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.”
The complete record
Every one of 1,269 lines we hold for Augustine H.H. Tan, in date order, each linked to its source. Free to read, in full, without an account. Page 4 of 26.
“First of all, is it necessary to introduce most of these charges or re-introduce them in the light of government revenue requirements? What are the costs to the firms involved? It may be recalled, Sir, that in the analysis of the causes of the last recession, one of the factors which added up the cost to the cost of the firms and made them uncompetitive were these various charges. Is there sufficient coordination among the Ministries when such charges are being reintroduced? And furthermore, in order to encourage our investors, we need to project a climate of certainty about Government intentions. They have to have certainty in projecting their cost of production. I want to comment particularly on the CPF contributions in relation to national savings. In 1984, our gross national savings as a percentage of gross national income was 46%. As a result of the cut in CPF contributions, this figure came down to 41% last year, still a very high and substantial figure compared to rates for other countries. At the same time, it may be noted that for the last two years Singapore enjoyed a current account surplus in 1986 at the rate of 2.9% of our GNP and last year, 2.6%. We have become a net international lender, a creditor, instead of a borrower. And since 1985, our Gross National Product has exceeded our Gross Domestic Product at market prices. Sir, these figures indicate that the potential absorption of our national savings domestically appears to have reached the limit and that further increases in savings will appear as increasing current account surpluses or net lending to other countries or investments in foreign countries. At the same time, we should be mindful of the distribution between private and public savings when we consider increasing CPF rates.”
“At the same time that these trade losses are allowed, perhaps the Minister might also consider the transferance of unabsorbed capital allowances and industrial building allowances to companies which change their shareholding. We note also, Sir, that a number of new tax incentives have been given in order to promote high technology industries in Singapore, and these indeed are to be welcomed because we must get our economy into hi-tech. So the R&D provisions, industrial building allowances, incentive for overseas investment, for royalty, income on product design and development, all these are indeed to be welcomed as a move in the right direction. At the same time we should take note that we have by now introduced a large number of tax incentives to many sectors of our economy - in manufacturing, in services, and the financial sector. The list is growing year by year. I take note of the warning given by the Minister that such tax incentives really represent tax expenditures. They represent loss of revenue and they are real subsidies if hidden from public view. I would like the Minister, in future presentation of the Budget Statement, to give this House a cost-benefit appraisal of past tax incentives so that we can look more favourably upon his proposals to introduce new tax incentives. Otherwise, we might be introducing incentives for everybody in Singapore and in the end nobody gets any real incentive at all. I come now to the question of various statutory charges and taxes which affect operating costs. There is talk of increasing the CPF contributions, Skills Development Fund contributions, and cancellation of property tax rebate, as well as re-introduction of the telephone and PUB taxes. I have a couple of questions to pose to the Finance Minister.”
“We cut costs; we promoted investments; and there was a fortuitous external event of major exchange rate realignments which worked to our favour. Sir, if I may now comment on some of the specific tax changes introduced by the Minister. Firstly, in respect of Schedule B where the effective tax rate has been lowered to 33% at the margin. This Schedule affects management corporations, clubs, and trade associations. We welcome this move but at the same time, if one looks at the figures, one would realize that these associations must have chargeable income in excess of $67,941 per year in order to benefit from the revised tax rate. Next, the tax treatment of unit trusts and investment holding company. Whereas I am sure unit trust management would welcome this move, at the same time the complete tax exemption is granted only if the stocks and shares are held longer than 18 months, and between 6 and 18 months is a graduated scale. The question is: is there enough stimulus to fund managers in a stock market that moves very fast in a matter of a few months? The deduction of trade losses by companies - again I think this liberalization would be welcomed by the private sector, but at the same time I think the liberalization may not be sufficiently extensive. Entrepreneurs who have made losses in their companies need to be able to cut their losses and go on to some other business. But I think the Finance Ministry, for fear of tax dodging, has not been inclined to liberalize the use of such trade losses. But I feel that it is something which, if liberalized, would encourage greater entrepreneurship in Singapore.”
“Mr Speaker, Sir, I rise to support the motion on the Budget Statement. Sir, we can be thankful for the continued recovery of our economy last year. In fact, it was a broad-based recovery. It was a full recovery from the recession of 1984-85 and the rate of economic growth of 8.8% represented nearly 4% above the long-term trend growth rate of 5% per annum. So quite clearly, the recovery has proceeded apace and has taken up much of the slack caused by the recession. Not only that, Sir, the economic recovery was also a very healthy one last year. Gross fixed capital formation rose by 4% in real terms after two years of double-digit declines. Of greater interest and importance for the future is the fact that the construction industry's contribution to gross capital formation declined back to more normal levels. Hon. Members might recall that the construction industry in 1979 accounted for 39% of capital formation but rose to 63% in 1984. Quite clearly, the economy had become very lopsided, very unbalanced. So we are back to 46% last year. This means that if the external conditions do not turn sour, our economy should continue to do well this year. Of interest too and importance is the role of the private sector in capital formation. In 1986 the contribution by the private sector was negative, minus 20%. But last year it rose by a healthy 18.6%. These excellent results are due to a number of factors. Firstly, there was a correct diagnosis of the causes of the recession, namely, the loss of international competitiveness plus the distortions that we had introduced into our economy. The prescriptions were correct, and not only that, but the implementation was swift and correct.”
