Chay Wai Chuen
Singapore
“As a result, some enterprising businesses and grassroots people have even come up with better ideas on equipment and machines designed to suit our HDB estates, HDB rubbish chutes and our older workers, to make the equipment easier for them to handle. 3.00 pm I give this as an example.”
“Since there are so many anomalies administered by the two agencies up to now, and because so many retailers will be affected, I urge the Ministry to freeze this scheme and review the procedures and policies entirely and put up the designated land for tender to be administered by one agency.”
“Sir, I would like to ask the Minister to give more choices, in terms of compensation or alternatives and flat type allocation for those people who are affected by the Selective En-bloc Redevelopment Scheme. Children should be, as best as possible, allowed to help pay for their parents in some of these choices that they have to choose.”
“Sir, the MUP Programme has been in place for some time and it applies to units which are 17 years and above. I would like to ask the Minister why are 40-year old flats still not upgraded.”
“Mr Chairman, there is an increase in the operating expenditure of $648 million this year for the Ministry of Defence. I would like to know what is the rationale for this increase.”
“Sir, the SAF has been involved in peacekeeping missions on several occasions, in East Timor and the Middle East, typically in the area of logistics and medical services. I wonder whether the Minister can enlighten me on what kind of role the SAF can play in this area of peacekeeping missions.”
The complete record
Every one of 526 lines we hold for Chay Wai Chuen, in date order, each linked to its source. Free to read, in full, without an account. Page 9 of 11.
“Mr Speaker, Sir, I wish to speak on this motion in the name of the hon. NMP, Mr Chia Shi Teck. Listening to what the previous hon. Member has to speak, I find that it is so much easier to follow the points and the logic of my Parliamentary colleague, Mr Peh, than to listen and follow the convoluted logic and questions of the hon. Member for Bukit Gombak. And it seems very surprising to me that Parliament today should be really debating on this issue which, as rightly pointed out by my Parliamentary colleague, pertains to the affairs of an individual involved in an employer-employee contractual problem. But, however, as in the nature of a democracy, any problems can be made political if a party or a person chooses to. It may as well be so that people will be clear about the issues and not let sentiments and emotions get the upper hand of logic and orderly thinking. The fact is that Dr Chee Soon Juan, a lecturer from the NUS, has been dismissed for alleged misuse of research funds by the employer, the NUS. If the lecturer concerned feels that he has been wronged, then he should take legal redress. I can think of at least two Members here who are qualified and able to represent him. The NUS being the employer is most willing for the employee to seek arbitration and legal redress as provided for in the terms of the contract, if the other party feels it has been wronged. Yet, it is strange that Dr Chee has not chosen the rightful and the lawful way of rectifying this alleged wrong. His Chairman and Secretary-General in the Party are both lawyers and they have been taking great pains to point out to the House why they cannot represent him in this issue. But I really believe that the matter pertains to arbitration, or to the court, and not to this House.”
“Thank you, Sir, for giving me this chance. It took me a little bit of time to realise that somehow the logic in his table is not correct. So I would like to clarify. First, the Member mentioned that there would be an increase of 209.91% if there was a GST on the Polytechnic tuition fee as compared to a fee of $420 in 1983. He has worked out two figures, one is $660 when there is no GST, and another is $881.63 when there is GST. He came to the figure of 209% by dividing $881 by $420. I think this is wrong. First, if he wants to compare the GST system to a system without GST, then he must compare like with like. That means he must compare the increase of $881.63 to the figure of $660, which comes to an increase of 33%, not 209%. The second point is this. He cannot work backward to impute into a GST system for the past years when there was, in fact, no GST system. If he were to do that, then I would say the PAP Government will be much wiser. They would not have increased the fee so much. They would have reduced the base. Then he would not have compounded it.”
“It is regarding a table that he presented just now. May I clarify?”
“No, it is regarding the point made by the Opposition Member for Hougang, Mr Low.”
“No, Sir. I want to clarify two points. The other point is ---”
“Sir, I would like to rise on a point of clarification. Just now, it was mentioned by the Opposition Member for Potong Pasir that we do not need business investments because the banks are flooded with cash. Maybe he does not understand that in the context of this debate, a reduction in the corporate tax will lead to greater investments which can give a greater value-added, noting the fact that there is now a much reduced rate of growth in our GDP. The second point, Sir---”
“But after just 30 years, the GST rate in Sweden has escalated to a high of 24%. And whilst the GST rate has remained at 24%, its income tax rate has not come down. It remains at a high of 80%.”
“Why do I speak up for these foreign workers when I do not hope to get any votes from them? Very simple. The answer is that we are Singaporeans. We are a people with a heart. We care. We show concern for the less fortunate. And if we do care and speak up for foreign workers, as they also help us in our economy, then more so we should speak up for the poor in Singapore, and the SDP does speak up for the poor in Singapore. We do show concern for the less fortunate in Singapore. We, the SDP, are not indulging in the politics of envy. I am surprised that MPs who are also union officials should be attacking the SDP for their concerns of the plight of the poor in Singapore. Are they true union officials or are they working for the employers? By speaking up on behalf of the poor in Singapore, the SDP is not causing a problem for Singapore, but it is causing problems for the PAP. If the PAP Government, as it says, has done a lot of good for the poor, eg, by giving as much as $70,000 subsidies per worker and getting back in return only $20,000 in terms of taxes from each worker, then it should not be unduly worried. The workers shall continue to vote for the PAP. But many suspect that the truth is that the PAP Government is not doing as much for the workers as it should. That is why it reacted so sensitively to the concerns of the SDP for the poor in Singapore. Singaporeans cannot be totally materialistic. We are human beings. We are, above all, Singaporeans. We must have a heart. We must care and we must show real concern for the less well-to-do. The whole thing about the GST is how it will affect the poorer people of Singapore in years to come. Now, we start off at a low rate of 3%, like Sweden in 1959, when they too had a rosy situation in respect of their economy.”
