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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“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $179,887,400 for Head S ordered to stand part of the Main Estimates. The sum of $451,117,300 for Head S ordered to stand part of the Development Estimates. Head E - 2.45 pm”
“Since then, those placed with the responsibility for investing such money are required to comply with the various limits for the different asset classes, purportedly to minimise risk. Even though the Act has served us well, we now need to examine its raison d'etre. It is interesting to note that the United Kingdom will be dispensing with the Trustee Investments Act this year, as it is outmoded and will no longer serve a meaningful purpose. The widening of the investible horizon, both in terms of instruments and geographical diversity, has rendered the Act restrictive, if not counter-productive, to what was originally intended. There is a shift in focus from a rule-based system to prudence. Sir, we are facing a similar situation here, in the form of an increasing variety of instruments, beyond pure time deposits and primary equities. Although modifications have been made to accommodate some of these developments, the Act is still restrictive from the perspective of trying to manage risk through diversification. Furthermore, the Trustees Act is still largely Singapore-centric, something which will check geographical diversification. The recent crisis has shown that a bias towards either certain asset classes or certain economy, in this case Singapore, does not make for satisfactory risk management. Ultimately, the ideal scenario is for investors to diversify their portfolios to maximise risk-adjusted returns instead of clinging on to the Trustees Act for a false sense of comfort and security. I would like the Minister to explain whether the Trustees Act is still relevant, given the circumstances so described.”
“So people are just registering names that do not belong to them and just selling on the Internet. Sir, there is no question that a legal framework which is up to date and able to cover the issues of the day will give us a competitive edge in attracting investments and businesses done through our logistics and financial system. I am asking the Minister if he will highlight to the House some of the legislation and measures which we are reviewing in the light of these rapid changes, and our capability and ability to cope with the voluminous changes which are taking place. Sir, I have another cut on conveyancing fees. Presently, property transactions involve a transfer of title and they have to be transacted through lawyers. Hence, buyers and sellers of properties have no choice. In other words, they have to use the legal services, unlike selling of cars. Since consumers have no choice, they have to pay conveyancing fees on the transactions. Presently, in our system, there is a statutory scale and this increases with the value of the property. Sir, as we are liberalising the fee structure in most other areas of businesses, from stock broking to architecture professional fees, for example, it is timely to review why there should be a fixed scale for conveyancing fees. I am asking the Minister if he will move to liberalise conveyancing fees and leave such fees to be negotiated between the lawyer and his clients. Mrs Lim Hwee Hua: Sir, the Trustees' Act which was modelled after its British counterpart, the Trustee Investments Act, was put in place to provide guidelines for the management of public money and money under trust.”
“Sir, I beg to move, That the total sum to be allocated for Head S of the Main Estimates be reduced by $100. Sir, in the last two days, Members have discussed the fast changing pace of the new economy. The lightning changes in technology and the exponential growth in the new economy present both great opportunities and at the same time frightening prospects for us. Government must grapple with many unknowns. If you take too conservative an approach, we will miss out the opportunities. If we move too fast, we may ride on the wrong bandwagon. Whatever directions we take, one thing is certain, and that is, we have even more difficulties in updating our legal framework to help us to plug into the global network. As the paradigm shift is so dramatic, and boundaries between countries and economies virtually disappear overnight, it is pertinent to us whether and how we are keeping our legal framework up to date. For example, in the fast changing world of the Internet, are we still grappling with trade mark and copyright issues relating to domain names and addresses and such like? How are we coping with so-called piracy in cyberspace in which well-known brand names, or otherwise, are registered on a first-come-first-served basis and then offered for sale? We have read of well-known personalities having their names registered by such pirates and then offered for sale to the rightful owners. I was searching for names for dot.com business in the planning stage and I was amazed and surprised at the kind of names that have been registered on the Internet. And I am quite convinced that the whole dictionary has been registered for domain names. And I found sites which do trading of names. An interesting example I came across is stocks.com, which is offered for sale for US$7.5 million.”
“In conclusion, our challenge is for Singapore to continually differentiate ourselves from the rest of the world by finding ways and means to creatively harness and add value to both our hard and soft infrastructures that we have painstakingly built. The secret of Singapore's success has not been that we were just responsive to the ever changing economic and political landscapes but always anticipating the changes ahead. We need to always keep it this way. With that, Sir, I support the motion.”
