Goh Chok Tong
Singapore
“This is what your father said during the debate on the Nassim Jade episode: "The proudest thing (for your mother) are her three children − upright, well-behaved and honourable... They are brought up straight, they are likely to stay straight. It is like, as I have said, a code of honour. If you break that code, you have brought shame...”
“They are not just the headaches of the Prime Minister and his team. They are not just the headaches of the PAP. They are also the headaches of the Workers' Party and every Singaporean. On their own, the Prime Minister and his team cannot resolve them. They require us, the Members of Parliament, and the people, to work with them.”
“The national financial education programme, MoneySENSE, continues to work with partners such as the Association of Banks in Singapore (ABS) and the media to educate consumers on the responsible use of credit facilities and the factors consumers should consider before taking on debt. PROPERTY AGENTS' COMMISSION RATES 2.”
“Mdm Halimah Yacob asked the Minister for National Development (a) in 2008, what is the takeup rate for the interim rental housing scheme that is provided to those without homes; (b) what are the reasons given for rejections under this scheme; (c) whether the rental rates were affordable; and (d) how many applicants had rejected the rental…”
“MAS is working with relevant government agencies and stakeholders to study the issue carefully, and to consider the various proposals that have been raised, including the feasibility of introducing a no-fault regime.”
“Mdm Cynthia Phua asked the Minister for National Development (a) if he will provide an update on (i) the use of sustainable alternative materials in the construction industry and (ii) the cost of construction materials in view of increasing inflation rates and rising oil prices; and (b) how will the high material and labour cost impact on…”
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“The Long Range Energy Conservation Programme could have the following objectives:- (1) To bring about a change in political and electoral attitudes regarding the value and use of energy; (2) To work with industry to increase the efficiency in the use of energy, i.e, reduce energy input per unit of output; and (3) To exact greater effort to reduce retained oil imports. The Conservation Programme could include the following elements:- (1) Differential pricing to discourage the excessive use of energy; (2) Selective mandatory energy-saving measures such as the maximum amount of lighting for advertisements, or minimum insulation standards for air-conditioned buildings; (3) Building codes aimed at energy conservation; (4) Financial incentives for investment by industries in energy-saving equipment; and (5) Financial or fiscal incentives to promote the setting up of skilled, labour-intensive industries requiring relatively smaller energy input per unit of output. Sir, I am not an expert on energy conservation and hence could only touch sketchily on some points which I think require further attention by specialists. I hope the Development Division will formulate such a national programme for energy conservation. I am sure they have the energy.”
“Minister for Finance whether such a programme has been or is being worked out; if not, whether he would consider initiating such a programme. There are two main aspects to a long range energy programme for a country: (1) developing new sources or alternative forms of energy, and (2) conserving the use of energy. Given a small economy and a smaller geographical area, the first aspect is of less relevance to us. We have no oil, shale oil or coal reserves. True, we have plenty of sunlight, but I doubt whether we have the energy and resources to undertake primary research into this area of energy resource. Take the case of Japan, for example. The financial commitment of a MITI (Ministry of International Trade and Industry) sponsored "Sunshine Project" inaugurated in July 1974 envisaged a minimum expenditure in constant prices of Yen 4,260 billion (or about S$37 billion) on research and development work for the period 1974 to the year 2000. (The main areas of research under the "Sunshine Project" are solar energy, geothermal energy, coal gasification and liquefaction, and hydrogen.) I doubt if we can afford that kind of expenditure on research into new forms of energy. Nor is it necessary. Rather, we should concentrate on secondary research to keep abreast of current scientific and commercial development in the use of new sources or alternative forms of energy. The second aspect of a long range energy strategy, that of energy conservation, is what we should concentrate on. We could call it a Long Range Energy Conservation Programme. It is long range because, firstly, any conservation programme has a long lead time, and secondly, it must be followed through so that it becomes a way of life.”
