Chiam See Tong
Singapore
“Sir, Singapore's sovereign wealth fund companies, Temasek Holdings and GIC, returned 17% and 9.5% yearly respectively, using largely Singaporeans' CPF money. Why is CPF returning 2.5% on the Ordinary Account and 4% on the Special Account only?”
“Thank you, Sir, for allowing me to take part in this debate. Under Singapore law, single parents are treated as singles who are not eligible to purchase a Housing Board flat unless they are 35 years old and they are also given reduced children benefits like lesser maternity leave and no Baby Bonus.”
“Sir, the collection of revenue from ERP gantries is way above the total amount of revenue lost by the Government from the exemption of household TV and radio licences. I would urge the Government to review and reduce the charges at ERP gantries for vehicles entering the ERP zones.”
“Although the Government is pumping $120 million a year to support needy students in all levels through a slew of enhanced financial aid schemes, schools funds and bursaries, we should not forget to look into the plight of students who have been cheated by unscrupulous education centres by helping affected students to pay or re-finance the…”
“Thank you, Mr Chairman, for allowing me to join in the debate. I would like to touch on fairer distribution of treating scholars amongst schools. MOE should ensure fairer distribution of teaching scholarship holders after graduation from NIE to the various schools.”
“Children and adults with special needs deserve better protection. It will reduce the anxiety of both caregivers and patients with special needs, like the mentally-ill and autistic children. I urge the Government to issue special I-cards to these patients.”
The complete record
Every one of 4,205 lines we hold for Chiam See Tong, in date order, each linked to its source. Free to read, in full, without an account. Page 78 of 85.
“It is about equivalent in amount required to construct 2(r) Potong Pasir estates. The number of units built in Potong Pasir estate in May 1985 comprised 3,634 units of flats, out of which 104 are double-storey maisonettes. That is the price Singaporeans will have to pay the Government for the loan. Mr Speaker, Sir, the object of the HDB, of course, as it was set up in 1960, is to provide cheap housing for the low-income group. With the high rate of CPF contributions, suddenly there are no more lower income groups. Workers seem to be able to afford to buy flats at over $40,000/$50,000/$60,000 or even over $70,000 a flat. But we know the income of the workers. You look at the statistics last year. About 53% of our workers earn not more than $600 gross per month. Members, of course, will in their mind be wondering what is wrong with these workers buying flats. I say there is plenty. Most of these flat purchasers will have a financial millstone hung around their necks for the next 10, 15 or 20 years. Now, with the downturn of the economy, the period of repayment has been extended to 25 years. It does not help. A simple calculation will show that the longer the payments, the total amount repaid will be higher. Even over a 20-year period, 80% or even double the original purchase price will have to be paid for. Is this what we call cheap housing? Just to give you an exam- ple. A $46,000 flat with a downpayment of $10,200 and repayment period of $313.50 per month for over 20 years will cost $85,440. That is about 84% more than the original price. I have discovered that many purchasers of new flats are paying over $400 or $500 per month for their flat instalments.”
“Mr Speaker, I beg to move, That the sum to be allocated for Head T be reduced by $10 in respect of Subhead TA-01 of the Main Estimates. Mr Speaker, the amount allocated to the Ministry of National Development is $10.8 billion, which is 87% more than the revised expenditure of last year's Budget for FY 85. One would imagine that such a big increase would have programmes set by the Ministry, probably equivalent to the second runway at Changi, or perhaps even a second bulk container terminal. But no such thing. In fact, 81% of it, or $8.8 billion of this amount is allocation for loans to the HDB; only about 10% of the total allocation is for roads, parks, and other infrastructures, and the balance of $255.55 million for resettlement. This figure, again, it is strange that that figure should creep in after the new accounting system of the HDB has come about. This amount constitutes about 2.4% of the total allocation. Under the new accounting system, lands are compulsorily acquired by the Government at 1973 values and sold back to the HDB. So I do not know how we have this $255 million for resettlement which is given usually at the time the land is compulsorily acquired. Perhaps the Minister could explain this to the House. The $8.8 billion is a loan from the Government to the HDB. It is not a grant, and therefore the loan will have to be paid for with interest. Who pays this interest? Certainly not the HDB. The flat purchasers will have to dig deep into their pockets to pay for it. If we take interest at a low level of 5.5% per annum, the interest on this loan of $8.8 billion will amount to $485 million a year. Now, it is sometimes difficult to comprehend a figure like this, in the abstract. Let me put it in more concrete terms.”