“This, coupled with the effect of globalisation and more liberalised measures initiated by the international community aimed at converting the world into one monstrous marketplace, and with many of our companies now plugged to this marketplace, is making our territorial principle of taxation more and more irrelevant, and the absence of group taxation felt stronger than ever. I sincerely hope that the Minister for Finance will review this in the interest of keeping pace with global trends and maintaining our relevance in the business world. While it is heartening to note a half percentage point reduction on corporate tax, the gap for taxes on individuals is widening to 21/2%. To prevent a trend of more individuals corporatising themselves to reap the benefit of lower corporate tax rate, I would urge the Finance Minister to also look into this. Another area which I think is in need of review is tax relief for children. With our declining total fertility rate, which currently stands at less than 1.5, we have to find ways to increase birth rates and incentivise couples to have more children and bigger nuclear families. In spite of the special tax rebates of $20,000 extended for two to four-child families to set off against income tax, this has proven to be an insufficient motivator for married couples to bear more children. Singaporean couples want to give the best for every child they bear and because of this high expectation they have set for themselves, it pushes up the cost of bringing up children. In the interest of increasing the number of Singaporeans and arresting our declining fertility rate, I would urge the Minister to consider increasing the tax relief for children as a motivator for Singaporeans to have more children.”
“I would like to first draw attention to the Finance Minister's segment of his speech on the new economy where he cited the important need to "adopt a global mindset, innovate and advance with global trends, or risk being rendered redundant". He went on to say that "unless we are among the world's best, we will be relegated to playing a peripheral role in the global economy." While I am glad that some enhancements were announced to support the technopreneurship drive, such as the estate duty exemption on residential properties used for business activities, it is my hope to see the Employee Stock Option Scheme (ESOP) creatively enhanced when it is announced in May this year, which, hopefully, will trigger many more high-tech start-ups. Apart from motivating local investors to be more adventurous to put in their money in start-up ventures, it will also help to bring us closer to a Silicon Valley atmosphere where talent from every nook and corner of the world flock, hoping to strike it rich through stock options. Technopreneurial ventures involve high risks. As such, it would augur well for the Government to send a strong signal that it is prepared to participate through incentives which would promote and motivate such ventures. Next, I would like to take issue on group taxation, which has been raised by several Members today and in the past. This is where I feel we continue to fall short in comparison to the advanced economies in the world. Mr Heng Chiang Meng, the Member for Cheng San GRC, and Dr Wang Kai Yuen, the Member for Bukit Timah, have argued convincingly in last year's budget statement debate of the important need for us to seriously consider this move in the context of our rapid shift to a modern and knowledge-based economy.”
“The second topic is my concern about our youth's world readiness. I can still vividly recall the headline of a Straits Times report less than two weeks ago which states "A wake-up call for Singapore youths." In spite of the financial crisis afflicting Singapore recently, it is apparent that our youths are shielded by their parents and, as the report noted, are stuck in a comfort zone where they saw no necessity to keep themselves abreast of the impact of globalisation and the borderless economy. Our young people saw not much of a need to seize opportunities in an open economy where information, products and people move freely across national borders. They seem to be obsessed with the feeling that just because Singapore is tops in many areas, there was little scope for them to learn from others. I see this, Sir, as a dangerous trend which needs to be given urgent attention. Such negative attitude and narrow-mindedness among our youths can only spell disaster for Singapore's future, if not quickly corrected and given the right perspective to them. Although the idea of a Ministry of Youth has been suggested as unnecessary by Deputy Prime Minister, BG Lee Hsien Loong, it is imperative that the Government focuses attention to this looming problem by setting up a body within an appropriate Ministry to tackle the issue. Perhaps, the Singapore International Foundation could also be charged with the responsibility to design overseas attachment and internship programmes for a wider cross-section of our youths to make them understand that there is much more to just material success and help equip them with a more balanced perspective of how they see the world. I come now to the specific tax areas.”
“Sir, for talent attraction in general, I know much has already been done to position Singapore as a hub for international talent. The setting up of the Kowloon Club for Hongkongers, for example, provides a sense of comfort and relief for new arrivals from Hong Kong to turn to and help them quickly integrate into Singapore society. The same should also quickly be done for others, such as Chinese nationals and Indian foreign talents, if this is not already in place. One of the frequent complaints I often hear from foreigners living here is the lack of space and recreational facilities. Hence, the NTUC's recent initiative in building a $22 million theme park in Pasir Ris and the repositioning of Sentosa as a day and night tourist and recreational destination are encouraging. I know for a fact that Caucasians enjoy weekend getaways. Hence, it would also help to freely disseminate information about weekend packages such as escapades to the Riau Islands or Tioman, these places being just a couple of hours away. I applaud the exemption of the 90% granted to royalties for innovations and inventions in a bid to attract and encourage foreign talent to create new products in Singapore. The new tax deductible Special Retirement Scheme for foreigners is an initiative in the right direction to enable them to reduce their tax burdens. Sir, I feel there is no better way though to attract top talent here than to create an abundance of success stories as evidenced by Silicon Valley and the Hshinchu's Science-based park in Taiwan. We all must be familiar with the saying, "success breeds success." Doing all this and more will help to accelerate the creation of success stories which will in turn help bring in the talent we need.”
