Chua Teck Chew Robert
Singapore
“Given time, if the economy of Singapore continues to grow rapidly and in the process bring in more and more adverse influence from the western culture, resulting in our people behaving like the westerners whereby the relationship between parents and children is built on legal responsibility and obligations rather than love and compassion,…”
“Sir, the idea of allowing owners of factories to build dormitories for foreign workers is an excellent idea. May I know from the Minister whether the rules concerning usage of factories, ie, the 60:40 ratio and so on have been changed so that factory owners can in fact build dormitories and not violate any of these standing rules?”
“This way the system will not be seen as favouring only the rich and depriving the less rich of ever owning a car. At least, if someone should lose out in the draw, he can attribute his inability to own a car to his lack of good luck and not just blame it all on the Government.”
“For example, Singapore families should be encouraged to try and spend some time in some of the rural areas of our neighbouring countries, perhaps even in the long house of Sarawak, to try and understand that people do live in a different environment.”
“Other possibilities include giving special tax allowance and depreciation benefits to financial institutions to encourage them to finance the machineries and working capital needs of these enterprises which often lack the track record overseas to obtain standard bank loans from the overseas banks.”
“So land cost in Singapore can never be the same as that of other countries which have more land. But we should not try artificially to keep the land cost down, but to ensure that our limited land resources are put to the best possible use.”
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“Will the Minister consider having a dialogue with the Singapore Retailers Association on this issue?”
“Sir, will the Minister consider conducting such a survey, maybe jointly with the Singapore Retailers' Association, because some of them are complaining that they are badly hit?”
“It says "... car parks charges were raised by between 7 and 10%".”
“Sir, with regard to item No. 6 in the Annex, I think there may be a mistake in the computation because car park charges were raised by about 12 1/2% during the year.”
“With reference to the Annex, would the Minister assure the House that university fees will not be increased again this year since GST will be applied to university fees?”
“" This is a major challenge in our regionalisation efforts. I beseech all Singaporeans to stand up and meet this challenge without fear of any repercussions. I urge the Government to initiate and back such a move. Mr Speaker, Sir, I support the motion and thank the President.”
“However, sad to say, I also learnt that many companies coming from several other large developed countries do not have such rules and were either pro-actively or re-actively engaged in corruption of officials and politicians in many of their host countries. They therefore become fair game to the corrupt officials, so to speak. I think it is time we Singaporeans, whether as the Government, politicians, business leaders, businessmen or ordinary citizens, should take a joint stand to say explicitly, "No corruption, please, we are Singaporeans." If such a stand is taken seriously and strictly adhered to by all Singaporeans and Singapore businessmen, whether travelling as tourists subject to harassment by customs or immigration officials at airports or businessmen being coerced to give bribes to facilitate the issue of a licence by officials, we will be sending a clear message to the officials of those countries that Singaporeans will not tolerate or participate in briberies. I admit that to take such a stand is easier said than done. But if US companies can do it, we should at least give it a try. On the other hand, in the meantime, no leaders, whether in Government or in the private sector, should publicly encourage or condone corruption by Singaporeans in other countries. Or else we will be subjecting our citizens and businessmen to aggravated harassment by officials looking for bribes. Such officials could say, "See, even your leaders think it is all right for you to bribe us." We should never compromise our integrity and moral principles by condoning briberies. We should condemn such practices so that one day, all Singaporeans, when challenged, could say without hesitation or fear, "No corruption, please, we are Singaporeans.”
“We need to help them understand the real magnitude of this problem and encourage them to acquire higher skills. In this respect, the Government should provide more incentives and remove any hindrances to encourage companies to set up more work place training centres, like those found in Germany, for training skilled workers. In our efforts to regionalise our economies, companies venturing into the region often face a dilemma, "To pay or not to pay a bribe." Back home in Singapore, our system is squeaky clean and corruption is illegal and has been dealt with severely. I agree with the Senior Minister that a corruption free system is our competitive advantage and should be guarded at all cost. The problem facing our citizens and businessmen, however, is what they should do when an official in the foreign country asks for a bribe while carrying out his normal duty. Some call the bribe local practice, and give it such fanciful names as administration charges, processing fees, finder's fees and facilitation expenses. But such practice goes against the value system upheld so vigorously in Singapore. I asked some of my friends who head the regional operations of American MNCs in the region whether they succumbed to such pressure from corrupt officials. I was surprised to learn that most of them do not and some had never been asked to give a bribe. However, they told me that, if approached, they would often politely tell the officials that under their US companies' rules, no corruption was allowed, even in their foreign subsidiaries and it was also illegal under US laws to engage in corrupt practices. Apparently, because such a strong stand is prevalent amongst US corporations, the officials concerned do not waste time on them and leave them alone.”
“Many newly developing economies are capable of putting in the required infrastructure, but quite often they are just trying to catch up with demand. Singapore excels in its ability to anticipate the future capability needs of the economy, and then plans meticulously to provide them ahead of demand. Once implemented, the projects are carried out efficiently and they continue to provide round the clock service to meet industries' exacting needs and demands for cost effective and highly reliable service. We should therefore spare no efforts to continue to upgrade and build world-class infrastructure and capabilities to remain internationally competitive so as to attract high technology and high value added industries to invest in Singapore. Talking about capabilities, I also strongly support the Government's plan to invest in the education and training of our people. This is the only way to move out of having to compete with countries which have abundant, low cost workers. However, we should address a nagging problem. More than 500,000 workers in Singapore have less than primary education and they are probably not aware of the serious competition they face from better educated workers in the region. They should be told that for every worker holding a job in Singapore, there are 720 workers in Asia waiting to take it away from him by willing to work harder for lower wages. For example, a worker in a garment manufacturing plant in Ho Chih Minh City is paid US$1 a day, compared to about US$25 a day for a Singapore worker. Yet, our group of more than half a million workers, most of them fairly matured in age, do not see the urgency, challenge or need to acquire more new skills to stay ahead.”
