Chng Hee Kok
Singapore
“Sir, I would like to ask the DPM whether the new Securities and Futures Act will be made retroactive in the Links case. In other words, will the civil penalties be made retroactive in the Links case? BG Lee Hsien Loong: Mr Speaker, Sir, the answer is somewhere in the new Bill [indicating].”
“Sir, one cannot appreciate the enormity of the problem of a poison pen letter unless he is a victim. Imagine the power of a poison pen e-mail done in the midst of a general election. By the time the truth is established, if it can be established at all, the harm is already done.”
“And this is because the transmission is now almost direct, that when orders are placed, they are placed not only with those who supply the items, the same orders are sent to the supplier's supplier's suppliers.”
“Sir, the Minister is aware that in the case of SingTel it is quite different because it is part of our asset enhancement exercise and a fairly large number of Singaporeans own shares in SingTel. Since the announcement of the Optus deal, share prices have dropped by some 30%.”
“This is a follow up of my earlier question. If the market sentiments are favourable, will the IPOs take place this year? BG Lee Hsien Loong: Mr Speaker, Sir, PSA and Singapore Power would not have appointed investment bankers and proceeded with due diligence unless they have very serious intentions.”
“And in many cases, over a period of time, we would be happy to reduce our shareholdings down below where they are now and, maybe even divest completely. Because the original rationale for building up and maintaining these companies has to be reviewed and may or may not continue to exist.”
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“Mr Speaker, Sir, to further improve the situation, will the Minister consider a scheme to open up the Residents' Committee centres in the day-time so that the senior citizens may use this facility?”
“These include the setting up of Senior Citizens' Clubs by the Residents' Committees, Citizens Consultative Committees, the People's Association, Day Care and Health Care Centres, health screening and exercise programmes. Details of these have been given by me in this House previously. The programmes are geared to helping the senior citizens to help themselves while those who live alone are given help through the Befriender and Home Help Schemes and the Home Nursing Foundation. The Government has initiated a comprehensive range of activities for the aged. More will be done when necessary. If Members of Parliament have any additional suggestions, they are welcome to send these to me and we will be happy to look into their feasibility. Maj Fong Sip Chee: May I ask a clarification from the Minister. He said 3(r)% of these old people were looking for work. Is it 3(r)% of the 6%, or 3(r)% of the total number? I am not clear about this point, Mr Speaker. If it is 3(r)% of the 6%, it becomes 50% of the old people are looking for work. Which is the correct figure, Mr Speaker?”
“Question No. 5. The Acting Minister for Community Development (Mr Wong Kan Seng): Mr Speaker, Sir, the former Ministry of Social Affairs conducted a survey in 1982 of a representative sample of 5,538 senior citizens aged 55 years and above to obtain information on the characteristics, needs and problems of the senior citizens in Singapore. In May 1983, the Ministry produced a Report called the Report on the National Survey of Senior Citizens. The Report covered the following areas:- - Personal Characteristics, Family and Household. - Employment and Retirement. - Health, Medical Care and Personal Needs. - Daily Living Activities. - Family and Social Support. The findings showed that 94.6% of the senior citizens surveyed live with some family members. Only 5.4% live alone. A similar proportion, 95.2%, are mobile and only 0.6% are confined to bed. 65.7% of the senior citizens are unemployed. Of these, only 3.5% are looking for work. A list of the activities of senior citizens is in the Annex (Cols. 743 - 744) given out by the Clerk. Annex - INVOLVEMENT OF SENIOR CITIZENS IN ACTIVITIES BY PERCENTAGE (Cols. 743 - 744) The survey also showed that senior citizens engage in meaningful interaction with the children they live with and maintain frequent and meaningful contacts with the children living apart from them. They are confident that they can rely on their family for help when they are ill or have other problems. Our senior citizens cannot be said to be lonely. Neither do they lack opportunities for interaction. Nonetheless, my Ministry has drawn up a number of programmes to help promote interaction among the aged and prevent boredom and loneliness.”
“Mr Speaker, Sir, this Ministerial Statement has come as a relief to all Singaporeans. In view of the complex nature of the Scheme, the Ministry of Labour or the CPF Board, or both, should make every effort and utilize all available communication channels to explain the complexities of the Scheme. CPF officials should also be well-versed in the Scheme when attending to any queries from contributors to prevent any misunderstanding. I hope the Minister will give us this assurance. The question I have now is on the $30,000 minimum sum. Is it meant to be a net sum after the bank loan or mortgage, or is it just the value of the house? In other words, you can buy a house for $100,000 but you are actually borrowing $80,000. You have only paid a down payment of $20,000. So does the $30,000 refer to the value of the house, or is the minimum sum the net sum after the bank loan? The third point I have is on the $10,000 limit. It does appear that actually this Scheme, for all intents and purposes, will affect very few CPF contributors because I think the majority of members at the moment have less than $10,000 each. Will the Minister explain why is this sum set, and does it mean that this group of people require less protection than those who have more than $10,000 in their CPF?”
“Sir, in view of the fact that other public forms of legalized gaming are already in existence, will the Minister consider issuing limited licences to casinos which will admit patrons on a limited basis?”