“But to accelerate our KBE positioning and ensure Singapore's successful transition to a full-fledged knowledge-based economy, we must be able to bring in the top high-end talent. Evidently, the competition for such talent is also intense as we are meeting head-on with Silicon Valley and the other top places in the world - the Himalayan peaks, as Minister George Yeo puts it. Sir, in addition to offering tip-top infrastructure and an increasingly intellectual environment, I believe incentives matter a lot to this group of people. I know of many cases where attractive stock options made the difference between losing or winning a top candidate. If pioneer status or tax holiday has been a successful tool to lure MNCs to invest in Singapore, we must look at such top individuals as intellectual capital, especially in the context of KBE positioning. It is therefore imperative that we find ways and means to incentivise higher level intellectual capital to attract them to Singapore and stay here for a period of time. Apart from the corporations doing their part to retain talent, the Government should consider making the tax environment for such people more attractive. As an example, we could consider a progressive tax rebate system, say, a 30% rebate on their tax paid in the first year is given in their fourth year of residence in Singapore, 40% in the fifth year and so on, subject to a maximum cap. If necessary, such incentives could be confined to high-level talents who truly contribute and make a difference for Singapore, just as pioneer status is not extended to every MNC putting in their money here. The criteria for qualification must be stringent.”
“I am convinced more than ever now as I too, in my experience in working for a multi-national corporation, am compelled to look for talent beyond the shores of Singapore to carry out higher value-added activities where locals do not have the expertise. The proverb "time and tide waits for no man" is more relevant now than ever. Technology has enabled many things never thought possible in the past and is changing at lightning speed with each passing day. It is therefore highly essential that we intensify the inflow of talent which could help us narrow the gap and catch up with those at the leading edge of technology. The analogy used by Senior Minister of how ATMs had dramatically affected traditional banking services in the recent past and how this is about to change again with the advent of the smartcard, is a clear demonstration of how technology is driving and forcing change in the banking industry, and how it will make many of the services offered by banks currently irrelevant in the not-too-distant future. It is this "change or risk becoming irrelevant" phenomenon that has forced the restructuring of our banks and banking system and the pursuit of top talents like John Olds and Alex Au. Sir, I am encouraged to note that the Trade and Industry Minister, BG George Yeo gave a convincing perspective of what foreign talent had done for Singapore in the Sunday Times yesterday and why we need them. I think it is important that this subject be raised periodically. Although by and large, Singaporeans generally accept foreign talent, many still feel that foreign talents deprive them of some of the good jobs which should have been theirs.”
“Translated at 3% is a total loss in GST collection of no less than US$330 million. The United States government has a headstart in this area but has yet to arrive at Internet rules that will curb tax losses as a result of sales transactions over the Internet. It is important for other nations to speed up the process of setting Internet rules especially when e-commerce is still small enough and tax distortions are modest. On the home front in Singapore, it is pertinent to ask the Government or the Minister on how it intends to address this critical issue. The new economy will pose tremendous challenges for Government as its working is not well-understood and, yet at the same time, has immediate impact. We have to grapple with lots of unknowns which are affecting our lives in a profound manner. My question is: can the Government face up to the challenge? Mr Ahmad Mohd Magad (Pasir Ris): Mr Deputy Speaker, Sir, thank you for permitting me to join in the debate. Sir, since many Members before me have spoken on the details of the Budget, allow me to touch on two topics which I feel passionately about as they concern the future well-being of Singapore and then comment on some specific areas of taxation which I would like the Finance Minister to give attention to. The first is on foreign talent. I recall how I listened in awe last year when Senior Minister, Mr Lee Kuan Yew, spoke during the Singapore 21 debate about the criticality of bringing in top talent into Singapore because we are now on a global stage, whether we like it or not. It really drove home to me that as a pre-requisite for us to play in the global arena, we must have talents, whether local or foreign, who are of global standard.”
