Keeping the Long Term View

1. 2007 was indeed a very good year. We had strong economic growth with employment at a record high. Singapore captured global attention as we continued to transform ourselves into a cosmopolitan, vibrant and distinctive city. Last month, we were listed among the top 20 global vibrant cities for the first time in the 2008 Hub Culture Zeitgeist Cities Ranking.

2. As Members have pointed out, there are many new challenges. With economic growth, cost pressures have gone up. Members have raised concerns about rising office rentals and housing prices in the Budget Debate. I will deal with these in detail. Nevertheless, even as we address the immediate cost concerns, let us not lose sight of our longer-term development objectives and focus. Our success today did not come by chance, but through persistent efforts over many years to remake Singapore into a distinctive global city. We must continue to keep the long-term view and position our city well in the global competition for jobs, investments and talents.

“The Singapore Way”: A Pragmatic, People-Centred Approach to Sustainable Development

3. Let me start with the longer-term development goals. The current cost challenges are reflective of the pressures on our limited resources as our economy and population grow. Last year, the exuberance in the property market and the construction boom caused construction costs to spike up. As a small open economy, the worldwide increase in energy and food prices has a direct and immediate impact on us. As we develop, these pressures can only become more acute, and not less.

4. Therefore, sustainable development must continue to be a key priority of the Government. The Government recently formed an Inter-Ministerial Committee on Sustainable Development (IMCSD) to review policies and chart new strategies for Singapore’s future development. The committee is co-chaired by Minister Yaacob and myself, and also includes members from the Ministry of Finance (MOF), the Ministry of Trade & Industry (MTI) and the Ministry of Transport (MOT). This Committee will work closely with the Inter-Ministerial Committee on Climate Change chaired by Prof. Jayakumar. This is a strong signal of the Government’s commitment to ensure that the growth we strive for is not at the expense of our quality of life.

5. Many MPs have spoken on this issue of sustainable development during the Budget Debate. Let me take this opportunity to articulate our philosophy and approach to sustainable development. The term “sustainable development” was more widely used after the Brundtland Commission introduced the term in its report titled "Our Common Future" in 1987. When Singapore became independent in 1965, this term had yet to catch on internationally. But Singapore had in fact adopted sustainable development principles right from the beginning, and consistently practised these principles in the past 40 years of our development. Not by choice but by necessity, because we are a city-state with scarce resources and no hinterland. We have evolved our own "Singapore Way" of sustainable development in the past 40 years, and it has served us well by achieving both economic growth and giving our people a good quality of life.

6. This Singapore Way is first and foremost, about a good system of governance. Our sustainable development approach for the past 40 years is founded on long-term, comprehensive planning, and supported by a set of key policies and best practices and breakthrough innovations in technology. Few cities in the world have an integrated planning framework like ours, where technical agencies across ministries come together to plan the land use and infrastructure needs of our development over a long-term horizon i.e. over a few decades. This allows us to judiciously maximise every bit of our land resources. We have pioneered traffic demand management measures like the Vehicle Quota System (VQS) and Electronic Road Pricing (ERP) system. We have planned self-sufficient townships to reduce the need to commute. We have achieved breakthroughs in waste and water management, and developed NEWater to enhance our water security. It is a total systems approach that includes both software and hardware. In our own unique and holistic way, we have been able to achieve a liveable environment in the context of an economically vibrant, highly urbanised and densely populated city.

7. The Singapore Way is also a highly pragmatic approach to development, or "pragmatic environmentalism". We seek the most viable and cost-effective methods of achieving environmental sustainability outcomes. We focus on measures that are practical, effective, and will make impactful contributions to environmental sustainability. Going forward, we will continue to experiment and make investment decisions in green technology taking into account economic viability and effectiveness.

8. Third, and this is related to pragmatism, the Singapore Way is about achieving a sustainable and mutually reinforcing balance between development and the environment. We need to remind ourselves that sustainable development is still about development, and that, at the core of the whole concept of sustainable development, is quality of life for our people. We still want growth and we still want good jobs. We want a better life for ourselves and our children. For the years ahead, we will have to do more to achieve greater resource efficiency to support our economic growth. We also need to ensure that our people have an excellent quality of life – that we can continue to breathe clean air, drink clean water, and enjoy green places and spaces. This means that we will have to strive to achieve all our development objectives – economic growth, a good living environment, our environmental heritage – in a balanced way. Tough trade-offs between the needs of the economy and housing, between housing and conservation, and between development and preservation of nature areas must continue to be made, especially in a small and resource scarce city-state like ours.