“Sir, I hope the Select Committee will give this point favourable consideration.”
“In the US, so far only a very small handful of corporations have faced lawsuits and this is only in cases where a company has one legitimate or original copy and they have several other copies in use in the offices. The leakage I think is very substantial in these markets, in the US as well as in the UK. This will remain so as long as computer software is very costly. It is unfortunate that these countries which profess so much concern for our well-being as a friend is at the same time putting so much pressure on us and arm-twisting us with GSP benefits and so on. The situation in the home market is not much better and the leakage in this part of the world is rather small. I think Singapore has been unduly singled out. As pointed out by the Member for Bukit Timah, many countries in this part of the world are perpetrators of much serious pirating. Revenue loss, as mentioned by the Member for Chong Boon and also the Member for Bukit Timah on computer software pirating, is based on the fact that revenue lost would not have occurred if original software had been sold. But with computer software priced between $1,000 and $1,500, I think it is very doubtful that this is the case. If there is tight control, there will be little or no sale of original software. We must certainly stamp out the selling of pirated computer software. At the same time, we must also discourage companies and organizations from using non-original computer software. However, we should not discourage our people, especially school children, from owning and exchanging computer software for their personal use at home. I think this is an area which will give us much hope and progress and we must continue to allow this development.”
“Mr Speaker, Sir, I rise in general support of this Bill with some reservations. Generally, the Copyright Bill will have repercussions on two main classes of products: (1) leisure and non-essential products, such as audio cassettes and video tapes; (2) educational products such as books and computer software. I think a tighter control of the first category of products on video tapes and audio tapes' pirating is welcome and this will have little impact on the general well-being of our population. Hopefully, the image of our business community will be improved when the copyright law is in force. However, tough copyright action on educational material is a serious area of concern. The public is apprehensive as there are many school children who are today in possession of unauthorised copies of textbooks or reference books. They are uncertain whether they will be prosecuted if they are found in possession of such material. The other area of concern is the clauses covering computer software. There is no doubt that cheap and easy availability of computer software has helped the intellectual and educational development of our children in the last five years. Although there are pressures from countries such as the United States and the United Kingdom for us to tighten up copyright in this area, I believe that the situation in these two countries is no different. The distribution of copied computer programmes in these two countries, as I understand it from reading news magazines, is that it is quite a widespread problem. I think the very fact that several software programmes are marketed with elaborate and sophisticated copy protection schemes must lend weight to this fact that it is a serious problem there.”
“So why should the hard-earned money of the workers be given to such investments? Many Members in this House have urged the Government to use part of the CPF money for the educational needs of their children which I support. Education for the children of workers is a form of investment and that is certainly a better form of investment than shares and gold and property.”
“Nevertheless, I am requesting the Minister to provide the public with some rough details now as this will help those who are looking forward to this scheme to do some advance planning. I hope the Minister will oblige. Mr Chiam See Tong: Mr Speaker, Sir, I do not support this amendment Bill and I would like the Minister to explain to the House what is the rationale of this amendment Bill by releasing CPF money for shares, gold and for non-residential property. These investments may fluctuate, as we have seen. If the time should come when a person retires and all these investments are at their lowest, what will happen then? It is true that the investor will have to take his chance in investing. But if the main purpose of CPF is to secure a worker in his old age or to give him security, then I think this piece of legislation is certainly not in line with the original purpose. I would also like to know how much money is going to be released in the share and property markets. Does the Minister hope that this money released will in fact boost up these markets which are now in the doldrums? Would it not be better, in fact, if the intention were to give a stimulus to the property and share markets by releasing part of the employee's CPF which I have advocated? I think it is important that CPF money, which is originally meant to give workers a security in their old age, will not create the false hope of big returns in the future which may not come. The property market is now so bad that the two years envisaged to revive the economy will not bring the demand for the property market and in fact it is so gloomy that there is speculation that the property market will not reach its giddy heights of 1981.”
“Mr Speaker, Sir, despite my appeal to the Minister, he is apparently trying to make CPF money more easily withdrawn. From 10% now he is increasing it to 20% for investing in shares. In the debate on the estimates for his Ministry last week, I requested the Minister for Labour to be cautious in making hasty moves to allow more liberal use of CPF savings. My main grounds are that, firstly, the level of CPF savings may not always remain at a high level in future as the percentage of contributions is now being varied according to the economy. The second point is that the CPF is now paying a risk-free and tax-free market rate of return. With such a good return, the Government need not be in a hurry to appease those who are more speculative. I welcome the amendments, however, on the use of CPF for properties other than residential properties. I advocated then that members should be able to invest more money in properties as it makes good philosophical sense. As an office shop or a small factory is indispensable in almost all businesses, this move will enable those with a low capital to start their business once an office is being paid for. I think it will also help smaller companies to restructure their capital, particularly if they are facing cash flow problems. By using CPF a small business will save on rental expenses by owning a shop, an office or a small factory. However, I hope that the non-residential property scheme will be flexible so that it may be more effective. In an oral reply last week, the Minister has mentioned that plans for non-residential property purchased with CPF will only be announced in May. I know the Minister will ask me to be patient and wait until next month for the full details.”
