Augustine H.H. Tan
Singapore
“There are instances when reserves should be used, but the govern- ment has to make a case to the President and if good arguments are used, the President is expected to concur. I therefore end by asking you, as you have done in your speeches, to support this Bill with a very loud "Aye" when it comes to the vote. [Applause].”
“We must have confidence that in the end, as Singaporeans, we know what is overall best for ourselves. We are a community of free citizens committed to making Singapore a great city to live in and for foreigners to come visit and admire.”
“There is such a thing as initiative. Who initiated the project? What was the objective of the project? And there is such a thing as economies of scale, the benefits of which are passed on to the taxi drivers. Let us not forget those elements. An hon. Member: They do not pay tax on their income.”
“They can still enjoy the seafood regardless of the indigestion. They can do the shopping and do other things in Johor Baru. I believe that what is important for us is that we do not preclude ourselves the option of setting our own national policies.”
“Mr Speaker, Sir, the Minister stated that it is undesirable to employ foreigners to run child care centres because they affect the values of our children. Is it not also true that by having foreign maids in our homes that they too directly impact upon the values of our children?”
“It was a point which I brought out much earlier when a similar matter was debated here in Parliament. Because the government could borrow on the basis of the reserves even though the President has one key to the reserves because there is such a thing as credit-worthiness of the country.”
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“But there are lots of people who may be left behind in the race towards greater material progress and I think we have to have a heart for some of these people. We have got to give them a place in the sun. We have got to be able to slot those people who cannot be slotted elsewhere into our economy. If we keep on thinking of people as digits and wanting to reshuffle them around the place, then I think we are doing serious injury to the social fabric of Singapore. I really cannot understand the logic of this Committee called STRED. On the one hand it talks about saving labour and so on and phasing out the current system, and on the other hand it talks about once having increased the hawker licence fees to what they call "economic rentals", then anyone may apply, including the ablebodied. This is like reasoning in a vicious circle. On the one hand we say we do not want our able-bodied to become hawkers, and on the other hand now we say, "All right. We want to charge market rentals. And once we have achieved that, then, we will let everybody come in, those who want to be hawkers." To me, it is nonsensical. We have got to have a consistent policy.”
“But, Sir, more seriously, if the fees are going to be revised at all, and they are going to be revised in the light of current construction cost, then I think all the Members of Parliament should take issue with the Minister concerned, because many of our hawker centres are built in times when the construction costs were very much less. Now we are talking of a uniform revision of hawkers' fee regardless of the age of the hawker centre or market and regardless of the location. Here again, I fail to understand the economics behind this particular decision. I know the Minister has to contend with the boys in the Ministry of Finance or the Ministry of Trade and Industry, but maybe I can give him some ammunition to counter them. I am very concerned about this issue. People may ask me why am I so concerned about the livelihood of hawkers. The Hon. Minister mentioned the hawker who bought a Mercedes Benz. I can show him hundreds or thousands of hawkers who are still very poor, after years of hawking. It depends on the location. It depends on the skills of the hawker in question. Not every hawker sends his children to America or to Europe. One cannot go by the standard, as I say, of Telok Ayer or of Newton Hawker Centre. The hawker centres have served Singapore well. They have provided employment for handicapped people, for widows, for people who find it inconvenient to have a full-time job. If a woman is a widow and she wants to have a means of livelihood, and if she were to work in a factory, she would have to hire somebody to look after the children. But if she were running a hawker stall, she could have the children around her. She could look after them, and not have to pay the extra charges involved. Singapore is developing very rapidly and that is fine.”
“But there are a number of points which I take issue with him e.g. the cost of $40,000 per stall which he mentioned. Now, if one were to assume roughly 40 square feet per stall, maybe a little bit more, that works out to $1,000 construction cost per square foot. That seems to me to be an extremely high figure, even for the most expensive commercial building. I am not an architect, neither am I an engineer, but I think that is rather exorbitant, especially for a humble hawker stall. Secondly, Sir, there are ways of cutting down this cost. For example, one need not use the piece of land solely for a hawker centre but, as in many housing estates, the hawker centres are integrated into buildings which serve other purposes. We have the example of Cuppage Road Hawker Centre where even the Ministry of Health has offices on top while the wet market and hawker centre are below, to the convenience of the Ministry staff and other people there. That should reduce the construction cost considerably. Another factor in terms of the construction cost has to do with the valuation of land. This time, and again I take issue with the Government bench, Government insists on using market prices. Government sets market prices by its very policies. I mean, to me it is a nonsensical thing for Government to say, "We are going to value this land at market cost." We have the recent case of HUDC trying to value land at market cost, or market price. Government is the largest landowner in Singapore. Government's actions have tremendous macro-economic repercussions. Government can make or break the price of land in the market. So I fail to see how this costing comes about.”