“To meet increasing competition from the other developing economies of Asia, we must enhance our excellent capabilities such as our world-class infrastructure. Let me illustrate the importance of such a move with an incident. During Malaysian MITI Minister, Dato Seri Rafidah's visit, I took her for a ride, literally that is, to visit TECH Semiconductor's high technology plant in Woodlands. This $500 million plant is the latest wafer fabrication facility in this part of the world, for producing high density memory chips. After donning our clean-room garments which made us look like a spaceman, or a spacewoman in her case, we toured the fabrication area where we were told that the air was ultra clean in the Class 1 clean room. This means that there is less than one speck of sub-micron dust particle in one cubic foot of air. At the end of the tour, we sat down with TECH's President, Mr David Smith. Minister Rafidah came straight to the point by asking David, "Can Malaysia support such an operation like yours?" David replied, "I think you have all the necessary electrical power, water and other capabilities to meet our need for such a plant." But Minister Rafidah pressed on and asked, "What are the critical factors?" David paused and then replied, "Well, it is not just having the megawatts of electrical power or millions of litres of water that we need to keep this plant going 24 hours a day. We need completely reliable and uninterrupted supplies of such utilities because any stoppage will mean we have to scrap all our work in process and each time it can cost us losses amounting to millions of dollars. Singapore can meet this stringent requirement for efficient, reliable utilities." I agree with David Smith that such capability is what keeps Singapore competitive.”
“Malaysian investment figures revealed that Singapore ranked number one going by the country with the largest number of manufacturing projects in operation in Malaysia. Singapore moved up from 9th position in 1992 to fourth position in 1993 in the country ranking based on the annual value of investments in Malaysia's manufacturing sector, overtaking several European countries and Indonesia. Such events show that Singapore is on the right track in its moves to regionalise our economy. We should do everything possible to help our companies, especially the small and medium-sized local enterprises, find new business opportunities in the regional economies and facilitate their investments in those countries. The Government could continue to work hand in hand with private sector trade organisations such as the SMA and other Chambers to jointly carry out our regionalisation strategies. However, I wish to draw Members' attention to a problem confronting companies going offshore. An SMA survey showed that companies wanting to regionalise are facing great difficulties in recruiting Singapore managers to start up or run their operations in the region. Singapore is too comfortable for them to want to face the unfamiliar and often difficult working and living environment of the other countries. We should inculcate in our managers and executives a sense of mission that by working abroad, they are helping to secure the future of Singapore. At the same time, we should provide incentives and remove obstacles to help them serve overseas successfully. While we must regionalise to add a second wing to our economy, we should continue to upgrade the mainstay of our economy which is our domestic economy.”
“Mr Speaker, Sir, thank you for allowing me to speak on Mr Loh Meng See's motion to thank the President for his Address at the Opening of this Session of Parliament. The President covered a wide range of matters affecting the future of Singaporeans. I wish to share my views on some of them. The business community welcomes the Government's commitment to promote a regional outlook among Singaporeans, and remove obstacles that hinder our entrepreneurs and companies from going offshore. Our relatively small population living on a tiny island with no natural resources must build its future by linking with the larger and resource rich countries of the Asia-Pacific region. We need to tap their resources and participate in their economic growth by increasing our trade and investment linkages with them. The political and economic climate is conducive for us to regionalise. In the last few years, our businessmen and companies have been welcomed with open arms to trade with and invest in the countries in this region. Our businessmen have been inundated with countless invitations to visit and invest in those countries. And almost everyday, there is a delegation of officials and businessmen from a regional country knocking on the door of the Singapore Manufacturers Association (SMA) and asking the SMA to help them organise trade and investment missions and seminars to promote investments in their country or state. Just last week, the SMA helped the Malaysian Industrial Development Authority to organise a seminar on "Business Opportunities in Malaysia", led by the Malaysian Minister for International Trade and Industry, Dato Seri Rafidah Aziz, and 1,500 businessmen attended the seminar. The large turn-up clearly demonstrated Singapore companies' interest in regionalisation.”
“Sir, before I ask Question No. 4, I would like to declare that I am a director of ECICS Holdings and IFS which are subsidiaries of Temasek Holdings. Question No. 4, Sir.”
“I believe that this is a very important Report for Singapore and I hope that the Government, as the Prime Minister has proposed, would take it seriously and implement all the recommendations to make sure that not only the cost of living will remain low and affordable to Singaporeans, but that our business costs will be contained and properly monitored so that we will never lose our international competitiveness. Give the poor man on the treadmill a chance. Don't give him a heart attack.”
“But on top of that, he also has to challenge the slope that he has to climb and, in this case, the slope is not determined by him. I would like to suggest that the slope, in many instances, the inclination, the percentage of it, is caused or decided by a lot of Government and statutory boards' fees, taxes and levies. Over the last few years, it seems that everybody wants to have a finger on that button to change the slope, each saying, "I am only going to change that by only 1%. It shouldn't hurt that fellow." But when you put it altogether, before we know it, the businessman has to run against an inclination of 10% or more, and at increasing speed. That is why quite often you find him exhausted of energy and resources. I like to propose that the recommendation to keep increases gradual and spread out over many years be taken seriously. How can we do that? I believe it is time we looked again at an earlier proposal I made that we should form some kind of a national tripartite council to, at all times, monitor our international competitiveness, whether it is labour, land or other cost increases. There is a call by the Committee in its Report to try and coordinate increases of Government departments and statutory boards. Who coordinates them at this time? I believe that a tripartite body can be more objective and can look at different angles so that it can be an effective machinery for making sure that we remain internationally competitive and that our cost increases will not erode our competitiveness.”