“Sir, I beg to move, That the sum to be allocated for Head X be reduced by $10 in respect of subhead CAA 1101*. (* The same amendment also stood in the name of Mr Phey Yew Kok). Sir, Members of the House are well aware of the political, economic and social consequences of the sharp increase in the price of oil since 1972, and the likelihood of further increases. I shall, therefore, not touch on this aspect, but instead on how we could alleviate the effect of high costs of energy in the interest of economic development. Before I do that, Sir, let me briefly explain why I am taking up this subject under the subhead "Permanent Staff". Development Division, under Head X, Ministry of Finance. Some months ago, it was reported in the newspapers that the Ministry of National Development was studying the design and construction of buildings with a view to cutting down unnecessary heat absorption from the sun so that expenditure on air-conditioning, for example, could be reduced. The Public Utilities Board has also revised its electricity consumption tariff to penalise the high consumers so as to cut down the use of energy. More recently, some hon. Members of the House have suggested that the Ministry of Science and Technology undertake research into the capture and use of solar energy, as we have plenty of it. All these actions and suggestions are sound, but the point I wish to make is that there is no nationally coordinated effort to work out a long-range energy strategy or programme to mitigate the effect of the high price of oil. I think the Development Division of the Ministry of Finance is the best place to work out such a national programme, it being responsible for the economic development of the country. I would like to know from the Hon.”
“Sir,I am happy with the partial reply given by the Minister for Health. The first reply was satisfactory. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The time allotted for Head L having expired, the following amendments were not proceeded with:”
“Sir, I beg to move, That the sum to be allocated for Head L be reduced by $10 in respect of subhead BAA 1101. Sir, hospitals are not areas which I would normally like to tread nor is it prudent on my part to cock a snook at the guardian of our health. But when the addition of two posts under subhead BAA 1101 increases the appropriation by over $2 million, I am interested to know if million dollar men are being created in the surgery of the Singapore General Hospital. Sir, the physical creation of Singapore's own bionic man may be a mythical project, but let me hasten to draw attention to a more serious and down-to-earth problem in the hospital. I read with great concern the reported resignation of 100 Government doctors in a New Nation editorial 23rd February, 1977 has called the mass resignation and emigration "mob hysteria" in a recent talk to the Rotary Club. Unlike the Member for Kim Seng, I am a layman in medical affairs but even a layman knows that health service is labour-intensive and its quality hinges on the availability of suitably qualified personnel, particularly doctors. With due respect to the press, laymen also know that press reports based on so-called reliable sources often turn out to be unreliable. Could the Hon. Minister for Health therefore enlighten us as to the true situation regarding the reported mass resignation of doctors from the medical service and whether or not the problem of "mob hysteria" exists. Having asked the question, Sir,I hope I would not end up in a hospital.”
“The end result is lower labour costs with the same real purchasing power after tax. This leads us to the final tantalizing question. Can the Government afford to give away $26 million? I shall leave it to the Minister for Finance to answer the question! 3.45 p.m.”
“Some countries like Canada have introduced indexation to income tax reliefs to ensure that these reliefs remain meaningful when cost of living goes up. I suggest the Ministry of Finance study this possibility. Let me briefly buttress our argument for a tax rebate - for that is what it is if personal reliefs are increased - with economic arguments. The Government has vowed to make the economy grow fast again, at least 6-8% in real terms. The Government has also emphasized the desirability of keeping costs down, including wages. First, if personal reliefs are increased by $1,000, the tax loss to Government is $26 million, By the same token, the money pumped into the economy is $26 million, assuming this entire amount is spent by the recipients. This should help to stimulate the economy. With economic growth, the tax collections should increase and hence the ultimate tax loss to Government will be less than $26 million. The tax rebate of $26 million will not be inflationary as we are an open economy. It is instead expansionary. Second, to the individuals it is real disposable income that matters, not salary, not even take-home pay. If the real disposable income is inadequate to sustain a minimum expected level of living, there will be pressure by employees to have their wages increased. Tax is an important element of cost. So long as the Government can afford it, it is better to have as low a tax rate as possible so that the overall wage required by an employee will not be artificially pushed up. It is better to give a tax rebate, assuming Government can afford it, and have a lower NWC annual increase for the taxpayers who benefit from such a rebate, than to give a higher NWC annual increase in order to achieve the same real disposable income.”