“When we pause to think what this GST is all about other than raising massive revenue for the Government in time to come, it is how it will affect the poor when it is implemented. Despite the denials of the Government, the fact is that there are large numbers of poor people in Singapore. There must be a few hundred thousands of Singaporean workers who are earning less than $800 per month. Then there are the unemployed through no fault of their own, the aged and the pensioners. Other than these large groups of people, there are also the foreign workers. A foreign maid is now paid about $280 per month. The employer has to pay, in addition to the salary, a levy of $300 per month. A foreign construction worker is paid about $500 per month but his employer has to pay the Government $400 levy per month. The levies imposed by the Government on foreign maids and workers are outright tax. After collection of the levies, the Government does not provide any benefit whatsoever to all these workers and their employers. All medical bills of these workers are borne mostly by the employers. When the GST comes into place, the Government shall be taxing on the spendings of 200,000-odd foreign workers in Singapore. The foreign workers, of course, do not keep all their earnings. They do go out and spend their incomes. They use their incomes to purchase goods and also for entertainment. And there shall be taxes on these spendings. Therefore, in addition to the Government levies, the Government shall also earn on the GST in respect of the spendings of foreign workers. There shall be more revenue for the Government in respect of all foreign workers. What does the Government intend to do with the additional revenue? Does it intend to help the foreign workers upgrade?”
“In introducing a tax reform such as the GST which will have across-the-board implications for income and prices, there is the question of inter-generation equity we must address for those who have contributed their whole working life in the building up of Singapore. The Minister has promised he will find more ways of offsets. If he cannot find more new ways, I urge him to give more to the existing ways. My colleague, Dr Wang Kai Yuen, has worked out the price increase for zero net gain based on the figures given in the Budget. The figures vary from 4% to 7% for the various household types. For the retired and the aged poor, I urge the Minister to monitor the likely price increases affecting this category of Singaporeans and make periodic adjustments to assist them, at least in the first few years when this tax scheme is in operation. Sir, I support this Bill. Mr Chiam See Tong (Potong Pasir): Mr Speaker, Sir, if the GST were put to the people for a vote, they shall most probably reject it, like the case in Australia in their recent general elections. The PAP did not even let out a whisper, let alone make the GST one of its election platforms at the 1991 general elections and the 1992 by-election at Marine Parade GRC. The PAP is not as forthright and above board as the coalition of John Hewson in Australia. It is true that the coalition lost the elections to the Labour Party, but they can hold their heads high. They lost with dignity. At least, we can truly say that they are not afflicted with the kiasu syndrome. Business people are concerned with GST but, above all, it is the poor who are most worried.”
“Many European countries have found this to their regret that, by doing so, the tax becomes too unwieldy and too costly to administer and audit. At a time when we are phasing in a new scheme of taxation for the economy, with long-term implications on income and growth, the Minister must not buckle up the economy the wrong way, particularly when we are gearing up for more privatisation, free market and building up a competitive external economy. Fourthly, Sir, I must touch on the so-called regressivity of the GST. From a theoretical static point of view, this tax may be regressive. For example, people argue that as consumption tends to fall proportionately to income at higher level, therefore, a fixed rate of tax on consumption goods will imply a lower tax paid proportionately to income at the higher level. From a practical point of view, this fear is illusory. This is because the Government is offering income tax relief as an offset. This means most Singaporeans will pay less tax. More important, by pushing for economic growth and income growth, most Singaporeans will go on to a higher level of income which means that they are going to pay lower tax for consumption proportionate to their higher income levels, thus becoming the benefactors of the so-called regressivity of the tax. Finally, Sir, I must bring up a category of Singaporeans who will not be benefitting from the GST. They are the ones who have retired and living on pensions or savings. There are many of them in my constituency. While prices and income can adjust in the free market for those who are working, the old and retired do not have this possibility because they are no more earning any income. I may also include the aged poor.”
“For example, in the global ideal situation, the tax should be neutral to foreign trade (so that neither importers nor exporters are favoured); it should be neutral to owners of capital and labour (so that none is favoured in the choice of techniques); it should be neutral to firms which are either horizontally or vertically integrated in the corporate sector or outside it. The value added tax, in the ideal situation, introduces no distortion to the resource allocation, leaving the optimal allocation to the free play of market forces. Hence, it is so important to introduce the least number of zero-ratings and exemptions. We are favouring exports and investments, but that is good for our future; as it gives support for economic growth, employment and income. Beyond that, I urge the Minister to be sparing in granting zero-ratings and exemptions. I support the Minister in not granting exemptions for medical services because that is the correct decision, if we are not to deviate from the economically optimal solution. Medical services are a big ticket item - exempting medical services will introduce distortions. I also support the Minister in not granting exemption for Town Council's service and conservancy charges. Sir, I must declare my interest as I am a Town Council Chairman. This is a time when the true believers of the free market are being tested. The Minister is correct in applying the solution of increased subvention which is considered necessary for social policy, rather than exemption which distorts choices. I can understand the reason why special groups want to be treated specially. The Minister should be sparing in giving a zero- rating here and an exemption there.”
