Name and Constituency of
Member of Parliament
Mdm Ho Geok Choo, Member for West
Coast GRC
Question
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.
Answer
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.
Thank you.