“Mr Speaker, Sir, I have four amendments. May I lump them altogether and speak as one amendment instead of separating them?”
“I differ from the Prime Minister in that. He can have his own opinion. He has made mistakes before. He has withdrawn his policies before. He has made mistakes. So it does not mean that if we have whatever cut, investors will not come. If they know that the workers are going to work harder and be more productive because the leaders have set an example, I think they will come pouring in. It is just the opposite.”
“May I just have a last word, Mr Speaker. It was the Prime Minister who took the initiative and asked me what is the percentage cut. I said that if the House so decides I would follow. Now he admits that if we on the spot decide, investors will be -”
“No, I have already answered the question. Whatever is decided in this House, I will follow.”
“Whatever is determined by this House, I will follow. Whatever is cut. Does it include the Minister's allowance itself or is it just only for the Backbenchers? [Laughter.] Do not laugh. Let us get this out. If the Prime Minister wants to get it out, let us get it out. Whatever the House decides, I will gladly follow. We will set the example for the country. We are leaders. Yes. We cannot call on the workers, "Be productive, tighten your belts, work third shift, suffer all kinds of inconveniences", and then we do not do anything about it. We are building a nation. We are not sitting here as members of a board of directors of a big corporation "Singapore Incorporated". We are here as leaders of the nation. We are in the process of nation building. That is what we are here for. We do not just say because to attract good men we have to pay them. How can we compare with the private industries? How can we compare with the industries of America? It is just impossible. How can we develop expertise if we just go by pay alone?”
“Mr Speaker, if there is going to be a cut, it should be for all Members in this House. If the Ministers take the lead, and if he says there is going to be a pay cut of the MPs, I will gladly follow. Of course. You cannot just say, "You go and have a pay cut. How much are you going to cut your pay?" What sort of argument is that?”
“They are the richest country in the world. How can we compare with them? What do our workers get? One-third? One-quarter of their workers' pay. That is no comparison. How can we compare Singapore with America? I just cannot see it. How you look at it, we cannot compare ourselves with America. They have got massive resources, talents, leaders in all fields. Are we leaders in all fields?”
“Please tell me if I am wrong. It looks to me that way. The other important point is to build confidence in our country. We have to get the workers behind us. Much has been talked about getting the workers to tighten their belts, to work harder, to work the third shift. But what do the leaders of the country do? Do they set an example? Great leaders like Churchill, Napoleon, they set an example. In the midst of the blitz in London, they did not run to the countryside and be in a safe place. Napoleon was a great general, not because of his artillery or his expertise in strategy, but he was there fighting with his soldiers. 3.45 pm We are talking of morale in a country, and the only way we can have a high morale is for the leaders to show an example. And there is no better way of showing an example than to have a pay cut. I am sure all the Ministers sitting in front of me do not mind a pay cut. Are we going to say that if they take away $5,000 off their salary, they will say, "Okay, I am going to give up?" Is that true? I do not think so. All the past Ministers now in the Backbench who were paid $3,000-odd they are still around. Ministers who have been dropped, they are still around. I do not think they will back out just because you reduce their pay. There is no argument at all. This is no argument. They are leaders. They want to do public service. They are here to do it. To set the example. We cannot make use of clever debating techniques and compare. When we want to show that we are bad, we compare ourselves with the best countries. When we want to show ourselves to be good, we compare ourselves with the worst countries - Philippines, Sri Lanka. How can we compare with America? In the 1950s they have got 53% of the world's GNP, and I believe now it is about 20%-odd.”