“Export promotion must remain one of the cardinal features for a competitive open economy to achieve sustained economic growth. The zero-rating of exports under the GST assists in this. There is the GST credit for all capital expenditure purchases given wholly at the time of purchase. I consider this to be a powerful element for raising capital intensity in our industries and businesses. While investment decision by businesses may not be sensitive to taxes in the short run, we must remember that whatever tax credits for capital expenditure will still raise business profits at the bottomline. Increased business savings must lead to higher investment for the economy in the long run. This will help in our productivity and give higher wages to our workers, generating higher value-added. Sir, the Government has deliberately chosen a value added tax of the consumption variety. Hence, it is called a consumption tax. This is because the Government is excluding from the tax base all investment or capital expenditure of the tax period. The Government could have adopted a VAT of the income variety. In that case, it would have taxed investment spending as well, if it were interested in more revenue. That would not be consistent with its intention to encourage savings by Singaporeans and Singaporean businesses. There is potential for economic growth in this and Singaporeans will benefit by this. Thirdly, Sir, a multi-stage GST is supposed to be an efficient and a good tax for the taxman. It is not the same as a turnover tax as mentioned by the hon. Member for Potong Pasir. Economists think it is a good tax because it is neutral - it does not distort allocation of resources.”
“Sir, I think this is an important consideration for small open economies, like Singapore. It is no point for the Government to have a VAT system unless it can help us in Singapore. The Minister has explained earlier why it is a more stable source of tax revenue than solely relying on personal and corporate income taxes. The experience of the last economic recession in 1984/85 has taught us a lesson about relying too heavily on personal and corporate income tax as a major source of revenue. The Government hopes to attain a 50-50 balanced two-way revenue after the GST system is implemented. This is something desirable as a stabiliser. In this respect, we must remember that the consumption tax was a recommendation of the Economic Committee. Secondly, the Minister has generously offered many income tax cuts, reliefs and offsets to address the burden shift of the tax. It also attempts to answer the question for ordinary Singaporeans, "What's in it for me?" There is a wider overall question, "What's in it for us?" that I would like to focus. After the hullabaloo is over, when the concern and worry regarding inflation, cost of living subside, as I am confident it will sooner rather than later, the larger picture that we must see is the growth dimension of the GST. There are several aspects to this. There is the investment effect because of the cut in the corporate income tax expected to be 5%. Corporations, local and foreign, will increase profit and can invest more, leading to more income growth and jobs for Singaporeans. There is the zero-rating for exports. Exporters in effect are given an implicit subsidy that is GATT consistent, in order to allow them to compete more effectively overseas.”
“Sir, I rise to speak in support of the Bill in the name of the Minister for Finance. First, I must compliment the Minister and his staff for putting up one of the most lucid and cogent White Papers on Government policies. I am sure he will enjoy the GST as much as I have enjoyed reading it in the White Paper. It would, however, be strangely hedonistic to support the Tax Bill before Parliament for its lucidity and cogency. However, as someone has said, there is nothing more certain in life than death and taxes, so if we are to be taxed, let us have a good one. My colleagues have covered several grounds on the GST. I will only want to make several points. First, the goods and services tax is necessary as part of tax reform. The time to introduce an alternative tax is to do so when the Government does not need the revenue - in good times, not in times when you need it. Sir, I have made this point here two years ago. Twenty-one of the 24 OECD countries, the most developed countries in the world, have the VAT except for the United States, Australia and Switzerland. Outside the OECD, 40 other countries have it. Our neighbours, Indonesia, Thailand and Philippines have it. Japan, Korea and Taiwan also have it. A value added tax system is a pre-condition for EC entry. Many of the Eastern European and Central European countries, who want to join the EC, are working hard to put in place a VAT system. In a world system of emerging trading blocs, eg, EC, AFTA, NAFTA, having a VAT system in place facilitates border tax adjustments, which is important for manufacturers and businesses if they are to correctly and accurately reflect such adjustments to minimise tariffs/duties as our goods enter international trade, thereby maximising our competitiveness.”
“Sir, presently there is a Rent and Utilities Assistance Scheme (RUAS) which is available for poor Singaporeans who are unable to meet their bills in rentals and utilities. However, a Singaporean paying his flat by instalment, struggling along in his 3-room purchased flat, is not eligible for any of such assistance because he owns the flat. 90% of HDB flats are owned. Many who own 3-room flats are on instalments and one day they may face difficulties because they have got problems after an accident or illness, leaving them unable to work for a certain period. Single mothers, divorcees with children, and problems of alimony payments and so on, may be adversely affected occasionally in the course of their working lives. Meanwhile, while they are unemployed, the bills mount - utilities bills, SC&CC charges bills and even instalments. These examples are drawn from real cases that I have met. These are people who are struggling at the bottom. They are not parasites of society. They are the ones who deserve help. I urge the Minister to be a little bit more flexible in administering this Rent and Utilities Assistance Scheme. Surely, if there are good reasons why a poor worker is unable to pay his bills for utilities and conservancy because of some accidents, some illnesses, some family crises, or some temporary personal difficulties, the RUAS Scheme should assist, instead of sticking to the rigidly imposed rule that he or she must be renting a flat.”
“Sir, on the upgrading of old flats, I am concerned that the older constituencies, such as Queenstown which have more than 85% of the total flats more than 25 years old and 95% of the total flats more than 20 years old, are not getting the same rate of upgrading. I would like to appeal to the Minister to accelerate the upgrading of such flats. In the last announcement, flats in six areas are due for upgrading. Flats which are 30 years old will be upgraded at about the same time as flats in the other constituencies which are about 15 years old. Many of the older residents have expressed the fear that they might not live to see the day when their flats are upgraded. So I urge the Minister to accelerate the upgrading.”