“For example, currently if a British-based firm downloads a book into a customer's computer, this will be considered a service and will be taxed at the United Kingdom's rate of 17.5%. But if this same company is based in the British Channel Islands or outside the EU, it will avoid this 17.5% tax completely. In Europe, tax officials have proposed that products sold in digital form will be taxed on the rate in the customer's country. For example, companies operating in the United States would have to collect taxes on all sales to European customers. In other words, there has to be a reciprocal agreement between nations for the collection and remittance of tax on out-of-state basis. Sir, my question to the Minister is: where does Singapore, a relatively small country and small economy, fit into this global scheme? Traditional retailers have gone on-line in droves. "Click and mortar", denoting a combination of on-line sales and traditional retailing, went from an unknown phrase in the beginning of 1999 to a New Yorker headline - making event by the end of last year. There is barely a traditional retailer left that does not now accept the Internet as a critical weapon in its retail arsenal. A recent report in the United States estimated that current tax revenue losses are less than 1% of total tax revenue collected. However, losses in the immediate future could grow to 2% to 4%. State and local governments also fear growth in Internet commerce will drain sales in shopping malls and traditional retailers, causing a drop in sales tax. In Singapore, the impact is no less profound. The Gartner Group has projected that by the year 2003, as I mentioned earlier, transactions through the Internet will total some US$11 billion.”
“Finally, just last month, the US Labour Department said worker productivity rose at a 5% annual rate during the fourth quarter of 1999, pushing the average growth in productivity for all of 1999 to 2.9%, the best the US has seen since 1992. Internet and technology play a vital role in wealth creation and productivity in the US, as confirmed by these figures. This must have a significant impact on Singapore as well. I think the Government should take this into account in our economic modelling, especially in the area of forecasting. Are we working on too conservative a basis if the United States example is anything to go by and whether our budgeting process needs some form of an overhaul? The second important issue is the impact of the new economy on Government revenues. This new economy where the transactions in the provision of goods and services are carried out between faceless individuals and faceless corporations domiciled in any corner of the world will pose the biggest challenge in the collection of Government revenue. In the area of direct taxation, it makes perfect good sense for a corporation to locate the source of the supply of goods in a tax haven just to get themselves out of the reach of the tax man. This is one potential large drain on Government coffers. The other relates to indirect taxation. How does the Government intend to tax every little parcel or packet that goes into a consumer home? What about non-physical goods? Another one of the key e-commerce tax policy issues is the increasing conversion of tangible goods into intangible goods. At issue are products like computer software, music, movies, videos and even books that can be turned into digital code and downloaded by customers anywhere in the world.”
“Insurers incapable of providing services over the Internet will shrivel. Eventually, not giving customers the ability to check balances, originate loans, buy insurance, or otherwise manage their financial lives over the Internet will cost institutions business. In no time, employers and employees will have little alternative but to seek training and retraining opportunities. This will have great impact on the Government's role and response in training and retraining and the role must increase in importance in the areas of skills development and manpower planning. Sir, Macroeconomic Advisers, a St Louis-based economic consultancy, in September last year, reported evidence of technology's impact on productivity. A new analysis shows that about half of the growth in non-farm businesses in US can be explained by the benefits of computer-related advances and investments. The study found that productivity growth has recently been more than double the average since 1973 and will remain over 2% for the next decade if current technology-investment trends continue. In the study by University of Texas, Internet firms are impressively productive. The average revenue per Internet economy worker is US$250,000, or 65%, higher than employees in the industrial economy. The automotive industry, for example, in the US earns US$160,000 in revenue per employee versus US$250,000 for an Internet employee. The US Department of Commerce forecasted last year that almost half of the American workforce will be employed by information technology-related companies by the year 2006. It also reported that from 1990 to 1997, digital economy companies achieved a "robust" 10.4% average growth rate in value added each year per worker. And these IT workers earned more than non-IT workers.”
“Technology has led to higher productivity, allowing firms to meet rising demand with the same number of workers. The remarkable growth of the US economy, coupled with low inflation in the last decade, is attributed to the high productivity contributed by technology and the Internet. The rapid increase in B to B and B to C e-commerce has also made redundant a whole host of middlemen from car salesmen to ticketing agents and stock brokers to insurance agents. The result is also a mismatch of skills and labour shortage. There is a shortage of workers in the new economy which cannot be filled by workers who are made redundant as their skills are not what is required. This must be a frightening prospect not only for workers who are not well versed with technology, but for Government planners as well. In almost every industry it touches, the Internet changes the role of the middlemen. In a world in which the Internet can connect everyone, it is possible for businesses to have direct relationships with their clientele and not rely on distributors. For example, dramatic changes have also occurred in the brokerage business. Although middlemen remain in the on-line investing world, they charge more and provide fewer services than their off-line rivals. Moreover, the web gives individuals the ability to buy stocks without using a broker at all. Why transact on-line? In most cases, it is a matter of convenience besides lower cost. It is also easier to trade stocks on-line than it is to trade over the phone. Sir, the not too distant future, the distinction between on-line and off-line financial services will fade away. Banks without Internet web sites will be as rare as banks without ATMs. Lenders without a web presence will find themselves losing market share.”