“Mr Speaker, Sir, I thank the Hon. Minister for the care in which he replied to the various questions which I raised. But I have a few points for him to consider. He mentioned that he has a total of over 10,700 public toilets to look after. I looked up the Public Health Inspectorate and I see that we have scheduled 160 Public Health inspectors to look after these toilets. If they do nothing else, each one would be looking after 67 toilets. I am just wondering whether he has enough manpower or womanpower as the case may be. 5.30 p.m. Secondly, Sir, while his inspectors are looking into the toilet problem, perhaps they should also look into the supply or the availability of soap and toilet paper and make sure that these are available in each and every toilet. I say this because, even in places like the National University of Singapore, these seem to be scarce commodities. Sir, the Minister also mentioned that he is looking after the personal hygiene aspects of food handlers and that, in particular, they are subjected to medical examinations and inoculations. But I think he missed the point of my question or the problem which I raised. That had nothing to do with whether they were carriers of disease themselves or whether they were healthy or not. I assume that is well taken care of. I was more concerned with their personal habits of hygiene. You will be surprised, Sir, how many people go to the toilet and never wash their hands. I hope the Minister of State of Education is listening, that he should implement an educa- tional programme in schools - "Wash your hands" campaign. The trouble is that they teach them to use their hands but never teach them to wash them. Coming next to the problem of hawkers, I think the Minister has taken pains to study the problem.”
“I for one certainly hope not and would like to appeal to the Minister not to do so because there are thousands of hawkers whose livelihood depends on the markets, and there are even more thousands of Singaporeans who are very used to these markets that it would be a shame for these to be phased out. The last issue I would like to raise with the Hon. Minister concerns the question of air pollution. I would like to ask him whether in the measurement taken of the air pollution in Singapore, what is the lead content and whether we have any measures to regulate the amount of lead permissible in petroleum and other petroleum products.”
“I do not know whether they make Szechuan ducks this way, but it is certainly most unhygienic. Then I was in another restaurant and, while we were waiting for our food, one of my friends went to the toilet and a waiter also went to the toilet. So my friend came out and he said, "He didn't." "He didn't" meaning he did not wash his fingers. I think we should take this seriously - before we issue licences to various food establishments and to hawkers, they should be taught the basic rules of personal hygiene, otherwise we can facilitate the spread of diseases. Another matter I wish to take up with the Minister concerns the recent revision of hawkers' fees. It seems to have been done across the board, regardless of location and profitability of the hawkers in question. I kind of rather suspect that the people who make decisions on such fees frequent the more popular hawker centres, like Telok Ayer and Cairnhill, where tourists and office workers frequent. But those of us who come from the more out-lying areas where the volume of business is lower and the profitability less, like markets in Whampoa, this would seem to be inequitable for the hawkers in question. I would therefore like to ask the Hon. Minister whether he should not review his policy to provide for differential fees to be paid in terms of different locations, so as to reflect this fact which I have pointed out. Another concern of hawkers is the announced policy of the Housing and Development Board and other relevant authorities not to build any more wet markets in new housing estates. Naturally the fear is whether the present wet markets are also going to be phased out.”
“Mr Speaker, Sir, I beg to move, That the sum to be allocated for Head M be reduced by $10 in respect of Subhead MA-01 of the Main Estimates.* Sir, we boast of a clean and green Singapore, and rightly so, because when tourists come to Singapore they look at our streets, the public buildings on the outside are kept very clean and there is much greenery in our city. But within the buildings, particularly within the toilets, we have a different picture altogether. When I fly to different airports of the world, Sir, and I get into their toilets, I know roughly the kind of country I am in. Although the toilets at our Changi Airport are very clean, I cannot say the same for our toilets in other buildings in Singapore. I do not know whether it would take a visit by the Prime Minister himself to a public toilet for something to be done, but I hope that the Ministry of the Environment can do something about this. Sir, I would also like to make reference to the question of hygiene in the handling of food. I was having lunch once at a restaurant in a major hotel in Singapore. After I finished my lunch I came out and I saw, at the back of my car in the car park itself, a whole string of ducks being dried out in the sun. The exhausts from the car, the fumes and so on, provide us - An hon. Member: Szechuan ducks!”
“Not moving, Sir. The Chairman: Amendment (7), Dr Lee is not here. Amendment (8), Dr Tan.”
“(8) That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NF-01 of the Main Estimates.”
“(6) That the sum to be allocated for Head N be reduced by $10 in respect of Subhead NE-03 of the Development Estimates.”
“Sir, is it not true that over the next two years, as the newer flats are available for purchase, there will be substantial numbers moving from the 1- and 2-room flats into the purchase flats. These 1- and 2-room flats will be vacant and therefore available for the people that are waiting in the Member for Anson's constituency.”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The Chairman: Amendments* Nos. (2), (3) and (4) are withdrawn because the hon. Members are not here. Amendment No. 5, Mr Jeyaretnam.”
“Mr Speaker, Sir, I am much encouraged by the forward-looking plans of the People's Association and its vision. Maybe the Minister could assure this House that, in planning for new community centres, increased land allocation could be made to provide for the new facilities that he has in mind. I foresee the day when a community centre ought to be a place where you can find a swimming pool in addition to the range of activities that are currently there.”
“Sir, I am already aware that our community centres have been used as kindergartens in the morning and that during examination periods, whenever requested, some centres have been opened for students who want to study there. My question concerns the use of the other facilities, the sports facilities in particular, at the community centres. I am at a loss to know how, either the People's Association or the Minister himself, could have made a survey to find out that the use of facilities peaks in the late afternoon or early evening when the community centres are not open at all in respect of sporting activity. In the matter of staff, I have heard a complaint from the People's Association that they have difficulty recruiting and retaining staff because of the long hours or the odd hours which are required for this kind of work; they have to work from 2.30 till 10.30 at night. So by the time they get home, it is close to midnight. But if my suggestion were taken up, i.e. these facilities be open from 8.30 in the morning, then we could consider having two shifts and then rotate the staff accordingly, so that it becomes less taxing and less onerous for people to work in the People's Association and its community centres and would make the job more attractive. 3.45 p.m.”