“On the penalties, the point I made earlier was that in the 1973 Act it was both a jail term and a fine. In the Futures Trading Bill, it is also a jail term or a fine or both. In other words, you have both. In the present case, clause 104 of the present Bill does not allow for both a fine and imprisonment. In a case where the offence might be a border-line case between a civil case and a criminal case, the court will be given the flexibility of making it a registrable offence and at the same time impose a fine. In this instance you can't because the court does not have the flexibility. It is only a jail term or a fine. So I think that point has been overlooked by the Attorney-General.”
“Sir, my other reservation relates to advice offered by those who operate out- side Singapore, in particular, stockbrokers who are based in Kuala Lumpur. This again relates to advice offered by stockbrokers and investment advisers. As there are a number of common listings of several companies on both the Kuala Lumpur and the Singapore exchanges, it is conceivable that our law may be at variance with that in Malaysia on this particular issue. Is our law still enforceable if a breach takes place in Kuala Lumpur? A Kuala Lumpur broker offers advice on companies listed on the Kuala Lumpur Stock Exchange which does not contravene the Malaysian law but contravenes our law. Is it enforceable? I have already stated my reasons for a separation of our market and make it independent and I am pleased that it has the support of the Member for Whampoa. Generally, I see difficulties of enforcement in cases where the breach is from across the Causeway. As long as we have different standards of practice, such as disclosure standards, procedures, listing requirements and code of conduct, I think the Bill will be found lacking in some areas. Overall, Sir, it is an improvement over the 1973 Act in that the present Bill puts a greater burden of care on dealers and investment advisers in their relationship with their clients. SITTING OF PARLIAMENT (Exemption from Standing Orders) Resolved, That the proceedings on the item under discussion and the remaining item on the Order Paper be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Prof. S. Jayakumar]. SECURITIES INDUSTRY BILL Debate resumed. 3.50 pm”
“For the stock market, it involves many men-in-the-street, their hard-earned money and most have very little experience. Therefore, I think clause 104 must be revised. Although the law has been improved, I am apprehensive that we may not have sufficient numbers of officials who have the knowledge and capability to spot any misdemeanours until it is too late. I think this point has been well brought up by the Member for Alexandra. In an interview in June last year, in discussing the lack of success of the Securities and Exchange Commission (SES) in New York on insider trading, the Minister for Finance was quoted as saying: 'Certainly, we have no intention of going the SEC route. We don't have the manpower resources to mount an effort like that.' Even if we are going to do it differently, I must ask the Minister if he is satisfied that he has the manpower resources to make the provisions of insider trading and market rigging effective. Sir, the clause about the offering of advice or recommendations is welcomed as it now places the responsibility squarely on those who offer advice. I have two comments on this. Clause 50 mentions about advice offered through circulars or other similar written communications. I am uncertain if this takes into account the new technologies, such as information offered through computers. They are not written information but information which is of a transient nature and is read from a monitor. You switch off the computer, the information disappears. Clause 50, I think, should have been more explicit on the various modes of communication to prevent any misunderstanding or it is a loophole in the law.”
“However, Sir, no matter how complete and encompassing our Bill is, it depends to a large extent on the actions of those who are involved in the securities industry. As financial deals become more complex, a healthy development of the industry must depend more on the integrity and sincerity of its key players and less on government control and regulations. Let me now turn to insider trading and market rigging. Sir, I hope that the wider provisions of Part IX of the Bill will inhibit those wrongful practices which goes to destroy the market. Market rigging and insider trading saps the confidence of investors, who in turn blame the government for not taking action. However, insider trading and market rigging practices are very difficult to prove. Hence we can only hope that those who choose to rig the market must understand the severity of the offence. Therefore the deterrence must be very stiff. In this, I am disappointed with section 104 on penalties for market rigging and insider trading. Presently, similar offence under the 1973 Act carries a maximum penalty of a fine of up to $30,000 or five years' imprisonment or both fine and imprisonment. However, clause 104 of the new Bill stipulates a fine of up to $50,000 or a maximum jail term of seven years, but not both a fine or jail sentence. It is inadequate even if the maximum fine and jail sentence are imposed as the gains of market rigging operations now run into tens of millions of dollars. As a comparison, the Bill which we have just discussed, the Futures Trading Bill, the penalty for market manipulation is a fine of up to $100,000 or an imprisonment term of seven years or both. The Minister has also mentioned that for futures trading, the main players are professionals.”
“Mr Speaker, Sir, I welcome the introduction of this Bill. After the events which rocked the stock market in the last few months, hon. Members and everyone who is concerned with the orderly development of our Securities Industry must welcome this Bill. Sir, I do not know to what extent the substantive provisions of this Bill differs from the draft amendments circulated by the Minister for Finance to the stockbroking community in June 1985, but I must assume that this Bill is a more encompassing and tougher law in the light of subsequent events. As the reaction to the draft amendments circulated earlier evoked a strong reaction from the stock broking community, the reaction to this Bill would have been much stronger if not for the events relating to Pan-El. I sympathize with the Minister for Finance. Had he tried to impose the government's will on the stock market, it will have evoked a strong negative response even from those whom the law is meant to protect, namely, the investors. Nevertheless, Sir, this Bill is necessaary and it is good to look at its passage in perspective. Similar changes have been made in several countries to laws governing the securities industry in the last few years, as mentioned by the Minister. The most recent example is the United Kingdom which, in December 1985, introduced the Financial Services Bill. This Financial Services Bill was introduced amidst a number of scandals ranging from the collapse of Johnson Matthey Bankers to multi-million dollars fraud and swindle at Lloyds, the world's largest insurance company. Well, as Members can see, even well established markets like the city in the United Kingdom needs adaptation and occasional reform.”
