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 just want to establish a matter of principle for the Government to consider. My next question really is very simple. If the couple had remained married and the husband gives a regular transfer payment to the wife, should this not also attract tax in that case? After all, you need to pay your wife to maintain herself and the children. Cdre Teo Chee Hean: Sir, alimony is different in that it is a stream of payments that is legally provided and there is recourse for the wife if the husband does not make such payment. At this point, I might also want to point out to the Member that with the latest income tax changes, a non-working ex-wife will only need to pay income tax if her alimony exceeds $17,000 per year. This is already quite generous. DONATIONS TO SCHOOL FUND-RAISING ACTIVITIES (Tax exemption) 2. Mr Chng Hee Kok asked the Minister for Finance whether tax exemption will be allowed for donations to school fund-raising activities without deducting the cost of the activities. Cdre Teo Chee Hean (for the Minister for Finance): Mr Speaker, Sir, under section 37(2)(c) of the Income Tax Act, only outright cash donations to the Government and approved institutions of a public character will qualify for tax deduction. This means that the donations must be given without any benefits accruing to the donors. However, from time to time, schools raise funds through various projects, such as dinners and concerts. Persons making contributions to these projects enjoy something of value in return. The contributions will strictly not qualify for tax deduction.”
“If that is the case, will the Minister of State say that such payment to the ex-spouse should also attract Central Provident Fund contribution as well? Cdre Teo Chee Hean: Sir, I think that is quite a separate question. If the Member feels that this is a subject which he wants to raise, perhaps he can raise it with the Ministry of Labour.”
“Sir, is the Minister equating the maintenance for an ex-wife similar to employment service? He mentioned the fact that it is just like a taxpayer having to pay for the services of a doctor, ie, maintenance for the wife is equated to employing the ex-wife as such. Cdre Teo Chee Hean: Sir, I assume the Member is asking whether or not such a treatment is reasonable. But there are other forms of unearned income which are subject to tax, for example, interest, annuities, rentals and so forth. These are also subject to tax.”
“But actually, the people have been paying more and more S&C charges to meet the cost of repainting of the flats and the Government has saved a lot of money. So when the Government uses the amount saved to pay for the upgrading of flats, it is only fair for them to do so. Mr Speaker, Sir, as it appears, the wage earners seem to be gaining a lot from this first budget after the implementation of GST, but in fact they are like the bamboo which has a thick outfit but actually hollow inside. Originally, it was thought that once the GST is implemented, the Government would help the businessmen lighten their tax burden in order to further stimulate the economic growth, with the hope that the industrial and commercial sector would make better profits, thereby further increasing the workers' wages to enable the people of Singapore to cope with price increases. Now the reaction from the business community is that the cost of doing business has been increased and there is no compensation from the Government. In order to meet the cost increase resulting from the payment of GST, they will have to increase the prices, but the workers' wage increase simply cannot catch up with the price increase. So will all these not add on to the burden of the cost of living of the people of Singapore?”
“In order to share the wealth of the Government, the people must have the money first. So this wealth sharing scheme of enabling people to buy the shares of the Government-owned companies, which the Government remains the majority shareholder, means that these companies will be able to absorb a lot of money from the people and all the money will indirectly go to the Government, being the biggest shareholder, and it will be controlled by the Government. In this Budget, the Government is also spending a lot of money for upgrading of HDB flats. The maintenance and repairs of HDB flats were originally done by the HDB. But because the flats are getting older, they have become more expensive to maintain. So they have become a burden on the Government. Accordingly, the Government used the pretext of allowing the people to participate in the management of housing estates and pushed the heavy burden of maintenance to the town councils. At the beginning, some subsidies were given to the town councils to enable them to change the water tanks and to carry out all kinds of repairs and renovations. In the Budget, the Government has announced that from this year, subsidies for cyclical works will not be granted to the town councils. In this way, the Government will be able to save $100 million, and residents in HDB estates will have to bear the cost of all the cyclical repairs and renovations. If the town councils are not able to bear the cost, and are forced to increase the service and conservancy charges, who will be blamed? The Government or the town councils? To make things worse, the Government publicised extensively that it is going to upgrade the flats, in an attempt to make the people grateful to the Government, thereby attaining the political purpose of the PAP.”
“Is it because the Government expects that the companies will make a handsome profit this year and expects to collect more tax? Or when companies have difficulty in competing in the international market, the Government will then increase the rate of GST correspondingly if company tax is needed to be reduced further? That is the usual tactic adopted by the Government to induce you into the trap and later on they will squeeze you. Now, Mr Speaker, Sir, let me deal with some policies of the Government in this Budget. Singaporeans should remember that this is the first budget after the implementation of the GST. On the surface, the people seem to benefit with things like the increase of CPF contribution by 1.5%, more rebates, but those people with an income of $1,000 will only benefit by $15 a month. The Government will pay for the rentals and the service and conservancy charges for HDB flat dwellers so that they can save some money. All this, as the Government says, will enable the people and the workers to have more money in their pockets. It is because they have more money to spend, therefore they will pay more GST. Singaporeans should remember that with GST, every day people are paying tax. The Government, after taxing the people a lot of money, and paying back only a little bit, expects the people to be grateful. On the other hand, the Government also said that they wanted the people to share the wealth of the country. The floating of the Telecom shares had gone beyond expectation. So the people put in $500 in their CPF, the Government paid them $200. This year, when they put in $750, they will get $300. For the next financial year, if the people put in $1,000, they should expect to get $500.”
“The manufacturing sector, particularly the electronics industry, grew because of the opening up of the American market. However, because of intense competition outside, the prices have gone down and the profits have also gone down. So now, even with the unexpected growth that has been achieved, I do not know whether the medium and small-sized enterprises would benefit by this or not. Now, with the implementation of GST, a lot of companies have to increase their cost on the software and manpower for administration of the GST. Although the Government says that the compliance cost is only 1.5% of cost of business, the estimate by the business people is that they need about $20,000 to $100,000 for the implementation of the GST. Even assuming that the Government's estimate is correct, that it is only 1.5%, coupled with the raising of the salary ceiling from $750 to $1,000 for SDF contribution and the restoration of another 1.5% of employer's CPF contribution, will that not affect adversely our competitiveness internationally? Will this not go against the very spirit of GST which is supposed to improve our competitiveness? If our local businessmen cannot compete internationally and if the economic forecasts are not as good as expected, then the wages of the workers will be affected, bonus will be affected, the price of goods would increase due to the increases in the cost of doing business. Then the wage earners will be doubly hit. What is even more puzzling is that the Government says the objective of GST is to enable our businessmen to be more competitive and has promised to reduce the company tax to 25%. Now, unexpectedly, the cost of business has been increased without the company tax being reduced.”