“Sir, since the Prime Minister himself is not here, I will pass on to another topic. Sir, I notice that the People's Association is spending $29.2 million on the Main Estimates and $34.5 million on development projects this coming year. Sir, we certainly welcome the efforts of the People's Association and we appreciate the tremendous upgrading in terms of facilities which are provided at our modern community centres. This has certainly resulted in a tremendous range of activities for the people of Singapore, especially for the lower income groups who now have access to sports facilities, reading rooms, libraries, and so on. There are a number of points I would like to direct to the Prime Minister or his delegate. The first point is that these community centres are open only from 2.30 p.m. on weekdays to about 10.30 at night. Why can't we open these centres from 8.30 in the morning, because this will enable more people to make use of these expensive facilities? The second point I would like to make concerns the policy on the posting of staff. Some of the People's Association staff, the Organizing Secretaries and their Assistants are really very good at their job. They try hard; they work hard. They are dedicated. Unfortunately, by the time they develop their contacts on the ground, whether in the Women's Sub-Committee, the Management Committee, the CCC, YEC, they are transferred to some other community centre and we get some new chaps or a new lady sent to us, may be "bran d new", without any prior experience. So it has an unsettling effect on the activities of such community centres. Perhaps the Prime Minister's Office can enlighten this House of such policies.”
“The point I am trying to make here, Sir, is that we are conducting quite a number of campaigns within each year. What are we trying to achieve, and are we achieving the purposes for which we set out to do? Perhaps the Minister or the Parliamentary Secretary from the Prime Minister's Office could reply.”
“Mr Speaker, Sir, I beg to move, That the sum to be allocated for Head U be reduced by $10 in respect of Subhead UA-01 of the Main Estimates. Sir, there are a couple of issues I would like to raise here. Perhaps I could take them one at a time to allow the relevant Minister to reply in turn. The first concerns the conduct of national campaigns. In 1980, according to my count, we conducted eight national campaigns, plus three others under the auspices of the Ministry of Education. To give some Members some idea of what we did, we had the Promote the Use of Mandarin campaign; we had the Metrication campaign; we even had the Parking Coupon System campaign; Fire Prevention campaign; a campaign to educate the people about the census of population; Courtesy campaign; Anti-smoking campaign; and one to get people to get the urine and blood tested; three others organized by the Ministry of Education; Use Your School Language campaign; Use your hands campaign; and a Courtesy campaign; a total of 11 for 1980. In 1981, I counted a total of six campaigns: Crime Prevention campaign; International Year of the Disabled Persons - I do not know what we are campaigning for - Fire Service Week campaign; Energy Conservation campaign; National Courtesy campaign and Promote the Use of Mandarin campaign. In 1982, I counted six main campaigns. Again Energy Saving, Crime Prevention, National Courtesy, Traffic, Speak Mandarin campaign; and "Productivity Month". Then there were other minor events, like Use your Hands campaign in the schools, Mother and Child Care Exhibition - again conducted at various places. In 1983, I expect us to have a total of seven campaigns and two of them would occur within the same month of September.”
“I suppose this means that most of the profits have been siphoned off to the companies and that workers are only left with the crumbs. The Clerk of Parliament will distribute this schedule (Cols. 915 - 916) which shows average annual remuneration per worker in manufacturing over the last 23 years since 1960. Manufacturing is indicative of the other economic sectors and the figures have been adjusted for inflation so that they are comparable. [Copies distributed to Members.] schedule (Cols. 915 - 916) Members will see straightaway that the average annual remuneration per worker in manufacturing has, in fact, more than doubled from $5,705 in 1960 to $11,521 in 1982 and these are real wages to reflect the increase in purchasing power which the average worker in manufacturing has been able to enjoy in the last 23 years. Another very striking figure in the schedule is the average CPF balances of workers. In 1960, the average balance was $1,089. In 1982, the average balance was $9,074, an increase of over eight times. Again these figures have been adjusted for inflation and they are all stated in 1982 dollars. Half of the increase of eight times represents the increased contribution from the workers, half represents the increased contribution from their employers. So we can see that not only have the workers been able to spend more on the necessities and luxuries of life but they have also been able to save more. What is more remarkable to me is that the higher CPF balances have come about even after deducting the commitments on HDB mortgages which is the means by which we have enabled the vast majority of our population to have the hope that one of these days they can own their own homes. I think this is a promise that no other government has been able to give to its people.”
“Again, Members have brought up points like taxation on venture capital and the Member for Tanah Merah brought up the point on international consultancy companies which I do not have time to reply today. I hope he will ask the question again in due course. I think I have covered all the material points which have been brought up by Members in the Budget debate. I will turn now to the comments of the Member for Anson. He has spoken, according to my watch, for 60 minutes but has said nothing that is new or relevant but a lot that is confusing. Indeed his speech seems to be a hotch potch of unrelated ideas, and I really think that he should confine himself to speaking on subjects with which he is familiar. He has asked why we have not spelt out the measures to see how we can see our Singapore economy through the present recession. I would have thought that the whole budget speech is devoted to that particular theme. Secondly, he has raised some new concepts which I am not familiar with, for example, tying bonuses to current cost profits. I believe that the term is current cost accounting. He has criticized the fact that Government may be using unduly tight interest rate and exchange rate policies which hamper our exporters and manufacturers. You cannot have tight interest rates and tight exchange rates at the same time. If interest rates are low, then your dollar will go down. So I think you have got to choose one or the other. The Member has a fairly predictable frame of mind. So I have taken the precaution of preparing a number of schedules relating to the points which he has raised in this debate. He has said that one defect in this budget is that workers have not been given a fair share in the prosperity of the company.”