“We accept that over a period of time, fees and other costs must continue to rise. But the question is: should they rise so fast, and so steeply, at the same time? I would like to illustrate, Mr Speaker, the plight of the businessman in the last few years with someone trying to get on to an automatic treadmill machine - one that is modern and hi-tech. On this modern machine you do not pedal it any longer by your own power. It is fully driven and you can change the speed and the slope or the incline. I would like to liken a businessman in Singapore getting on one of these machines and he has no control over the speed nor the inclination or the slope of the machine. It is beyond his control. First, he has to run as fast as the machine moves in order to stay on the treadmill, and there are forces causing him to do that - competitive forces from outside - whether it is cheaper labour elsewhere, cheaper land, or cheaper operating costs in the international environment. I will give you some examples. The Report mentioned that JTC charges S$15 to S$16 per square metre per year for land in the outlying areas such as Jurong. Recently, I took a mission to Sarawak. In Kuching, they charge S$15 per square metre for 60 years, which means land here costs 60 times more than in Kuching, and this is not jungle or anything. It is a free industrial zone two kilometres from Kuching airport. So here we have got tremendous external pressure and competition. Labour cost here is two to three times higher than Malaysia or six to 10 times higher than in China. Here the businessman is running against very strong competition and he has to keep running and increasing his speed to keep up with this treadmill.”
“Thank you, Mr Speaker, for giving me the opportunity to speak on this motion. First, I want to join my other parliamentary colleagues in congratulating Mr Lim Boon Heng, the Chairman of the CRC, and his members for giving us a comprehensive review of the cost situation in Singapore. I would like to touch on only two subjects because of time constraint. First, on education. I support the Committee's recommendation concerning maintaining the subsidy for university fees at the current 79% instead of the proposed 75%. Also, future fee increases, as recommended, should also be made gradually. I would like to draw the House's attention to Table 8.7 on page 79. If you look at how university tuition fees had been increasing between 1986 and 1992, we can understand why people are very anxious. The increase in university tuition fees during that period was between 21% and 44% per annum. So that is a hefty increase and it is very difficult for people to accept that this is necessary so that the subsidy level can be brought down. So the recommendation of the Committee to graduate or make the increases gradual should be taken very seriously. Otherwise we will have a lot of anxious parents not knowing where is the limit. I would like to touch more on the review of business costs and competitiveness. Whatever cost increases we have to bear in Singapore will be acceptable provided we can afford it. And our affordability will depend on whether we remain internationally competitive, so that companies can continue to pay wage increases to raise the standard of living of our people. I note that "the committee agrees that business costs have indeed risen sharply in recent years." Also, the Committee asked: Fee increases: Why did so many fees rise at the same time?”
“I hope that if, in future, there is a need to increase the rate of GST, serious consideration will be given to look after the interest of the lower income group so that they will not carry an extra burden. With that, I support the Bill.”
“Having collected these fees, they have to pay GST to the Government. If they want to use the reserve fund years later for a major repair, they have to pay another another round of GST to the contractors. In other words, there is a double taxation. They have to collect GST twice. I think there is something wrong here. I hope that the Minister will be able to make some arrangement to avoid the unnecessary double taxation of GST in this kind of situation. Personally speaking, the implementation of GST is very wide and extensive. Some people may have some reason for not having to pay tax previously. They will be affected by GST after its implementation. In other words, they will be made to shoulder a certain amount of the tax burden. I think it is very fair. In the process of implementation of GST, some adjustment is made to the personal income tax. Those with an annual taxable income of less than $10,000 will not have to pay tax. The result is that if we have any special need to increase the GST in future, then any futher reduction of personal income tax would not benefit the lower income group anymore. So if we increase GST by 1%, then the lower income people will have 1% extra tax burden. I think it is not wise. The Minister has already agreed that within the next five years there will be no change to the GST rate. What about after five years? Will there be a need to increase the rate of GST? Why will happen? At that time, reduction in the personal income tax rate will not serve the interest of the lower income group. In what way will the Minister be able to help the lower income group, as we have done now?”
“If we deduct the ARF, the COE, and the import duty from the market value, the actual value of the second-hand car is about 25% of its market value. It is not 50% of the value. Another extreme example is that in the case of a ten-year old Japanese car, the value of the car is as good as the PARF. If you minus the PARF, then the actual value of the car is zero. So it is zero percent, and not 50%. From these two extreme examples, we can see that the real value of the second-hand car is something between 0% and 25%. It is not 50%. I hope the Minister will look into this matter and explain why he feels that 50% is the correct value for a second-hand car for the purpose of GST. Secondly, the imposition of GST on second-hand vehicles is unfair to the public. Why? If I buy a new car, I do not have to pay GST. When I buy an old car, I have to pay GST. Both are consumption. Why is it that for the new car, there is no GST and for the old one you have to pay GST? I think it is unfair. I hope the Minister will explain. In the Committee's Report, paragraph 12, it is said that GST is payable on club members' subscriptions and condominium dwellers' service charges. From my personal point of view, I think these two categories of services are not profit-oriented. They do not make profit. There is no value added. Whatever fee you receive will be spent on purchasing services and the GST levied on the services. So you collect tax on the one hand and pay off on the other hand. It is meaningless to collect GST from these people. There is a new problem arising out of this. For example, for some clubs or management corporations of the condominiums, they collect large sums of money in terms of the sinking fund. It is treated as a reserve.”
“We are also concerned about rounding up when the GST is implemented. That supermarkets and so on will round-up, and it will not be 3% GST, but effectively more than 3%. I also agree with the Minister that public awareness of GST and its implications in implementation are not quite well known. May I suggest that more publicity be given in terms of TV programmes, video tapes, or even using high-tech multi-media and computer-based instructions, and that these be made available to individuals and companies so that the message of implementation of the GST can be easily propagated to the public. I believe, through the companies, GST can be better explained with the help of the company accountants and executives. So a computer-based instruction system would definitely help. May I suggest also that a GST hotline be set up at the appropriate time to answer public queries. I support the Bill. Assoc. Prof. Low Seow Chay (Chua Chu Kang)( In Mandarin): Mr Speaker, Sir, GST will be introduced in Singapore for the first time next year. When we implement this tax system, there will be a lot of problems that we may not have anticipated. That is why after receiving representations from the various quarters, the Select Committee on the Bill made a 43-page amendment. The care taken by the Committee is indeed praiseworthy. On the proposals by the Committee, I have some observations. Firstly, on second-hand vehicles. The Committee proposed to levy tax based on 50% of the value of the car. I think this way of calculation is not scientific. I can give you two extreme examples to illustrate why it is not scientific. One example is this. In the case of a recently-registered second-hand vehicle, the actual price is not 50% of its actual value.”