“We should remind ourselves that we compete in an international arena where the business world increasingly finds little or no boundaries. Mr Low Thia Khiang (Hougang)( In Mandarin): Mr Speaker, Sir, in last year's debate on the Budget, I criticised the Government for privatising social services and for blaming on the market forces the increase in prices. The Government has now admitted that the operation of market forces will hit harder the lower income group and the poor. The Government has also admitted that Government will provide the necessary social infrastructure services, education subsidies and health subsidies. All this open confession is gratifying. How the Government will be able to implement these promises and commitments, let us wait and see. First of all, let me discuss this Budget from the national economic point of view. In 1992, the Government forecast that the growth of 1993 would be 6% to 7%. Now we have gone beyond the forecast and attained 9.9% growth last year. Because the Government is encouraging people to buy shares, the turnover in the stock market has grown many times and this is one of the main reasons why the growth has gone beyond expectation. Therefore, many Singaporeans who buy shares have also made contributions to the economy of Singapore. My question is this: is this kind of growth healthy? The Minister for Finance said that the growth is across the board. It has done well in various sectors. But the overall GDP growth in 1993 had increased by 12.5% and the main sectors that had promoted this growth are finance and commercial services, public utilities and manufacturing sectors which grew at 20.4%, 15.6% and 10.9%, respectively.”
“But not all sectors of businesses perform similarly, and in a free market, wages will adjust to accommodate these and, in my mind, they will adjust more smoothly than if you impose structural changes. As CPF contributions are structural, I am concerned about the point advanced by some of my colleagues for a further 5% increase in CPF. The main argument seems to be that, in the recession of 1985, workers sacrificed for the benefit of businesses. My colleagues may recall that in 1985, our unit production cost was out of line with that of the other NIEs. We were just too expensive. This, together with high statutory costs, was the main reason for the recession. But very fortunately for us then, the world was not in recession and we could recover within two years just by trimming our cost structure. I am all for high wages, but I would rather prefer to leave it to the market place to decide than to build these high wages as part of our structure as it is in the CPF. By advancing the point continually that workers have sacrificed for the benefit of business organisations, such proponents forget the nexus between healthy businesses and employment. Without businesses, there will be no need for workers, much less high pay. We should not forget that businesses can relocate to a more viable and conducive environment, but not all unemployed Singaporeans can. When I look at a newly emerging market, like Vietnam, with low wages and a relatively well-educated population, and a large domestic market to boot, each time I visit the country, I feel that we have a hard enough time trying to keep ahead. Hence, we should not increase the expectations of our workforce unnecessarily.”
“It is too important an issue and the Government must not be just doing the right thing, the Government must be seen to be doing the right thing. Although the financial offsets announced at last year's Budget and the additional rebates in rental and service and conservancy charges are generous, these could be easily negated by a one-off increase in inflation of 5% to 6%, which adds up to a total inflation rate approaching 9%. This is possible. Our current inflation rate is about less than 3%, add another 6%, you can reach 9%. Hence, it is better to err on the side of prudence and be even more generous where possible. Over-spending by government is worth every cent we give out, if we can gain widespread acceptance for GST. We should not bolt the stable door after the horse has bolted. Although I welcome the 5% one-off rebate in tax, the Government has missed a golden opportunity of giving an even higher rebate to mitigate the GST and also to link this 5% one-off rebate to economic performance. Despite the fact that the economy grew by nearly 10% and generated a surplus of some $5.5 billion, the 5% rebate is unchanging and this has been going on for the last few years. As a result, there is a growing perception that this 5% is actually structural. In fact, everybody accepts 5%, no more and no less. Mr Speaker, Sir, I turn now to the restoration of the 1.5% in the CPF. I have been quoted in the media that I would have been more comfortable if this increase is spread over another two years. Sir, no matter how strong our economic growth is, businesses always need time to adjust. In fact, with high growth in certain sectors, businesses in these sectors have naturally attracted higher wages, and wage increases in these businesses are actually more than 1.5%.”
“I said then, and I say it again, that price fixing, or so-called orderly marketing, works against the interest of the consumer and this cannot be condoned or allowed. Our market is relatively small. When our coffeeshops implement an increase of 10 cents in the price of a cup of coffee, the consumer's choice is narrowed considerably. How can the Government persuade the consumers to have a cup of coffee at some cheaper location when, in fact, there is no cheaper location. In a market which acts against price fixing, the consumers have a wider choice as the more profitable coffeeshops may not see the need to increase their prices as part of the marketing mix. In other words, with high volume and enough profitability, they keep their prices low. In fact, they can generate even more volume. The airline industry, and this is usually led by our national airline, Singapore Airlines, acts against or blacklist travel agents for giving discounts or prevents Singapore travellers from travelling when they purchase less expensive tickets from outside Singapore. This is wholly unsatisfactory. If this kind of action is not detrimental to the interest of travelling Singaporeans, what is detrimental to our consumers? Sad to say, despite my protestations, the Government has seen fit to allow price-fixing activities to continue. As we promote free market principles, we must make a start and take action against price fixing practices. The Government will go another step forward in gaining acceptance of free market policies and, I believe, a smoother implementation of GST if consumers are more than convinced that their rights are protected. In implementing GST, we should not leave too much to chance.”
“Moreover, the Price Control Act was only amended in 1973, 21 years ago, and traders and businesses are not convinced that the Government will activate the Price Control Act. Did the Government, after all, not bother to review the Act ahead of GST? The penalty in the Price Control Act, set some 20 years ago, is, in my mind, definitely outdated and not sufficiently intimidating. Therefore, the perception is that the Government is not serious in its threat on the use of the Price Control Act. It is not too late, however. The Act enables the Minister to appoint a Price Controller and other deputies whose authority and responsibility is to investigate cases of profiteering. I, therefore, urge the Government to act on the enabling provisions of the Price Control Act and do something about it now. If they do so, the Government will send a clear signal to businesses and consumers of its intention to use the Price Control Act in the event of profiteering as a result of the GST implementation. To ensure a successful implementation of GST, the Government must also act against price fixing. Presently, business groups are permitted to form a cartel and set prices. Two well-known examples which come to mind are the Coffeeshop Owners' Association and the airlines. The recent 10 cents increase in a cup of coffee is an example which has caused a lot of concern to Singaporeans. The other example is the concerted effort by a number of major airlines operating in Singapore in setting fares, in the guise of what they call orderly marketing. This has been going on for a number of years. But, Sir, if you were to recall, I brought up this matter in this Chamber on several occasions.”