“Mr Speaker, a supplementary question for the Minister for Community Development. Is he aware that there are people who go abroad to seek brides without knowing that when they try to bring them back to Singapore they are subject to this restrictive immigration rule?”
“Point of clarification, Mr Deputy Speaker, Sir.”
“But as a result of this the people have become ignorant and are driven to the conclusion that such an approach has made the Malay MPs ineffective. Worse still, we Malay MPs are branded as stumps to be stepped upon by others. The parties to this process, including the top level leaders of the country, know this and are aware of the stand of the Malay Muslim MPs today on the issue of GRCs and, before that, the twin constituency representation mentioned by the First Deputy Prime Minister yesterday and recapitulated this morning by the Minister for the Environment, Dr Ahmad Mattar. Our stand and our feelings are well understood by them.”
“You might as well not be there", and added: "If there are to be three, ie, three in the GRCs, I do not think I can see this role being played for the one who will be there will be the "Yes-Sir man." This I quote fully from words uttered. I am even more saddened when I heard some people said that being elected through the GRCs, the Malay candidate would not be effective because he would be elected under the "arm pits" of two other candidates. Some say the implementation of the GRCs would make the Malays complacent to such an extent that efforts towards upgrading their socio-economic status would slacken. I have also heard words to the effect that the GRCs would erode the special position of the Malays under Article 152 of the Constitution because they say the GRCs will bring the Malay MPs to the same status as the other minorities. I do not understand, Sir, how such a conclusion could be made when, as far as we know, Article 152 of the Constitution is still intact and has not been tampered with, and is now slowly being appreciated. Efforts to uplift socio-economic standard of the Malays are gathering momentum and it will continue to progress. I must answer the question on the self-respect and effectiveness of Malay MPs in relation to Malay participation in the Singapore political life today. I am aware of the the advantages offered by the 'politics of accommodation' in contrast to the disadvantages that might later arise from the 'politics of confrontation'. So far it is clear that through this philosophy we have been able to nurture the spirit of compromise that we have practised in the interests of Singapore through consultations and discussions, seeking solutions behind the scene free from the limelight of publicity.”
“Does it really mean that with the GRCs it would be more difficult for Opposition candidates to get into Parliament, particularly Opposition candidates from the minorities? The implementation of the GRC, I think, Mr Deputy Speaker, would not reduce the chances of the Opposition or Independent candidates to win seats in future elections so long as they are capable, they are of high calibre and they use the right strategies. The Member for Potong Pasir knows this and has recognized this as a fact. Mr Deputy Speaker, many of the questions raised on the GRC issue seem to revolve around whether its introduction would, firstly, reduce the proportion of Malay representation in Parliament; secondly, limit the election of Malay candidates to only through the GRCs;and thirdly, erode the effectiveness of Malay MPs in their role inside and outside the House. The first two questions arise out of the conception that there will be only 13 GRCs. I think the answer to the two questions clearly is "No". This is because not all Malay candidates would be standing in the GRCs, and I am sure the number of Malay Muslim/Members of Parliament, which is nine, now would not remain the same all the time. I hope so. But, out of the three questions, the third question is the most important because it has given rise to prejudices and very serious misconceptions. It is serious because it questions the effectiveness and at the same time the integrity and self-respect of our Members of Parliament. Mr Deputy Speaker, in fact, I consider this problem even more serious when I heard people saying, and I quote, "What is the use of being there only to be a stump?”
“The future might be even more different. We must look ahead with our eyes wide open. If we wait until the grass burns before we rush to dig a well and find a pail to draw water, then I think that will be the end of our village. For Singapore, a fast-changing country and being so fragile, I think this problem is even more dangerous. If the United States which has been firmly upholding the principles and philosophy of democracy faces problems of voting along racial lines, then it is no longer a question of a 'big mistake' in our policy of integrated schools or the practice of reciting the pledge before classes begin - a practice which was introduced in the 60s - but, Sir, it is a universal fact of life. Neither it is a problem of justice, ie, of whether there is justice or injustice, but of how justice, and especially injustice, goes along racial lines. I do not think either the fall in number or percentage of votes for a PAP candidate is simply due to the selection of professionals as our candidates for Parliament. I do not think our Malay colleagues in this House are, I quote, the "cut-and-plant" "supported for five or six years till he grows some roots; come an unlucky day, the wind blows and he falls kind of leader". I do not think we are of that type. Mr Deputy Speaker, some people have said that if we introduce this GRC concept, let us not have a half-sweet or a half-sour orange. But if we fully understand the true aims of this exercise, it seeks to ensure the presence of minority representation in Parliament. So if we want the fruit to be completely sweet or completely sour, this would mean having GRCs in all the 79 constituencies. Divide the number by 3, we have 26 minority representatives. In other words, 33%. What logic is that?”
“That the minorities, whether in terms of population or economy or religion, are being taken into the centre stage at the national level in the United States shows why it is necessary that these various interest groups be represented at the policy- making level. They are elected at the national level because the majority feels that the minority leaders have a role and contribution to the society. But when the situation arises that only Welsh candidates could win in Wales, only Irish candidates could win in Boston, when only a native candidate can win in a certain district in South Korea and someone from the Nagoya Prefecture alone can win in Nagoya, Japan, then I think, Sir, Singapore must examine this problem. Singapore has managed to achieve its position of all-round success and stability today because we always use our foresight while learning from the universal problems of others. And it is through this foresight that we anticipate as correctly as possible the problems that would occur 5, 10 or 20 years later and come up with the right measures to resolve these problems and implement them with open eyes. So when somebody says that the trend of voting along racial lines is non-existent in Singapore, that the perception that it does exist is an insult to the people of Singapore, that PAP Malay minority candidates have never lost because the people vote for PAP and the party and that the success of the PAP candidate depends on whether the candidate fielded is a grassroots leader or, I quote, a "cut-and-plant" kind of leader, I think there is something really wrong here. There is a Malay proverb which says "Lain hulu, lain parang, Lain dahulu, lain sekarang". It means that something of the past does not necessarily equally apply today.”