“I say that the law is too lenient. Presently, accused persons are being charged under the Children and Young Persons Act. The maximum punishment for cruelty to children and young persons under this particular Act is two years' imprisonment and a fine of up to $1,000. This was consolidated in 1970 and therefore it is $1,000 in 1970. I think this is grossly inadequate. One would expect this to be the minimum sentence. Let me quote one of many examples. A few weeks ago a 33-year old mother was charged under this particular Act. She was charged for inhuman treatment of her baby. The baby was pinched and caned. It was quite brutally beaten on a number of occasions, and finally the baby died. The pathologist certified the cause of death as multiple injuries on a battered child. What did her mother get? Her mother got four months'imprisonment. How old was the baby? 20 months old. The case very clearly shows that the law is too lenient. I think the Minister must initiate more action to combat child abuse before we are saddled with more physically and psychologically maimed chidren.”
“Mr Speaker, Sir, I have an amendment under Amendment No. (8) - Children and Youth Services (Protection and Welfare). Mr Speaker, Sir, I rise to speak on behalf of little children who are being abused by fathers, mothers, step parents and other adults. I rise too on behalf of caring parents and other individuals who feel that the Government must do more to prevent child abuse. Child abuse and violence against children must be deterred. For every case of abuse against a little boy or a girl which has been reported, several must have gone undetected. I leave it to Members to imagine the number of child abusers who have got off scot-free for every case that finally comes to court. It is difficult to pinpoint any single cause of violence or abuse of defenceless children. However, I am particularly worried that, because of our present economic problems, a retrenched worker or an individual who is out of job for an extended period of time may resort to taking it out on their children. It cannot be condoned but you can understand how this can happen. To prevent more cases of abuse, social workers and officials of the Ministry of Community Development must take all complaints seriously and put more efforts to investigate thoroughly. Besides counselling these people, the Ministry may have to take more of these children into its care. We cannot underestimate the importance of such preventive measures. A victim of child abuse today is a potential abuser in future. Whatever we blame it on, it makes little difference to the child who has been abused. How do you explain to a little boy who has cigarette burns all over his body? Or how do you empathize with an innocent child who has been lacerated? Therefore, something has got to be done to combat this heinous crime.”
“Mr Speaker, my question really is that in any event will the Acting Minister allow an extension of time for this CPF money to be reimbursed so as to give the family time to arrange for alternative financing and so on?”
“Since the Economic Committee has directed that the PDAS be liberalized to promote aggressively and more product development activities, I urge the Ministry to review this scheme to include licensing.”
“This is a timely move and it means that the pricing of a statutory board's services will be oriented towards cost recovery with a small margin. As already mentioned by the Minister for Finance, the previous pricing policies were necessary as surpluses were needed for development expenditure. However, with profit maximization by the statutory boards then, it meant that the statutory boards could work towards optimal efficiency, cost effectiveness and improved productivity. With profit maximization motive now removed, how can we ensure that the statutory boards will continue to be efficiently run? Will there be the motivation to seek productivity improvements? Will they make sure that they will maintain their costs as low as possible? I think some appropriate measurement criteria are necessary, especially for those boards which charge for their services. Will the Minister consider the introduction of some measures so that statutory boards' performance may be measured? Finally, Sir, my other amendment is on the Product Development Assistance Scheme (PDAS). Last year, during a similar debate, I lamented on the inadequacy of the PDAS and I asked that this scheme be extended to include the payment for international licensing. Last year, 16 companies were granted a total of $1 million under the PDAS. I personally have my doubts as to its effectiveness and success. How do you measure the success of PDAS? The success must be measured by whether commercial sales are generated by the product which has been developed. To improve the chances of success, I think licensing is definitely more effective as a licence will enable the licensee, which is usually a small company, to manufacture commercially viable products.”
“Mr Speaker, Sir, I have two amendments under this Head and I would like to speak on them together. I have three points to make. The first relates to the implementation of Government policies. Although the business environment is necessarily dynamic and the Government has to react to changes, I think it is important that the Government must be careful when it comes to balancing the need to make policy changes against the dependence of companies who need the continuity of policies to plan and operate. Most investments take time to show a return and this is true of an investment by a multi-national corporation or that of an individual who invests in a restaurant in Singapore. Whether it is big or small, it needs time. Since time is the essence of every investment, the Government must take the utmost care to examine all aspects of a policy change before implementation. Whether it is pollution control, environmental control or work permit changes, due consideration of the impact on businesses must be studied. Even if a policy change is sometimes necessary, the changes should be phased in gradually. We have many instances whereby the changes are announced and they apply immediately and this makes it very difficult for businesses to react. As long as ample warning is given, businesses will then be in a position to make the necessary changes. I hope the Minister will work closely with other Ministries such as Labour, Home Affairs and Environment or all those Ministries whose policies will have an impact on businesses. The second point, Sir, I would like to turn to the subject of control of statutory boards. The Government has stated that henceforth, statutory boards will not be motivated towards the maximization of profit.”