“In this way, while the medical bill for the company may exceed 2% of the total remuneration, due to some who are seriously sick or some who are exceedingly health conscious, they may be required to pay the tax portion of their expenses, if the company does not wish to subsidise them. And the others who are not so sick, or not so health conscious, can still retain the quality of the medical benefits. The other minor point which I want to raise, and perhaps the Minister can clarify, is whether medical insurance expenses fall under this category of the 2% capping. 2.30 pm”
“Sir, I would not be raising the point on the foreign-based income because it has been raised earlier. I would like to move on to medical expenses for companies. Many workers and managers have expressed concern about the capping of the 2% of total remuneration for health care expenses to be tax deductible. Understandably, they were concerned about the capping, meaning that they will at the end of the day lower the standard and quality of health care services borne by companies. Although many members of the Resource Panel of the GPC for Trade and Industry and Finance have expressed such concern, I must admit, however, that on deeper reflection, I share the rationale of the Minister in proposing this capping. I think it is entirely sound and defensible, in order to assign more personal responsibility for health care and minimize the baggages that businesses will have to carry to facilitate competition and taxation policy. In this direction, however, I do think that there is a need for an individual limit, so that senior officers or a few persons do not consume the larger part of the tax benefit, and crowd out the benefits for the health care needs of the lower level workers. One way, of course, is for the companies themselves to limit the individual medical benefits. Another way may be to cap the tax deductible medical benefits of the individual worker, based on the maximum of 2% of his remuneration multiplied by the inverse of the ratio of the claimants of the benefits to the total number of workers in that category. I think a relatively easy method for this can be worked out.”
“But for the new entrants to the labour market, say, in the 18-21 age group - I am just giving a suggestion - it may be worth our consideration to reflect their lesser productivity contribution by a reduced employer's CPF contribution rate. Already we have a reduced rate of contribution for the older workers. Do not the new entrants to the labour market have the same reason for a lower rate of employer's contribution? This will lighten the employer's burden considerably.”
“Sir, thank you for allowing me to chip in. Sir, in this budget, the Government proposes to raise the employer's CPF contribution by another half per cent. One of the problems faced by the employers is to raise productivity in the workforce, as mentioned by my two colleagues. We hear of various quality control circles, measures and so on being undertaken by companies to practise and raise productivity. In our present kind of labour market situation, it is quite common, for example, to find workers hopping from one job to another for a raise in their salary. Companies spend a lot of money on their own for the training of these workers, even though skill training grants may be available partially. A new labour market entrant to a corporation or a team is not likely to make the same amount of contribution to the team in terms of productivity. Yet, the employer paying for this new entrant is paying for the same share of his CPF contribution, just like the other members. Worse, the new staff, the new entrant I am referring to particularly, after a short while of training, may even leave the organisation, especially in our labour market situation today. At a time now when manufacturers and businesses are so concerned with wage cost and productivity, can the Government not consider setting a reduced CPF employer's contribution rate for such new entrants for a period of, say, 2-3 years? Then the worker will not get his take-home pay reduced but his employer's burden will be reduced correspondingly to match the reduced productivity of new entrants. For people who have been working in the labour market for some time, it is not reasonable at this stage to effect a reduced CPF rate contribution.”
“Yet, in Chart 4 as presented, the 1992 figure of 23% is the highest for the last 12 years. If a 1% increase is about the equivalent of $700 million by our GDP measure today, a 1.6% increase over the last year in this share of the GDP operating revenue, as a proportion of GDP from 1991 to 1992, it is about $1.1 billion. So I urge the Government and the Minister to watch this figure closely in order that the Government does not over-tax the economy. In this respect, I can detect in the last one or two years specific attempts by the Government to pass back some of these reserve surpluses of the Government to the people. Schemes such as Edusave and Medifund and the discount assistance for the purchase of soon to be corporatised public statutory boards' shares, such as Telecom and PUB. I commend these measures to enable more and more Singaporeans to be part of the share-owning and property-owning democracy. What we are doing in these schemes are probably unique in the world. I hope the Government can explain and publicise this asset-sharing and asset-enhancement programme and the rationale for it to more and more Singaporeans so that they can take part in it and share in the benefit of this democracy. Finally, I support the motion in the name of the Minister for Finance.”
“If we consider the productivity and its corollary, the cost, with the combined inputs of labour and capital, I wonder whether the total factor productivity of Singapore industries is matched with the wage cost increases that we are generating. I suggest that the Government look into deriving a statistical series on this total factor productivity to give a better indication of the competitiveness of our industries after paying for labour and capital. The second point I wish to make concerns the external dimension of the economy. Creating the external wing to the economy does not necessarily imply a high economic growth for the Singapore economy by the GDP or GNP measure, unless incomes are continually repatriated back to Singapore. Hence, it is important for the Government to identify the right type of companies for strategic industrial development overseas. Sir, I have made this point in my budget speech in 1989 and it is available in Hansard. I will not test your patience with this. The appropriate tax measures, incentives and support measures must be developed for such strategic industrial development in order to maximise the success of these ventures and the linkage with the Singapore economy. Unless this is done, it will not generate a spin-off for the domestic economy and enable the domestic factors to multiply value and opportunities for them downstream. Singaporeans thus may not generally benefit from these overseas ventures. The third point I want to make concerns the high ratio of Government revenue to the GDP. Since 1988, the figure has been creeping. It was 23% in 1992. I am glad that the Minister for Finance has noted this. He does not believe that this figure is too burdensome.”
“Mr Speaker, Sir, I wish to speak in support of the motion in the name of the Minister for Finance. [Mr Deputy Speaker (Mr Eugene Yap Giau Cheng) in the Chair] 4.40 pm Sir, I would not touch on matters of the GST as the Bill is up for Second Reading. I will concentrate on some specific points in the Budget. While the economy grew by 5.8% last year and performed creditably compared to the other NIEs such as Taiwan, Hong Kong and South Korea, I am concerned about the weaker relative performance in productivity of Singapore. If one looks at the index of relative unit labour cost - I share the view of the previous speaker, Dr Wong - and if we compare this index with the other NIEs, we notice that - for the past four years I made the same observation in a row - our relative unit labour cost index against the NIEs has been rising by about 10-12 points annually over a base of 100. A unit labour cost measure or an index does not say anything specific about what is happening to the output and productivity. However, comparing ourselves across the range of other wages and other sectors in the other NIEs, it is interesting to see that our labour cost has gone up by over 10 points annually compared with these countries. Are we losing out in the competition with the NIEs? In the Budget Statement, it was mentioned that productivity rose by 3.1% over 1991. This again, looking across the last 10 years, is the second lowest annual productivity increase for the past 10 years. Even then, we are only referring to labour productivity. What happens when we consider the cost input of the capital which works with labour in producing the output?”