“The more advanced the country, the higher the standard of living of its people, the higher its citizens' education, the greater their political consciousness, the clearer the symptoms of this problem. This has been dealt with at length yesterday by the Member for Jalan Kayu. Countries like Great Britain, Ireland, Fiji, Canada, all give us different pictures and different dimensions to the problem of racial relations. While in some countries the problem occurs as smouldering embers with the existence of undercurrents, in other countries it has begun to show its uglier aspects. In fact, in certain countries it has started to destroy the very social fabric of the society and bring the country into chaos. Mr Deputy Speaker, while a country is fighting for its independence, conflicts arising from differences in race, religion, colour, or language have always been concealed or swept aside. While the society struggles to fulfil its independence by eradicating poverty, starvation and misery, these differences lose their importance. The threat of colonization, starvation and poverty are too big as they determine the survival of the society. But when these threats begin to disappear, problems arising from racial, communal, linguistic, religious and colour differences would start appearing. Yesterday we heard that such a problem is now threatening the United States. The fact that there are Japanese mayors or Black senators or Hispanic congressmen are all part of a new malady that is spreading through the country we call the Father of Democracy.”
“It is because of the importance of institutionalizing multi-racialism that from the very beginning when the All Party Convention was held 30 years ago, when we first outlined the Singapore Constitution, the issue of participation of the minorities in Singapore has been constitutionalized. In fact, even today we find some ground rules in existence being observed. This is simply to maintain good racial relations in Singapore. It is with the same consciousness and in the same spirit that about 20 years ago, when we established a Constitutional Commission on Minority Rights, this multi-racial character was enhanced by several proposals, among them the creation of the Presidential Council for Minority Rights. That is today a reality. Mr Deputy Speaker, Sir, the motion on the Bill before us today shows clearly that there are signs that racial problems do exist in Singapore, that there is a possibility that these problems will affect the harmonious relations and political stability of this country and that we must do something about it. I think the rationale or reasons behind this measure has been widely discussed. We do not wish to experience the same misfortune that has been plaguing so many countries. The current experiences of Fiji, Sri Lanka, India, Ireland and many other countries,as have been described by the Member for Kolam Ayer and many other members, have taught us not to delay any action to prevent from being preyed upon and destroyed by this disaster. I do not wish to repeat this as it has been touched upon by so many Members of this House. But what I would like to impress upon Members is the fact that racial tension is not limited to Third World countries alone.”
“We always look at the developments in these countries with an open eye and look for the universal elements which are the cause of some of their problems and ask ourselves whether the same problems could occur here and whether there is a possibility that they might occur and, if so, whether we could find a way to resolve them before it is too late. Do racial problems occur in Singapore? If they have not occurred, would they occur? If they have occurred, is there any possibility that they would affect the political stability and harmony in future generations? Actually, the institutionalization of multi- racialism in our society is nothing new. Neither is enshrining it in the Constitution. We have heard yesterday from the First Deputy Prime Minister how Singapore has been able to enjoy prosperity, progress and a high standard of living through political stability and harmonious racial relations that have been created by various means. Through the Constitution, whether as it was first outlined or as subsequently amended, through policies implemented in various aspects of life, through school education and through community education, multi-racialism which is a pillar of the national philosophy of Singapore, has been firmly upheld. In fact, in same cases and in certain situations, the Government has avoided itself from being influenced by the majority voice in order to ensure inter-racial harmony. Such a policy, Sir, is correct and necessary. It should not only be cherised, but should also be permeated to all facets of our life. The motion on the Constitution (Amendment) Bill before us is nothing new and is not something that has never been done before.”
“There are other adjectives one could use, but I agree you are not mad. I was shocked to learn for the first time that the SDP does not have multi-racialism in its platform. And perhaps one good thing out of this debate is that he will now change his constitution or his platform to include multi-racialism. I throw this down as a challenge. More fundamentally, Sir, the question is: is this Bill constitutional? Is it in the spirit of the Constitution? It is certainly so. Because multi-racialism is one of the pillars of our Constitution. Secondly, is it a good idea? To me it is because it is going to help us promote stability in Singapore. But more fundamentally, we ought to go beyond this Bill and perhaps ask ourselves questions like what more do we need to do in Singapore to promote multi-racialism? And on this, I have not heard many people contribute in terms of ideas. If we can do so, make people more conscious of the need to integrate Singaporeans of all races, cultures, religions, into one identity, then Singapore will have a future. 12.40 pm The Parliamentary Secretary to the Minister for Foreign Affairs (Encik Yatiman Yusof)( In Malay): Mr Deputy Speaker, Sir, since the issue of the Group Representation Constituencies was first raised by the Member for Kebun Baru until the debate yesterday in the House, a lot of views have been heard. In fact, through different forums in the newspapers, television and magazines, the people's understanding of the background, the concept, the aims and mechanism of the GRCs have become clearer. I do not wish to discuss these views in detail. What is clear to us is that Singapore becomes what it is today by learning from the problems of other countries.”