“Thank you, Mr Speaker, for allowing me to join in this debate. As a Member of the Select Committee, I have the privilege of hearing from the representors as well. I want to take this opportunity to commend the Minister for Finance and the Select Committee for the way they have accommodated the various requests from the representors, especially businessmen who are concerned about losing their competitiveness, as a result of which many amendments were made to ensure that international trade and international competitiveness will not suffer because of GST. The impact on the cash flow of exporters and manufacturers was also taken into consideration. I would urge the Minister to keep this in mind when implementing the GST, just in case something goes wrong: that our international competitiveness and trade and cash flow on exporters and manufacturers will not be negative and thus affecting our economy. There is only one concern which has not been addressed and that is exemption for an item which I think is very important, and I would like to urge the Minister to consider this. The GST is supposed to be a tax on consumption and not on investment. Yet, in Singapore we have been promoting the need to further the educational level of our people, to upgrade the skills of our workers and our human resources, which is our only resource we have in a major way. I would like to ask the Minister to consider exempting or zero-rating all educational fees or skills training cost so as to encourage this investment in human resource. I think it is wrong to tax an item which surely is an investment in the future of Singapore. I think we have overlooked this in some way and I would like the Minister to consider that this is an item worth considering for exemption or zero-rating.”
“We should also try to encourage, say, supporting industries to be located near their major clients to minimise travel. The third area is the need for a better transport system within Tuas. I must first declare that I have a company operating in Tuas. But the thing is that in Tuas we have difficulty getting enough workers to work there because of inconvenience in travelling within that area. I would like to ask the Minister to consider extending the MRT line to the West so that Tuas can be more actively used for industry. But, also, remember that the second link to Johor will start from Tuas. So an MRT line there would definitely make better use or more optimal use of Tuas.”
“Sir, transport cost is a production cost in any company and the Government's land transportation policy has both positive and negative effects on businesses. The vehicle quota system has helped to control the number of vehicles on the road and this has resulted in smoother traffic flow which means that goods can be transported quickly and shipped out of Singapore expeditiously, while businessmen can spend their time running their businesses and not stalled in their cars in traffic jams. However, our transportation policy has raised transport costs in Singapore. In the latest round of COE bidding, the quota premium for goods vehicles alone was $12,960. I hope that the Ministry would look at the impact of transportation policy on business costs because we are already paying a high cost for cars and goods vehicles. If COEs continue to rise, our businesses, especially export-oriented manufacturing, would be seriously affected. In addition, I would like to suggest that we encourage the pooling of transportation resources among companies. This can be achieved by helping companies to find ways to share their distribution system. It would be especially helpful for small and medium enterprises. Another way of resolving the transportation policy is to minimise inter-company and intra-company transportation requirements. In other words, minimise travel required between companies and within companies. We can do this if we allow companies to integrate more of their operations in the same location. Currently, we tend to separate them into industrial and commercial operations so that company staff have to travel quite a bit. Also, transportation cost has also gone up.”
“Such grants could easily be channelled from the large foreign workers' levy collected by the Government.”
“Sir, the relative unit labour cost has been increasing over the last few years and this has eroded the international competitiveness of Singapore manufacturers who have to compete in the export markets. There is no doubt that Singapore manufacturers are being priced out of international competition, partly due to the tight labour market and, more significantly, as a result of wages rising faster than productivity improvement during the last four years. The answer lies in improving our productivity. And to make headway, tripartite efforts are needed from the Government, employers and employees. Employers or managements must continue to improve their companies' operations by implementing various productivity and quality improvement programmes. In this respect, it is a good sign that management is taking the lead in the national productivity improvement efforts. Employers and employees must jointly promote training. But employees must recognise that if they fail to train and upgrade their skills, their jobs will eventually be taken over by their hungrier but more hardworking counterparts in the other developing economies. Employees must also realise that companies cannot invest seriously to upgrade the skills of workers who do not stay with them long enough to be trained. Employees should resist job hopping. Otherwise, they will end up the real losers. Employees must acquire higher skills all the time and this should apply to fresh school leavers as well. 1.00 pm The Government must help companies, especially the smaller companies, to set up in-house or group training centres and fund them generously, not just with SDF alone, but with additional grants so that every company has the means to upgrade the skills of its workforce.”
“Sir, I hope that the Minister will respond to these three requests.”
“To encourage companies to train foreign workers, perhaps part of the foreign workers' levy should be allocated for companies' specific training or inhouse training for workers wishing to embark on a formal scheme such as the apprenticeship training programme administered jointly by ITE and the companies. These workers should be given 3-year work permits so that, at the same time, companies can apply for training subsidies or SDF support. Next, regionalisation training scheme for foreign workers. Sir, the Minister announced recently that the Singapore Government would now allow companies operating abroad to bring their foreign workers back for training. We welcome this recent initiative. The regionalisation training scheme for foreign workers is to be administered by the Economic Development Board. However, there is a limit placed on the number of trainees each company can bring into the country. The limit is 100 workers or 10% of the company's total workforce in Singapore, whichever is lower. While accepting that there must be a limit, however, the 10% or 100 workers do not relate actually to the size of the foreign operations. I hope that the Ministry and the EDB will administer this scheme more flexibly, as some of the companies may need to bring back more than 100 workers or 10% of their local workforce in their initial stage of starting operations overseas. And if they are unable to train the right number because of this limit, it will only slow down the shifting of labour intensive operations out of Singapore, and I think that is not good for Singapore. Sir, I support the Government's move that the more labour intensive industries should be encouraged to move out so that workers can be released to higher value, higher skilled, high technology industries.”