“Yes, vast sums of money. All these investments or savings, if they do not give a return, they become consumption. And this will pull down our economy much more. It looks like the only way we can get ourselves out is to attract more foreign investors and start all over again. An hon. Member: How?”
“Well, whatever it is. An hon. Member: Just say "vast sums of money."”
“The hotels that have been built in Singapore, Mr Speaker, Sir. It has been reported that the amount invested in properties in Singapore, I believe, is something like $120 billion, I believe. Anyway, it is something like four or five times of our reserves. It is a very big sum of money. [Laughter]. You may laugh. Fair enough, if you think this is a joke. I do not think this is a joke. This is a national matter. An hon. Member: It is your figures!”
“Mr Speaker, Sir, may I be allowed to join in the debate? I understand you have a ruling of five minutes. But if I do exceed the time, will you allow me to carry on?”
“There would not be a Crown in Singapore.”
“What percentage of these investments is abroad and what is the percentage locally?”
“Sir, out of the 7,200 applicants, how many of them are first-time applicants, ie, those who are not upgrading themselves to a better flat? Mr Teh Cheang Wan: Sir, again, I cannot give the figure offhand. Approximately, I would say 25% of the applicants are upgrading to bigger flats. Another 25% of the applicants are already residents in HDB estates but they are "split families", in other words, the children got married and have applied for new homes as they are moving out of their present homes. There may be another 10% who form their own family nucleus perhaps with their spouse who is not an HDB resident.”
“Damage has also been done because Singapore has been made out to be a place that welcomes only high technology. But the First Deputy Prime Minister has since changed that policy - high tech, low tech, any tech will do, he says. So it looks like we are in a real desperate straits. In the past, pioneer companies, at the end of their pioneer status, will have to pay the full corporate tax. Now, a scheme has been worked out for them to pay only something like 10% tax after their pioneer status has expired. So the Government is bending over its back to make sure that pioneer status companies which are already here will remain here. So the Minister for Finance is not exaggerating when he says that we have a severe recession. If the Government really wants business to grow, then it must establish an environment where business can grow. It must have a more open society where entrepreneurs dare to be bold, dare to venture. The Senior Minister has pointed out in the Sunday Times of 16th March that Information Technology was the way out of the economic gloom. Can an information or professional service industry bloom in Singapore under our present stifling atmosphere? If Singapore wants to breed its own professional expertise and dispense with the crutch of using foreign expertise all the time, then the paramount requirement is that we must, first of all, establish a truly democratic society. Thank you. 3.24 pm”
“So only about $2 or $3 billion is, in fact, used for construction. Many Members have discussed the issue of consumption tax. I am not in favour of it. It will hurt the workers more than the other groups. The workers are already asked to forgo 15% point cut from their employer's CPF, and they have also been asked to tighten their belts. The 25% rebate in personal income tax will benefit the rich more, in absolute terms. Should the consumption tax be introduced, the workers will bear the full brunt of it, as they are broader based. On this issue, again the credibility of the Government is in question. On the one hand, it gives out 25% rebate of personal income tax and, on the other hand, it takes back by way of consumption tax. This consumption tax, as has been said in this House, will be inflationary. A consumer item will be more costly if it attracts consumption tax at every stage whenever it is sold, say, from the wholesaler to the retailer and then to the customer. At each stage, the tax will be slapped on, adding more cost to that item. The steps taken by the Government at the moment is nothing new. It is just back-pedalling. I have already mentioned this before. We are just reversing gear and starting all over again. But, of course, this time it will be more difficult. As has been reported in the papers, other countries like Ireland, even Bavaria in Germany, Oregon, Hong Kong, and even those not mentioned in the newspaper report, like Mexico which I know of, are trying to attract investors. So we will have a more difficult time. Once you drive people out, it is not going to be easy to get them back. I notice that the EDB is asking for a higher budget than the $20-odd million that is allocated to it.”