“' Fourthly, Sir, I wish to compliment the Government for the policy on containing the public sector's share of manpower resources and on containing the size of public expenditure and the GDP. This is a very good yardstick to go by without sacrificing the quality of output and service. When the Government expenditure gets too big, there is always a danger of inefficiency. Finally, Sir, I must thank the Finance Minister for granting the tax relief for National Service reservists. Although this decision was taken after the recommendation of the Committee for the Recognition of Contribution of Reservists to Total Defence (RECORD), many outspoken reservists have, over the years, spoken out for similar ideas, for well past a decade, as far as I can remember, speaking with experience as a Manpower Officer of a brigade for the same period. To all the reservists who have been banging this idea, and who have by now gone ROD from the reserve, there is still a $500 tax relief for their past service. They are not forgotten. It goes to show that this Government does listen to the good ideas of the people and that people with good ideas should not give up, even though sometimes the Government seems hard of hearing.”
“It is not very useful to talk purely in terms of economic growth alone. Sir, I am concerned that labour productivity only grew by 1.6% last year, while real wages went up by 7.6%. As pointed out by the Minister, this is the third year where our real wage growth exceeded our productivity gains. I urge the Government to tackle this problem anew. Related to this is the unit labour cost which has been rising for the past three years. We run the danger of pricing ourselves out of the competition. The second point, Sir, I wish to touch on concerns the wayward fortunes of the trade negotiations for the Uruguay Round. Through the leadership of our Prime Minister, Mr Goh Chok Tong, the creation of the ASEAN Free Trade Area (AFTA) is a significant achievement for Singapore and for the ASEAN countries. Singapore businessmen will benefit positively and significantly from this as it allows lower tariff for the movement of goods within ASEAN countries. More important, Singapore, through ASEAN, can benefit from the many favourable tariff preference arrangements. ASEAN and AFTA can be platforms on which Singapore and ASEAN countries can bargain for the optimal free trade arrangements for the simple reason that united we are strong, and divided we are weak. Thirdly, Sir, I must compliment the Finance Minister for his expose on Adam Smith and the virtue of the free market. Few Finance Ministers can afford this luxury. The only other Finance Minister in the world that can expound so proudly on Adam Smith, I believe, Sir, is the Financial Secretary of Hong Kong. Nonetheless, the Minister has not forgotten to mention this and I quote: 'The market system, suitably tempered by Government intervention, has served Singapore well.”
“Thank you, Mr Speaker, Sir, for allowing me to speak in this budget debate. I wish to speak in support of the motion in the name of the Minister for Finance. But before that, Sir, let me congratulate the Minister for Labour for his very clear and well-argued exposition on the maid levy issue just a moment ago. I think it is a good example for us that we should not let emotion get into the way of clear logic and rationale when talking about the maid issue. It also gives a very good perspective of the social implication of growth. So I urge Members to study in depth the Minister's response to this issue. I also wish to cover only certain points, as my able Parliamentary colleagues have already covered many areas. Firstly, Sir, our economy grew by about 6.7% in 1991 compared with 8.3% in 1990, at 1985 market prices. Although many people may think that this is a letdown, I personally do not think so. It is, I believe, a realistic rate of growth for our economy at this stage of our development. Singaporeans should not expect the economy to turn in 8%, 9% or 10% of annual growth, although this was the norm in the 70s and the 80s. It is more important for our people to realise that productivity growth is a more crucial dimension of our real economic growth for us now. This is because by expanding capital inputs, we need labour to work with the capital. And as we are in full employment, such an increase in the labour input can only come from our own labour supply, or from outside Singapore. We already have about 300,000 foreign workers in Singapore. Alternatively, we need our workers to work with greater intensity of capital and to be able to do that they need skills and training. Hence, increasing our labour productivity is crucial at this phase of our economic growth.”
“The Malay community is fortunate and pleased that the Government is taking an interest in their affairs. The MENDAKI Foundation has been working actively to raise the economic, educational and social standing of the Malays. Assistance in the form of annual Government grants to Malay organisations should be maintained so that the community may reduce and perhaps eliminate altogether the problems that have been burdening them. As for the Muslim Religious Council, it can upgrade its administrative machinery further if it is allowed to engage in the development of endowment lands and in pilgrimage agency. MUIS needs a business arm so that it can involve itself in development and business. An amendment to the Administration of Muslim Law Act can be considered. If other statutory bodies can engage in business activities, I think MUIS, a statutory board, can be allowed to do the same. Mr Deputy Speaker, I support the motion of thanks to the President. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the item under discussion and the remaining items on the Order Paper today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng]. 3.34 pm”
“I am impressed by the proposed Medifund scheme. I hope it would enable more patients to gain assistance when they encounter difficulties paying their hospital bills. I would suggest that more flexibility be exercised when considering applications from those in the lower income group. We should not impose such strict criteria as those which apply to cases under the Public Assistance Scheme. The health care system needs to incorporate incentives for the individual to maintain his health. Every individual must be responsible for his own health and fitness, if he is to avoid having to spend large sums of money when taken ill. The Government can encourage people to participate in mass sports activities, whether for recreation or competition. In this regard, assistance can be provided to all national sports associations (NSAs) in the form of annual grants and training and competition facilities. If possible, every NSA should be provided with individual facilities, to serve as training ground for sportsmen and proper venues for sports fans to watch tournaments. In Singapore, support for sports events has been very encouraging. However, as we know, the performance of our sportsmen at the international level has not been satisfactory. We can see the example in the SEA Games recently in Manila. I think we need to set up a Ministry of Sports in order that we may attain excellence in sports as well. Lastly, Mr Deputy Speaker, I think my speech would be incomplete if I did not touch on Malay community affairs. I am heartened by the Government's assistance to the Malays through MENDAKI, the Association of Muslim Professionals (AMP), the Muslim Religious Council (MUIS) and other organisations.”