“Sir, the foreign workers' levy helps to regulate the supply of foreign workers and prevents the dampening of the wages of Singapore workers. However, it is still a business cost which adds to the already high labour cost of Singapore. The manufacturing sector grew by only 2.3% in 1992 as a result of higher labour cost and operating costs exacerbated by lower demands in our main export markets. This slower growth and the actions taken by manufacturers to automate their operations and redistribute their activities in the region resulted in a drop in labour demand in the sector. Consequently, the manufacturing sector shed 13,100 jobs last year. May I request the Minister to consider extending a helping hand to our manufacturers at this difficult time by lowering the foreign workers' levy for the manufacturing sector, at least until the sector returns to normal? May I suggest lowering the levy by $50 for the first tier and $100 for the second tier? This would be most helpful. We must remember that the manufacturing sector is very important for Singapore's economy but it is facing a very difficult time. Our manufacturers export the bulk of their products against very tough competition at the moment from the other NIEs and the developing NIEs. Next, the training of foreign workers already in Singapore. According to feedback from manufacturers, one of the reasons for the low productivity in the manufacturing sector is the lack of training of low-skilled foreign workers. There is currently no incentive for companies to train these workers, as the companies are uncertain whether the work permits of the foreign workers would be renewed after the 2-year period. Secondly, the training of foreign workers does not receive any support from the Skills Development Fund.”
“Sir, the Singapore Government believes in open competition and in allowing market forces to improve the productivity and performance of the various sectors of the economy. Yet, the radio and TV industry has always been a Government monopoly. In the light of new developments in the radio and TV industry and the advent of satellite broadcasting, and the need for faster and wider access to new technology and world events, may I ask the Minister the following questions? First, does the Government plan to deregulate the radio and TV broadcasting industry and allow private radio and TV stations to be set up in Singapore in the near future? Second, does the Government intend to allow the general public, including homes, to receive direct satellite TV broadcast in the near future? Third, does the Government plan to operate a satellite TV station to broadcast Singapore TV programmes to the region so as to promote Singapore's role as the regional economic and telecommunications hub and, at the same time, keep Singaporeans working abroad posted on the latest developments here in Singapore?”
“Sir, the Straits Times of 13th March, 1993, reported in a headline, "Singapore top investor in Johor" according to the Deputy Minister of International Trade and Industry of Malaysia. The Republic has overtaken Japan and US, according to statistics. Here is the report: `JOHOR BARU - Singapore has overtaken Japan and the United States as Johor's top investors, according to Deputy Minister of International Trade and Industry Chua Jui Meng. He attributed the surge in Singapore investments in Johor to the private sector moving freely across borders within the Johor-Singapore-Batam Growth Triangle. Mr Chua said that over the past two years, Singapore had also emerged as Johor's biggest trading partner.' Sir, our efforts to regionalise our businesses and form an external economy can succeed only if we continue to enjoy political stability and economic development in the region. Singapore is actively involved in various regional cooperation programmes, such as APEC, AFTA and the Growth Triangle. Our future depends on the success of such cooperation efforts. May I request the Minister to give the House an update on the various programmes for regional cooperation and explain how does the Singapore Government intend to enhance such regional cooperation and what are the likely future political and economic implications or benefits for Singapore?”
“Sir, first, I must commend the Government on its efforts to provide excellent health care at affordable cost to the population. Today, I just want to give some suggestions and ask some questions concerning improving health care services. First, on the quality of service. I wonder if the Minister can enlighten this House on what is being done to constantly upgrade the services in hospitals, especially the restructured hospitals and with regard to outpatient clinics. It seems the waiting time is still fairly long. Having been there for check-ups, I found that even with appointments, it can range from half an hour to two hours waiting for your turn to see the specialist or the consultant. Is anything being done to improve the service to reduce waiting time? In the manufacturing sector, we practise "just in time". Maybe we could share some experience there. Second, it seems that patients referred to the outpatient clinics in the restructured hospitals by private practitioners or GPs are always channelled to full-paying outpatient clinics, regardless of their affordability. Is there any way patients can be given the choice to opt for a cheaper class of outpatient treatment by consultants or specialists? If so, how can they go about it? This is to make sure that proper care is affordable to lower-income people. We understand that the Green Paper by the Ministerial Committee on Health Policy will be out soon. Will the Minister enlighten us on when this may be expected?”
“Right now, we are quite clear about what the land should or should not be used for. We have divided them into housing, commercial, industrial, science parks and business parks. What about allowing for integrated development? Because with the changing needs, integration of a company's operation, integrating its office operations, its manufacturing operations, its procurement and other operations, makes a lot of sense at this time because it saves labour, it reduces administration costs, it reduces transportation between the different locations which should reduce congestion on the road and save transportation cost. So I am asking the Minister whether he would consider allowing integrated development on more sites in future and whether guidelines could be issued for such a purpose so as to improve efficiency and productivity. I would like to make a final request for a simple guide book to be issued for the public in view of this new initiative being taken by the Ministry, for example, on strata title bungalow lots. I think the public would want to know in a simple form what must be done before a member of the public can take on any development. Right now, because there are so many rules and regulations, members of the public are not well informed. At times, even the professionals are a little confused.”
“Thank you for giving me time to discuss "Relaxing Rules and Regulations for Property Development" under this cut. I think all Singaporeans agree that the Singapore Government has done a very good job in developing the country so beautifully and orderly. Last year, the construction industry, for example, continued to grow at 17.6%, far above the other sectors of the economy and contributing 1.1% to the total GDP of the country. The property development side is doing very, very well. Under such circumstances, I am wondering if the Minister would enlighten us whether his Ministry takes periodic reviews of rules and regulations concerning property development so as to avoid duplication, to improve coordination, to reduce delays and red tape. For example, what mechanism exists to coordinate the work of different Ministries, Departments and Divisions involved in planning and approving property development and how to simplify or reduce such rules and regulations? The second point concerns rules and regulations for industrial land use. With changing development in the manufacturing sector, the need for land usage for manufacturing has been changing over the last few years. No longer are manufacturing plants just production areas. New needs have to be met, for example, for R&D, for training, for in-bound and out-bound logistics, for procurement, warehousing, sales, marketing and so on. Has the Ministry taken a review of the existing guidelines concerning usage or even space utilisation in the manufacturing area? If so, what are the new guidelines? Also, is the Ministry looking into allowing integrated development to take place on the same piece of land so that the property developer can build office/industrial complexes on the same piece of land.”