“Investment in Singapore property or whether it is an HDB flat, a private residential property, commercial and industrial property or even vacant land, with CPF funds is a correct move in line with the basic aim of the CPF. With ownership of a property, when you retire you can always convert your property into cash and rent a home. In my opinion, it is also the right philosophical bent. Nothing evokes a more emotional response than to be able to say, "I own a piece of Singapore." This is a stake in the country which we must all nurture. Hence, instead of opening the door to other forms of investment, the Government must restrict the use of CPF savings to property investments only. However, the rules may have to be liberalized further. In fact, I see no reason why HDB flat dwellers or flat owners should not be allowed to invest their surplus CPF savings in a second residential property, better this than in shares and gold. Finally, Sir, let me refer to the Economic Committee which has called on the Government to, "review the CPF scheme from a longer-term perspective, to decide on the appropriate long-term rate and structure of CPF contributions that would meet the basic needs of retirement income, home ownership and medical care." I endorse this call for a comprehensive review. However, if we accept the fact that the CPF rate of contribution is an economic tool, a long-term rate must also have built-in flexibility. The question of home ownership must also be enlarged to property ownership and, most important, the objectives of the CPF must be clearly restated and argued. The Government must not be afraid to do what is right and it is better, as far as I am concerned, to err on the side of prudence. 2.45 pm”
“Such flexibility will ensure that we shall always be able to react to changing circumstances. This flexibility also means that we must be prudent in the way in which we use our CPF savings because our savings may not always remain high. The second point, relating to CPF is the rate of return. In the years when market interest rates were high, there were recurring complaints that CPF savings were not attracting a good interest rate, even though it is for payment on HDB mortgages. HDB mortgages command a special interest rate. Even these people felt that the Government was unfair as the CPF balances were getting a poor rate, never mind what is their mortgage interest rate. Sir, today the situation is quiet for various reasons. Therefore, I fully support the move of the Government to peg the CPF rate to market rate. The linkage between return on savings and the cost of mortgage is now properly established. You pay for what you get. With the pegging of the CPF interest rate to the market, an important by-product is that there is no rationale for allowing CPF to be invested in shares and gold. In the days when there were complaints that the CPF interest rates were low, contributors said they could get a better return in the market. Butwith the rate pegged to the market, people must understand that this interest rate is a risk-free, tax-free rate. That is about the best rate you can get in the market without any risk. Therefore, I think the Government should not open up Pandora's box and allow more uses to be made of the CPF. The third point is investment in property. This I support wholeheartedly.”
“Mr Speaker, Sir, an item of keen interest during this recession is, of course, the CPF. In fact, during good times or bad times, CPF is a hot topic. This is inevitable as there are more than $20 billion standing in the fund. At this level it is easy for one and all to suggest how this money may be made use of. The latest scheme, of course, is the investment of CPF savings in shares, loan stocks, unit trusts and gold. Personally, I am not in favour of CPF savings being used for such investments as it goes against the philosophy and objective of the CPF. Before we liberalize further on the use of CPF, I think it is important that we go back to fundamentals. The objective of the CPF is well known and I do not intend to discuss it here. However, I shall limit, my discussion to three areas which have a bearing on the utilization of the CPF. The first is the changing rate of savings. Sir, in asking that CPF savings be used for different purposes, there is this general expectation that CPF savings will continue to rise or at least be maintained at a high rate. The recent reduction in the CPF should bring home the point that this is not so and that the CPF savings rate is actually an economic tool. In the years of high inflation, the CPF rate should increase to reduce the liquidity in the market, to cut costs of doing business. We have just modified the employer's rate of contribution and I cannot see, or be absolutely certain, when will its original 25% rate return. The CPF may also have to be modified at some point in time to take into account the structure of the workforce. A young worker will need a higher rate of CPF to enable him to pay up for his home and an older worker may be paid a lower rate to make him more attractive in the workforce.”
“Sir, that is precisely the point, because we may be relying on a model that makes the public expect too much. And this is the fear that I have. BG Lee Hsien Loong: Mr Speaker, Sir, that is precisely the reason why we are not ready to release the model yet.”
“Sir, will the Acting Minister indicate the timeframe by which this econometric model will reflect the future of our economy accurately? BG Lee Hsien Loong: Mr Speaker, Sir, we hope that as time goes on, our econometric model will become more and more accurate. We also hope that within a year or two, it will able to make useable predictions. However, if the Member for Radin Mas has read the reports of the forecasts of the US economy, which are regularly published in great profusion, and which are based on extremely sophisticated and complex econometric models, he will understand that no matter how elaborate the model or how sophisticated the computer you use, there is still a very large degree of uncertainty involved in predicting the future of an economy.”