“Mr Speaker, Sir, I give my full support to the Budget Statement presented by the Minister for Finance. In politics, Sir, the best intentioned and well meaning policy can sometimes go awry when implemented. If the public perception of a certain policy is such, it takes a great deal of persuasion to convince them otherwise. The implementation of Telecom's time-based charging is one such example. I hope our memory is not short-lived. We can only hope that the implementation of GST will not go the same route as the Telecom's time-based charging. I give my full support to the implementation of GST. It is a necessary move for our long-term viability and competitiveness. This shift from direct to indirect taxation is the most far-reaching change in our tax structure since we first started collecting tax. Although the Government is confident of the outcome, despite the ongoing campaign, I have this nagging anxiety that we may not have done enough. The people still see the implementation of GST as a revenue-generating exercise which is wholly unnecessary in view of the huge Budget surpluses which we have accumulated every year. Their main fear is that the price increases will overwhelm the financial offsets which they have been given and this will affect their lives and their standard of living. Hence, their biggest fear on the implementation of GST is high inflation and profiteering and they begin to see this happening with their daily cup of coffee at the local coffeeshops and hawker centres. They see the Government's threat on the use of the Price Control Act as paying lip-service. In fact, they see the Government telling them to eat or buy at some other place if they feel that a certain shopowner is profiteering.”
“Sir, will the Minister of State confirm that COEs which have been tendered for by motor cycle dealers but are not used will now be recycled and these can be converted for other vehicle COEs? Cdre Teo Chee Hean: Mr Speaker, Sir, that is correct. TAXI FARES (Increase) 9. Mr Chiam See Tong asked the Minister for Communications whether taxi fares will be increased in view of the escalation of tender prices of Certificates of Entitlement. Cdre Teo Chee Hean (for the Minister for Communications): Mr Speaker, Sir, applications for taxi fare revisions are considered by the Public Transport Council (PTC). If the taxi operators wish to raise fares, they have to apply to the Council. The operators will have to satisfy the Council that the proposed fare increase is justified.”
“Sir, due to the uncertainty, when will this committee complete its report? Assoc. Prof. Ho Peng Kee: Sir, the committee's report will be made available to Government some time in early March, and within two months the Government will clarify the position. SALE OF HAWKER STALLS (Withdrawal of privilege and priority to sitting tenants who profiteer from GST) 2. Mr Koo Tsai Kee asked the Minister for the Environment if he will consider the recommendation of the Consumers' Association of Singapore to withdraw the privilege and priority of sitting tenants to purchase their hawker stalls if they profiteer from the implementation of the Goods and Services Tax.”
“In order to attract more talents into the Civil Service and politics to help in the running of our country, I think we should give them sufficient encouragement and rewards. Because, on the one hand, we want them to maintain the tradition of honesty and integrity. On the other hand, we must also give their families the security of a certain standard of living. I think we should consider giving them better remuneration. Perhaps we should revise the salaries of our civil servants and Ministers more frequently, and not just once in a long while.”
“I support the statement by the Deputy Prime Minister. In fact, many people have the misconception that our Singapore Ministers are over-paid. In fact, in Singapore, where we give reward according to merit, many Chief Executive Officers of big companies are drawing salaries of more than $1 million a year. So if we compare our Minister's salary of $20,000-$30,000 a month to this $1 million salary of the CEOs, I think the difference is very obvious. Of course, in other countries, the political leaders' salaries may not be as high as ours, but they enjoy a lot of perks. For example, they are given free housing, servants, cars, drivers, overseas holidays for the whole family and entertainment allowance. From what I know, in one of our neighbouring countries, each Minister is given three servants and his entertainment allowance is more than 10 times the annual salary of our Ministers. Of course, I do not encourage our political leaders to be lavish and waste our people's money. The PAP Government's traditional principle and image of honesty and integrity must be maintained. However, in Singapore, our political leaders have only a salary with no other benefits. For example, they have to pay for their own COEs, CBD, parking and other miscellaneous charges. I think there are some financial pressure on them. Some people have asked me: why is it that our Ministers have to pay for their own COE, CBD and parking charges? One day, a worker was queuing up to buy a CBD area licence for the month and he was very surprised to find that a Minister was also in the queue buying the CBD area licence. He asked me why the Minister is not given free access to CBD. I said it is a right policy. The Minister who introduced it should also abide by the rules.”
“Of course, as long as this commission's reports are published, they will be picked up by the media, by the Opposition, or by anyone in Singapore, and I see no reason why we need to come back to Parliament every few years on this matter. Mrs Yu-Foo Yee Shoon (Yuhua)( In Mandarin): Mr Speaker, Sir, I support the statement by the Deputy Prime Minister. First of all, I like to say that I am very happy with the Government's decision to revise the salaries for civil servants and political leaders as announced by the Deputy Prime Minister. This is an overall salary revision. Civil servants from Superscale officers down to Division IV officers will benefit from this revision, particularly for Division IV officers who will get a revision of between 8% and 28%. I think this is very reasonable. However, this salary revision is made in conjunction with a revision in medical benefits. So I would support the call by our union leaders that the Government should allow the pensioners an option to decide whether they want to remain in the existing salary scheme or to accept the new salary scheme. In other words, they should be given a choice to remain in the old scheme or to get into the new scheme. I believe if we give them this option, they should be very happy and be satisfied with it. As for the salary scheme for the quasi-government departments and statutory boards, I think they should have more flexibility in this aspect. Because in these organisations, many of their activities are run along the lines of the private sector. I think they should be given more flexibility, especially in salary structure and the award of bonus to their employees. Another point which I would like to raise is with regard to the salaries of our Ministers.”
“Mr Speaker, Sir, I support the salary revision announced by the Deputy Prime Minister. In view of the fact that Mr Low Thia Khiang has raised only a number of clarifications, I do not wish to state my reasons as my colleagues have already mentioned in their support of the revision. If I say more, it appears very defensive. So I shall like to make only two suggestions for the Deputy Prime Minister to consider. First, it relates to the salaries of Superscale officers. Since these officers do not have regular or annual adjustments of salaries, I think it is inevitable that the increase once every four or five years seems to be very large. And these will be the two salary scales, that of our office-holders as well as the Superscale officers, which the public will perceive as very extensive salary revisions. But, in fact, if you annualize it, it is not so. This being the case, I see no reason why it must be done in this manner. Is it not possible for the Government to consider changing this system of remuneration or compensation of our senior officers to allow for some sort of annual or regular adjustments of salaries to be in line with, maybe, those on the lower scales? This will make it less contentious and does not make the increase, coming once every four or five years, seems very large. The second point also leads me to make a similar proposal for our office-holders. Our system is very transparent, as has already been made clear by my colleagues. There are no hidden perks in the system. It is straightforward salary. But this being the case, perhaps we should consider establishing some form of a machinery or commission to do reviews of the salaries of our office-holders on a regular basis.”