“I understand the polytechnics and the Institute of Education are highly subsidised by 85% to 90% from Government funds. I would like to suggest that the Ministry of Education look into the possibility of providing subsidies to help industries set up such joint-training technical or training centres to enable technicians to be trained on the job and off the job. In Germany and in Switzerland, there is such a practice. I would also like to suggest that incentives also be granted for technical training. Such incentives could include expenses on training equipment qualifying for investment allowance, almost like those given for capital expenditure in industries, say, up to 50% of investment allowance. Also, maybe accelerated depreciation allowances for prescribed training equipment similar to the 100% write-off for expenditure on computers and R&D equipment currently given under the Income Tax Act. This scheme, of course, if it is extended to expenditure on approved training expenditure and training equipment, would definitely help companies to set up more such training centres. I believe that the training of skilled workers is a very, very important priority and I hope that the Government, especially the Ministry of Education, would take the initiative along with the private sector to look into this possibility of setting up more industry-based training centres. I believe it will help especially the small and medium enterprises who are unable to set up individual in-company training centres, so that the skills level of our workers can continue to rise in line with the Government's education programme to provide 10 years of basic education.”
“Sir, in the marathon economic race of the nations, the availability of a pool of skilled technicians has enabled many nations to move ahead of others. In Singapore, we are very fortunate that we have built up this pool of technicians and skilled manpower over the years and it has given us a competitive edge, especially in view of the efforts being put in by the less developed economies trying to catch up with us. Unfortunately, we also have a backlog of relatively unskilled and lowly educated workers whom we are trying to upgrade with all kinds of programmes. I would like to commend the Ministry of Education and Government for initiating 10 years of basic education programme to enable our future workers to receive at least a good sound basic education on which we can build skills to equip them for the demanding jobs of the future. We should target for all "N" and "O" level students in future to acquire higher skills so that industries can be upgraded and we can move further ahead of our competitors. But, to-date, most of these skills training has been provided in full-time institutions, although in the last few years more industry-based training centres have been set up. We have looked at the German and Swiss dual training systems and we are now trying to emulate them. In fact, last year, the SMA, along with NPB, NTUC, SICC, the Ministry of Education, sets up a council on apprenticeship training to look at this dual training system. And we are targeting to have at least 10% of the new workers, coming into the workforce every year, go into some kind of apprenticeship or dual training scheme. But in order to make it a success, we need to set up more joint technical or skills training centres between industry and the Government.”
“First, I want to declare my interest as ECICS non-executive director. On this issue of Export-Import Bank, I have earlier asked the Minister for it, but I did not get an answer. I will bring it up again. The US has actually got the Export-Import Bank in place to help finance companies going overseas with low interest and longer term financing so that they can take on projects overseas against keen competition. Such facilities are not available for our Singapore businessmen when they go overseas and they find tremendous competition from the bigger companies from the developed nations which have such banks. Of course, the US also has this Overseas Private Investment Corporation which is backed by the government to insure the investments and the contracts against political risks. I know of an example in Singapore, where a Singapore company actually secured a contract in China for oil-field development amounting to almost US$100 million. The businessman came back and he managed to convince the bank to finance him. But, at last, he had to give up the project because the bank would not finance him as there was no insurance available against political risks here in Singapore. So, finally, the contract was terminated by the customer and Singapore lost a US$100 million deal because of this. So I would like the Finance Ministry and the Government to look into the needs of such businessmen venturing overseas to take on contracts as well as to invest abroad.”
“Sir, on behalf of the business community, I would like to thank the Minister for Finance for the very generous package of tax incentives for both companies and individuals. The unilateral tax credit and the double tax deductions and other incentives are timely considering that we want to move companies out to regionalise their operations and also to help them overcome the higher costs of doing business. In particular, the property tax rebate is timely. We are hoping that, eventually, the property tax rate could be permanently lower so that the cost of operations can be reduced. I wonder if the Minister would take the initiative, along with his colleagues, to ask JTC and HDB to take the lead by passing on the cost savings in property tax rebate as reduced rentals to the business community. Concerning tax changes for companies, I have got one here that affects companies and individuals. Last year, in the SMA survey concerning regionalisation of companies, one major problem faced by companies is to persuade their managers to go overseas or to manage their overseas ventures. So companies would like to look at using share option as an incentive to encourage managers to go overseas. However, we understand that share option is taxable at the time the option is exercised, assigned or released. Quite often, when an employee exercises the option, he is taxed immediately and I understand that the financial burden becomes higher than his income can sustain. So I will ask the Minister to clarify if such share options, when exercised, would be subject to tax or not locally, or whether it can be deferred until the actual benefit is derived, such as the time of disposal of the shares rather than at the time of exercising the option. May I go on to the next issue of EXIM Bank?”
“We should also help local companies to build track records in the domestic markets so that when they go abroad, they can get into different projects in other countries, taking on new contracts. Maybe, we should consider giving them a margin of preference for getting Government projects so that they have a track record to go out of Singapore. I would also like to propose that we should study ways of lowering the start-up costs for new ventures, look at where they are unduly penalised by maybe high Government fees to start up new ventures. We should also explore the possibility of setting up an insurance scheme to prevent bankruptcy similar to the one that is administered by the Japan Small Business Corporation. This is very useful if we want to help the smaller firms to succeed and to promote entrepreneurship.”
“Sir, on top of all the incentives that are already in place for promoting local enterprises, I would like to propose a few items for the Minister's consideration. One of the areas that we want to help local enterprises succeed in is in skills upgrading and training because low productivity is a problem there. Let us try and see if we can do what the Swiss and Germans have been doing to help their local enterprises to set up training centres in-house or jointly for industry groups. They provide grants or tax incentives for the training facilities as well as for the operating and manpower costs. Local enterprises, especially the small and medium-size enterprises, usually are unable to set up training centres on their own. So we should try and encourage them to set up, say, within industry groups. But to do so, they require a lot of technical help as well as financial assistance. But this is an important area for us to consider because we want to upgrade the skills of our workers so that they can command higher wages without losing our international competitiveness. We should also look at providing more liberal financial incentives to help local enterprises come together under the fusion scheme which is being carried out by EDB. Let us help them to fund and bring in more fusion consultants from abroad. These consultants are usually retired top engineers who have worked in big Japanese or other companies and who are able to help our small companies develop jointly end-products so that they are not just dependent on MNCs as they are sub-contractors and parts suppliers. I think this will be very, very useful in the long term.”