“If the Government accepted the Member for Rochore's recommendation to cut a 5% point in employee's CPF -I believe you recommended that?”
“Acting Minister. I can quote other Ministers who have spoken in such contradictory way but I shall leave it for another day. So much for the credibility of our Ministers. Why only a 15% point cut in the employer's contribution and no cut in the employee's? The reason given by the same Acting Minister was that internal demand for consumption comprised only one-third and the balance two-thirds was external demand. Examples given by him were demand for surplus hotel rooms, the excess capacity of oil refinery and shipbuilding facilities. Therefore, the additional take-home pay of the workers will not stimulate the economy. I do not agree with that. Although our local demand may be small compared to the external one but you must remember the number of local companies is large, about two-thirds or 80%. It is true they comprise a small percentage of local demand but their numbers are large. Every bit of injection of funds in the local market will be a stimulus to get us out of the recession. Be that as it may, the real reason why the employee's CPF cut is not implemented is because the Government needs the money. The Prime Minister has said in the last general election, "We do not need your money." If that was the case, why not cut the employee's CPF and return the money to them? After all, the Government does not need people's money but the Government just cannot do it. According to the Economic Report at page 7, the net CPF contributions currently amount to $2 billion per year. The Straits Times reported that a 15% point cut in the employer's contribution would amount to $1.5 billion. After the 15% point employer's CPF cut is implemented, the CPF Board would have a net balance of $0.5 billion a year.”
“If we did that, we have more chances of attracting investors to put their money in Singapore. In Hong Kong, they say one business lifetime is about five years. Therefore, not changing our fiscal policy for five years is reasonable. There is no better way to build confidence than by having an element of predictability in the Government. Fresh in our memory is the CPF issue. When times were good the Government kept increasing it till the CPF rate reached an absurd high of 50% of the workers' salary. Of course, businessmen protested. The business community just could not carry such a high wage burden. The excessive savings had a recessionary effect on the economy. At the same time, the construction industry was overheated, pushing it to a sharp over-supply situation, and yet the Government refused to lower the CPF rate until now. At this point perhaps I would like to quote the Acting Minister for Trade and Industry. It is a pity that he is not here. The report appeared in the Straits Times on 1st September 1985: 'Brig-Gen. Lee said Mr Chiam's proposal to cut the rate of CPF contribution would reduce the standard of living for the workers. So don't talk about cutting costs in an airy-fairy fashion without realizing that you are at the same time talking about cutting the standard of living of the people.' Mr Speaker, Sir, for the record, I do not come to Parliament to talk in an airy-fairy fashion. I say what I believe in. But does the Acting Minister say what he believes in? Apparently not. About five months later, he made an about-turn and agreed on a 15% point cut in the CPF rate. He said; "I think this is a reasonable cut." Obviously he did not know what he was talking about at that time in the first instance. But anyway he was promoted to be a Minister.”
“The Government has accepted most of the recommendations of the Economic Committee. Basically, the recommendations are to cut costs and make Singapore a more competitive place to do business. Will these measures in fact bring us out of this severe recession? I would say that it would be difficult because the Economic Committee has not addressed itself to the root problem. I say the crux of the matter is the PAP Government itself. The main problem is that its credibility, as was mentioned yesterday by the Member for Serangoon Gardens, is in question. The trouble is that businessmen now no longer have faith and confidence in the Government. It has practised its policy of pragmatism too far. It makes too many sudden changes. One day it adopts one policy and then reverses it on another day. All the measures so far are either temporary or on a two-year basis. The short-term measures will not do. The Government must make a commitment that it will do away with the paternalistic type of economy, support the private enterprise and not interfere in the free market forces. The Minister's assurance that taxes which have been temporarily suspended will not be reimposed for as long as it takes the economy to regain its vigour is not good enough. The Government must give some form of commitment, as I have often said. It must commit itself, I would say at this juncture, to a period of, say, five years, that it will not alter its fiscal policy. This only then will give confidence to investors. In fact, that was done in India under the regime of Rajiv Gandhi's government. One of its policies in its economic reforms ensures a continuity of fiscal policies for five years. As a result, India is now enjoying a stock market boom. It is time we implemented that policy.”