“This is about twice the growth rate of the US. Extrapolating the e-commerce market in Asia is set to be worth US$32 billion by 2003. Here, in Singapore, the Gartner Group Incorporated reported that Singapore spent US$484 million in business-to-business (B to B) transactions and US$101 million in business-to-consumer (B to C) transactions last year. They forecasted that by the year 2003, B to B and B to C will total US$11 billion. Sir, with these huge numbers, Government's e-commerce plans and promotion of venture capital activities, many more companies are expected to jump on the e-commerce bandwagon. If these statistics are anything to go by, I think the Internet economy has arrived. Leaving aside the social issues, the profound changes brought about by the Internet economy raises two key issues for the Government. Sir, the first relates to how this new economy affects Government planning and growth forecasting and how this will affect areas, such as manpower, economic modelling, accounting for productivity improvements and the effect of wealth creation through high-tech start-ups and stock market listings. The second issue posed by this new economy is the potential loss in Government revenue due to losses in GST and direct taxation. Underlining this of course is the question of how are we prepared for the new economy. The explosion of the technology era will have implication on the manpower planning of countries hot on the heels of this new economy. The US, for instance, has experienced changes in its employment and wage growth patterns as a result of the rapid pace of adoption of new technology. Workers on the job suffer from a lingering sense of insecurity.”
“3 million jobs and is expected to reach US$507 billion by the end of last year. Another report from the Commerce Department in the US measured the "digital economy" which they defined as the value of the hardware and software produced by the computer and telecommunications industries. It was reported that the digital economy accounted for 8% of America's GDP, a very remarkable figure considering how new this economy is. Sir, these are mind-boggling numbers. There will be about 250-300 million global users of the Internet by the end of this year and still growing with some 65,000 new users every day. Some 2,000 new secure web sites (secure web sites are those set up by businesses) are added each month, reflecting the creation of new companies and shifting of existing businesses to the Internet. All these impressive growth numbers must mean that it is imperative that we understand the truly incredible impact the Internet will have on the global economy and Singapore's role in this new paradigm. The Internet economy is an economic phenomenon never seen before in human history. The value of the Internet economy, or transactions done through the Internet, is experiencing exponential growth. Research company, International Data Corporation (IDC), reported that commerce on the Internet is expected to top US$1 trillion by the year 2003 on the World Wide Web. It is small wonder that businesses are moving their capital spending into technology, not just among technology companies, but also those in other mature industries. In Asia, a GS Asia Web report recently released by Goldman Sachs concluded that Internet users in Asia will grow by a compound annual growth rate of 40% bringing the total number of Net users to 64 million by the year 2003.”
“Mr Deputy Speaker, Sir, I rise in support of the motion standing in the name of the Finance Minister. The world of business and government is dominated by buzz words like "e-commerce", "dot com", "portals", "eyeball" and "Internet economy". But what is Internet economy or sometimes loosely termed as the new economy or digital economy? The truth is there is no universally accepted definition for "Internet economy". Economists have trouble defining what is the new economy, let alone understand it. Some used the term to describe the combination of the business of multi-billion dollar Internet companies like Yahoo and American On-Line as well as the effects that the Internet has had and continues to have on businesses. Since the driving force on the Internet is the US, some have gone so far as to suggest that the Internet economy is also the US economy. What you know for certain is that Internet technologies and applications have grown more rapidly in the last few years than any other singular event in human history and the cumulative effect of technology and business transactions alone done through the Internet is the backbone of the new economy and this has a profound effect not only on our lives but governments all over the world. This new economy has continued to surpass all expectations and confounded experts and no lesser a person than even Alan Greenspan, Chairman of the Federal Reserve of the US. Sir, the Internet economy indicators, an on-going study of the Internet at the University of Texas funded by CISCO System, seek to quantify the Internet economy. It reported that the industry generated US$300 billion annually, grew 68% from the first quarter of 1998 to the first quarter of 1999, accounted for 2.”
“Would the Ministry consider setting up a DNA database of known or convicted criminals as a deterrence? Assoc. Prof. Ho Peng Kee: DNA, in fact, is being used now, where appropriate, to identify or match the culprit. The Member is right in that currently we do not have a DNA database. Police is looking into the possibility of setting up such a database. Mr Chiam See Tong rose ---”
“No. My question really is that if they are prepared to supply power at a much lower price, how do you determine that the Singapore consumers should not benefit and at the same time keeping in mind the long-term interest of Singapore? BG George Yong-Boon Yeo: We will take these factors into account. If power is available very cheaply from Malaysia and the quality of that supply can be assured, then we should surely in our own interest consider it.”
“If we free up the market completely, it is going to be hard to be selective about who should supply and how much to supply, is it not? BG George Yong-Boon Yeo: Cross-boundary electricity flows are completely within our powers to regulate and control. Is that your question? I am not sure.”