“There may be opposi- tion to the Bill but I have heard nobody oppose multi-racialism, not even the Member for Potong Pasir. That is good.”
“Well, we will see. The second problem with this Bill is that it is manifestly political. Yes, we are changing the electoral process. Yes, it may affect the election outcome. But I think what is more fundamental for us to consider is what is it going to do for the political future of Singapore. To me, whatever will promote and maintain political stability is what I am prepared to support. And I think Singaporeans should think likewise. We live in a very uncertain world, economically, politically and in other respects. And if we can ensure that Singapore will continue to be a stable place at least politically, then we have a good chance of making it economically. The third problem with this Bill is that it has racial implications. It forces us in this House and outside the House to think in racial terms. And we are not comfortable with it, for two reasons. One is that it seems to allow undesirable undercurrents of racism to surface. Maybe not expressed openly but it is there. The other is that we have been educated over the past 30 years to accept multi-racialism, that more Singaporeans are no longer conscious that they are Chinese, Indian or Malay. And suddenly here is this Bill, we have to confront this question of racial representation in Parliament and it is not something that we like because emotions get stirred up in the process. Does it reflect the failure of our educational efforts? I do not think so. We have to face up to realities in the world that we live in. If we see trends in other countries that lead to instability, then I think it behoves the leadership of our country to prepare for eventualities. And I believe that is the real intent of this Bill, preventive medicine for the good of Singapore. But what is encouraging to me out of all this debate is this.”
“Mr Deputy Speaker, Sir, before I came to Parliament this morning I asked two of my students their reactions to this Bill. Both were negative. So I asked myself the question why. As I listened to the debate both inside and outside this House, I can discern, I think, at least three problems with this Bill. Firstly, it is a new idea, at least to Singapore. Secondly, it is manifestly political. Thirdly, it has racial implications. The fact that it is a new idea means that we have to sell it in order to get people to accept it. And in spite of very extensive efforts over the past year, suspicions still linger over the intent of the Bill. But the suspicions boil down to one major objection, and that is, we are out to fix the Opposition. That somehow having half the constituencies under the GRCs will benefit the PAP at the expense of the Opposition. I think this gives the Opposition more credit than it is due. The main problem of the Opposition is, first of all, organization, or rather the lack of it. The second major problem with the Opposition is that it has poor leadership. And having poor leadership, they have great difficulty finding candidates of quality and, more importantly, of integrity. So let us not have any excuses that this is a concept that is used to fix the Opposition. There are other ways to fix the Opposition if we wanted to do so. Perhaps we can give the Member for Potong Pasir a choice before the next elections. Have a GRC including Potong Pasir and have the opportunity of beating our Second Deputy Prime Minister, or else face a PAP candidate alone in Potong Pasir and lose the next elections in either case.”
“Sir, is the Minister aware of the unintended impact of his scheme whereby a relative who might not otherwise be able to afford class A ward but by virtue of the use of the Medisave scheme of the son or the parent or close relative is able to afford it and it is the doctors, the hospitals, that really benefit from the process.”
“Sir, is the Minister aware that although the intention of allowing the use of the Medisave Scheme for immediate relatives is a good one for compassionate reasons, at the same time, it really has represented a big drain on the entire scheme because practically everybody who has got relatives would then depend upon their Medisave to foot the bills? At the same time, is he aware that there are many cases where actually the relative is footing the bill indirectly by paying to the person the amount that is actually taken from Medisave? So it is a back-door way of withdrawing from Medisave.”
“At present, Medisave can be used to pay for the hospitalization expenses incurred in Government and private hospitals. In the Government hospitals, Medisave covers the full hospital bill. There are limits to the Medisave withdrawals by private hospitals. These are: (i) a limit of $300 a day for the daily hospital charges which includes investigations, medicines and doctor's daily attendance fee. From this limit of $300 per day, $50 can be used to pay for the doctor's daily attendance fee. (ii) surgical operation fees based on the fees charged in the Singapore General Hospital. My Ministry has already extended Medisave to cover day surgery, radiotherapy, expenses incurred in Government or private hospitals for deliveries up to the third child and recently Hepatitis B vaccination. The only other extension presently being considered is the payment of premiums for the Catastrophic Illness Insurance Scheme when it is finalized.”
“In the review. BG Lee Hsien Loong: That is in the review. We are pushing our exports to Japan. The numbers have gone up. In percentage terms, they have gone up quite well, but in absolute numbers, they are still low. As you are aware, the Japanese market is not an easy one to break into. There are many - perhaps impediments might be too strong a word - but many reasons why each time we move, the results are far less than one might a priori expect. For example, recently we were informed that the Japanese were generously improving some GSP preferences for Singapore. There were a number of items. The one which was supposed to be of interest to us was peppermint oil. You might not be aware that we are exporting peppermint oil. In fact, neither was I. As it turned out, the total value of peppermint oil and many other things which we cannot name came to less than $200,000 a year. So the benefit might disappear into the decimal points. Nevertheless, it is a market which will gradually become more open because the Americans will push it and the Europeans will push it and we will do our little bit. And as it opens, our people should be ready to move in. POLICY ON MEDISAVE 12. Mr Chew Heng Ching asked the Acting Minister for Health if he will explain the policy on the use of Medisave by account holders and whether there are plans to extend it for other uses. The Acting Minister for Health (Mr Yeo Cheow Tong): Sir, the Medisave Scheme was introduced specifically to meet the hospitalization needs of the average Singaporean worker and his immediate family. The immediate family includes his spouse, children and parents. It has also been extended to include his grandparents if they are Singapore citizens or permanent residents.”