“During such times, it is necessary for the Government to take an active part in spending while the private sector is hesitant to expand its operations. The Government will reduce its role when the economy recovers in order to ensure that there is no crowding out of resources. I think Members also know that a large part of Government spending is in development projects which will improve the social and economic infrastructure of Singapore. This is an area where the private sector does not venture into - public housing, power supply, industrial land, port development, telecommunications, which will bring lasting benefit to us. As time is short, I will skip over some of the specific taxation issues brought up by various Members. I hope they will bring them up again in the form of Oral Questions so that we will have time to give them a reply. This includes taxation on foreign source income brought up by the Member for Chong Boon. I would like, however, to say a few words about estate duty. There seems to be a concerted campaign during this debate to question the need for estate duty. I would just like to mention here that we are reviewing whether estate duty is necessary in Singapore and, if so, what can be done. Perhaps by next year I will be able to let Members have more information. As regards the enhanced child relief given to specially qualified women, several Members have suggested that this be extended to all working women. I am not sure whether there is a valid case for it. But I am sympathetic to the suggestion by the Member for Thomson that qualified teachers in schools and nurses should perhaps be considered. I will recommend this to the Ministry of Finance.”
“On a point of explanation, Sir. It was an under-estimate of recurrent expenditure, an over-estimate of development expenditure and an underestimate of revenue. Dr Tony Tan Keng Yam: I am grateful to the Member for Whampoa. But he has brought up a very serious point, and that is that the Budget presented annually to Government does not include the expenditure of our major statutory boards and also of the Government companies which the Member for Rochore mentioned, I would like to point out here that the annual budget does state the amounts that are being provided by Government to statutory boards by way of operating or capital grants and loans. Of course, the budget does not reflect the revenues and expenditures of those statutory boards which are self-financing. However, this does not mean that Parliament is not kept informed of the spending plans of the various statutory boards. Each statutory board is required to present its budget as well as its audited statement of accounts annually to Parliament. Further, the parent Ministry of each statutory board regularly monitors the board's activities and its financial performance. Finally, as a further measure, the Ministry of Finance will be introducing a computerized system to monitor the long-term recurrent and capital expenditure commitments of all the statutory boards, including those which are self-financing. This should ensure that the expenditure of statutory boards is under adequate Government control. One last point brought up by the Member for Whampoa which deserves to be discussed is the increase in Government spending in the last few years. This is necessary because of the fact that we are in an economic recession.”
“We must, first of all, realize that our role is largely that of the middlemen, whether we are talking in terms of entrepot trade, providing tourists with services or adding some value in manufacturing plants. We are essentially processing other people's resources in one way or another. If we can enlarge our vision, we can become international contractors and garner the expertise to build turn-key projects for other countries. As the world economy recovers, and as the patterns of comparative advantage change, there will be opportunities for us if we are ready. It is certainly the right thing to do to build upon skills and infrastructure but we need to extend our horizons beyond our shores. If we can help the private sector build up international trading firms and international contractors, we need not be limited by our labour or land resources, or even capital as we assume a truly international middleman's role. Sir, with these few qualifications, i would like to extend my support to the Hon. Minister in his Budget. It has not been an easy budget to prepare, and I offer him my humble congratulations for a job well done. 6.18 p.m.”
“Sir, I am seriously concerned about the economic implications of physical planning because we have unwittingly under-cut our efforts to promote manufacturing and tourism. Hon. Members may have heard of a disease called the Dutch-disease. There is nothing peculiarly Dutch about it, except that the symptoms were first noticed in Holland. In the 1960's the Dutch discovered natural gas. This led to such a boom that the Dutch guilder appreciated significantly in value, squeezing out her export industries, particularly manufacturing. In a similar way, our uncontrolled property boom has undermined our manufacturers as well as the tourist industry. It has undoubtedly also distorted the pattern of investments. Why invest in a 15% per annum manufacturing plant when you can double your money in property ventures overnight? Who are the richest people in Singapore? Are they the manufacturers or the property developers? The question is: can Government do something about it? I believe it can. Government must not look upon land sales as a purely revenue earning device. It has a more responsible role in evening out demand-supply balances in land, and hence booms and recessions in the property market. And I believe there are also political repercussions to be considered. 6.16 p.m. [Mr Deputy Speaker in the Chair] Turning now to consider the tax changes in the Budget, I am sure Singaporeans are relieved for they were expecting tax increases. Indeed, we got some welcome relief and the only tax increases fall on the shoulders of sinners who smoke and drink. The Hon. Minister is right in saying that we face tough times ahead. I believe we need to be more enterprising if we are to secure our little niche in the world economy.”