“" At the same time, I think this headline is also an indictment of those politicians who are here, who profess to represent the man-in-the-street, but have not taken the trouble to read the Report. Sir, on this note, let me, on behalf of the House, express our appreciation to Mr Speaker and to you for your very kind patience over the last few days. Question put, and agreed to. Resolved, That this House endorses the conclusions of the Cost Review Committee contained in Paper Misc 5 of 1993 and calls on the Government to accept the Committee's recommendations to contain rises in the cost of living. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Dr Lee Boon Yang]. Adjourned accordingly at Seven Minutes to Five o'clock pm to a date to be fixed. table - BREAKDOWN OF WEEKEND CARS ACCORDING TO ENGINE CAPACITIES AS AT 31ST AUGUST 1993 (Cols. 865 - 866) Annex A - GOVERNMENT'S RESPONSE TO RECOMMENDATIONS OF THE COST REVIEW COMMITTEE (Cols. 867 - 876) Annex B - COMPARISON OF PRICE CHANGES PER YEAR IN HONG KONG AND SINGAPORE, 1988-1993 (Cols. 877 - 878)”
“Some of the suggestions from my colleagues are worth looking into and implementing. And even those suggestions which the Chairman of the CRC has said that they have considered and rejected, I think they should still be looked into and a full explanation be given to the public by the Frontbench at some future sessions. For me, the greatest disappointment is the debate of the two SDP Members of Parliament. Unfortunately, the two leaders are not here now. Given the opportunity to state their stand, I think they have failed to do so. They did not take the opportunity to use the basis of the CRC Report to even make suggestions on what is their stand and what are their recommendations. We do not expect them to produce a report, like what has been done by the CRC, with the full support of Ministry officials and a wide cross-section of society. But, at least, I thought they could have actually used that Report as a basis to turn it around and tell the people and this Chamber how they would have tackled the problems differently. I think they owe it to the members of the CRC, the representors, Ministry officials and the man-in-the-street, which they profess to represent. These people deserve better. Sir, we lament at the comments of some of the better-educated who were reported in the press, and those are the comments made supposedly without any reading of the Report. I think those people whom we have directed our comments against can now take consolation in today's Straits Times' column by Sumiko Tan. To them, this headline is a vindication of their stand and the headline of Sumiko Tan's column today says, "Let those who want to speak for the people read CRC report first.”
“Mr Deputy Speaker, Sir, after this inflation of words, I am sure I must be quite a welcome sight, and I shall be very brief. Sir, let me take this opportunity to thank all my colleagues, more than 30 Members, who spoke on this very important and key subject. I hope that the CPI will no longer be an issue in future, but certainly questions of rising aspirations, rising expectations, as we grow economically, will continue to bother us, and I do not think that this is the end of the subject. There are highlights and disappointments in this debate. The highlight for me today is the speech by the Minister for Trade and Industry. When I focused on the question of subsidy in my opening speech, I felt that this is really the key issue pertaining to Government services. And I think this is the first time that I have heard a very comprehensive reply from the Frontbench. The principles on subsidies, how and when you would or would not apply subsidies, and to what extent, have little or no bearing to whether we have a surplus or deficit in our budget. I think it is a key and very important speech as far as I am concerned. The Minister has been very modest though in that the subsidy is much higher than what he is prepared to admit, especially on the question of housing. Considering the fact that 60% of our house owners are actually upgrading, ie, they have already benefited from the subsidies on HDB once, I think the Government subsidy is more than adequate and more than generous than he is prepared to admit. Sir, the other highlight is that Members, despite the various meetings, and deliberations of the Committee over one year, have brought up some valuable suggestions which I think the Frontbench will best direct Ministry officials to look into.”
“Sir, can I seek clarification on this 5-year bar that the Minister has mentioned? In the event that there is a 3-child family, can the flat be sold at the market price even if the occupation period is less than five years, and the owners will be encouraged to sell the flat in the open market?”
“This is also beneficial to Singapore which is scarce in land.”
“After all, the conception by Asians and Westerners is different. To the Asians, it is considered inauspicious to be admitted to hospital. So, it is unlikely that Asian people like us would abuse the medical services. Therefore, I would appeal to the Government to consider giving more subsidy to the health care for our people. I agree with the Committee's recommendation that the Government should focus its building efforts and subsidies on providing affordable housing for the lower and middle income groups. The Housing and Development Board should consider building more 3-room flats for sale to the public at posted prices. Mr Deputy Speaker, Sir, the new generation of Singaporeans is brought up in a prosperous and politically stable environment. Under the stop-at-two family planning policy, our children have their own rooms to stay in and our people receive better education and better income. Naturally, they will opt for bigger and better flats and live a more comfortable life. According to the statistics from HDB, in 1992, 50% of engaged couples were opting for 5-room or Executive flats when buying their first homes. But the prices for 5-room and Executive flats are not affordable to them and so they blame the Government for the rising costs. Therefore, I would suggest that, besides building more 3-room flats for sale at posted prices, the Government should also consider changing the design of the 3-room flats. It should consider expanding upwards by re-designing the 3-room flat from the usable floor area of 60 square metres to a compact apartment with an attic with a total floor area of 100 square metres. The new-design flats with prices to be capped at an affordable range of the current 3-room flats will satisfy the needs of the new generation.”
“I would, therefore, believe that the setting up of a committee will control operational cost whereby the parents and students would not be troubled with the continuous rise in university fees. The school fees in independent schools should also be controlled. As long as the Government does not reduce the educational subsidy and there is proper control in educational cost, it will set the minds of parents and students at ease when there is a necessity to raise the school fees. On health care, the Committee recommended that there be at least one Government hospital to preserve the patients' option for treatment. At the same time, hospitals should improve their public relations exercises so that the public can be better informed about the availability of financial assistance. Financial counselling of patients should also be handled with sensitivity. According to my knowledge and understanding, in the early 60s and 70s, Singaporeans would only stay in hospital when they have no other choice. However, after treatment, they were grateful to the PAP Government for the medical assistance and medical care. But in the 80s and 90s, most Singaporeans would cast doubts about the medical assistance rendered by the Government when they are discharged from the better equipped Government hospital. They will be billed and they have doubts about the Government service. Mr Deputy Speaker, Sir, I agree with the CRC's recommendation to retain at least one Government hospital to allow patients a wider choice. At the same time, the Government should make available more affordable class C and B2 wards, so that people will have the same attitude of appreciation to the PAP Government as was the case in the early 60s and 70s. As long as medical subsidy is not misused, it is worth considering.”