“Sir, in view of what the Minister has said about the more robust Japanese growth expected for this coming year, are there attempts being made to push our exports in the Japanese market since that is where the potential lies? BG Lee Hsien Loong: Mr Speaker, Sir, I do not recall saying anything about more robust Japanese growth in the coming year.”
“Sir, could the Minister explain to this House why the recent stock market crash in Singapore appears to have very little impact on the growth rate? BG Lee Hsien Loong: Sir, first of all, we are not sure that it has very little impact on the growth rate. There is a lag of about two quarters between movements in the financial sector and the stock markets and the real sector of the economy: exports, production. So far, as a result of the stock market crash, we have seen our leading indicator go down. After a very long period of improvement every month, it has gone down for three months in a row: down, then flat, then down again. Will this mean that in six months' time the economy will slow down? Maybe. It depends on what happens after this. But I think the stock markets not only in Singapore but elsewhere are in for an uncertain time because the fundamentals which were out of synch before October 19th are still out of synch. How much effect will the Singapore stock markets have on the Singapore economy? we think relatively less than in the United States, because fewer people in Singapore own stocks and because a lot of our economy really is based on companies which are not listed on the Stock Exchange but are listed elsewhere: all the multi-nationals, for example. Will this mean that we will escape? No, because our stock market movements are derivative. They are derivative on the US stock markets, the Japanese and European stock markets. So whether the global movements in the financial circles will affect us depends whether they affect the US economy. we will be on the same roller coaster. I think we will know in about three months because by then, the trend of the leading indicator will be known and whether there is any slowdown overseas will start to be seen.”
“Sir, have these figures been submitted to the US government? Why is it that they remain unconvinced and keep on bashing us? BG Lee Hsien Loong: Mr Speaker, Sir, all figures which we have available and are relevant and helpful to our case have been made public. The US government has access to them. It is not a matter of intellectual conviction but of political expediency which is causing the US to look for scapegoats to attack in order to divert attention from the fundamental problems which cause their trade deficit. ECONOMIC OUTLOOK FOR 1988 11. Mr Chew Heng Ching asked the Minister for Trade and Industry what is the economic outlook for Singapore in 1988. BG Lee Hsien Loong: Sir, MTI released its economic review of 1987 and forecast for 1988 on 31st December last year, to coincide with the Prime Minister's New Year message. The Clerk has distributed copies (Cols. 257 - 262) to Members and he should have one. copies - ECONOMIC PERFORMANCE IN 1987 AND GROWTH ESTIMATES FOR 1988 (Cols. 257 - 270) In 1987, the Singapore economy recovered fully from the recession and grew by a robust 8.6%. Growth this year is likely to be slower, 5 to 6%, in line with the expected slowdown in the international environment. With indigenous labour force growing by about 2%, provided our productivity improves by about 3.5%, we should be able to achieve steady growth within the long-term target of 4 to 6%. This forecast for 1988 assumes that there will be no global recession. We expect the US economy, our largest domestic export market, to grow by 2%. However, should a recession materialize, external demand for our goods and services will weaken, and our growth will be much slower than the 5 to 6% presently projected.”
“Mr Deputy Speaker, Sir, I think the more important question is that there is this large sum of money that could be misused; money that could be used profitably for charity which, I believe, is the intent of this Bill. Dr Richard Hu Tsu Tau: I think this is a quite correct statement. In addition to this debatable, arguable point about dissolution, whether or not they intend to go through with it, the present constitution allows the committee to use the funds for any purpose. So whether they dissolve the Club or not, the $286 million worth of accumulated assets plus a continuing revenue of between $30 million and $40 million could be used for the private benefit of the members, without necessarily dissolving the Club, and the intent is identical.”
“Mr Deputy Speaker, Sir, I rise to seek clarification on clause 16 in regard to paragraph (b) which allows the Board or the Turf Club: 'to publish in any newspaper ... any advertisement setting out any list of totalisator agencies, the name, address, hours of business and any telephone number of any totalisator agency, any rules, terms or conditions upon or subject to which totalisator investments may be received at any such agency, or the name of any race meeting in respect of which totalisator investments may for the time being be received at any such agency;' And then the Bill goes on to describe in paragraph (2) of this clause that: 'Nothing in subsection (1) [which I have just described] shall be construed to authorise the exhibition or publication of any matter intended to induce any person to make any totalisator investment.' Sir, I fail to understand how the second paragraph negates the first paragraph because it apparently allows the advertisement which facilitates the gambling on which the whole system is based. And quite clearly, all information provided in all such advertisements are bound to, if not induce, encourage people to participate in gambling.”
“I have here the Survey of Business Expectations of the Services Sector in Singapore but unfortunately there is no distinction made between the big firms and the small firms, the foreign firms and the local firms. Then there is the problem in the area of tourism, since the Minister mentioned incentives for tourism. The problem brought to the attention of my GPC is this. That people who come here on package tours are limited to certain shops which pay commissions to the tour agents, as a result of which the prices are not the lowest that our shops can offer to these tourists. The tourists may go away with the wrong impression of Singapore. So can something be done about this, if we want to project Singapore as a shopping centre? Secondly, are the airline seats for travellers coming into Singapore sufficient? These are some of the questions which I would like to address to the Hon. Minister.”
