Mdm Ho Geok Choo, Member for West Coast GRC
To ask the Minister for Trade and Industry in view of the recent World Bank’s ranking on the ease of doing business which has put Singapore as the most business friendly country for the second consecutive year (a) why did Singapore rank lowly for areas of registering property, starting a business and getting credit; and (b) how can Singapore improve in such areas.
Mr Speaker Sir, for the second year running, the World Bank has ranked Singapore as the easiest place in the world to do business, among 178 countries.Compared to last year, we have improved or maintained our ranking in all of the ten areas covered.This is a good testament to our pro-enterprise, business-friendly environment.
Mdm Ho has asked why Singapore ranked lowly in the areas of registering property, starting a business, and getting credit; and how Singapore can improve in these areas.First of all, let me state that World Bank ranked Singapore 7thin Getting Credit, 9th in Starting a Business, and 13th in Registering Property. Rankings from 7th to 13th position put Singaporecomfortably within the top 10% of the 178 economies surveyed.To say that Singapore ranked lowly in these areas would be inaccurate.
Secondly, we should also understand World Bank’s methodology. On the subject of access to credit, for instance, the World Bank report shows that Singapore ranked lower in terms of the availability of credit information.We assume that World Bank defines a linear relationship between the availability of credit information and access to capital. The World Bank methodology measures coverage of the entire population by a credit bureau whereas our newly formed Credit Bureau (set up in 2002) has only a relatively small database of customers with credit history.But I am sure our Credit Bureau’s database will grow with time.More importantly, the latest SME Development Survey shows that the percentage of SMEs which reported difficulty in accessing funds has decreased from about 13% in 2006 to 9.5% in 2007.This, we believe, is the outcome of joint efforts by the Action Community for Entrepreneurship (ACE), SPRING Singapore and our financial institutions to increase financing options and loan products customised for SMEs in the past 4-5 years.
On starting a business, the World Bank has reported that it takes five days to start a business in Singapore whereas in the best country, Australia, it takes only two days.The reality, fortunately, is that over 90% of our businesses registered online via ACRA's BizFile within a day.It is also worth noting that we have improved our performance from last year by removing the need to register with the Central Provident Fund Board (CPFB) when a business is started.More improvements are due to be made in the coming years and I am confident that our ranking in this area will continue to rise.World Bank’s ‘five-day’ assessment is, I believe, due to their treating parallel procedures as sequential. We will work with ACRA to see how we can improve the user interface for business registration by, for instance, streamlining the five procedures identified by World Bank into just one.
On registration of properties, World Bank measured how long it took and how much it cost to register a property.World Bank concluded that it is more costly to register a property in Singapore because of our higher stamp duty compared to some of the economies ranked above us, such as New Zealand.But our businesses look at property transactions from a total-cost perspective.For instance, Singapore does not impose any capital gain tax on the property transaction.On the other hand, capital gain tax in other regimes can be rather costly.
World Bank also considers the online search for information related to property registration here to take longer, at seven days, compared to leading jurisdictions.We acknowledge that there is room for improvement here. MTI will work with closely with the Singapore Land Authority (SLA) to simplify and shorten the process for property registration.
Mr Speaker Sir, I am glad that the World Bank has recognised Singapore’s efforts in setting pro-enterprise best practices, and accorded us the distinction of being the easiest place in the world to do business for the second year running.While we are gratified with the acknowledgement, we must not become complacent but instead seek continuous improvement in enhancing our business environment for our businesses. I would like to assure Mdm Ho that we will make every effort to keep Singapore’s lead in our economic competitiveness.