“I rise not in support of the motion that is before the House. Please let me first comment on the 53% of our workforce that is mentioned in the Budget statement as not having attained even a primary school education. The PAP has prided itself of its 20-odd years of record. But the 600,000-odd workers who have not even received or did not even manage to get this primary school education will surely go down as a black mark in the record of the PAP. The Government has promised to bring us to a Swiss standard type of living in 1999. With this kind of a workforce, how are we going to reach that standard? The Swiss have got almost 99% literacy in their workforce. So this one ingredient is already absent in our society. How can this Government hope to reach a Swiss standard of living? It has, first, to solve this very basic problem. 600,000 workers is a big number. It is more than the present enrolment of our schools. So it is a national problem, and the way the Government is going about it is just by small measures - BEST classes conducted by a political party. I think it is a shame to politicize education. This should be left to the Ministry of Education. It has already been mentioned that we have funds in the Skills Development Fund. What is it there for? To develop skills? How can we go about developing skills when our workers do not even know how to read and write or recognize numbers? Maybe they can be trained to a certain extent but surely not to the extent you would like, ie, to bring the economy of the country to a high standard. So I would urge the Government to treat this problem seriously and treat it as a national problem. There is enough fund and it should be more serious about this whole problem.”
“Mr Speaker, Sir, may I be allowed to join in this Budget Statement debate?”
“Can the Minister please cite the three awards for HDB tender for construction of flats in 1984, or any figures for last year to show whether the prices are going up or down?”
“Sir, the Minister is saying that the whole amount of money is now coming from the taxpayers. Is that correct? There are no other sources of money to finance the construction of the MRT.”
“Mr Speaker, Sir, to compare the construction of the MRT, which requires a tremendous amount of money with building schools, I think they are two different things.”
“Is the Minister saying that the first intention of the Government to sell parcels of land at Marina South to construct the MRT has been shelved and it is now relying solely on money from taxpayers?”
“Is it not true that most of the members of these so-called grassroots organizations are appointed by the PAP?”
“As regards the grassroots organizations, can the Minister please tell this House what type of grassroots organizations he has in mind?”
“Mr Speaker, Sir, this last category of persons who have contributed to the security and social well-being of the State, in what order of priority would they be given - Armed Forces, Police personnel, staff of HDB and grassroots organizations, as the Minister has mentioned? Are they on the same priority scale, or is there a difference?”
“Mr Speaker, Sir, I would also like to express my condolences, and also on behalf of the Member for Anson, to the families of those who perished in this tragedy. I was at the scene and I could see the difficulties involved in carrying out rescue operations. I wonder whether the Minister intends to set up a special team with this particular type of expertise for rescue operations if, we hope not, there were other such collapses. Because, from what I saw, using bare hands to remove the debris is certainly not a good method. I know, of course, of the dangers of collapsing beams and concrete slabs. Perhaps the team should look into other methods of rescue, such as the Minister has mentioned, the tunnelling method. I think that is probably the most suitable method. Could the Minister comment on that?”
“You are not answering the question on religious songs.”
“Because the Minister said that he was going to answer the Member for Bo Wen. I asked whether or not last year's tender prices have dropped.”
“Mr Speaker, Sir, the Minister has not answered the question. What we want from him is actual instances, for example, in the development of Potong Pasir estate, or any other estate if the Minister so wishes, what is the calculation to show clearly the subsidies that are given. Up to now we have not got such calculations yet. Can the Minister please oblige?”