“Incentives, Sir, are designed to promote economic expansion but at the same time there are disincentives that we may be producing within Singapore and these are matters of public concern. The older retrenched workers are by and large breadwinners, and moreover they are going to be an increasing percentage in the future because of the ageing of the workforce. There is another concern expressed to us in the matter of incentives by the local private sector and these are the following. Firstly, is the local private sector as a percentage of the contribution to the GDP declining? Secondly, in particular, in manufacturing, is the local private sector declining in terms of its contribution? Thirdly, should there not be special incentives for the local private sector participation which are better than those offered to foreign investors? Given the international climate, I think it might be in order for us to look more closely at the potential role that local entrepreneurs can play in our development. I am also concerned, Mr Deputy Speaker, Sir, about the small businesses in Singapore. The macro-economic indicators look good but the question is whether there is a percolation of economic growth right down to the small man, the shopkeeper level. There is a third stage - shop rental increase that is coming, on 1st January 1988. It is a matter of some concern to over 8,000 shopkeepers who rent them from the HDB. The rentals for JTC premises are also a matter of some concern, whether and how soon these are going to be revised. All these would be affecting our economic performance. I would urge that there be a monitoring process in respect of the small business sector in Singapore.”
“I will take heed and focus accordingly, Mr Deputy Speaker, Sir.”
“Sir, at a time of rising economic growth and in the face of the wage restraint policy, one obvious way of overcoming wage restraint is for workers to move from company to company. Obviously in the process they gain higher wages. But this adds up to higher labour costs for the firms involved, both the firms losing the workers and the firms gaining these workers. In addition, there are training costs involved of new workers that are needed to replace these workers who have gone away. Perhaps we need to emphasize this to the workers in Singapore that there should be a greater sense of responsibility, that job-hopping is not something to make a habit of, that jobs are not something to be taken for granted in a very uncertain world. Some of the private sector representatives who met our Committee have proposed to us that perhaps some form of restraint might be introduced to hinder or at least to slow down this high turnover of workers. But we are still studying the matter and perhaps the Minister himself may have some ideas to share with us. But it is a matter of concern to us. The Minister also mentioned earlier the problem of the older retrenched Singapore workers, a matter of concern also of the NTUC Secretary-General and the Minister for Labour. My Committee is equally concerned for two reasons. Firstly, the older retrenched Singporean workers.”
“In particular, I think there is concern that Japan and West Germany are not serving as the additional locomotives for the world economy that the Americans have been urging them to do. I think for various domestic reasons, in particular, the fear of kindling inflation has restrained the West Germans and to some extent to the Japanese from stimulating their economies to the extent that might be necessary. The impetus to protectionism continues as a result of the slow growth in the OECD countries. In America we read of various trade bills which come before the Congress and our Ambassador there and our trade officials have their hands full coping with the new bills and trying to project the right image of Singapore, trying to tell the Americans that we are a free port, we are not protectionistic unlike other countries, and that therefore we ought to be treated differently from countries which may come under the ambit of those restrictive bills. All these spell difficulties for us in the future. So we should not be complacent about our economic performance but we should redouble our efforts not only to increase productivity, but to put into effect the proposed wage reform. And I would like to emphasize the importance of this that we need to have a wage structure which has a bigger variable component by way of bonuses which can be altered from year to year in response to profitability of firms. Because this will enable us to, in effect, cut wages without having to cut employment. Earlier on this morning there was a Question tabled about the labour market in Singapore and our need for foreign workers. My Committee has received comments from the private sector in regard to the problems of high turnover of workers, as a result of which labour costs have been rising.”
“Mr Deputy Speaker, Sir, I rise on behalf of my GPC to support this Bill and also to make a few observations on the state of the economy. Sir, we are all heartened by the rapid economic recovery of our country from a very severe recession. It was a combination of factors, both domestic and external, that enable us to recover so quickly. Domestically, of course, we have just heard the Minister putting into formal effect the tax incentives which have been announced earlier. There was the CPF cut of 15 percentage points for the employer's contribution, various statutory costs were cut and, above all, there was wage restraint which required the full cooperation of the NTUC and the workers. Externally, of course, various Ministers went around trying to encourage foreign investors to come to Singapore successfully. But more importantly, we were the beneficiary of exchange rate realignments which have occurred since September 1985. These were the realignments concerning the US Dollar vis-a-vis the Japanese Yen and the European currencies, in particular. In the first place, the realignments allowed our goods to be much more competitive in European markets as well as in the US and to a lesser extent in Japan. But more importantly perhaps, it gives impetus to foreign investors to come to Singapore, particularly Japanese investors. The question that we must pose to ourselves is this. Can we expect this economic expansion to continue? What are the prospects likely to be? Hon. Members would have read the various economic reports in newspapers and magazines indicating that economic growth performance of the OECD countries is not up to expectations.”
“If you are operating a department store or a supermarket, the requirement for workers does not go up and down. It stays the same. The business does not go up and down. What goes up and down is the ease with which you can find workers and perhaps the effort you must make to recruit them. But if we allow in foreigners into these sectors - retail, department stores, local small restaurants - then we will be permanently hooked. And I think the objective which the NTUC Secretary-General mentioned, and many labour MPs I am sure will heartily second - that we should encourage employers to hire Singaporeans rather than blindly depend on foreign workers for all their needs, no matter how peripheral - that objective will never get achieved. I am sure the Member for Whampoa also subscribes to that objective.”