“I wish to declare my interest as a director of Singapore Power. My question to the Minister is: will he allow Genco's to supply power to the Grid from outside Singapore, for example, Malaysian independent power supplier? BG George Yong-Boon Yeo: I think we should allow the importation of power on a selective basis by taking into account the needs of energy security in Singapore. We are already connected to the Malaysian Grid, but not as if we were part of the same grid, but in an emergency, we supply to them, they can supply to us. We should be able to do the same with Indonesia too one day, depending on the economics. But at all times, we must take into account the fact that energy security is our own responsibility which we must safeguard.”
“It is 600,000. BG George Yong-Boon Yeo: 600,000 according to Mr Chng Hee Kok. We provide employment in the Bintan Industrial Estate and in the tourism area for some thousands, maybe at the most ten plus thousands. Do we provide facilities there? Where we are located, we do provide some facilities to the workers and to the surrounding areas.”
“Sir, I have two supplementary questions. The first question is, if this is strictly a commercial deal, press speculation is that it is more than commercial but political as well, especially in our case, one of our Ministers has approached the Hong Kong government on behalf of SingTel. The second question is that Government's shareholding in SingTel will continue to be diluted as a result of the loyalty shares issued to current shareholders. Which point will the Minister feel comfortable that we need to improve the framework to make sure that Government still has control over SingTel?”
“Sir, before I ask Question No. 2, I wish to declare my interest as an independent director of Pacific Century Development Limited. Question No. 2, Sir.”
“Sir, press reports seem to suggest that our telecommunications policies are falling behind Hong Kong and that we are playing catch up. Will the Minister like to comment on that?”
“Secondly, because we are running significant physical surpluses, that means, there is no reason for anybody to lose confidence. And thirdly, we have significant reserves. So if the exchange rate is pushed in the wrong direction, we are not defenceless. We have resources with which to intervene. Of course, you must judge that you are right, and the exchange rate has gone in the wrong direction. So anybody who wants to speculate in the Singapore Dollar has to take that into account. That has served us well for a long time and I think that continues to be our approach. We have in a controlled way liberalised. That is why we took a first step in 1998. Then we took a year. We watched the experience. Some companies listed. There were some bonds. Quite a number of foreign entities issued S$ bonds. We gained confidence in the new position, we took a further step. So we will take it incrementally and carefully.”
“Mr Speaker, Sir, the Deputy Prime Minister says in the long term, to be a leading financial institution, the internationalisation of Singapore Dollar is inevitable. At the end of the day, I think that as long as we have a strong economy, and he has mentioned about the surpluses to keep the Singapore Dollar strong, how do we on the one hand become a leading financial institution, like New York and London, and at the same time hold on to the Singapore Dollar and not internationalise. BG Lee Hsien Loong: Mr Speaker, Sir, that is another issue. Increasing internationalisation in the long term, as Mr Chng says, is inevitable. But it is not something that happens overnight and it is not a black and white issue - you are either open, or you are not. It is a matter of degree. It is a matter of time. It is a question of what safeguards you can put in, even partial safeguards, in order to deter excessive capital flows - sudden amounts coming in or sudden amounts going out - which can push the exchange rate either very high or very low and affect our exports, our trade, our real economy and our jobs. It is not easy to do because even a big country, like Japan, finds the Yen pushed in directions which are against its basic real economy. And when the Yen is high at 90, or at one stage below 90 to US$, their manufacturing exports suffered, and many of their industries became uncompetitive. Then market sentiment changed and the Yen moved to 150 and they became worried that this was going too far and they intervened. So even a big country does not have full control. We are a small country, a very open economy, so we cannot have full control. But we can have a significant degree of control, firstly, because our economy is basically sound.”
“Sir, despite the fact that the economy is growing, as a result of the restructuring, retrenchment is likely to continue. Will the Deputy Prime Minister indicate his forecast what the retrenchment numbers are likely for at least the next one year? BG Lee Hsien Loong: Mr Speaker, Sir, the public transport rebates will run out at the end of this year. They will not be extended. Mr Chng Hee Kok asked about retrenchment. I do not have an accurate figure but we think it will be more than 15,000 workers this year.”
“Mr Speaker, Sir, I welcome the Government's move. I would like to ask the Deputy Prime Minister whether we are now on track to achieving a long-term economic growth of 4-6%.”
“Mr Speaker, Sir, will the Minister say that the Ministry has no control on how much SCV charges our consumers for the services?”
“Mr Speaker, Sir, in fact, I mentioned during the Budget discussion that I support a single category for all cars.”
“By the Minister's argument, there seems to be a compelling case to collapse both categories of cars from A and B to even one single category.”