“Mr Deputy Speaker, Sir, the CRC mentioned that in discussing the problem of rising cost, it is advisable to separate lifestyle and price changes. Many people feel that the cost of living in Singapore has risen much higher than what official statistics show. This may be due to the improving standard of living. Better household income has led Singaporeans to continue expecting higher quality goods and services. This shows that our standard of living has very much improved. Although the expenditure of Singaporeans is higher, their income has also been increasing all the time and so has their standard of living. Therefore, it is better to strike a balance between our lifestyle and the changes in prices. I think it is better than to advocate slackening our pace in the standard of living in exchange for the early days of cheap prices. I believe that most Singaporeans will not want to turn the clock back to such a situation. On education, I agree with the Committee's recommendation that the Government should maintain its subsidy rate for university fees at the current 79% on recurrent expenditure instead of reducing it to 75%. The universities should also control cost. According to feedback given to me by many university students, there is no tight control in the universities' budget. The high recurrent expenditure has resulted in a rise in operational cost. I suggest, therefore, that the Ministry of Education and the Ministry of Finance jointly set up a committee to oversee the recurrent expenditure of the universities. This may include examining whether there is an over-supply of teaching staff or excessive acquisition of equipment or purchase of big equipment for minor projects, under-usage of facilities or wastage of energy.”
“Mr Deputy Speaker, Sir, I said "I come to understand". I will check my facts and I will answer it tomorrow. Mr Peh Chin Hua (Jalan Besar GRC)( In Mandarin): Mr Deputy Speaker, I second the motion in the name of Mr Chng Hee Kok, Member for Tampines GRC, to endorse the conclusions of the Cost Review Committee Report and to call upon the Government to accept the recommendations. The rise in the cost of living, business cost and inflation has caused much public concern and it was also one of the main issues in the 1991 General Election. A thorough debate on the Report is therefore a good public education exercise to enable the people to further understand the contents and suggestions in the Report. Mr Deputy Speaker, Sir, I believe that the Report of the Committee, led by the Minister in the Prime Minister's Office, Mr Lim Boon Heng, is a thorough and comprehensive document. The rising cost of living and inflation rate have been carefully analysed and many practical recommendations have been made. These will assist in the future development of the country. It is a very valuable document. Another conclusion of the Cost Review Committee is that having examined in detail the accuracy of the CPI, the CRC found that the method of calculation is sound. The Committee is satisfied that the CPI is calculated in accordance with international convention and that there are no significant inaccuracies in the CPI. In other words, the average rate of inflation was only 2.4% from 1980 to 1992, which is the lowest in the world. This conclusion dispels the doubt of some people and also helps to strengthen the people's confidence in the Government and to have more faith in the future policies of the Government. It also nails the inaccuracy of the Opposition.”
“Although we have never matched a revenue source with its expenditure and disbursement, the yearly declaration of what I call a COE dividend will go a long way towards mitigating this political problem. This move will illustrate that the COE is not a fund raising exercise. At the same time, it rewards all users of public transport system. Somehow, we have to find an innovative Singaporean solution to this political problem which, like it or not, is very pervasive and unhelpful. Question proposed.”
“I spoke to Mr Lim Hng Kiang today. I am happy for that family. But news of people making money on large flats is quite unsettling for those who feel that they may have been left out if they remain in their present flat. So they have to make sure that they upgrade. Now, with 91% of our people owning their own homes, the objective of a house ownership society has been met. It is time now to look at the principle and all the issues relating to subsidy in public housing. On health care, Sir, I understand that a White Paper on affordable health care will be presented soon, and I propose to leave this issue for a fuller debate. I am sure that paper will generate a great deal of interest as the question of health subsidies must be the key issue. Sir, finally, let me move down to the question of public transportation and the COE. Although the majority of the people are agreeable that the vehicle population must be controlled, they are not happy about the resulting high COE prices. Unfortunately, high economic growth and continued improvement in real incomes in the range of 6% to 8% will completely outmatch the 2% to 3% increase in car population. The result is that COE prices have gone up, and they will contine to go up. And the result is public alarm and frustration and this is aggravated by the result of monthly tenders. The monthly results on COE prices keep this issue in constant focus. The public is convinced of other less painful solutions and that the Government is not doing it because the Government is out to raise money. I say, let the Government return this money to the people via direct means through the tax system or the CPF.”
“And before he even moves in, he has already profited more than $200,000, and all through the generosity of the HDB and our new three-child family scheme. In other words, the five-year bar on ownership is removed when he has got his third child. That is what I understand. I am happy for that family. Unfortunately --- Some hon. Members: No.”
“I suggest we peg the subsidy level at current levels and do some re-thinking on this issue. We have to balance out between the necessity to invest on producing more tertiary graduates and, at the same time, ensuring that they return more to society as a result of their expensive education and high earnings potential. In Australia, there is a special tax on graduates for a certain number of years. In other words, we tax our graduates upfront. The Australian way is to tax them when they start work. Perhaps, the re-thinking will focus on a combination of both. Sir, let me move now to the question of subsidy on public housing. I applaud the Government's decision to continue building 3- and 4-room budget flats. At present, 91% of Singaporeans own their homes. Half of all those who applied for new flats in 1992 were upgrading to bigger flats. The corresponding figure in 1987 was one-third and only 4% in 1977. Still, it is necessary to ensure that everyone, and in particular, those in the lower income group can enjoy affordable basic housing. I have spoken out on a number of occasions in this Chamber on the need to review our subsidy policy on housing, particularly subsidies on the larger room flats. As a small step, and which is in line with what I have spoken on in the past, I welcome the recommendations calling for a review of housing subsidies for executive apartments to be phased out. With the high subsidies on larger room flats, there is only one way to make money, and that one way is to make sure that one applies for the largest flat possible and in the most desirable area. Recently, I come to understand that an executive flat owner in my constituency sold his flat for $400,000. This is nothing new. The only thing is that this is a new flat.”