“I hope Government is paying attention to this, as we may be crowding out the private sector. Typically, publicly owned enterprises use administrative connections and even legislation to out-price and crowd out private competitors, and later the public ends up paying even higher prices. I hope the Government will review the public sector's role in the economy and allow more leeway for the private sector. Reductions in corporate taxes and further reductions of income tax can be achieved if the Public Sector trims its activities in non-essential areas that can be better handled by the private sector. Mr Speaker, Sir, I would now like to discuss the matter of economic planning. As I see it, Sir, there is a vital missing ingredient in our economic planning, and that is, the economic repercussions of physical planning are not taken adequately into account. The Hon. Minister mentioned that the Construction sector doubled its rate of increase to 36% last year. But surely there must have been big strains on the sector - where did we get all the skilled workers? Premiums on Land Sales last year went up by 145% to $1.2 billion. What is Government's policy on land alienation? Is it to raise maximum revenue? Is Government aware of the repercussions on property prices, home ownership, and escalation of rentals on shop space, offices and factories? Are we pricing ourselves out of the tourist market because of higher mark-ups? What is the rationale for more than doubling our hotel rooms in five years, from 15,724 to an additional 18,965? Are the investors or potential investors informed of Government's plans? If we were to judge by a recent experience, the answer would appear to be no. One hotel group shelved its extension plans when information was made public in this House.”
“Minister for Finance or his delegate would make only minor references to statutory boards when money is loaned to them but this House is given no indication of their total intended expenditure. In other words, Sir, the Budget as presented each year gives us only half the picture, at best. This House and the public would have to wait until next year to read of expenditure by statutory boards, as reported in the Economic Survey. I earnestly hope the Hon. Minister would take this point seriously as, I am sure, industrial and commercial observers would need the same valuable information to plan their activities. Another important implication that arises from the activities of statutory boards is that the role of the Government has been greatly expanded. I was surprised to learn, as I was preparing this speech, that last year's total expenditure by Government and the seven major statutory boards amounted to $16.7 billion or nearly 58% of our GDP. This is an extremely high percentage, by any standards. Indeed, even the tax receipts of Government alone have shown a dramatic increase from 15% of our national income in 1970 to 21% last year. There are at least two important consequences of this development. Firstly, it means that productivity performance in the total public sector is absolutely critical for the health of our economy. Last year's Government wage bill, and I am sure that for the statutory boards too, rose by 27% but has there been corresponding productivity increase or has there been only an increase in grumbling and discontent because others got a higher increase? A second important consequence of the dominant role of the public sector is the effect on the private sector. I have not mentioned the industrial and commercial activities of the public sector.”
“The point, Sir, is that these CPF-held Government bonds will only be worth something, depending on the viability of Government's and the statutory boards' development projects and commercial/ industrial investments. It is my understanding that, in the past, such investments and projects were carefully appraised and monitored and, by and large, yielded good economic and social dividends. Is there any guarantee, Sir, that this will always be the case? Will we get a Government someday that will fritter away our hard-earned CPF funds? When the younger hon. Members retire, can we be assured that inflation would not have eroded our CPF balances? There has, of late, been some signs that public standards in the use of funds have been lowered. I am a little concerned, Sir, about the rather grand public buildings we are putting up, rivalling our commercial buildings in opulence. And there was the instance of a major statutory board which for many days published full-page advertisements, proclaiming the one word "MERGER" in funeral black. I thought at first that Tan Chin Tuan and Wee Cho Yaw were going to merge their banks! I did not know whether to be amused or excited when it was later shown to be a merger between the humble Post Office and the Telecoms. I certainly did not need to be further informed, at my own expense, through a telephone bill which could be lower. Mr Speaker, Sir, the proliferation of statutory boards has other implications. Last year the seven major statutory boards, viz, HDB, JTC, PUB, PSA, Telecoms, URA and Sentosa Development Corporation, spent over $8 billion, nearly almost as much as Government itself. Yet this expenditure is not directly accountable to Parliament. The Hon.”
“Two of the three biggest under estimators turned out to be our key financial pillars, namely, the Monetary Authority of Singapore: estimated revenue from dividends as presented to this House was $100 million while actual dividends paid was $300 million. The Currency Board on the other hand had an estimated surplus of $36 million, while the actual surplus was only $1.2 million. Mr Speaker, Sir, I am sure there must have been extenuating circumstances that account for these serious budgetary lapses, but if these are allowed to continue it would make a mockery of the Parliamentary budgetting process. Our Ministers and civil servants should show respect to this House by keeping within reasonable limits of the Budget. Allow me next to comment on the Public Debt. As at the end of 1982, Government owed a total of $20.7 billion, of which $19.9 billion was lent by Singaporeans, primarily through the CPF. For the next financial year, we shall need $1.8 billion (if there are no major miscalculations again) to service this debt. This amount comprises slightly over a quarter of Government's recurrent expenditure. Sir, these figures look horrendous, but I believe Government finances are in a healthy state. Each year, as hon. Members can see from the Budget, Government revenue exceeds its recurrent expenditure. For the next financial year, for example, there is an anticipated surplus of $1.9 billion which is transferred to the Development Budget. However Government intends to spend $7.8 billion on development projects. It, therefore, needs to borrow $3.7 billion. This money will come mainly from our CPF savings. In turn, CPF will hold Government bonds.”