9. We also cannot forsake growth, as growth ensures that we have the resources to do even more for the environment. It is only with growth that Singapore will have sufficient resources to implement measures and to undertake investments to help us cut down on energy consumption or help us make use of renewable energy, both of which help mitigate the impact of climate change. So we want a virtuous cycle of economic growth and a higher quality of the living environment supporting each other, and not place one objective before or at the expense of the other.

10. Going forward, how do we make the next leap to become a leading eco-city in Asia? The key is Partnership. An eco-city needs eco-residents. Sustainable development is as much about changing lifestyles as it is about new technologies or green buildings. We need to partner the private and the people sectors to make fundamental changes to the way we live, work, play and commute at the level of individuals and businesses. So when I heard Member talk about making more efforts to facilitate a higher rate of recycling, I am very encouraged as it is through such efforts, through advocacy of leaders and the MPs, that we will succeed. I am also happy to note the concrete efforts made by the various CDCs. For example, Member talked about the energy efficiency efforts in the North West CDC during the Budget Debate. Going forward, the IMCSD hopes to partner MPs, CDCs, grassroots organisations and NGOs to further promote and expand ground up efforts in support of sustainable development.

11. The IMCSD also intends to co-create a sustainable development strategy with the people and private sectors for the future, by seeking the views and expert knowledge that resides both locally and internationally. I expect that some of these discussions will reflect the inherent tensions between development and environment that face our resource-scarce state -- whether it is between conservation of buildings and development that Member has talked about or whether it is between conservation of wooded areas and housing. But I believe such discussions and debates are essential to foster greater awareness of the challenges we face, and greater ownership of the solutions that we will come up with, together. I am greatly encouraged by the various suggestions from Members about how we can further our sustainable development efforts. The IMCSD will study them carefully. In particular, Memer asked whether the IMCSD would be looking at encouraging environmental sustainability in our built environment, including public housing. The answer is ‘yes’. Apart from the broad strategies, the IMCSD will also look into specific new initiatives in various areas, such as in transport, in our built environment, promoting green industry and expanding green spaces, to make Singapore the leading eco-global city in Asia. Member also asked whether the Government will be introducing more financial incentives to encourage environmentally friendly practices. I do not preclude this, but the IMCSD needs to address sustainable development in a holistic way, with a whole slew of measures including public education, including research and development, and if necessary, legislation. The IMCSD intends to launch a blueprint next year that will provide a comprehensive road map of the initiatives and the measures that we will need to take to sustain our development for the next 10 years and beyond.

12. Even as we do more domestically, we hope we can share with other cities our model of sustainable development. We have started on an important project that the Minister for Foreign Affairs George Yeo has talked about. This is our collaborative project with China, the Sino-Singapore Tianjin Eco-City. Through this project, we hope to share some of the development strategies and measures that Singapore have taken and we hope to learn from the Chinese their strategies and initiatives so that together, we can create an eco-city that will be replicable in other cities in China. The UN biodiversity chief Ahmed Djoghlaf, who visited Singapore in January this year for the first time said that he could never have imagined such greenness and nature could exist in the heart of one of the most populated cities in the world. He encouraged us to share our experiences with other highly urbanised cities and we have promised to do so. We hope to share a model of sustainable development that is financially and economically viable, that is replicable and that addresses the needs of cities that are highly urbanised, densely populated and economically vibrant.

Land Use Strategies for Sustainable Development

13. MND/URA will continue to plan our land use judiciously to ensure that we can grow comfortably into the future, and yet provide an even higher quality of living environment for our people.

14. In the next few months, MND and URA will roll out the Master Plan 2008. This plan will guide development for the next 10 to 15 years and we will involve various stakeholders in the process. The land use plans have been developed with three key objectives in mind – firstly, to ensure that we have sufficient land to support economic growth; second, to reduce commuting by bringing jobs closer to home and homes closer to jobs; and third, to provide greater greenery and leisure options for our people.