“Besides diverting the energies and attention of teachers and principals away from their primary role, fund raising has the adverse effect of causing a financial burden on most parents as this adds to the perceived problem of cost of living. We know that fund raising may be voluntary, but this is never so, as I think no parent wants to see his son or daughter return to school empty-handed or being looked down as a result of a small contribution. A recent issue of the Economist magazine reported that one reason for the success of East Asian countries such as Malaysia, Indonesia, Thailand and Singapore is their investment in basic education for their people. Generally, these countries spend more than 60% of their education outlay on primary and secondary education. By contrast, they pointed out that Latin American countries usually spend less than half that amount on basic education. This is one of the factors for the unprecedented growth of these Asian economies in the last 25 years, averaging no less than 6.5%. Still, it is in Singapore's own interest to see that our students who are capable of developing further, up to tertiary level, should be given every opportunity to do so. It has been pointed out that the percentage of our workforce with tertiary education is way behind other NIEs like Taiwan and South Korea. We need to produce more graduates for the new technologies which the economies are now moving to. In a healthy and growing economy, the greater the multiplier effect the greater the value added to the economy. At the same time, we are also closing the subsidy gap and there seems to be strong social arguments for doing this. We need more tertiary graduates, but we want them to pay more for their education. There is a dichotomy here.”
“The result for the nation is mounting budget deficits and rising unemployment. It is not surprising. In the OECD countries today, there are some 35 million people unemployed. The unemployment rate in the EEC countries is crossing 12%. Despite the serious recession, the governments are not able to cut back on highly subsidised health and welfare services. In some cases, the government is bankrupt and it is still not able to do that. I think no Government dares to take the risk of removing or curtailing subsidies for fear of being booted out of office. So subsidies remain, and the country grows weaker. Sir, with this backdrop, it will be a very careless and irresponsible government to increase subsidies, especially on public services as cost increased. We need subsidies, but where and which are the productive areas that we need to subsidise? In my view, only education should continue to qualify for special treatment. Education is an investment in our people and our future. The current rate should be retained as only the products of such subsidised education can contribute to our continued economic growth. Overall, education cost has gone up but is still affordable despite sharp fees at some independent schools. Perhaps, generally, some parents are feeling the financial pinch from the constant demands to participate in fund raising efforts initiated by the schools. This is one area our Government should review. If education is indeed an investment, then the Government must provide all the funding needed for developing the infrastructure. School extensions, air conditioning libraries, providing audio-visual facilities, and other so-called frills, should be fully borne by the Government.”
“The alternative to taxes is government borrowing, which means the government will be mortgaging the future of our children and the country. By 1990, New Zealand had acquired a national debt of NZ$62 billion. New Zealand's population is not much bigger than ours. Cost of servicing this NZ$62 billion debt is more than what is spent on health services or education. What every citizen must realise is that the Government has no money of its own. Every cent that the Government spends comes from the people, directly or indirectly. When the Government imposes heavy taxes on businesses and workers to finance its welfare and other subsidies, a vicious cycle results. These welfare programmes and other subsidies also breed layers of bureaucracy. In some countries, four out of every 10 workers are employed by the government. If a businessman who employs a worker at a minimum salary of $1,000 per month has to pay another $1,000 in social security levies, payroll taxes and other benefits, he becomes uncompetitive. As a result, many industries in Europe find that their products are becoming increasingly uncompetitive in the world market. At the same time, a business under such conditions is loath to employ more people. Hence, young people who want to work are unable to find employment due to the employers' reluctance to employ, and they end up to live on unemployment benefits. Those who are working find themselves forking out up to half their pay cheques to the Government in taxes. They may find that with disability allowance, child support, housing and other allowances, they are better off not working. So they decide to go on welfare. This is a very common occurrence in the developed countries. An interesting example is Spain. For every person working, there is today one on welfare.”
“It is inevitable that with high subsidies, abuse sets in. Everyone wants a right to subsidised services, but nobody wants to pay taxes for it. But someone has to pay. Eventually, the entire country pays for it. Countries such as Germany, United Kingdom, United States, Sweden, Australia and New Zealand are well known examples which have highly subsidised welfare and health services and now suffer from serious structural problems, and other problems of abuse which their governments are not able to remedy. All these countries are in recession and the problems are structural - high public expenditure and subsidies in non-productive areas leading to high Government deficits, high interest rates and huge unemployment. Let me quote an example. Britain's National Health Service (NHS) used to be held up as a model for other countries. Now, the NHS system is creaking and running out of cash. One of the anomalies of the system is a confusion of priorities - first come, first served. For example, if your grandmother dislocates her hip bone, she may have to wait up to six months before she can get a hospital bed and get her ailment fixed. At the same time, NHS pays for non-essential cosmetic surgery for aspiring models who want a nose job as long as they are earlier in the queue. Excessive subsidies and welfare spending result in ballooning government deficits which can only be met by borrowing or by increased taxes. In the US, government subsidy for health has increased from 20% some years ago to 56% today on an individual's health bill. In Sweden, the ratio of total tax revenue to GDP is 52%. Sweden is a very well known example. For the average worker, it means that he hands over half his pay packet to the Government in the form of taxes. This kills his incentive to work.”
“Should an HDB upgrader be entitled to a similar level of subsidy as a first-time house owner? How do we ensure that in health care, the subsidies are going to those who need it most? These and many such questions deserve a coherent and comprehensive reply from the Government. I urge the Prime Minister to address these issues in a comprehensive manner. Government must stick to certain principles in using the market mechanism and application of subsidies. On the one hand, the Government is known to champion free market principles so strongly that the public perception is that the word "subsidy" is not in the Government's vocabulary. Yet there is a high degree of subsidy in housing, health care and education. Even when there are subsidies, the principle is not uniformly applied. On the one hand, the Government invests in our national defence and agrees to shoulder this 100% from taxes. Yet, when it comes to investment in education, the Government does not even pay fully for school extensions. Hence, there are indeed subsidies, and the issue before us is how are the subsidies being applied. To ensure that our reserves are not misallocated resulting in demand distortion, the free market is indeed the best approach. At the same time, the political and social realities are that certain segments of our population will be adversely affected and this has to be looked into. Therefore, instead of an across-the-board approach, targeting subsidies at those who are in need will prevent us from falling into the abyss which the developed countries are now facing. The mistake - and even tragedy - of heavy Government subsidies is apparent in many developed countries today. Heavy subsidies must lead to misallocation of precious resources.”