“I hope with this University, more mature citizens would gain the opportunity to obtain a degree. However, I hope the admission criteria would not be so lax as to bring down quality. The Open University needs to ensure that its degrees are equivalent to degrees from NUS, NTU and other universities. It is also imperative that the Government allocates the same amount of funds as it does for NUS and NTU. This would ensure that the Open University's fees would not be so high as to burden its part-time students. Mr Deputy Speaker, I also support the Edusave scheme, under which an account will be opened for every student. I propose that the scheme begins when the child is five years old, so that students can take advantage of the fund right from their pre-school years, because most of our children begin formal education at five or even younger. The Government can also allow students who are well-off to contribute their Edusave funds to the school. I think the Hon. Minister for Education has already expressed agreement to this idea. The school will then be able to enhance its activities for the benefit of all students. Mr Deputy Speaker, allow me now to touch on health care. Much has been raised by Members in this House over the increasing cost of health care. I would like to voice the concern of the ordinary citizens on this matter too. I urge the Government to monitor the situation constantly to ensure that costs would remain affordable especially to the lower income group. Higher rates of subsidy must continue to be allocated to B2 and C class wards. A public education programme can be launched to inform the people of the quality treatment and care available in B2 and C class wards. This is to encourage more people to use them in accordance with their means.”
“In this connection, I welcome measures to be taken by the Government to ensure that those in the lower income group will not be left behind by the tide of progress. The President's Address, Mr Deputy Speaker, gives the people much to hope for. It explains the Government's philosophy and sets out a long-term plan to meet the country's needs and the aspirations of the people. The plans outlined in the book The Next Lap need to be explained in a simple way for the benefit of the people so that it could serve to stimulate everyone to strive towards excellence for Singapore. Mr Deputy Speaker, allow me now to comment on two areas - education and health. I am impressed by plans to raise the quality of education in Singapore. We have just heard the Minister on this point. We have come to a stage where every citizen has access to a full education that will equip him to contribute to the nation's economy. The principle of meritocracy we espouse must be maintained and, where possible, practised with a touch of compassion. Every student who wants to study or gain a skill must be given the opportunity to do so. The changes we have introduced in our education system should lessen the drop-out problem. We have just been told by the Minister about the 4% drop-out rate in primary schools. I think we need to improve the situation further and bring the rate down to zero. Besides reviewing the streaming system, the Government should also seriously consider expediting the introduction of the day school and reducing the number of students per class. This is not a new proposal, and in fact has been raised several times in this House. Mr Deputy Speaker, I support the setting up of the Open University, which is scheduled to start this year.”
“Among the most obvious is our economic success, which has seen us growing from a trading centre, catering to the needs of the region, into a centre of finance, communications, high-tech industry, tourism, etc. Our achievements in these fields have brought us prosperity and turned us into the second most advanced country in Asia. And these past 32 years have been, to my mind, a period of consolidation that has equipped us for the challenges of the future. Mr Deputy Speaker, one of the factors responsible for our success has been our honest and capable leadership. Our leaders are prepared to embark on tough policies in the interest of the nation. And, that Singaporeans have been willing to accept these policies reflects our pragmatic nature. As a result, Singaporeans enjoy a high standard of living in a stable and peaceful environment, conducive to an even higher quality of life. However, although we have succeeded because of good Government, the citizens remain dissatisfied and this led to a drop in the percentage of votes for the PAP in the last general election. I am sure there is a message in this for the Government. While enjoying the fruits of success, the people are facing pressures in their daily lives in the form of rising costs, in housing, transportation, education, health care and daily expenditure. Even if we support the principle of the free market, we have to bear in mind the social cost of our comfortable life. The Government has to act with care when dealing with the rising cost of living, to ensure that the people, especially those in the lower income group, do not suffer in trying to make ends meet.”
“Yet she is certainly the most competitive and efficient economy in the world today. There is no correlation between regulatory control and efficiency. Hence, I was very much reassured in the President's Address when it was mentioned that the Telecommunication Authority of Singapore (TAS) would be corporatised, not privatised. Being eternally hopeful, I always believe that when corporatised, the Government will still have a hand in regulating control, especially in determining fair economic charges through the Board. In corporatising, there is more leeway and speed for decision-making. There is also more direct accountability. However, the public interest must also be taken care of in setting fair economic prices. Otherwise, the runaway "economic horse" will surely upset the "political cart". I hope the Government will not lose sight of the need for social efficiency and equity in such corporatising exercises. Dr Vasoo, the hon. Member for Tanjong Pagar GRC, mentioned that there is also a rider between the "economic horse" and the "political cart" who must steer in the right direction, presumably so that there is no U-turn. I may add that there are also passengers on the cart. Some are sitting in front, many are seated behind, some have fallen off. The journey, Sir, must be done so that horse and men are home in one cart. And I have no doubt, Sir, that we can do so in good time. 3.22 pm [Mr Deputy Speaker in the Chair] Encik Ibrahim bin Othman (Thomson GRC)( In Malay): Mr Deputy Speaker, since the People's Action Party came into power in 1959, the country has scored achievements in various fields.”