“Mr Speaker, Sir, would the Minister please let us have, in writing, his calculation of the subsidy which, up to date, we have been unable to obtain from him? That is, could we have concrete instances where the subsidies are actually given?”
“Yes. I would like to ask: How is this subsidy given to purchasers of HDB flats?”
“Mr Speaker, Sir, the Minister has again mentioned about this subsidy.”
“Would the Minister please tell this House whether the tender prices for the construction of HDB flats have fallen last year? Mr Teh Cheang Wan: Mr Speaker, Sir, notice of a similar question has been given by the Member for Bo Wen which will be answered at a later date.”
“Or is it perhaps a feeble, incapable government who will be pushed by the whims and fancies of the mob? The Cabinet will do its part. First Deputy Prime Minister will be travelling in September to Europe to promote Singapore. I will be going to Japan in May, to the United States in June. My Minister of State, Dr Lee, will also go. We will look for new markets, new places where we can attract business in and find business to go out. We will do everything which can be done, but in the end nothing is certain. Can we guarantee that recovery will come next year or at the end of next year, or 1988? We cannot guarantee that. Nobody knows what the world will bring. Nobody knows whether the US economy will continue its recovery, actually limping along on its recovery longer than any previous recovery, or whether it will go into a slump. Nobody knows what will happen to commodity prices, although nobody is optimistic about them either. Nobody knows what other events may take place in this region, as dramatic as the events of the last two weeks in the Philippines. So we cannot be sure, but what we are doing will make sure that if there is a ghost of a chance, then all of us will succeed. [Applause]. 12.41 pm”
“If they do not understand it, if they are confused and bewildered, then they will become angry, demoralized, and we will fail. So far, the spirit which has been shown has been good. The union's response has demonstrated that there is substantial understanding. The sacrifices which have already been made are significant. These are not peanuts. These are drastic measures, not tokens. If we can hold this position, then we will succeed. The Government will do its part. The policy recommendations are here. A systematic implementation plan has to be worked out. All Ministries, departments, statutory boards will be involved. It is easy to say, "EDB will promote services, TDB will sell Singapore." To get that organized, to hire the right people, to go out and get the first firm here, be it a lawyer's firm, hospital, or accountant's firm. That is a massive amount of work which will be done. The private sector has to work. Moaning and groaning, maybe cathartic, but it will get us nowhere. The opportunities have been identified. The process of cooperating with us in the Economic Committee has been highlighted them to the private sector. Many opportunities which they were previously not actively aware about have been identified, and I hope they will now follow up. The Cabinet itself will play its part in promoting Singapore because when you want investments to come in, when you want people to commit and back you and to be certain that you are the right horse, they must judge not just your country and your report, but your person. What are you like? Is this a leader whom I can have faith in? Or is this a wild-eyed rabid fanatic who may do something rash and demolish all my investments overnight?”
“That has nothing to do with economics. BG Lee Hsien Loong: So the conclusion is, policy changes do not eliminate the problem. They help us to regain a competitive edge. If we do not have CPF, if we do not have reserves, if we do not have taxes which can now be reduced, then we would be in a sad position. A recession would still have come, and in future a recession can still come. We will have fewer parameters to play with, less to talk about, much more to be sad over. So do not believe that after we have trimmed the CPF and the corporate taxes, there will be no more recessions and property slumps. There will be. If we are not careful, what is reduced on the CPF side can easily be eroded way. Wages can easily take up the 15% slack which the CPF has created, costs can easily go up if managements do not know what they are doing. Then we will be sitting here morosely wondering what to do next. Mr Speaker, Sir, we are therefore discussing solutions to the problem, we are not discussing the causes of the problem. In the end, we must connect this analysis with our day to day life. The Americans have a slightly crude saying: When you are up to your waist in alligators, it is very hard to remember that you are supposed to be draining the swamp! We are not quite up to our waist in alligators, but there are many bush fires to be fought. Manage wages, hold down increments, adjust CPF, look for new areas of business, cope with retrenchments, unemployment, adjustments, but never forget what our aim is. And our aim is to drain the swamp, to get out of the swamp. If people understand this, and accept the changes and work towards this objective, then we can make it. Then we can get where we want to go.”