“The severe beating taxpayers have been given despite a rise in monetary income is because inflation increases monetary earnings and forces it upwards into the higher tax brackets of a progressive income tax structure. I have already demonstrated its disastrous effect on both the lower income and the higher income groups. We have seen that the biggest percentage increase in tax liability comes at the lower end of the income scale, while the tax-bite gets progressively bigger with income increases. The distribution of tax burden by income classes as originally envisaged is, therefore, altered in the process of inflationary increases in income with `See Appendix II, cols 907-8 unchanged tax rates and personal reliefs. I wonder if the Minister for Finance is aware of this. Sir, the underlying assumption of a progressive tax structure is constancy in the purchasing power of money. If the purchasing power of money changes rapidly, the tax structure and personal reliefs must be reviewed. I am not asking at this stage for a lowering of tax rates as Government must raise enough revenue to finance its ordinary and development expenditures, besides having to build up reserves for a rainy day. Like the Member for Jalan Kayu, all I am asking is that a thorough review be carried out to assess the damaging work of the unseen, unwelcome and unfeeling tax-man - inflation - and to find a solution to counter it. With due respect to the Minister for Finance, I think all of us tax-payers have been diddled, not by the Minister, but by inflation. Let me ask, Sir, have we built a case for personal reliefs to be increased by, say, $1,000? I submit we have if the quantum of personal reliefs as originally allowed in 1 948 is intended to apply in real terms to today's living environment.”
“In current prices, income has increased by 42% in the four-year APPENDIX - COMPARISON OF TAX LIABILITIES AND DISPOSABLE INCOME BETWEEN 1972 AND 1976 (Cols. 907 - 908) period 1972 to 1976, but tax liability has increased by 99% for Case C, 165% for Case B and 6950% for Case A! Sir, I have talked of current prices and real income but in truth I am not a "real" economist. That distinction belongs to my better qualified colleagues from the other side of the House, but when the taxman bites I can feel real pain. Mr Speaker, Sir, I would not have been so painstaking in trying to quantify the taxman's bite but for an ominous note in page 2 of the Memorandum on the Main and Development Estimates of Singapore. I quote: `In FY 76 income tax collections are expected to reach $1,200.0 million which represents a growth of only 34% over the actual receipts for the previous financial year. The current growth rate is by far the lowest since FY 71 when the growth rates ranged between 24.3 to 52.8%. The present low growth rate is largely attributable to the slow economic growth in the preceding year. Also, several tax concessions have been granted recently but tax rates have remained unchanged for some years.' I repeat, "tax rates have remained unchanged for some years." Sir, before our tax boys get any ideas, I submit that tax rates must not be changed upwards in the next few years so long as the Minister expects inflation to take place at about 5-6% per annum, as he informed us on 24th February. I have cautioned earlier in the debate on the President's Address that whilst inflation may be good for the businessman, it can crush the poor and the salaried workers. I repeat that warning.”
“The employee's salary is, therefore, being raised by 42% from 1972 to 1976, on a compounded basis. This is less than the increase of 45% in the Consumer Price Index. Thus, real income has actually fallen by 2.1% despite the passage of time and NWC increments and despite the growth in per capita GDP. Now, let us examine the effects of inflation and the NWC increase on taxes. I have prepared a table based on three income levels: Case A refers to the lower income group with a monthly salary of $500; Case B is for the middle income group with a monthly salary of $1,500; and Case C the higher income group earning a monthly salary of $4,000. These are income levels in 1972, our base year. Sir, I shall not bother the House with the details of the calculations which I shall attach as an Appendix* to my speech for purpose of recording in the Hansard, but only give the results of the analysis. On the basis of a four-member family and the personal reliefs as allowed, and adjusting the 1976 incomes of these three groups (the 1976 income has been increased by 42% from 1972) to income at 1972 prices, we find that while monetary income has grown by 42%, disposable income in real terms (income after tax at 1972 prices) has actually decreased by 3.5% for Case A, 6.8% for Case B and 11.8% for Case C as opposed to a fall of 2.1% before tax. The average tax rate for the three cases, i.e. tax payable as a percentage of income, has jumped from a negligible 0.03% to 1 .5% for Case A, the lower income group, from 5.4% to 10.1% for Case B, the middle income group, and 19.9% to 27.9% for Case C, the higher income group. But now, let me give you the real shocker.”