“Mr Speaker, Sir, is the Hon. Minister aware of the biases, distortions, introduced by the Work Permit policy in that bigger firms, hotels and enterprises are free to import virtually all the labour that they want, while the smaller firms, usually local and Singaporean firms, cannot find any foreign workers, and are not allowed to import any? There are these biases that must be corrected? BG Lee Hsien Loong: I am aware that some employers may be prejudiced against older workers. The Minister for Labour has mentioned it and it has been published in the newspapers. But there is no bias in the Work Permit policy against local firms. Not every sector of the economy can bring in foreign workers. We have confined it to construction, to manufacturing, to hotels and domestic maids. I speak from memory on behalf of the Minister for Labour. I think it is right that we confine import of foreign workers to individual sectors where the problem can be contained. In construction, during a boom there is tremendous demand for workers. The boom does not last forever. After it is over, these foreign workers are retrenched, and they go home. In manufacturing, the turnover of workers is high, and the fluctuations are also large. In electronics, where there has been 35% growth, there are shortages. It is the most sensible place to allow in additional workers. They will meet the temporary shortfall, which will not last forever. In the next manufacturing recession, the numbers will be reduced. In other sectors of the economy where the fluctuations are not primary but derivative and smaller, to allow in foreign workers is to make ourselves permanently dependent on a foreign source of labour. We cannot disengage.”
“Mr Speaker, Sir, would the Hon. Minister agree that one way to safeguard the interests of our older retrenched workers is to insist that all firms hire a certain minimum quota of Singaporeans? BG Lee Hsien Loong: Mr Speaker, Sir, that is one way, but I am not sure that is the best way. In the labour market, as in so many other areas of the economy, who hires whom, who buys what, at what price, is best left to market forces to decide, as the hon. Member for Whampoa has many times reminded us in this House, as an economist. We can encourage employers to hire older workers. I think we should. We can encourage them and pressure them not to discriminate unfairly against older workers. But in the end, the employer has a responsibility to hire the person best able to make a contribution to the firm, and not merely be a burden on the payroll and be a token gesture of charity. So we cannot force employers to hire older workers. I think we have to make the older workers more productive. We have to get them retrained. We can find ways to help retrain them, as I said, through BEST and MOST, and we will look for other ways as well. But I do not think that coercion will lead either to greater welfare or to higher economic growth.”
“So there should be some mechanism to ensure that the MRT and the bus companies provide the best management possible, that they run their services as efficiently as possible. But this Bill does not provide for any such safeguard. In other words, if the bus companies were to present a proposal for an increase in fares on the ground that otherwise the bus services will not be viable, how would this Public Transport Council respond? It would simply have to look at the book and say, "Yes, we agree and we increase the bus fares." But if the operators are hiding some money behind the scene, siphoning off money, and in a bus service with a lot of cash flow, it is easy to siphon off the cash that flows into the coffers of the bus companies without anybody noticing. So without good, efficient management, I do not see how we can have an efficient system at least cost to the public.”
“Mr Deputy Speaker, Sir, I rise to support this Bill as moved by the Minister. I think this Public Transport Council is a desirable vehicle to rationalize bus fares, taxi fares and MRT fares. However, like the Chairman of the GPC who has just spoken, I question whether the functions of this Council are comprehensive enough because there is no mention there and there is no explicit mention of licensing of taxis, neither is there mention of any power over the frequency of MRT services. The way the functions are listed in clause 4 of this Act appears to me that the bus system is used as a residual system, in other words, to take care of any excess or any necessary increase in supply of services after the taxis and MRTs have performed their services in accordance with the fares. I think for the Council to be really effective, it has got to take an overview, a comprehensive view, of not only the bus routes but the number of taxis which are on the road and the frequency of MRT services. The other important factor that should not be overlooked is that there is no way one can guarantee the efficiency of the MRT or the bus system. At least for the taxi operators there is sufficient competition to assure that the best and the most efficient services are forthcoming. But for bus operators and the MRT, one can only rely on the management expertise. I think historical experience here in Singapore bears this out - that until the Government sent in the team of officials into the Singapore Bus Services Company, the bus services were being provided very inefficiently. I am afraid there may come a time where in order to guarantee viability to the bus services and to the MRT, fares would have to be increased continually.”
“Mr Deputy Speaker, Sir, these target long-term CPF rates appear to have been set to satisfy housing needs, retirement and health needs. My first question is, would the Minister supply the basis of his calculations to this House? In other words, what exactly are considered to be housing needs? Does he consider a 3-room flat, a 4-room flat, or is allowance being made in his calculations for upgrading of flats? And how many upgradings has he allowed in his calculations? Secondly, Sir, has he taken into account the macro- economic considerations from the overall savings investment needs of the economy? Because there has been a concern expressed in the last couple of years that we are over- saving in relation to the investment requirements or what we can invest in our own economy. So were the macro-economic considerations taken into account? If so, could he supply the details to this House?”
“Why are we confining to Singapore citizens?”
“Mr Deputy Speaker, Sir, I have a couple of questions. Firstly, would the Hon. Minister consider a petition by existing tenants of HDB shophouses to purchase shops from the Housing Board? Secondly, why is he confining the sale of new shops to Singapore citizens, if he is really concerned about the property market? One would have thought that by allowing non-citizens to compete in buying the new shops, this would help to buoy up the property market.”
“Yes, there would be profit to a lawyer if he is seen to be so effective that he could drag every case that he has dragged through the courts right here into this Chamber.”