“MTI will therefore continue to give weight to our surveys, such as the Survey of Business Expectations, and the feedback through agencies such as the EDB and the TDB. At the same time, we will also improve on our statistical publications to make them more timely, accurate, comprehensive and useful. I would therefore urge private sector firms and businessmen to respond promptly and accurately to our surveys. I would also like to encourage firms, industry groups, chambers of commerce, and also academic economists, to publish more independent analyses of our economy. This will reduce the risk of basing plans and policies on only one set of forecasts. Finally, the latest statistics on the state of the economy. Based on data for the month of January, which is the latest available, MTI preliminary estimates are that GDP in the first quarter of this year is likely to be 4% lower than the first quarter of last year. Several key sectors, notably manufacturing, construction and commerce, are still declining. This comes after a 5% decline in the last quarter of 1985. The economy therefore still shows few signs of recovery.”
“Sir, in view of its importance to our economy, will the Acting Minister include a report on this item in future Economic Surveys? At the moment, the Economic Survey does not include a report on loss of investments to Singapore. BG Lee Hsien Loong: Mr Speaker, Sir, we will consider that, and we will present it in the form of a progress of the upgrading of our economy. ECONOMIC FORECASTING (Improvement of) 8. Dr Ow Chin Hock asked the Acting Minister for Trade and Industry what measures are being taken to improve M/1/3 upon the quality of economic forecasting and also to provide the latest economic data. BG Lee Hsien Loong: Mr Speaker, Sir, to improve our economic forecasting, the Department of Statistics is developing an index of leading indicators. This index is meant to give us early warning of economic downturns and recoveries. At the same time, the Ministry of Trade and Industry is setting up a new Economic Research Unit. This Unit will develop an econometric model of the Singapore economy. The model will be useful not only in forecasting the likely performance of the economy, but also in working out the probable effects of different economic policies. Lest I raise unrealistic expectations, let me caution that no econometric model, or indeed any forecasting tool or technique, can be completely reliable. It is particularly difficult to predict the performance of a small, open economy such as ours. The external influences on its course are dominant, and can never all be infallibly foreseen. New techniques will only improve our forecasts if they are supplemented by good feedback and informed business judgments.”
“Sir, I have one matter to raise with the Minister, and that is, the Accident and Emergency (A&E) services available at the hospitals. A frequent complaint in this House as well as in the press was the public's dissatisfaction with the A&E services. The main complaint was that there were large crowds of people seeking medical attention at the A&E services. Often these people have to wait for long periods of time before they were given any medical attention, even though some were in urgent need of immediate medical help. When they were examined by the doctors, many complained that the examination was very brief and there were cases of errors of judgment and diagnosis. Some even complained that there was lack of sensitivity on the part of the hospital staff. Sir, I recall that there was a publicity and educational campaign on the A&E services organized by the Ministry in November last year. In this connection, may I ask the Minister what have been the results of the publicity and educational campaign on the A&E services and whether there have been any improvements in the A&E services with regard to three main points: (1) the number of attendances; (2) the percentage of non-emergency cases handled by the A&E; and (3) the waiting time for medical treatment. Finally, if this campaign was deemed to be effective, are there any plans to repeat this campaign this year?”
“I think the way to dampen demand for free textbooks is to set very difficult conditions. Presently, the income level that they have set is $350 take-home pay. I think many Members in this House will agree that, without any doubt, this level is too low. We must not treat textbooks as an expenditure item. It is more an investment, a development expenditure. Since it is not a handout, it must be viewed as an investment in our future. I hope the Ministry will be more generous in the next fiscal year.”
“Mr Speaker, Sir, I shall be brief. I feel compelled to rise to express my disappointment on the vote for free textbooks. I think the Ministry is not doing enough. For the present fiscal year the vote for free textbooks is $65,000. This is at the same level as last year. With the recession one would expect that this amount should have been increased. Presently the $65,000 would only benefit something like less than 1% of the population who are in primary schools. Yet we have said in this House many times that there are 15-20% who are in the lower income group. This 15-20% in the lower income group must be helped to improve and the Economic Committee Report has recognized this. It has said in several places about maximizing the potential of the population, upgrading the educational level of our people and, of course, increasing the talent pool. I say that free textbooks is just one of these. It will go a long way towards the achievement of our objective. Textbooks is a one-time expenditure for a family and families cannot be blamed for not saving up for this item which occurs at the end of the year. Those in the lower income group have just enough income to meet their monthly expenditure and they do not have any left for them to save for textbooks. Since this is just one of many household expenditures, of course, being poor, compromises will have to be made. If they have two children in school, more compromise. I think, presently,besides schools, free textbooks are provided by the School Advisory Committees and other well-meaning grassroots organizations. I think the implications are very clear. There is therefore a need for free textbooks and the Ministry's conditions are unduly stringent.”
“Mr Speaker, Sir, I am concerned about the failure rate of 25%. Do the Ministry officials offer advice to applicants on the capital cost for setting up a hawker stall, so that they will know what potential risks they are incurring? This is to discourage applicants who have no skills but want to take up a stall.”
“Since there are no penalties for over-parking in the private car parks, will the Minister consider a review of the penalty for over-parking in URA and HDB car parks, where there is a penalty calculated at four times the parking fee for over-parking by 10 or 15 minutes. There is no penalty for over-parking in private car parks.”