“Profiteering is only possible when there is a shortage. I think older Members here may remember the very high price increases in 1973 and 1974 as a result of the oil shock. But that was not due just to the oil price increases. It was due to a shortage of many primary commodities, many food products. Rice, for example, was in great shortage and, I think, older Members will remember the "Eat More Wheat" campaign to try and get people to switch from rice to wheat. But the situation today is quite different. Commodities are plentiful, they are cheap, and we can get them from many, many sources. Thailand is not the only source for rice. Vietnam now is the third largest exporter of rice in the world. So there are many new sources. And we will make sure that there are sufficient supplies and we will continue to monitor prices. We will perhaps ensure that people price-tag their products. We will encourage the formation of consumer interest groups. As the Minister for Finance has already said, if necessary, we are prepared to support CASE to track price movements and all these measures, I am sure, will be more than adequate to ensure that there is no profiteering as a result of GST. The items on productivity and skills development, I will ask my Senior Minister of State to answer them.”
“But actually, according to our index - this index is not just something that some officers sit in the office and manufacture, we have thousands of points, literally thousands of points, where field officers go and check prices and collate prices in order to prepare these indices - over the last 12 years, the index for hawker food rose by an average of only about 1.9% per year, whereas in the same period the nominal wage growth was 8.9% per annum. If workers get more wages, surely you must concede that hawkers and others, hairdressers and other service providers, must also earn more, and part of that would be of course an increased cost of services. I think that there is a rather unrealistic expectation that people can have increased incomes with costs remaining stagnant. I remember being told by Herman Kahn once (he is dead, and he used to be in Hudson Institute), "there is no fun being rich in a rich country because everything is so expensive". I suppose we can paraphrase that by saying that there is no fun being employed in a country which has full employment. If you have a job in a country where most people are unemployed, you can get a lot of cheap services. But is that what we want? So we must be realistic, make sure that increases are backed by productivity, that the increases are not artificially fuelled by shortages, that whether we impose GST or do not impose GST, that markets remain open, that we import what we require from the cheapest source and keep the supply lines free. That way, we can keep costs down. And that is what we will do for GST. We will make sure that supplies are adequate, and, if necessary, increase the supplies. I do not think that there is any real danger of profiteering as a result of GST.”
“15 pm Inflation and GST, and cost of living have been mentioned by Dr Ow and also in yesterday's debate. Yes, our costs have been going up. But, as was pointed out yesterday by one of the speakers, all the evidence so far in most of the countries that have introduced GST is that GST itself does not contribute to an inflationary spiral, but it is how we react to the GST. If after all the offsets that we have announced, there is demand for increased wages to meet the GST, then I think we are on a dangerous track. And I hope we never enter into such a spiralling arrangement. But a lot of the complaints about increase in cost of living arise because people always only remember price increases. And people always have a rather romantic, idealistic idea of the past. They always talk about the times when you could have your hair cut for 70 cents, a bowl of kuay teow for 20 cents. Never, of course, focusing on the fact that they earn much more now than they used to earn. But the fact is, as the economy develops, as we progress, as we become more affluent and as the middle income group grows, costs of certain services will go up. The trouble is that everybody wants to have an increase in his own wages and have all his costs stagnant or static, which is not possible. In any growing economy, costs will increase. For example, I think there is an impression that food costs, ie, cooked food costs, have gone up tremendously over the years.”
“Labour cost will only be cheap if we have unemployment, and we do not want that. The shortage of labour means everybody is employed. Therefore, we should put the labour to better use. So while the process of adjustment is painful, I think we must look for other ways of adjusting rather than to try and artificially keep the price of our resources down. We will continue to monitor the prices of all the inputs that go into our various businesses and we will do everything possible to remove all the supply side constraints so that we do not artificially push up the prices of our resources. But we cannot, for example, remove the supply side constraint on labour by allowing a large number of foreign workers to come into Singapore. If we do that, we will depress the wages of our semi-skilled and lower-skilled people, or even our skilled workers. I do not think that is fair, apart from all the social and other problems that we will face, if we allow large numbers of foreign workers to come in. We will also continue to ensure that we have adequate and efficient infrastructure that meets the needs of our industries. We must also ensure that our taxes are low and we must make sure that investors are always given value for the money that they invest here. I do not think there is any danger of our manufacturing industry being hollowed out because of higher cost. If you look at Japan and Germany, their costs are much, much higher. Yet they are the leading manufacturers in the world, because they are highly productive in the way they use their resources. So all the other requests, like reduction of the second-tier on foreign workers levy must be seen in the light of what I have just said. 2.”
“In the case of manufacturing, for example, our survey two or three years ago to assess the input and output factors in manufacturing showed that, in fact, land cost was only about 2% of the total manufacturer's cost. Of course, land cost in the business increases to much higher levels in the service and other industries. But for manufacturing, it was relatively low. When JTC adjusts the land price, it adjusts it according to what, in fact, people are paying in the latest leases. This is a willing landlord and willing tenant kind of relationship, and they pay what they think they can afford. If we do not do that, we will not be putting land to the best use. But I concede that this process of adjustment is a painful process. But we have always had industries in Singapore that found it not viable to carry on any more and they had to close down. I think it was, in the longer term, for the good of Singapore. I can remember the time when we first started our textile industry. There were many investors producing just gray cloth, no bleaching or dyeing or anything like that, but they just weaved gray cloth and sold it. Land was cheap and labour was cheap. All of them are now out of business. If at that time they had come to us and said, "Look, do not increase the land price. Labour costs are going up. Try and do something about it", we will still be making gray cloth. It was a painful process for them to make the adjustment, but in the longer term it was for the good of the Singapore economy. This process is going on all the time. I think we must accept that. If we accept it and do all that is necessary to put our resources to best use, then our people will earn the kind of income that will bring us to the level that we desire.”