“Sir, I can go on but it is really unnecessary. A balanced approach is crucial. We have also achieved much by the enlightened hand of the Government in the past. We can do as much by adopting this balanced approach so that all our people, especially the lower income class, can see and have the benefits of membership in the Singapore society. Sir, as we enter a new page of history, as we start on the Next Lap, much can be done, yet much can also be undone. The Minister for Communications has a very difficult job because everything he lays hands on affects our incomes, whether it is telephone charges, Certificates of Entitlement (COE), or the Electronic Road Pricing system to come. Similarly, the Minister for Health. The next difficult job, Sir, coming up, I believe, could be the Minister for the Environment. Yet one of the most important lessons we may not have learned is that it is not regulations or rules which will stultify us, it is bad regulations which hinder us. It is the slow decision-making in the Government bodies, hierarchies which restrict and obstruct us, in failing to understand changing technologies and changing relative prices. We must have the correct rules and regulations to tackle the right problems. We must see the problem well ahead. For that, it is so important to have a good, far-sighted government. One of the most regulated and unfree economies of the world is Japan, much more than the United States or Europe. This statement does not come from me, Sir. It comes from Lester Thurow, author of the book "The Zero Sum Society". Anyone who has done business with the Japanese, or has lived in Japan, will know the power and network of the Ministry of International Trade and Industry (MITI) and the rules and regulations in Japan.”
“It played a balancing role, sometimes predominant and heavy in one hand, occasionally lightly in another, to stimulate and steer the economy to raise the level of investment and economic development in these countries. In this role, Sir, I must say the PAP Government achieved wondrous results for Singapore. I would like to give a good example of how intervention and control by the Government achieve world-wide acclaim in Singapore. It is the Housing and Development Board (HDB). No country in the world has housed 90% of its population and almost all of it on sold housing units. If the so-called free market had reined, we would probably have a housing situation in Singapore today more or less similar to what Hong Kong is. We would not have achieved the results in housing that has even won the accolade by the Chinese President, as was quoted by the Deputy Prime Minister yesterday. Land reform was another. Perhaps, we did not realise that such a Government interventionist legislation as the land acquisition for urban renewal goes against the free market rules. Yet I remember that when this legislation was first introduced, the former Prime Minister had a difficult time reconciling this with his English legal training in property rights. Yet everyone marvels at our nice and tree-lined roads and buildings, for commercial and residential purposes, and the systematic urban planning in Singapore. It is a valuable public good. Without it, we would not have our HDB today. The Government is able to mobilise huge amounts of domestic savings for our development effort over the past 25 years through the Central Provident Fund (CPF). The CPF is an enforced savings scheme. A free market economy does not force people to save. Yet we all agree that the CPF is a good scheme.”
“Economists call this "market failures", such as in industries where there are externalities, where there are economies of scale, or in the area of public goods. By that I mean, Sir, that where there are side-effects to the production or consumption of the goods and where such side-effects can cause benefit or cost to the firm that is different from that incurred by the society, this will lead to a breakdown of competitive pricing. Competitive markets also break down for certain firms such as in the utilities or the telecommunications sector which are natural monopolists. The free market, therefore, may not lead to benefits to the consumer because of their monopolistic control. In the case of public goods such as defence, and a clean and green Singapore, in areas of standards and research, it is difficult, and, I believe, wrong, to let the free market rein, where anyone, for example, can pay another to do his national service or compensate the Government for not doing so, or anyone can simply pollute the air we breathe for a charge, or anyone can buy a certification of standards for a fee; particularly in a country like ours where so much interaction of an economic, social and political nature takes place. In so small and vulnerable a place, the governing hand is more imperative today than before. Sir, one of the most significant factors that explains the phenomenal success of the East Asian economies is the visible hand of the Government. Yesterday, we were shown figures which showed that many of these East Asian countries of Korea, Taiwan and Singapore, for example, had all high growth rates and low inequality of income over two decades. The government of these countries was an important initiator of economic growth and efficiency.”
“It is important, I feel, for people bonding, for levelling up, for pride in the membership of the Singapore society. I believe that taking the funding for these scholarships and bursaries and grants under the current budget will save us from many difficult situations later on, every year, when we will always have to explain why money is reduced from the Edusave for the majority of students because the education fees for the 25% of students have gone up, or the school grants have risen, especially so when there are more roving Members of the Opposition in the House seeking targets or opportunity. Sir, I would like to move on now to the question of the free market economy. Over the past few days, many Members have spoken and championed the cause of the free market economy. Just now the Member for Tampines GRC had spoken about the three views on this free market economy. I rather believe that there may be three and a half. I believe that there is no such thing as a free market economy, just as there is no such thing as a free lunch. Any economy comprises a set of rules and regulations under which transactions for goods and services and rights take place in an orderly manner, for which gains can be expected in order to keep the relationship going or stable, so that the exchange is no robbery. Such rules and regulations must be set by the government. A free economy presumably means that there is to be a minimum of rules and regulations and control by the government under which competition will ensure that people will benefit by getting the best economic price for their goods and services and rights. Yet, left to itself, the market fails in certain situations.”
“The 25% of students and the $100,000 grant to every secondary school or the larger proportion of the students in the age group, whose enrichment, education or grant this scheme was supposed to originally provide? As I understand it, only the remaining amount, after the deductions, would be available for grant to the ordinary student in the age group. It may appear that there is no difference. After all, it is coming out from the Government's purse. I beg to differ. First, there is the mechanics of the public finance. If paid out of the current budget, the amount of scholarships and bursaries and secondary school grants can always be factored in the yearly expenditure and not be subjected to the vagaries of the residual surplus. Secondly, there is the question of principle. If we are to transfer the endowment fund from part of our reserves in order to level up society, then I feel we should distribute it without discrimination. These reserves belong to all Singaporeans, as pointed out very eloquently yesterday by the Deputy Prime Minister. I realise that in a society that aspires to meritocracy, Government's expenditure and policies can always be tuned to achieve certain desired outcomes. In this case, the support for scholarships and grants to independent schools and neighbourhood schools' top students surely will not lose its message of meritocracy if paid out of the current budget. On the other hand, when we transfer part of the nation's reserves, these reserves belong to all Singaporeans. When we intend to show that we care for all, irrespective of whether one is a winner or a loser, then the gesture must be to give equally. This was the idea as originally conceived.”