“Is the Minister of State saying that the Government has got nothing to do with this proposed merger between SMRT and Trans-Island Bus Services Ltd?”
“Sir, will the Minister clarify the position? There seems to be a public perception that this proposed merger between SMRT and TIBS is a Government-sponsored matter. As a result of that, there was a run up in prices and shareholders who bought the shares at $4 have now lost money. Should the Government not have responded much earlier and made the position very clear that this is not a Government-sponsored matter?”
“Mr Speaker, Sir, will the Minister say that he is satisfied with the performance of TAS despite the comments made by the chiefs of Singapore Telecoms and Pacific Internet?”
“Mr Speaker, Sir, will the Deputy Prime Minister give the House some indication as to when the matter will be settled after next week, ie, after the Malaysian general elections? Secondly, what is the timeframe in which this matter will be taken up with the World Trade Organisation? BG Lee Hsien Loong: Mr Speaker, Sir, I am not able to say when the matter will be settled. It very much depends on the Malaysian authorities. We are raising the matter with them and we will continue to do so. As to whether we would raise the matter in the WTO, that depends on what progress we make in our bilateral discussions with the Malaysians. I think it is an issue to be considered carefully.”
“Sir, will the Minister of State also consider taking action against slow moving traffic on the overtaking lanes? Assoc. Prof. Ho Peng Kee: I think the Member is referring to road hogging. Sir, road hogging is an offence in Singapore. But Traffic Police tells me that it is not a serious problem. Indeed, offenders who have been apprehended have come down. In 1995, there were 1,200 and last year, there were 600. But I would agree with the Member that there is a continuous need for education and also continuous enforcement because this way, our expressways will flow even more smoothly.”
“Sir, will the Minister consider a review of the NII? Instead of allowing for the full portion to be put into current reserves, limit a certain portion of it into current reserves, since NII is accrued from past reserves.”
“However, I am of the view that the three-year time bar is still an impediment in truly deserving cases since the discharge is not automatic. Perhaps, the Government or the Ministry would like to review a further lowering of this limit, especially in cases whereby the person has started an e-commerce business which is what we are trying to promote. Sir, while we lower the legal hurdle in discharging bankrupts and helping to lower the social stigma, I wish to state that it is still necessary to instill or reinforce the basic fundamental principles that hard work and honesty are integral qualities in commerce. No one should take advantage of the bankruptcy laws to shy away from this obligation to repay his debts and I think the law should not help him in this respect.”
“Mr Speaker, Sir, I rise in support of the Bill. Any move we make to aid technopreneurship drive is always welcomed, Sir. Bankruptcy and the difficulty of getting a discharge is a major impediment to entrepreneurship. I am delighted that we have progressively lowered the legal hurdle in discharging the bankrupts since 1995. One can only hope that, by lowering the legal hurdle, we can lower the public stigma attached to bankruptcy. Whilst we lower the legal hurdle, I get the distinct impression that we may not be discharging bankrupts fast enough. For example, I am aware of a case in which a bankrupt was in the process of seeking a discharge under the old guidelines. But when the new guidelines were implemented in which the debt was raised to $200,000, he was not given the discharge as he was still governed and considered under the old guidelines. The distinct impression given is that while we have the law, perhaps we are not implementing the law sufficiently fast. Perhaps, the Minister of State would like to comment on how fast we are discharging our bankrupts and the number of cases of discharge that we had done since 1995. Will the new guidelines apply to all cases, even those who are in the process of being discharged under the old policy guidelines? Sir, to improve the rate of discharge, so to speak, I would like the Minister of State to also explain to this House if we have sufficient manpower in the office of the Official Assignee to implement the law. It is one thing to have the law but we do not have the manpower to do that. Lastly, I refer to clause 7 in amending section 125(2) of the Bankruptcy Act. Sir, the time bar of five years which has now been lowered to three years to obtain a certificate is most welcomed.”
“Mr Speaker, Sir, in my view, the most crucial point in this whole issue is the standing of the Government and our institutions among international investors. There was a suggestion by the Prime Minister that PERC has already indicated that the standing of our institutions and our Government has been affected. My question is whether the Prime Minister is planning to take any concrete measures or moves to strengthen and improve our institutions, if damage has already been done by this debate.”
“Mr Speaker, Sir, the Deputy Prime Minister said that to make Clob legal, the Malaysian authorities would have to go to Parliament, in other words, to pass a resolution to make Clob illegal. BG Lee Hsien Loong: Mr Speaker, Sir, Clob is not illegal. Even today, it is not illegal. Clob is an offshore market. It operates outside Malaysia, just like people trade in Malaysian shares in London or Hong Kong. It does not require Malaysian law to make it legal. It did require the cooperation of the KL Stock Exchange because Clob had to operate nominee accounts and also investors had to buy additional shares, rights issues, and so forth. Indeed, it complied with all the rules and regulations of the KL Stock Exchange all the many years it was in existence. In September last year, the KL Stock Exchange changed its rules and Clob reassessed its position and decided that it was no longer viable for it to operate under the new rules. But there is no question of Clob being illegal.”