“Moving to downstream petroleum products as we have done is also hazardous and costly as other countries have cheaper raw inputs like gas. Perhaps the Hon. Minister can explain to this House, in view of the bleak prospects that I have outlined, (a) why Government has been encouraging and investing in new refineries, and (b) why a further substantial injection is being made to the petrochemical project? Mr Speaker, Sir, I would now like to direct the House's attention to the Budget Estimates, not for the year 1983-84 but rather for the year 1982-83. The Memorandum on the Budget of 1983 provides a brief review of our expenditure and revenue performance last year. Budgetted recurrent expenditure was $7.6 billion but the actual turned out to be $9.3 billion, or 22.1% excess. The biggest offending item was the Public Debt. Although this House provided for only $1.4 billion, an actual amount of $3 billion was spent, representing an increase of 120%! The second biggest offender was the Ministry of Law which increased its expenditure from $37.2 million to $57.2 million, an increase of nearly 54%. The third major offender was Pension, which spent an excess of 23% or $16.8 million over the Budget. For Development Estimates, however, Government underspent by $1 billion or 14.8% below the Budget. And this, in a year of slower growth! It is hard for me to understand. The biggest culprit was the Ministry of Law, with minus 48.8% followed by no less than the Prime Minister's office of minus 46.9%, Ministry of Finance, minus 31.7%, Ministry of Social Affairs, minus 30.3%, Ministry of Culture, minus 28.9% and Ministry of Trade and Industry, minus 27.4%, among others. The revenue estimates for 1982 fared little better. Actual revenue turned out to be 18.6% higher.”
“The question is: how long will the oil glut and price erosion last? My guess is: only for a short while. As the global economy recovers, so will the demand for energy. There is also a lot of pent-up demand for energy because many OECD countries have obsolete industrial machinery which have not been replaced because of inflation and recession. Singaporeans should therefore pursue energy conservation relentlessly. The figures on energy consumption quoted in the Economic Survey are not encouraging at all. There appears, to me, to be very substantial room for energy conservation in all sectors of the economy. The analysis presented in the Survey on energy is too skimpy and aggregative. We should, for instance, be gearing our manufacturing towards production of energy-saving goods and machinery. Our efforts are presently directed towards saving labour via mechanization and use of robots. However, more use of capital equipment usually means more intensive use of energy. We need a two-pronged policy - to economize on labour and energy and to produce energy-saving goods and services. The oil glut and corresponding oil price erosion has, however, an adverse effect on Singapore. Hon. Members would have read of a major refinery reducing its output and capacity. The trend for oil producing countries to refine their own oil will exacerbate the problem. Furthermore countries are turning more towards barter trade arrangements, which will further erode our role as a major oil refining centre. Members would have read of the case of Pertamina, Indonesia, having such an arrangement and the threat it poses to our refining industry. We must recognize the shift in comparative advantage.”
“I expect the next round of inflation to be much worse than the last. After that, perhaps we shall see the crunch - but not for a few years yet! It would be wise, however, to plan for the eventuality of another Great Depression. Singapore survived the 1930's Depression through emigration of sub- stantial numbers of Chinese and Indians back to China and India. The next time, this option will not be available. We will then have to depend upon our foreign exchange reserves. The first task is, therefore, to invest those reserves in relatively depression-proof investments, bearing in mind that bank deposits would be the first to be wiped out. The second task is to work out a survival plan to meet the minimum needs of Singaporeans for at least 10 years. The third task is to identify industries that are relatively depression-proof, if there are any, so that at least some Singaporeans can keep on working and earning. On the energy front, the world economy is enjoying a temporary respite. I hope Singaporeans will not be lulled into complacency because of the current oil glut and reductions in prices. There are a number of reasons for the present situation. One is that OPEC overestimated the capacity of the market in 1979-80 to absorb the price increase it set. Secondly, the depth of the current recession has substantially trimmed demand for oil. Thirdly, energy conservation measures have successfully reduced the growth in energy demand. Fourthly, OPEC's share of oil production has been eroded from 60% in 1973 to only 39% today. Fifthly, a decade of high oil prices has stimulated supplies of alternative forms of energy like gas, coal and nuclear power. But these sources, let us not forget, are marginal in nature. They are costly and they too will run out before too long.”
“Moreover, surely the stern lessons of the Great Depression of the 30's have not been lost on the present generation, namely, that protectionism increases mutual misery. The other major global problem mentioned by the Hon. Minister is the possible breakdown of the international monetary system. A default by a major creditor nation like Brazil or Mexico that is not averted by concerted action can produce a domino-like effect on the international banking system. I am, however, somewhat less pessimistic than the Hon. Minister for a number of reasons. First, the credit-worthiness of many of the developing- debtor countries has been much eroded by the global recession which has cut back their exports both in volume and in price - especially for primary commodities. This is why some of their debt-service ratios look horrendous at the moment. However, as the global economy recovers, as I believe it is in the process of doing, the debt problems of the developing countries will ease. Falling oil prices will have much more beneficial than negative effects on the world economy. Furthermore, the United States appears to have switched its monetary policy from concern with curbing inflation to one of encouraging economic growth. But perhaps what makes me really hopeful is that everybody is talking about the possibility of a breakdown of the world financial system. When there is such awareness, the event is least likely to occur as emergency measures would have been prepared. I was more fearful in 1974-75 precisely because so few were concerned about the problem! If an international monetary breakdown does occur, I expect it would catch people unawares. At present, I am more fearful that global inflation would be re-ignited by over-zealous reflationary policies in the OECD countries.”