“In Singapore, the average return on their investments was 38% compared to 13% from the investment in all foreign countries. Last year, as Members know, we had a record commitment of $3.5 billion of investment in the manufacturing sector. All these will demonstrate that we are still competitive. Nevertheless, we cannot be complacent. We must pay close attention to cost and ensure that our total environment continues to be very competitive and attractive. We cannot afford to adopt a carefree attitude. But the answer to increasing cost is not to try and artificially keep down labour cost or land cost or the cost of resources. If you want to continue to enjoy increasing incomes and higher standards of living, people must earn more. The way that they can justify earning more is, of course, to be more productive. The answer then is to put our resources to the best use possible, whether it is labour or land, or any other resource. We must, in order to ensure that it is put to the best use possible, subject it to the market test. For example, land cost. I know that many Members have pointed out that JTC has increased its rent and, in some cases, it has increased maybe as much as 50%. I would urge Members to look at the actual absolute figures. Where the percentage increase is very large, you will invariably find that the old rents were very low. They were completely out of line with the market rents. Of course, the investor who has been used to very low rentals for many years is bound to be very unhappy when rentals are raised. That is quite natural. But I think they have to look at the total cost of doing business.”
“I would like to come to a more important subject, that of business cost and inflation as a whole. Dr Ow has quite rightly pointed out that our unit business cost has been going up and that our competitive position vis-a-vis the other NIEs is being reduced. He pointed out that the major component is the labour cost, and Mr Chua also pointed out the cost of land. As long as we are developing, and as long as the international economy is developing, we must expect that there will be some firms that are doing well now which will find difficulty and some may even have to close down. This is a changing situation. It is not static. Firms find new opportunities and firms find that areas in which they were strong at one time have ceased to be areas where they can continue to operate. I think this is something that we cannot stop. Secondly, we can never expect that our cost of labour and our cost of land will be the same as that in countries where they have more land and many more people. We have to be careful. As we track our competitive position it is not just merely the cost of labour or land per se but our overall competitive position, which is a function of many, many variables. Labour is one element. Of course, land and the other elements such as the efficiency, adequacy and quality of the infrastructure, the political climate, and the consistency of Government policies. All these are very important factors. In spite of our higher labour cost and higher land cost, Members will know that in the 1992 world competitiveness report, we were still ranked No. 1 among 14 NIEs. The fact that we are still competitive is also reflected in that the US manufacturing firms enjoyed an average return in Singapore much, much higher than what they enjoyed in other countries.”
“We do not want to create a situation where we give so many incentives and so easily for investment overseas that it becomes more attractive to invest in other places than to invest in Singapore. That will be very counter-productive. So at least in the initial phases the Finance Ministry is quite right in insisting that they would approach this on a case-by-case basis. Whether the cases that are approved are less susceptible to hollowing out or round tripping, that would be assessed. There may be no guarantees, but certainly this is an aspect that will be looked into before a particular project or investment is approved. So I would say that for the present moment it would be wiser to stick to the case-by-case approach. Mr Robert Chua has circulated the findings of a survey by the SMA. I will look at them, but I can make comments on some of the points he has raised regarding, for example, training of local managers and local workers for projects overseas. We already have a programme to train foreign workers in the Singapore operation so that when the Singapore investor invests overseas he can use these trained workers in the overseas operation. We have given incentives such as grants to offset the foreign workers levy up to six months. This scheme has been in operation for Batam. It can be extended to others. To train managers, this has already been done. But, at present, each company will have to pay for the cost of training such managers. Again, I would like to sound a note of warning. We must not become so over-enthusiastic about investing overseas that we throw all our resources in such a way that those who go overseas get much more than those who invest in Singapore. We should never bring about such a situation.”
“On the suggestion of the Singapore Government agencies jointly developing industrial estates and towns overseas which can be the place where Singapore and ASEAN investors can invest, I am not so sure whether this is a good idea. JTC has invested in Thailand and elsewhere, but not primarily for Singapore investors. I am not sure whether it is a good idea for all Singapore investors to go into one particular industrial estate developed by a Singapore agency. They should be all over the place to make use of the various advantages that different places offer. But all the same, I will give this idea further thought. A suggestion was made by Mr Leong Horn Kee that we should encourage local companies and GLCs to form groups to go overseas. I will ask them to take note. But one of the reasons why the GLCs in Singapore have been far more successful than Government-owned operations elsewhere is that we just leave the GLC management to get on with their work without too much interference from the Government. They must be able to assess for themselves what kind of partnerships to enter into and what will be to their advantage. So while we can make general statements, we must allow the management of each Government-linked company to decide for itself what is best in the interest of the operation. I will pass on the suggestion and leave it to them to decide. Mr Chay said that approval of various incentives to invest overseas or explore opportunities overseas should not be done on a case-by-case basis, but on a transparent across-the-board basis. Certainly, we can make the criteria transparent, and I think we should. But it does not follow, therefore, that it should apply automatically. I think it is very important that when we come to fiscal incentives we look at each case.”
“EDB, in fact, is in a much better position to assess how to help local industries to go overseas and still maintain this contact with the Singapore operation. On the other hand, the Trade Development Board, which is responsible for the promotion of export of goods and services, also can help. Very often, when they take missions overseas to explore new markets for Singapore products and services, the businessmen who go in the TDB mission do identify investment opportunities. And if they do, TDB, together with EDB, will try and help these firms to bring their investment into fruition. In the overseas centres where we have perhaps EDB, TDB and the embassies operating, yes, I think they should work together. A suggestion was made that all these Government agencies and embassies should contribute to build up knowledge of the overseas markets not only in terms of the markets for the Singapore products, but also in terms of investment for Singapore investors. This is already being done and, in fact, the Trade Development Board does collate information from many, many sources, not only the embassies and other Singapore agencies, but also from other commercial agencies as well as sources of the Government of the other country. They collate this information into guides which are used by Singapore exporters and I am sure they will also be useful for potential investors from Singapore. We will let both the TDB and EDB continue to deal with this matter and in the light of experience see whether changes need to be made so that there is no overlapping or duplication of work.”