“Sir, is it not true that the then prevailing CPF contribution rate was the major factor taken into account when the Foreign Workers' Levy was calculated, particularly the levy of $120 on foreign maids?”
“For the less popular estates, will the Minister consider reducing the general down payment so that more people can take up those flats?”
“Will the Minister consider, assuming that these flats are in so-called less popular estates, easing the down payment and other payment terms, to make these so-called less popular areas more attractive?”
“Sir, will the Minister agree to allow taxi drivers to set their own rates without reference to the Registry of Vehicles?”
“Sir, the rates we are talking about are the relative growth rates between roads and cars. Does the Minister intend to peg the increase in road tax to some kind of ratio between the increase in cars and increase in roads?”
“Sir, will the Minister give an assurance then that road tax will not be increased so long as the relative growth rates between cars and roads are maintained?”
“Everyone I met said rentals went down. Yet we have the Economic Survey saying that housing costs went up 2.5% because of higher rental costs. Sir, let me now touch on the trimming of the civil service and the statutory boards. The reduction of 10% over five years is about 2.1% a year and this is actually about the same level that was achieved in 1985. Of course, as the Member for Kebun Baru has mentioned, this reduction will not necessarily mean a 10% reduction in payroll unless, of course, the reduction is across the board. I would like to take up two points on this. Although the Minister has said that the reduction in numbers will be achieved through normal attrition and selective recruitment, I do not see why the Minister should give an indirect assurance on job security. If there are redundancies, it should be dealt with accordingly, just as they do in the private sector. It is uncharacteristic of this Government. Perhaps in the process, we may get an even more efficient service. The other point I wish to bring up is the composition of the Working Group which is charged with the review of public manpower levels. This Working Group is staffed by senior personnel in the public service. I have my doubts about the effectiveness of self-policing or self-regulating roles unless someone outside the civil service is involved.”
“A man who was a hawker, had retired, and finally was assessed for tax. It was only a small sum of over $50 and, I believe, he paid. But subsequently he received another letter demanding that he declare his income for the last, maybe, seven or eight years (if I remember correctly). I think this is quite unnecessary. He has paid his tax. There is no need to go back to the hawker and ask him to declare seven or eight years' income for tax purposes. We should try to get more of those people, who are presently not paying tax, into the tax base. If the property tax rebate of 50% is to be effective and meaningful, the annual value of the property must also be re-assessed accordingly. The complaint is that the Property Tax Department is quick to adjust the annual value upwards whenever rentals go up. But, of course, when rentals are coming down, the Department is very slow and does not do the necessary adjustments. One landlord I know of, complained that he had to justify and explained in great detail to the Income Tax Department why he had to reduce substantially the rental charged on a showroom. He had an existing tenant, and if he wanted to keep him, he had to reduce his rental substantially. The Property Tax Department was not happy about it. In any case, after all that trouble, despite the reduced rental, the tenant finally folded up because the rental was still too high. I am apprehensive that such complaints may be well-founded, and I quote a little item on page 61 of the Economic Survey. It is about Prices and Inflation. It says: 'On the other hand, housing costs rose by 2.5% because of higher imputed rentals due to the revaluation of owner-occupied properties.' I just cannot understand why rentals went up last year. Everybody says that rentals went down.”
“In fact, I read the speech he made last year during the debate on the Budget, and of course there were many truths in what he said. However, today I must take exception to what he said about the tax rebate. The impression given is that, of course, the high income group will benefit more than the lower income group. Although it is not politically wise to say this, I would like to say that, if a person is earning a high income, obviously he should be given a high rebate. And why not? I think that all taxpayers have benefited from what the Minister has proposed, and I have also taken note of his comments on those in the lower income group. We must always keep this group in mind. But, however, the principle that the tax base be as wide as possible must apply, even if the tax on an individual is only a few dollars. To broaden the base, the Government must widen the net to include those who are self-employed. This has been mentioned before. The inequality or inequity is not between a man who pays $50 or $100 in tax and one who pays $1,000 or $10,000. I think the inequality or inequity is between someone who pays his due share of tax and a person who does not pay tax, and yet at the same time benefit from the services provided by the Government - services such as education for his children, medical health and, of course, other services provided by the Government. I think the inequity really lies between tax-payers and non-taxpayers. I would urge the Government to make larger efforts to try and bring more people into the tax base rather than having officials pay more attention to those who are paying their taxes, which in some cases tantamounts to harassment. I remember a case in my Meet-the-People session sometime ago.”
“Mr Speaker, Sir, I rise in support of the motion standing in the name of the Minister for Finance. Although the Minister mentioned only two differences in this year's Budget from previous years in his opening remarks, I consider that the most significant difference is actually the shift in government philosophy. I hope that this signifies a real shift in thinking instead of just implementing measures which are pragmatic and practical. The danger of doing what is pragmatic is that these measures may be overturned when the situation improves. I think this will be wrong and this has been shown to be the case. Although the last Budget recognized that the private sector will be the main engine of our future economic growth, there were insufficient steps or policies implemented to back up this philosophy. In this respect, this year's Budget Statement is quite different. I think it is very difficult to fault the Minister on this account. In fact, the familiar charges of the Government giving out with the right hand and taking away with the left hand is absent, except of course for the consumption tax. I have spoken out against this tax in the last debate on the President's Address, but I am now inclined to urge Singaporeans to adopt a wait-and-see attitude. And I am reassured by the Minister's remarks when he mentioned the consumption tax. I think, basically, it is hard to argue against the philosophy that you want to reduce direct taxes and giving the wage earner the right or the choice of how he wishes to be taxed and how he wishes to spend his money. The reduction in personal income taxes, both in the form of a 25% rebate this year and the changes in the future tax rates, are welcomed. I am a great admirer of the Member for Rochore.”