“No excessive government intervention in the economy. Total laissez-faire. No high CPF, in fact, no CPF at all. No high taxes, 18.5% constantly held up as a model for Singapore to follow. Currently no property slump. No PAP Government. And yet in 1985 they had a severe recession. Much more severe now than they realized earlier. Their growth was 0.8% compared to 9.3% in 1984.”
“The Chairman of EDB informed me that he went on a promotion tour a couple of weeks ago. He found out that Bavaria was advertising for investments. Bavaria, that is South Germany. And they were offering 60% capital grant on investments in Bavaria. That means, if you bring $100 million to set up a firm there, they will match you with $60 million straightaway so that you can buy more machinery, hire more workers. That is the competition which we are up against. And we want to tax them heavily and say they are willing to pay? Are we honestly better than German workers? If we do not move, if we do not get out of our present niche, then we are finished. The future strategy is to go into total business, to go into services, to go into offshore business. Do not just look in Singapore, but look beyond Singapore. Do not just look at Manufacturing. This is not just a production base. This is not just the place for other people to bring their plans, their assembly lines, their blueprints all complete, for Singaporeans just to put it together. This must be the place where people come and do all kinds of business - design work, management of subsidiaries, fund management, personnel management, services repairing equipment, services advising clients. Then we will have something which will take the others some time to catch up on. Even that will not be a final solution. But I think the solution to the next stage of catching up will be the next Economic Committee Report. That is where we must move. Even then, this is not our last recession. This is not our last property slump. To think that it is the Government's fault, and the Government should go down on bended knees and beg forgiveness and crave pardons is ludicrous. Let me take an example - Hong Kong.”
“There is no certainty but neither is there another way out. We will have to make it so." So investors, watching Singapore, do their calculations. They do not come here out of charity. They come here if they think this is a place for them for the long run. And that is what we must preserve, the stamina, the endurance, the determination, to make the long run. The report provides the key policies, taxation, wage reform, manpower development, education, local businesses, entrepreneurship. These are all important pieces which must be put in place by the Government, by the private sector, by the population. Unless we get them right, we cannot get the short-term right. We have to move. Yesterday the Member for Whampoa said he disliked the term "niche", because that is where you put ashes. If we do not get out of our present niche, our ashes will be put there, because others are closing in on us. The alternative to doing what is recommended is not just to bumble along in our comfortable old ways, preserving our old livelihood and our old standard of living. It is to hazard everything which you have gained so far and risk going back all the way, 20 years back. The world does not stay still. Today we can make a living by getting Hewlett Packard, or Seagates British Petroleum, to set up a factory here. Do you think there are no other countries in the world eyeing these investments? Do you think that the other newly industrializing countries are not strenuously upgrading their education, building their infrastructure, raising their technical competence level, developing into substantial economic entities in their own right? Do you think that other countries, equally desperate for such investments, are not going all out to get them to come, offering all kinds of inducements?”