“Secondly, they have resulted in a lot of diversion of capital investments into conservation measures which, of course, use up this capital which could otherwise have been productively employed. Thirdly, high energy prices especially for oil have led to very extensive capital investments in alternative energy sources. A decade of low growth rates plus prolonged and deep recessions has produced unemployment rates in excess of 10% in most industrial countries. This fact, together with normal yearly additions to their labour force, will guarantee that unemployment will remain a severe problem into the 1990s, even if there should be robust economic recovery. Somewhat less robust recovery will exacerbate the unemployment problem in the industrial countries. Hence, I believe the Minister is right in stating that protectionism is a mounting problem. What will prove to be especially damaging would be the large scale adoption of non-tariff barriers. At least tariff barriers can be overcome if our exporters are efficient enough. But quotas, administrative obstacles, health and other domestic regulations can be used to hinder trade and consequently cause severe disruptions. A consignment of fresh orchids or fruits quarantined in the hot sun for a week is effectively destroyed. Yet, Sir, I believe there is a ray of hope. Bilateral, if not multilateral negotiations, can be worked out to keep markets open and minimize trade and production disruptions. If the Americans can work out a bilateral agreement with the Japanese and each in turn with the European Economic Community to avoid protectionist excesses, and if their growth rates are reasonably buoyant, there would be some leeway for countries like Singapore.”
“Mr Speaker Sir, in his Budget Statement, the Hon. Minister for Trade and Industry painted a very sombre picture of the world economy. He also sounded very pessimistic about its prospects for improvement. There are two key problem areas in the global economy that threaten our economic well-being. The first is protectionism. In terms of unemployment, the industrialized countries have experienced a relentless increase for nearly a decade. There are a number of explanatory factors. One is the type and pace of technological changes. In the main, these have been labour saving and have been in the direction of miniaturization, making the parts so small that there has to be tremendous alterations in terms of plant and equipment. Another factor has to do with the characteristics of post-industrial societies which are saturated with goods like cars, household appliances and so forth and which demand newer types of services. A third factor is the change in population structure, from one that has many youthful dependants to one that has aged dependants. Stringent birth control programmes accompanied by horrifying abortion rates have shifted demand from diapers and prams to old-age homes and wheelchairs. And the problem is a mounting one that even Singapore will not escape. Of course, there were other exacerbating factors. The very extensive welfare programmes have resulted in an erosion of work ethics and have also created tremendous disincentives to save and to invest. The energy price increases have, of course, helped to worsen the unemployment quite a good deal. In the first place, such increases in energy prices have shifted the pattern of comparative advantage in many industries and countries.”
“A point of order, Mr Speaker, Sir. Is the hon. Member asking a question or making a statement? Mr Jeyaretnam: I am going to ask a question, Mr Speaker, Sir.”
“Do I take it then that the Hon. Minister of State will agree with me that future rates of increase in compensation should reflect the rate of increase of HDB prices?”
“May I ask the Hon. Minister of State which is the relevant rate of inflation, if one were considering relocating one's housing - the CPI or the rate of increase of HDB housing? Mr Lee Yock Suan: The rate of increase in housing, obviously. But there are other factors too, for example, disturbance allowance and so on, which depend on the cost of living. In fact, the 50% increase in December 1981 was more than adequate to compensate for the 38% average increase in HDB prices in 1981.”
“Sir, is the Hon. Minister of State aware that he has just contradicted himself over the rate of inflation?”
“Sir, would the Minister of State relent by allowing this category of people to rent 1- or 2-room flats?”
“Sir, is the Minister of State aware that there are some people who do not qualify for 1 - or 2-room rental flats? At the same time they do not have enough CPF funds to purchase 3-room flats, and this category of people will have to wait seven to eight years before they can get a rental flat.”
“Sir, what about the category called Entertainment Tariff? Does it cost the PUB more to supply electricity to places of entertainment, or is it meant to discourage entertainment?”
“Not quite, Mr Speaker. Sir, may I seek clarification. The Hon. Minister mentioned that the PUB supplies high tension electricity to the industries and they have to do a conversion at a cost to themselves. I fail to see why the PUB should be concerned that the industries have to incur a cost to use electricity. Surely what is pertinent to the PUB is the cost of supplying the electricity to the user, be it high tension or low tension. And the more pertinent point is, what is the per unit cost of supplying to the industrial users as compared to the domestic users? If the cost is the same, why not charge them the same rate?”
“Mr Speaker, Sir there seems to be quite an array of tariff schedules covering different users. I was listening to the Hon. Minister but I did not get the rationale for the different rates charged for different users. Reading page 2 of Schedule 1, the category called HT Industrial Tariff is charged the lowest rate of all. Between 1 and 100,000 kWh per month the rate is 15.61 cents and above 100,000 it is 14.61 cents. I notice that these are the lowest rates in all the tariff schedules. It seems to me therefore that we appear to be subsidizing this particular category. Furthermore, if we look at the last category HT Non-Industrial Tariff 16.11 cents per kWh per month, it is again rather low compared to the others. One particular category seems to benefit from the adjustment in the tariff rate, i.e. the users of less than 100,000 kWh per month under Non-Industrial Tariff. Presently they are paying 16.55 cents and under the new rates they will be paying 16.11 cents. Is there any particular reason why this group should be enjoying a reduction?”