“Will a Malaysian leader do likewise with the TV3 report?”
“The commentary in Sunday's Mingguan Malaysia by the former Chief Editor of the Utusan Malaysian group criticised the so-called media, our media, of course, and SM's negative views on Malaysia. Sir, the short response is that this is sheer paranoia. There is nothing further from the truth. It is in Singapore's interest to see a prosperous Malaysia, and we have stated in no uncertain terms and on many occasions that we believe and act no less on the "prosper thy neighbour" philosophy. Nothing hurts Singapore socially and economically more than a troubled Malaysia. When Malaysia sneezes, Singapore catches the flu. Implying that Singaporeans can be easily manipulated by western powers, the commentary goes on to play the "foreign" card, which is very popularly used in Malaysia these days, especially in the last two years. To say that the west is more comfortable with SM Lee and not so with the "anti-western Dr Mahathir" is in my view laughable. Everyone knows that SM Lee has more than his share of detractors in the west and in the western media with the likes of William Safire. It is only SM's intellect that has earned him and Singapore grudging respect. Sir, negative reports on Singapore in the Malaysian media are often received with stoic silence in Singapore. Singapore leaders and Singaporeans who are riled often take it quietly in our stride. We cannot choose our neighbours, but we can choose the way we respond to intimidation and bullying tactics. But the report on TV3 on the Sultan Hussain (Amendment) Bill takes a dangerous and provocative line, and this has to be debunked. This my colleagues have done so. Sir, Singapore's response to the Business Times' editorial, which I mentioned earlier, is a criticism of the Business Times by our Prime Minister.”
“Mr Speaker, Sir, I rise in support of the Sultan Hussain (Amendment) Bill. I also share the sentiments and views of my hon. colleagues. Sir, unfortunately, the Malaysian media, especially TV3, have chosen to join in this debate. TV3 is a private and politically connected television station in Malaysia. In its Malay broadcast, which my colleagues have mentioned in Viewpoint on 30th June 1999, the programme and the presenter deliberately and selectively slanted the report on this issue. It has gone to the extent of accusing the Singapore Government of taking away Malay rights. The interview of Mr Ridzwan Dzafir was edited to fit in with their slant reporting. Facts which Mr Ridzwan Dzafir took great pains to state in the full transcript, which I read, were ignored. Sir, had this been a Singapore media report on Malaysia, it would have caused no less than an uproar. When the Business Times penned an editorial on 18th June 1999 on the subject of the Malaysian election and its leadership, the event caused a storm. Malaysia's Foreign Minister, Syed Hamid Albar, was reported to have told Asiaweek that "it is appalling that a paper from a friendly country should take upon itself to meddle in our internal politics." Sir, if the TV3 broadcast is not more than meddling in our internal affairs, then what is? We do not tell the Malaysians how to run their country. They should do likewise. Unfortunately, Malaysian politicians and their media indulge in double standards. They act as if they have a monopoly and a right to criticise and make comments about Singapore as it suits them. Just this very morning, there is a report in the Straits Times and the headline reads "Singapore rapped for looking down on Malaysia".”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, until more recently, civil defence shelters were built in the void decks of HDB flats. The latest developments are in Woodlands and Sengkang. CD shelters are now located in all flats, that means, every flat will have its own individual civil defence shelter. However, Sir, these civil defence shelters take up some 10% of the space in the flats. Moreover, the CD shelters are also made of reinforced concrete and the owner of the flat is not allowed to puncture or drill a hole into the wall. Therefore, these CD shelters are in fact very hot and humid and no air-conditioners can be installed in these shelters. Also, in the case of a major mishap, we will have a whole stack of CD shelters, one sitting on top of the other, and I think the rescue efforts will be very difficult. I would like to ask the Minister why there is a need for the design of CD shelters to be located in each individual flat, and whether they will go back to the older design which the owners of flats find more favourable. Second question for the Minister is: are these design criteria also applicable to the private apartments and condominiums?”
“Sir, in the last two years I have been asking for the Ministry to look into privatising some of the services. I think the Minister did indicate last year that something will be done about it. I am referring to our declining workforce and manpower problems and we should not deploy well-trained police officers to do the work of looking after car parking offences and so on. Private individuals or corporations can be empowered to issue summonses to vehicle owners who flout public parking rules and I wonder whether the Minister will implement, if and when he implements, the privatisation of such services.”