“Mr Speaker, Sir, thank you for allowing me to join in this debate. I wish to speak in support of the motion of thanks in the name of the Member of Parliament for Hong Kah GRC. Many of my parliamentary colleagues have touched on most of the issues in the past few days and I will only want to highlight on a few points. In the President's Address, it was mentioned that part of the Edusave will be used to provide scholarships and bursaries for the independent and neighbourhood schools, and for grants of $100,000 each for secondary schools. The grant for the students under the proposed scheme will therefore be reduced. And as I understand the scheme, as conceived originally, the Edusave is an endowment scheme from the accumulation of budgetary surpluses that would otherwise have gone into the State's reserves. This Edusave scheme would provide for every child within the age group certain grants from the endowment for enrichment, education, or for his savings. I am in support of providing more scholarships and bursaries for the students, although I would prefer that these scholarships and bursaries be given to students in need, so that we can ensure that all our able students can go to the independent schools. However, I feel that such expenditures should be taken out of the current budget rather than from the Edusave Endowment Fund. The Edusave, as originally conceived, is to be built up from the accumulation of budgetary surpluses. Its pace may be dependent on the size of the budgetary surpluses as accumulated or the state of health of the economy. In years when the economy is in recession, as we cannot be too sure it will not happen, whose claim on the Edusave Endowment should have priority?”
“For example, if there are three candidates standing for the election and the results of the highest-polled candidate is 35% of the votes while the others are 30% and 25%, respectively, with a 10% spoilt votes, under the present provisions, the candidate with 35% of the votes would be elected by a simple majority. Yet he has only 35% of the people's votes. Will the Minister consider requiring a second round election of the two highest-polled candidates to determine the winner? The third point I would like to point out is that, under the present provisions, clauses 16(5) and 23(2)(a) allow for symbols to be allotted to the candidates. In Parliamentary elections, the party symbol identifies very clearly the candidate. Many people will vote on the ballot papers, matching the candidate with the party symbol which they are already familiar with. For example, the PAP lightning or the Workers' Party hammer and so on. However, for the Presidential election, people may not be too familiar with matching the symbol with the candidate. So I am just suggesting that perhaps the Minister might consider alternatives such as having a picture of the candidate next to the name of the candidate on the ballot papers. Another alternative might be to print the names of the candidates in four languages so that non-English speaking Singaporeans, especially the older folks, can also vote correctly.”
“Thank you, Mr Speaker, Sir, for allowing me to join in this debate. I would like to speak in support of the Bill. Sir, the Presidential Elections Bill follows quite closely on the Parliamentary Elections Act. However, because there are definite differences between the elections of the President and Members of Parliament, I wish to point out certain issues which the Minister may wish to address. Basically, there are three points. First, Sir, clause 9(4)(b) of the Bill requires that a candidate should make a statutory declaration that on nomination day, he or she is not a member of a political party. Would the Minister consider specifying a minimum time period during which he is required to cease to be a member of a political party? In this way, it lessens the perception of the public of any partisan connection of the election and of the candidate. The second point, Sir, concerns clause 32(8) of the Bill which specifies that the candidate with the greatest number of votes is given to be elected. Unlike Parliamentary elections which elect a party to govern, the Presidential elections basically centre on the candidate. Considerable power is held by the Elected President. We go to a great extent in specifying the qualifications of the Presidential candidate. I feel that it is only logical that we should also ensure that the choice of the people is absolutely clear cut. The present provision allows only a candidate with a simple majority to be declared the Elected President. This may not be reflective of the people's choice.”
“They can easily hedge the Certificate of Entitlement into the vehicle.”
“Currently, you can have a period of three months for your transfer of the COE. If you allow this period now to be six months before the period of the currency is "dead", so to speak, first, there is a problem of comparison in what Prof. Maurice Choo has just talked about evaluating two systems; and second, I am afraid this might generate more room for people to speculate.”
“Can I ask the Minister why he would like to extend this currency period before the first transfer to six months? It is now three months before you make your first transfer. So why does he want to extend this time to six months? First, there is a difference in comparison. Second, one of the fears expressed is that people will play the market, ie, speculation. If you extend the period to six months, the opportunity for this play of market will be more ready.”
“I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head J be reduced by $10 in respect of Code JF 3100 of the Main Estimates. Sir, the topic is on the upgrading of community centres (CCs). Many community centres built in the late 70s and early 80s were not so architecturally aesthetic and attractive compared to many of the so-called new generation CCs. Community centres' management committees and the People's Association are facing difficulties in trying to attract more people to participate in the activities of these CCs. These older CCs face competition from the new generation CCs in terms of comfort and facilities. Presently, the PA through the Ministry of Finance gives dollar-for-dollar grants for extension building funds. There is no such dollar-for-dollar funding for upgrading, renovations, fixtures, etc. Yet, the upgrading of facilities is important to answer to the needs of modern Singaporeans. I sincerely hope that the Minister can respond positively on this.”
“Sir, as the Minister has answered my query on this subject, I do not wish to move this amendment.”
“I thank the Minister for her reply and I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“Sir, may I be permitted to reply? The category on subventions may include social transfers. All social transfers are part of subventions, but not all subventions are part of social transfers. Therefore, the category on social transfers should be correctly reflected to indicate correct work load and performance indicators.”
“Sir, I beg to move, That the sum to be allocated for Head J be reduced by $10 in respect of Code JD 2510 of the Main Estimates. Sir, this is on social transfers. The figure shown for the year under review is $3.75 million, which is a decrease of about 24.7% over last year. I gather that the Minister has raised the rates for public assistance. Can the Minister explain the reasons for the decrease?”