“Mr Speaker, Sir, taking up what the Minister of State has just mentioned that 85% have at the moment less than $5,000 in Medisave. Does it not mean that the balance, ie, the other 15%, are actually over-providing? If at the moment 85% with less than $5,000 find it just about adequate, therefore those who are saving more than $10,000 are actually over-providing, is it not?”
“It appears to be an undue or unnecessary restraint on our business. Why did the Ministry or its officials not respond when a press report on this matter came out?”
“The present decline in oil prices helps to lower our costs and lower inflation. More important, the decline in world oil prices will help the US to recover. As we all know, the US economy is our major trading partner. If the recommendations are implemented extensively and not in small increments, this will be the much-needed shot in the arm which the economy needs. What we need in Singapore today is a rare commodity called confidence confidence in the business community, confidence of our people. This is one commodity which I think everybody must try to generate among our friends, our neighbours, in businesses and at home.”
“They were told, "Please do not come to Singapore, move somewhere else." I hope that this hi-tech and low-tech debate may now be put to a permanent rest. It is the role of Government to provide the regulatory framework, share information and data with businesses for decision-making and, of course, they must provide the various incentives to promote businesses. However, it is not the role of Government to tell the businessmen what not to invest in. On this framework, most businesses are planned on a fairly extended time period, sometimes for as long as five to 10 years. What a business fears most is a sudden or structural change in the rules of the game. We set up a business and we know what are the rules. Two years downstream, you change the rules of the game. You change the law. The case of the pig farms is still fresh in many people's mind. We just cannot change after we have given the go-ahead. I think this is a very important criterion when a businessman or a foreign investor looks at our investment climate. It is not enough to implement the policies recommended. The investor must be fairly certain that the policies under which he decides to invest will not suffer a sudden terminal disease. I am hopeful that the proposed recommendations in the Economic Committee's Report will not suffer such a fate. I think my optimism is well-founded on the fact that the new architect of our economic blueprint is also the person who is going to be charged with its implementation. The Member for Alexandra has asked us to exercise caution and that we should not be carried away by the euphoria that the Economic Report will solve all our problems. I think he is quite right that there should be some caution. On the other hand, I believe there is also room for optimism.”
“There will be a short-term factor of lack of size and liquidity but I think this is where the recommendation in the Economic Report that Government-owned companies should be privatized be taken up at a faster pace. Government-owned enterprise should be encouraged to fill the void and the pace must be quickened. Besides Government-owned enterprises, I am calling again for the privatization of statutory boards. Last year when I brought this up in this Chamber, there was a negative response from the then Minister for Trade and Industry. Since then, we have been overtaken by events in the stock market, and I think the privatization must assume a more urgent stance at least from the point of view of building up our own Stock Exchange to go together with our new directions in the economy. The Report of the Economic Committee has listed several activities which the Committee deems to be the potential winners for the future the service sector, the general directions in manufacturing. But I am afraid this is reminiscent of our promotion of hi-tech industries at the expense of many others not too long ago. We have been promoting hi-tech industries at the expense of many other industries. The Government can implement the necessary incentives for those activities which are projected to be desirable for our economy. However, different businessmen see things differently and they should not be penalized by disincentives. If they know what they are doing, if they have done their calculations, if they have projected their returns, we should not penalize them with unnecessary disincentives. I have heard of cases in which investments were turned down, about two years ago, because they did not fit in with our hi-tech industry.”
“Quite clearly, it has shown very serious defects and with the problems of the last two days you can ask any stockbroker or any investor I doubt that the new Securities Industry Bill which was presented at the last Session of this Parliament will resolve the defects which are, to my mind, structural. One of the major defects is our linkage to the Kuala Lumpur Stock Exchange. This is reflected in the high number of Malaysian companies on our Exchange. Presently, there are more Malaysian incorporated companies than Singapore companies listed on the Stock Exchange. Today, less than 120 companies are Singapore companies. This works out to less than 4 in 10 are Singapore companies and, to make it worse, most of these companies are so-called sunset industries. There are many reasons why foreign incorporated firms should not be listed in Singapore. They should be discouraged. Different countries pursue different development strategies. They also have different attitudes and ways of doing business. Hence, the demands placed on officials who are the custodians of public money vary from country to country. If you have a different system, a different way of doing business, you look at things differently. To make it worse, the listing requirements for companies also vary. One country may take a very strict stand and another country may take a more liberal attitude towards listing of companies. Hence, under such conditions, can our laws really apply in cases where there is abuse? Recent events have shown that it may even hurt diplomatic ties in what I consider to be essentially a business matter. We must work towards a fully independent Exchange.”