“Just like the community clubs are different from the community centres, the community clubs of tomorrow must be no less than today's country clubs - with swimming pools and dining facilities - everything except the golf course. We need more than just cosmetic changes. Besides the local environment, the Government can do something else here. One of them is, as I said earlier, to widen our space. The Government should facilitate the building of the second causeway and the extension of the MRT line to Johor. In the long run, as long as Johor, and Malaysia continues to grow at current levels, Johor will be an excellent gateway for Singaporeans and owning a weekend home next to a golf course will be a good solution to rising aspirations. Therefore, I urge the Government to work closely with the Malaysian Government and speed up these two development projects. I move now to the issue of subsidies. Whether it is health care, education, housing or transport, the whole issue of prices rests on one word and that is subsidy. At the heart of the Report is the question of Government subsidies which I thought the Cost Review Committee should have more fully addressed. Whether it is health care, education, transportation, housing or business cost, the extent of the price chargeable to the consumer all relate to what is the role of Government and the extent of the cost to be passed on to the people. There are many questions which we can raise on Government subsidies. What is the role of Government and to what level do we subsidise the cost of education, health care, housing and public transportation? Are subsidies on education similar to that on health and housing? Have we reached a level of development in home ownership that subsidies should be scaled down and, if so, in what areas?”
“The Japanese did it some three to four years ago. In the face of a US onslaught on trade protectionism, the Japanese government exhorted the people to buy foreign-made goods and work shorter hours - have longer leisure hours and enjoy yourselves. And they are doing it after four decades of sheer hard work. I think our Government has a similar role here. The vistas to a good life means travel, the appreciation of the arts, country clubs in Johor and Batam, a weekend condominium in Johor or a house in Australia or China. In other words, continue to aim high, but widen our space. I think this is very important as the problem will get more acute. With current rates of economic growth at 6-8% and growth in real incomes, in 10 years, we shall double our national income. Each time a country doubles its national income, the national psyche undergoes a transformation, it seems. We expect improved efficiency, take beautiful and clean surroundings for granted, demand to see better facilities in housing estates, better lifts, more covered walkways, buses and telephones that work, higher demand on services and lots more. In short, even higher expectations. Witness the Orchard Road Mall. Ten years ago, this would have been unthinkable. We actually spend millions of dollars to pave up a public thoroughfare with good quality ceramic floor tiles. Many developing countries today are still not able to provide adequate housing for their people, and here we actually spend money and worry about the beauty of our public roads and thoroughfares. What all this means is that the Government must start the planning process now.”
“They should redirect their energies and aspirations, and make the necessary adjustments to get good value for their dollar without necessarily giving up the good life. Singaporeans should aspire to be international citizens. Affluence has broken down so many barriers for Singaporeans. We can earn our dollar here and spend it abroad, especially on things that cost less to produce overseas. We may be limited by scarce land in Singapore, but we are not limited by boundaries or our financial resources to purchase from abroad what is not available here or to obtain from abroad what we cannot get in Singapore. I think some Singaporeans are already doing that, eg, Singapore corporations developing golf courses in nearby countries and Singaporeans joining golf clubs in Johor and Batam. Instead of buying weekend cars, why not think of owning weekend homes that cost a fraction abroad and spend our holidays there, just like people in the developed countries with their summer homes? Many of my friends I know in Europe, who can afford it, work and live in cramped homes in the city, but they take regular trips out to the countryside where they have their summer or country homes. I think Singaporeans should treat the world as our summer home. There is much talk about exhorting our people to lower their expectations. I am afraid this is counter productive. High expectations is what motivates our people. It is the driving force behind what we have achieved today. I think a better solution is to help the public to define what is considered a good life. Right now, upgrading is the buzz word. Everybody wants to upgrade. It is almost impossible to switch gears. We can, however, in tandem, focus on widening our vistas of what is the good life. This is not unusual.”
“In economics, this is known as a ratchet effect and demonstration effect. The ratchet is a mechanical device that turns only one way and not the other. Simply put, this means the adjusting of a life-style upward with increasing income and always the difficulty or impossibility of a downward adjustment. Is this upward adjustment of our life-style something that we need to worry about? I think the answer is both yes and no. The answer is no, as I believe it is the Government's role to promote and help our people to achieve a good life with a high standard of living. We have said so many times. The answer is yes, there is something to worry about if the public does not see the linkage between a strong competitive economy which makes a good life possible, and that there is always a price that must be paid. It is not possible to earn good salaries here and pay low prices like those in China and own a house like one in Australia, all at the same time and place. Perhaps if we adjust our mind-set, this may be possible. I must stress that this does not necessarily mean that we need to lower our expectations of the good life. It is more a change of perception of what constitutes the good life, how to achieve it and what possessions are realistically within reach, given our constraints and the environment. For instance, if you are living in a land-locked country with the sea many hundreds of miles away, and lazing by the beach every week is your idea of a good life, I think you will have to change your recreation or else you have to pay a lot of money every week just to travel to the beach. This is the same scenario as indulging in car ownership in the land scarce island of Singapore. Singaporeans should therefore reconsider their options.”
“There are other statistics worth mentioning here which will illustrate the whole range of Singaporeans who have benefited. Despite the punitive and prohibitive taxes and other fiscal disincentives against car ownership, there was one car to every 10 Singaporeans last year. In 1983, it was 1 to 15 and this is despite the fact that our population has grown in 10 years. Today, 94% of Singaporeans in the bottom 20% income group own a refrigerator. 90% of them own a television set and some maybe with more than one television set. Another interesting indicator is Singapore's consumption of electricity. This has more than doubled in 10 years. In 1983, each person consumed 493 kilowatt hours. In 1992, this went up to 1,024 kilowatt hours, because most households can afford and have household electrical appliances and many actually have airconditioning. There are 265 telephones to 1,000 Singaporeans today. Ten years ago, it was only 194. In 1981, 39% of our population had life insurance and this rose to 59% in 1992. Eating out is a very common family affair. This is pointed out in the CRC's Report. Although not measured, more are eating out at more expensive places - for the comfort, ambience and usually as a result of our children's desire to visit modern fast food restaurants. Mr Speaker, Sir, what all this means is that Singaporeans with rising affluence have developed more expensive tastes and have acquired a life-style with more material assets and these cost more to maintain. There is this constant competition on the hard earned dollar. This competition on the dollar which we earn results from succumbing to media advertising, the whims of our children, keeping up with our neighbours and, of course, payment for essential services.”