Supporting Economic Growth

15. First of all, supporting economic growth. Member asked about the plans to rejuvenate the CBD and develop Marina Bay.

16. To meet the future demand for Grade A office space, URA will be releasing land around the Tanjong Pagar precinct as well as redeveloping the Ophir/Rochor corridor into a vibrant office cluster. So the existing CBD will not be forgotten. However, Marina Bay remains the centrepiece of our efforts. It will be a seamless extension of Raffles Place, and will offer high-quality office spaces along a lively waterfront. Let me just give you an idea of its eventual scale. The amount of space that will be generated within the area located immediately adjacent to the existing financial district at Raffles Place and Shenton Way will be equivalent to two Canary Wharfs in London. It will provide as much Grade A office space as Hong Kong's Central. We are beginning to see the new financial district at Marina Bay taking shape. We have the new development of One Raffles Quay and the Marina Bay Financial Centre as well as the two recently sold sites at Marina View. URA will make available more sites for development in this area over the next 5 to 6 years, in line with market demand. When completed, these new developments will provide more than 1.1mil sqm of office space. In other words, to put it into context, this is equivalent to the total amount of office space at Raffles Place today. The new financial district is expected to take more than 15 years to materialize, depending on market demand. The Government will release land in a calibrated manner to meet such demand.

17. Member asked about having more underground connectivity between buildings in the Orchard Road and downtown business area. I would like to inform him that the Marina Bay has been master planned as a pedestrian friendly district. In other words, there will be covered walkways at ground level, and an extensive underground pedestrian network that links the developments to the MRT stations. For Orchard Road, URA plans to work with the private sector to achieve a comprehensive and seamless pedestrian network that includes not just underground links and walkways at street level, but also second storey links between buildings. This will require incentives but also a lot of persuasion on the part of the Government, but I believe it can be done.

Reducing the Need to Commute

18. Next, reducing the need to commute. It will not be sustainable for all the economic activities to continue to be focused in the city centre only. Member asked if we could consider intensifying land around MRT stations to facilitate the public using the MRT to go to work.

19. Yes, it has been a key planning policy of the Government to intensify land use around the MRT stations. However, Members should appreciate that not all sites around MRT stations can be developed at the same time. Many offices and commercial buildings today are already located around and integrated with MRT stations. For example, there is a vibrant cluster of office and commercial buildings built up around the Novena and Tampines MRT stations. In the new MP08, new commercial centres at Jurong, Paya Lebar as well as Kallang-Bugis will be developed to support our economic growth. These centres are near existing developed areas, well-supported by infrastructure such as MRT lines and roads. New industrial estates will also be created and located over different regions. All these efforts will make getting to work more convenient and cut down commuting time.

Ensuring a Quality Living Environment

20. The third objective of MP 08 is to ensure a quality living environment. At last year’s National Day Rally, PM mentioned the plans for the rejuvenation of HDB estates including Punggol 21 and Dawson. Our housing estates will be rejuvenated through redevelopment such as SERS or upgrading programmes such as the Home Improvement Programme, Neighbourhood Renewal Programme and Lift Upgrading Programmes. Member suggested that we look into providing for retirement villages. As she may know, the Government today provides elderly housing in the form of Studio Apartments or SAs. Unlike other countries with stand-alone retirement villages, SAs are located within HDB estates. In fact, some SAs are located within blocks together with other flat types. This is because we want to allow the elderly to be integrated within the community as well as to enjoy access to a wide range of facilities. The Government has also set aside land for the private sector to consider developing private residences that are purpose-built for the elderly. For instance, the Government has made available a site at Jalan Jurong Kechil. The site comes with a shorter lease of 30 years to make it more financially attractive for retirement housing development. So we are trying a shorter 30-year lease and we will see if private sector is interested.

21. Lastly, the MP08 will include more recreational choices and destinations to improve the quality of life. There will be more water-based recreation, new sports facilities, and lifestyle destinations. There will be new parks. There will be enhancement to existing ones. Member talked about Park Connectors. I want to assure Member that our Park Connectors will not lead to nowhere. The aim of the Park Connectors is to connect up all the parks so that the parks can be accessible. In fact, we have stepped up the development of Park Connectors. Two hundred km of these green corridors will link up our parks around the island by 2015. This is more than what was originally planned under the 2002 Parks & Waterbodies Plan. In fact, for those living in the east, they would know that the Eastern Coastal Park Connector is now completed. It is 42km long or equivalent to the distance for a marathon. In fact, in few months’ time, there are plans to hold an ultra-marathon event, which is twice the distance of a standard marathon. I would like to assure Members that we are very serious in developing the Park Connectors, as this is how we can leverage on our parks and green spaces. But we also need programming to bring people to the parks. A programme that has gained traction is what we call the “Community-in-Bloom” programme. This programme has succeeded in promoting greenery appreciation, a strong gardening culture, and community bonding. For members who have not started this programme in their constituencies, I will recommend it to you.

