last year, we have made progress on various initiatives. For example, as part of our OneMillionTrees movement, we have already planted around 160,000 trees so far.

We also launched the new Sungei Buloh Nature Park Network in August last year. And we announced plans to rewild certain landscapes across our island, to support ecological connectivity.

At the Joint Segment on the Green Plan, I set out some of our targets: These include adding another 1,000 hectares of green spaces over the next 10 to 15 years, and expanding our Park Connector Network so that by 2030, every household will be within a 10-minute walk from a park.

With your permission, Mr Chairman, may I display some slides on the LCD screen? Thank you. 

Now today, we have a Coast-to-Coast trail that cuts across central Singapore as you can see on the LCD screen. We are also developing the Round Island Route, the Rail Corridor, and the Bukit Timah-Rochor Green Corridor.

We will establish and curate more of these recreational routes, so that Singaporeans have more opportunities to enjoy nature and the outdoors. And in fact, because of COVID, many Singaporeans are now exploring Singapore like never before. That is a wonderful thing. 

We will create two more corridors running from North to South, just like the Rail Corridor. The 18-km Eastern Corridor will link East Coast to Pasir Ris via Bedok Reservoir, and the 34-km Central Corridor will link Woodlands in the north to the city centre. We will also create two new Coast-to-Coast trails running from East to West. In the north, we will have a 25-km Coast-to-Coast Northern Trail, running from Khatib Bongsu to Sungei Buloh. And in the south, we will develop a 62-km Coast-to-Coast Southern Trail from Changi Beach to Tuas via Singapore Botanic Gardens. 

So in time to come, as the boyband Westlife put it, you can go from coast to coast and find the trail you love the most. At the same time, we will enhance our park connector infrastructure along Phase 1 of the Round Island Route, between Rower’s Bay and Gardens by the Bay, to make it more seamless and accessible. 

Mr Dennis Tan asked how we can make our park connectors safer for users. NParks is focusing on enhancing the safety of park connectors with high usage and more frequent feedback on user conflicts. Enhancement works include segregating wider park connectors into footpaths and cycling paths, updating markings and signage for better clarity, and implementing more lighting, speed regulating strips, and advisory signs. 

Notwithstanding this, there will still be a need for users to share paths, for example where space does not allow for segregation. NParks conducts regular outreach efforts to raise awareness on park connector etiquette, such as keeping left on shared paths and giving way to others. 

At the same time, NParks and LTA do also conduct joint enforcement against errant park connector users, such as PMD users who exceed the speed limits or ride recklessly. NParks will continue to work with LTA and the community to promote responsible use of our park connectors.

Overall, Singaporeans can look forward to 500 km of park connectors by 2030. These will allow for immersive experiences for all sorts of visitors – from families to hikers and cyclists. At the same time, they will add to our island’s ecological connectivity and resilience.

We have committed over $315 million to these City in Nature efforts over the next few years. 

This work will help make Singapore greener, more liveable, and more sustainable, and we invite all Singaporeans to join us on this journey.

Conclusion

Building a more resilient Built Environment sector, keeping public housing inclusive, and transforming Singapore into a City in Nature, together with the presentation my colleagues will provide later – these are some of MND’s key priorities in the year ahead and beyond.

These are ambitious, meaningful projects, but the Government cannot push them through alone. We need all Singaporeans to take part – individuals, businesses, and community organisations.

As we continue to build Singapore together, we will need to anticipate long-term social and economic trends and plan for them, while being flexible to adapt to near-term changes. Given our limited land and many pressing needs, including new ones that surface on the horizon, we will also need to make difficult trade-offs across different priorities. 

These are conversations that we need everyone to contribute to, with your different passions and expertise. My colleague, Minister Indranee Rajah, who will speak next, will explain how we will involve Singaporeans in this very important but very exciting journey.

As the COVID-19 pandemic has shown, we are far stronger when we work as one. I am confident that we can build a more resilient, inclusive, and sustainable Singapore, together.