“That is the way for us to get prosperity and recovery. That is the purpose of the policy changes proposed by the Economic Committee and substantially endorsed by this Government. But we must look beyond this recession. Indeed, the recession looms large. If you judge by the debate in this House, you would never have guessed that the policy measures recommended are only three chapters out of 24 chapters in the book. There is a reason why there are another 21 chapters after Chapter 3, and that is, we must get our fundamentals and long-term direction correct. The way we hope to get out of this recession is for companies which are already here to invest more, and for new companies to come here and put in fresh investments. They do not do that because this year CPF is down. They do that if they think that for the next five years, the next 10 years, this is a good place to do business and that this is a good year to start. So to get out of this recession, we have to demonstrate that we are able to make a sustained effort, keep it up for years, then only will people come in. Then only will the economy grow. When I was in London last month, I made a pitch to British investors, bankers, people who have an interest in Singapore, people who want to know whether we are a good place for them to put their money. I told them the way for us in the future is to be more competitive, more flexible, work longer hours, work third shifts, go for hardship tours overseas, even in god forsaken places. They listened to me carefully. After the speech, one lady came to speak to me. She said, "You've put it positively. You said this is the way forward. But let me ask you honestly, do you really believe your people will do this?" And I had to tell her, "I do not know.”
“And the way to preserve that edge is to make sure that we continue to have good government, make sure we continue to hold together as a people, make sure that labour management relations are never soured up, either by irresponsible employers or hot-headed union leaders on both sides. And then we will be valuable. That is the way to become competitive. If we are competitive, then pleasant consequences will follow, important consequences. We will be able to export more to the rest of the world. All the talk about domestic demand neglects one very important fact. Two-thirds of our demand is external. There is no domestic demand for shipyards. There is no domestic demand for oil refineries. There is a limit to the number of nights a Singaporean will sleep in a hotel in Singapore every year. Stimulating domestic demand will help all these industries and businesses not a whit. What we must do is to stimulate external demand. If our prices are competitive, our hotel rates are coming down, then conventions will come to Singapore and the rooms will begin to fill up. If our rentals are low, then headquarters of multinational companies will come to Singapore to occupy office space, and our commercial building occupancy rates will go up. If our goods are competitive, and the margins can be improved, orders from other countries will go up and more business will be generated in Singapore. We can make the adjustments here, but their purpose is overseas. Then existing companies will get more business. After a time, new investments will also come to Singapore and then new jobs and better jobs will be created, not necessarily the same ones, not necessarily doing exactly the same thing as we used to do, but new jobs and jobs which will earn a decent living.”
“Why? BG Lee Hsien Loong: Why is Singapore not like Sri Lanka and why must Singapore not become like Sri Lanka? Because we have a better business and political environment. When a company goes to a country, sets up a firm and hires workers, it does not just look at the cost of workers. If it was only the cost of workers which mattered, we would be out of business long ago, because the Chinese would undercut us by a factor of at least five in all their special economic zones. They look at the overall environment of the country. It is like going into a restaurant and ordering food. You are not just paying for the food. You are paying for the ambience, the music, the waiter saying, "Did you enjoy your dinner, Ma'am?", the rose which is put on the table for your lady friend. The same goes for hiring workers in a country. You must judge the country as a whole. Does it have good government? Does it have political stability? Are there good labour management relations? Is it an honest environment where enterprise can flourish and crooks captured? If it is, then the value of each person who works there goes up. He commands a premium. That is why we do not have to be as cheap as Hong Kong. We are more valuable, not individually, but taken as a whole, Singapore is worth it. That is why we must never become like Sri Lanka. But I should add a caution. That is not why we can raise our wages as high as we like without consideration for Hong Kong, Taiwan or Korea. We have an edge. But it is a finite edge. It is not indefinitely large. We must watch it, we must preserve it. If we do not preserve that edge, we will become as cheap as Hong Kong or Sri Lanka or the Philippines.”
“The Report is a solution not for these two years, or even for this term of the Government. It is a solution for the next decade and more, and therefore it has to take a long view. It has to look at the position down the road. This year there is no purpose served in collecting a large amount of money. But there is a purpose served in putting the machinery in place so that when we need it, it is there. If it is not done now, it cannot be done later on. The fourth component of competitiveness is to make Singapore a better place to do business. The Member for Potong Pasir pointed out that Singapore is not Sri Lanka. He was absolutely right which is probably why the Member for Anson appeared to grimace when this was said.”