22. We will also continue to safeguard our natural biodiversity and heritage. The four Nature Reserves and 18 Nature Areas are reflected in the Master Plan. Member spoke about protection of mature trees. We have in place legislation, supported by development control measures, to protect trees within designated tree conservation areas, along Heritage Roads and roadside planting verges, and also in our gazetted National Parks and Nature Reserves. Through prioritising developments in existing urban areas, areas which are not required for development will be kept undeveloped for as long as possible. Let me say that we cannot place trees and biodiversity above housing and other needs of our people. But through judicious planning and sensitive development, we can share this limited space of ours with the birds and the trees including Albizia trees.

State of Singapore’s Property Market

23. Let me now turn to the short-term challenges that members have brought up. One immediate challenge is the supply of office space and private residential property. Indeed, demand in these property sectors was very robust in 2007 in tandem with the growth of the overall economy. The current short-term office crunch was partly a result of low office development activity during the 2002 to 2004 period when the market was down. The private sector was hesitant in taking up sites made available by the Government and was converting office space to other uses. On the other hand, in 2005 and 2006, there was faster than expected demand. These factors jointly contributed to the current shortage in office supply.

24. In 2008 and 2009, the office market is expected to remain tight due to the continuing shortage of new office supply. However, some 1.4 mil sq m of office space will be completed, mostly in 2010 and beyond. This is equivalent to about 5 years of supply, based on the average demand in the last few years. The Government has also released land for transitional office sites as well as vacant state properties, which will yield 150,000sqm of additional office space. These transitional office spaces will be available within a year or so to ease the short-term space crunch. The Government has also temporarily disallowed the conversion of office space in the Central Area to curb further depletion of the existing stock.

25. These measures are going to take some time to filter through to the market. I will suggest that in the meantime, tenants can look at alternative locations outside the Central Area if they can. Office rentals vary widely depending on location and development. We read about record office rentals in the headlines but these reflect the rentals for selected prime locations and Grade A developments. The median office rent in locations outside the city centre, which accounts for 80% of office space in Singapore, is less than half that within the city centre. With more supply coming on stream, increase in office rentals will be moderated over the next few years. And that is before taking into account any unforeseen circumstances arising from the sub-prime problems in the global financial sector.

26. As for private residential properties, the Government has responded to the price and rental increases by releasing more sites for residential development, more market information, and withdrawn the Deferred Payment Scheme to pre-empt speculative activity. The increase in prices and rentals had moderated towards the end of last year. And like office space, prices and rentals for private residential properties also varied across market segments and geographical locations. As at end-2007, i.e. 4th quarter last year, the median rent for non-landed private housing outside the Central Region was about half that for non-landed private housing in the Core Central Region (covering postal districts 9, 10, 11, Downtown Core and Sentosa). I would like to inform Members that more supply is coming into the pipeline, which will moderate the price and rental increase over the next few years. As at 4Q2007, there was a total supply of almost 65,000 uncompleted units of private housing from projects in the pipeline, out of which 56,000 units are expected to be completed between 2008 and 2011. To put that into perspective, the average demand for uncompleted units over the last few years was 11,000 units per annum.

27. The Government will continue to monitor the property market closely and will calibrate the office and private residential supply to be made available via the Government Land Sales (GLS) programme. We will continue to take a market-led approach by using both the Confirmed List as well as the Reserve List for the GLS.

Foreign Worker Housing

28. Let me now take one last point by Member who asked about the supply of dormitory facilities for foreign workers. The demand for dormitory facilities has indeed increased and increased sharply, with the entry of more foreign workers needed for our booming economy. To take some of the heat out of the construction sector, the Government has already deferred close to $3bn worth of projects, which will translate to a reduction in the demand for foreign workers and foreign workers’ dormitories.

29. We have several foreign worker housing options that we hope the industry can consider. There are dormitories set up within factory premises, purpose built dormitories and quarters provided within construction sites. We will release more sites for operators to build workers' dormitories, and require successful tenderers to provide a range of amenities within the dormitory sites. For the past year, BCA and JTC have launched seven new dormitories sites, which will provide close to 50,000 additional bed spaces. Here, I will like to appeal for members’ co-operation as some of these sites may fall within your constituencies.

30. In conclusion, let me assure Members that my Ministry will take concrete action to address these short-term challenges. At the same time, we will stay on course and persist with our ongoing efforts to develop Singapore into a vibrant and distinctive city in a sustainable way.

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