“I do not know about used cars, but I know about used lawyers. Sir, I was honourable enough to apologize when the case warranted it. But why does he not give the same advice to Mr Jeyaretnam? He could have saved himself a lot of bother and not be fined in this way. Sir, the point is very simple. The Act exists to prevent Members of Parliament from benefitting from their positions here in this Chamber. It is as simple as that.”
“That is an issue. That is precisely the point, Mr Deputy Speaker, Sir.”
“Mr Deputy Speaker, Sir, may I ask the Member for Potong Pasir one simple question? He is a lawyer and he deals with clients and he comes to this Chamber sometime after dealing with his clients and brings up their cases here because he has failed to obtain satisfaction for them in the usual way. If he does, would he not be benefitting from this procedure so that clients in future would see him as a useful lawyer to go to because he can bring their cases all the way up to Parliament?”
“That is not my point, Mr Deputy Speaker, Sir. It is for the protection of that person so appointed that I was suggesting the amendment. That particular section refers to the protection of the judicial manager or the receiver. So I was suggesting extension of the protection to an external consultant who had been appointed prior to the appointment of the judicial manager.”
“I will read it: 'The judicial manager shall report the result of the meeting (which shall, subject to subsection (2), be conducted in accordance with regulations) to the Court and shall give notice of that result to the Registrar and to such other persons or bodies as the Court may approve.' Sir, you will notice the reference to "regulations". But as I scan this Bill there is no explicit reference to regulations, no enabling provisions. Perhaps the Minister can explain why this was left out. Perhaps the regulations will be spelt out later.”
“If one compares this provision with a subsequent provision, section 227K, where the word "forthwith" is put in there or some time period is also specified. This is of importance, Sir, because we are dealing with a company which is financially troubled and time is of the essence. Already there were many complaints by those who made their representations to the Select Committee that the time taken for a Court to appoint a judicial manager is also very critical. So the gazetting part should be done as quickly as possible. I know the Minister tried to accommodate some of these complaints by providing for an interim judicial manager. Then on page 85, section 227I (c), right at the top, it says there [this is in regard to a judicial manager], the judicial manager of a company: 'shall be entitled to be indemnified in respect of that liability, and to have his remuneration and expenses defrayed, out of the property of the company which is in his custody or under his control in priority to all other debts except those subject to a security to which section 227H (2) applies.' This exclusion of those securities mentioned under section 227H(2) appears to be inequitable. One could imagine a situation where the judicial manager incurs very substantial costs expenses, and the assets of the company which are not tied up under that provision may not be sufficient to defray his expenses. So I believe that perhaps the Minister might want to consider amending this either immediately or sometime in the future. My final point, Sir, refers to page 89, under section 227N (3).”
“Paragraph 3(a) provides for the nomination of a person who is an approved company auditor and who is not the auditor of the company to act as a judicial manager. This nomination obviously comes from either the management side or the creditors of the company or some joint action between them. As I read some of the submissions, there was some complaint that this was unduly restrictive because of the small number of company auditors who may qualify to do such a job as a judicial manager. So I see some attempt at compromise in the amended Act under paragraph 3(e) of the same page 75, where it is provided that where a judicial manager is appointed by the court or nominated by the Minister, that person need not be an approved company auditor. I am somewhat at a loss to understand why, in the case of company directors and creditors, the restriction was maintained, namely, that the judicial manager who was nominated had to be a company auditor, whereas when it came to the court or the Minister they were quite free to choose whoever they wanted to. In other words, there is no restriction that he had to be a company auditor. Why is this so? I am in favour of it, but why not extend the same provision to the earlier case? In other words, allow the company directors and/or creditors to nominate somebody who is not necessarily a company auditor. On page 76, paragraph 4(a). I will read from paragraph 4: 'When a petition is presented to the Court, notice of the petition - (a) shall be published in the Gazette and in an English and Chinese local daily newspaper and a copy thereof sent to the Registrar; and (b) shall be given - (i) ... (ii) ...' I notice here that there is no time limitation set out and I believe a word such as "forthwith" or "within two weeks" would be appropriate.”
“(a) is in regard to a judicial manager, and (b) to a receiver and manager in the discharge of their duties. Perhaps we should add a third: '(c) an external consultant nominated by creditors with the consent of directors to assist in restructuring or otherwise to rescue the company without going into judicial management or receivership to avoid undue publicity which may precipitate his downfall.' Sir, the purpose of adding this paragraph (c) is to protect an external consultant that may be called upon by the creditors jointly with the directors of the company to assist in restructuring the company. And this could happen just prior to the appointment of the judicial manager, and such a person ought also to be protected under the provisions of this Act. I next turn to clause 45 which deals with section 227. This new version represents something of a half-way house between Chapter 11, which is in operation in the United States and the British company practice. In fact, it goes somewhat beyond the current British practice, as I understand it, reading from the Select Committee Report because it has implemented some of the provisions of the Committee called the Cork Committee or Cork Report. So clearly we are moving into unchartered waters. The question is whether the provisions under this clause would be effective. The Member for Chua Chu Kang, who was a member of the Select Committee, mentioned in one of the hearings that even under Chapter 11 in the United States, which is far more liberal in so far as the company management is concerned, only about 10% of the troubled companies are ultimately saved. So I just wonder whether our provisions would enable us to save more than 10% or somewhat less. Next, Sir, I would like to turn to page 75, paragraph 3(a).”