“Singaporeans cannot expect the good life and not pay our nurses and teachers high salaries. I think the question is how much should Government subsidise these essential services. I will deal with this question of Government subsidies in the later part of my speech. [Mr Deputy Speaker in the Chair] 4.08 pm For entrepreneurs, the cost of doing business in Singapore has admittedly gone up and will continue to do so, especially for those who require relatively cheap labour, because labour will never be cheap in Singapore relative to what one can get in neighbouring countries. It is inevitable that low value added industries must and should continue to relocate elsewhere. The other reality - and the most agonizing because there is no way out - is our island's limited space and scarce land resources. This fact will continue to make ownership of private property and cars premium possessions that are out of reach of many Singaporeans. I move now to what has been highlighted in the Report on changing life-style and I like to call it improving life-style. Materially, there is no question that Singaporeans are better off today than 10 or 20 years ago. Less than half a generation ago, many of our parents actually worked as domestic maids and washer women. But today, we employ no less than 60,000 foreigners for such services, and the numbers continue to grow. According to the Singapore Tourist Promotion Board, in 1971, nearly 80,000 people travelled by air and sea. This rose to 330,000 in 1981. In 1991, 1.6 million trips were made by Singaporeans. These figures do not include travel to and from Malaysia. In other words, our population of some 3 million Singaporeans made 1.6 million trips abroad in 1991.”
“After all, today, the Public Utilities Board and Telecoms charge to one cent. Besides verifying the accuracy of the CPI, the next most important significant finding in the Report is that prices have, contrary to public perception, not outpaced real wage increases. In other words, our incomes are not eroded by price rises. The Committee's one-year study shows that prices of basic items have not gone up markedly. In fact, there has been negative inflation in some instances because of our strong Singapore dollar. Prices of most imported goods, ranging from essential foodstuffs to luxury items such as video cassette recorders and televisions have, in fact, gone down. I think even prices of oranges for our Lunar New Year from China this year had also dropped compared to last year. For many people, travelling abroad is certainly much cheaper today. Let me now move on to an important area covered in the CRC Report and that relates to land and labour constraints. The key areas identified for study by the CRC, which are education, health care, transportation, housing and business, are all affected by two key constraints in Singapore. Whether we like it or not, there are two realities we must accept in Singapore - labour and land shortage. These two factors will continue to have a significant bearing on the cost of services such as education and health care, and possessions such as landed property and motor vehicles. As long as our economy continues to grow at current levels, there will be a labour shortage. Hence, anything that is labour related or labour intensive will continue to cost more as wages go up. As salaries and wages improve, cost must go up and this is more marked and more so in service industries.”
“Highly probable that he is earning a substantial four-figure salary. He is only in his early twenties. He is what most Singaporeans will consider to be a very successful individual. Yet, his comments, if shared by many of his peers, are indeed a cause for concern. Does this mean that some of our better educated are not able to discern between reality and perception? Worse, if this generation who is the biggest beneficiary of our economic success feels that they are worse off as a result of, say, COE. If this is part of the bond building process, I think Singapore has some way to go. Whatever people may say about the Government, I think this Government cannot be accused of fudging national statistics or whatever national statistics published. Therefore, this is a very fundamental principle and the Government has no choice but to continue to rebut any such disbeliever. On this, I must also compliment the press. All the articles which I have read so far suggest that our journalists are in fact level-headed, pragmatic and have a deep understanding of the issues involved. Reviewing the Cost Review Committee's Report, it is apparent that postponing certain unavoidable cost increases during the mid-1980 recession years fuelled public perception of sharply rising costs. Perhaps if such increases had been spread out more evenly and in smaller dosages and at more regular intervals, the perception of rising costs would have been different. In this regard, I must say that had the one cent coin been more popular, cost increases should not have been rounded up in many cases like bus fares. The one cent coin today is very fashionable in the United States, a trillion dollar economy. With the implementation of the GST next year, I think we must bring in the use of one cent coins.”
“Mr Speaker, Sir, as I was saying, the value of the time and effort spent cannot be easily measured when this is viewed as another step forward in the process of bond building between the Prime Minister's Government and the people. Hence, the Report has to be fully discussed and debated and I hope that all my colleagues in this Chamber will give a resounding vote in favour of this motion. Sir, much has been written and presented in the media on the findings of the CRC, but I understand that this debate is rather one sided. There is little or no public response. Does the public at large agree with the findings? Do they have an intuitive feel that the findings on changing life-style mirror their own lives? Will this Report put an end to this issue at the next General Election? I can only answer with some certainty to the last question and quite clearly the answer is no. The question of cost of living as measured by the CPI is a political hot potato. It is easily exploited by the Opposition and I think no government is immune. Although this is multi-dimensional in character, it is a single dimensional issue as far as some people are concerned. When a person is affected by hospitalisation or COE or housing, he does not seek to understand rational arguments. I am therefore concerned by the comments of one Mr Koh Su Haw, who was quoted in the Sunday Times on 3rd October 1993. He said: 'They came to the conclusion (meaning the CRC Report) that the CPI was accurate and that the problem was with people's perception. This was the same conclusion they started out with. It seems funny that they took a year and there is nothing new to report. The report seems to have been a political exercise rather than one in economics.' Mr Koh is a research analyst. Most probably, a graduate.”
“Mr Speaker, Sir, I beg to move, *That this House endorses the conclusions of the Cost Review Committee contained in Paper Misc. 5 of 1993 and calls on the Government to accept the Committee's recommendations to contain rises in the cost of living. *The motion also stood in the name of Mr Peh Chin Hua (Member for Jalan Besar GRC). Mr Speaker, Sir, for a long time since independence, Government's statistics and published numbers and, least of all, the Consumer Price Index (CPI), have never been questioned by the public. Unfortunately, as the Cost Review Committee (CRC) has pointed out, a confluence of factors resulted in questions being raised about the accuracy of the CPI. This comes on the heels of a change in the country's leadership, and doubts cast about the veracity of Government in a key economic indicator, such as the CPI, and this cannot go unchallenged with a detailed study. The study has been completed and the accuracy and relevance of the CPI has been established. I compliment Mr Lim Boon Heng's Committee for its work. However, the value of the time and effort spent cannot be easily measured when this is viewed as another step forward in the bond building process ---”
“Sir, is the Minister aware that, in view of the liberalisation of the scheme where capital gains may be withdrawn from CPF, a certain level of price fixing or manipulation is possible, and is he confident that the CPF Board and the computer system are adequate in coping with the task of keeping track?”
“Mr Speaker, Sir, seeing the gap between the prices of private housing and HDB Executive flats, does it not lead to a situation whereby there will be more applicants in future looking for Executive flats as a result of the higher subsidy?”
“Sir, I really do not understand the Minister of State. Maybe I am a bit dense. If this number of applicants in Tampines is shifted to another area, the total demand remains. It is the same. In other words, the total demand far exceeds supply. That is my point.”