“[Laughter] My job in this House is to raise matters in such a way that the Government, although it has done extremely well, can do even better. Whereas when people parrot me, they are concerned with pulling down what the Government has built. So it is a matter of motivation, that is the real difference. In future, I will carefully qualify what I say in this House so that people will not misquote me. On the matter of the long wait for HDB housing, I too have come across cases where people have waited eight years, nine years, or even longer. But in each case they had been offered at least two or three times flats in locations where they were too choosy. Now they cannot get them even if they want to because other people have already got into those flats. So that should dispose of what the Member for Anson was trying to say. Sir, I think we should note that nowhere else in the world can people buy flats so easily, so cheaply, and so painlessly. I think Government has made it really too easy for our people, so much so that our people have become overly dependent upon the Government for providing accommodation. They have come to expect such high standards of the Government that should we just slow down a little bit, as we did over the last two years, there is a hue and cry. And the Member for Anson becomes the champion of these people. I think we ought to place this matter in proper perspective for the people of Singapore. Nobody likes rising prices. I do not like them. But sometimes they are inevitable. I am glad for one reason that the Member for Anson is here, and that is, that I can sometimes take the position of the Government and defend it.”
“Yes, I will. Thank you. Sir, I agree with the Minister that the booms and slumps in the building industry are unavoidable and I said so in my speech, but the question is whether we could not have moderated the boom that we experienced over the last 2 1/2 years. He mentioned too that the Government took advantage of the 1975-79 property slump to launch a number of projects. He mentioned that it was perfect timing. I may not agree with the word "perfect" but it was good timing. The real question was whether, in the course of taking advantage of a slump, we did not over do it, i.e. did we not launch too many projects that we overheated the property market, especially the construction sector? And I gave evidence in my speech of the overheating. Even from the national accounts, we see that in 1980 the construction sector grew by 10% in real terms, 1981 by 17%. He mentioned that there were 146,000 Housing Board flats built, and Changi Airport, Kent Ridge, General Hospital among other projects. I drew attention to the third quarter of 1981, and that was at the peak of the property market where the Government launched twice as many contracts in value terms as in previous quarters. He did not reply to that. Furthermore, I also made reference to the URA withdrawing two choice sites in its 10th sale. I asked for the reason why and he did not give the reason. I also made allusions to building regulations and so on which may unwittingly have raised the prices of apartments. Coming now, to the HDB. Sir, I am beginning to regret having raised the matter about HDB accounts in this House. Sir, it seems that there are people who are parroting me, whatever I say in this House. There is a big difference between the way I say it and the way people repeat it!”
“Sir, I beg your indulgence to speak because the Minister referred to what I said in my comments on the Budget address.”
“Mr Speaker, Sir, the Member for Anson seems to be championing a lot of causes in this House. But I can tell him that I have been an MP for 12 years and I have seen many more cases than he has in the short few months that he has been an MP. I have had cases where parents have complained about their children being wrongly detained for drug abuse. And in each and every case, I have written to the authorities concerned and I have received a lengthy reply with proper evidence that the person has been examined properly, and in each case I have shown the letter and its contents to the parents concerned and they have shut up. At the most, they will say, "Will you please appeal for my son to be released sooner." I said, "That, I can do." And I write in an appeal in due course and then a reply comes back saying, "We will evaluate the case. We will watch the progress." I can assure the Member for Anson that all due safeguards are being taken, and I give him that guarantee on the basis of my 12 years' experience as an MP.”
“Mr Speaker, Sir, in order to help both sides in the discussion, perhaps the Minister can tell this House how many times would a soldier be expected to return home during the three months of in-camp training? Then we will get some idea of the bus fares and other incidentals that might be incurred.”
“Sir, could the Hon. Minister inform this House whether and to what extent the new petro-chemical complex on one of the islands that is being set up will add to pollution in Singapore? Furthermore, could he inform this House whether dangerous chemicals and gases will be produced there and what safeguards have been taken?”
“Mr Speaker, Sir, earlier on the Hon. Minister mentioned that 2,035 social welfare assistance cases have had their allowances withdrawn because they have grown-up children. First of all, may I ask him what are the criteria used by his Ministry to establish that their children are, in fact, able to support them; and secondly, how many of these cases were subsequently reinstated upon appeal.”
“He was not exaggerating when he spoke of the possibility of the world economy going into a tailspin, and by that I think he means an economic depression. At the most, the OECD countries are expected to recover only slowly and only towards the latter part of the year. In view of the time-lag, it will be a few months before Singapore can catch up. We can, therefore, expect increasing protectionist pressures upon our exports this year. At home, a pressing issue is to build more homes, especially HDB flats. The problem is not whether we can build 58,000 HDB flats in the next two years or 21,000 private and HUDC units in the next three to four years. The question is whether the prices will be affordable by the people. We need, therefore, to set our construction priorities urgently and examine the economic implication of Government land, zoning, building and other policies. Permit me now, Sir, to conclude by congratulating the Hon. Minister for Trade and Industry for a Budget which is not only imaginative but incisively presented. It is a Budget reflecting not just one man's wisdom but, I believe, the accumulated wisdom of 21 years of Government and eminently deserves the Support of every Singaporean. 6.00 p.m.”