“But if we relate the $26 million to income collected from individuals only, and not companies, the percentage will probably go up to about 8-10%. This is, of course, a significant percentage. The Minister, therefore, has a good defence here, but only fairly. As for the shrinkage of the tax base, I agree it is salutary for the population to be reminded that the services provided by the Government must be paid for. But I would simply ask at this stage whether the affected taxpayers at the lower income scale should be paying tax in the first place! The answer will depend on whether their real income has actually gone up since the time when the present quantum of personal reliefs was originally worked out. When I said my colleagues' argument did not cut deep enough, I did not mean to be disrespectful. I was simply having in mind their not quantifying an argument which could be quantified. Now I have done this, and it shows some disturbing results. As we are discussing income tax, the relevant measure for inflation is the Consumer Price Index and not the Gross Domestic Product deflator. The Consumer Price Index as at December 1976 was 144.9, down from a peak of 150 in February 1975. Its base period is November 1972. By coincidence, the National Wages Council made its first promulgation in 1972. The recommended wage increase of 8% for that year. however, will be ignored by us in our calculations so that we have a common base year of 1972. In 1973 the NWC award was 9%, with certain offsettings. In 1974, the recommended annual increment was $40 plus 6% pIus annual increment or $40 plus 10% for those without annual increment. Let us assume an average increase of 15% for that year. to be on the generous side. In 1975 the NWC increment was 6% and in 1976 7%.”
“Mr Speaker, Sir, I rise to speak with some trepidation, as not only do I stand the risk of being bruised by superior counter fire power, but also the possibility of being ruled out of order for repetition! But conscience speaks louder than fear and it shall be my guide. I am going to speak on a subject which has been raised by several Members and commented on by the Minister for Finance during the debate on the President's Address a few weeks ago, as I feel that the argument did not thrust deep enough and the answer offered did not parry the attack sufficiently. Sir, some of my colleagues in this House have argued for an increase in personal and earned income reliefs from income tax on the ground that the quantum of reliefs was fixed about 30 years ago whereas the cost of living has risen significantly since then, particularly over the last few years. This argument was basically sound but it was not carried far enough. The Minister for Finance warded off this argument by saying that an increase of $1,000 in personal reliefs would mean a loss in Government revenue of some $26 million and a narrowing of the tax base, i.e, the number of people paying income tax. This line of defence is correct but not impregnable. He also added that while the cost of living has gone up, so has the per capita income which increases the ability of the taxpayer to pay income tax. But is this really so? First, let us take the $26 million potential loss. $26 million is a lot of money from an individual's viewpoint, but what is its significance to the Government? Income tax expected to be collected in the fiscal year 1977 amounts to $1.38 billion, and $26 million is only 1.9% of this.”
“If sufficient shipping space is provided for the Westbound traffic, there will naturally be surplus space Eastbound. For the Australia/Singapore trade, there is a deficiency of containerizable Southbound cargoes to Australia. If handling costs in Singapore are kept low, as they could because of efficient operations, Eastbound ships in the Far East/Europe service could use their surplus space to carry Europe to Australia containers for transhipment in Singapore onto Southbound ships in the Australia/Singapore service. Trade between Mediterranean ports and Australia could similarly be transhipped in Singapore. So too could cargoes moving from Australia/New Zealand to West Asia. We should, therefore, strive to be a world transhipment centre and not just rest on our laurels as a regional warehousing and transhipment centre. Mr Speaker, Sir, I support the motion of the Member for Ulu Pandan in expressing our thanks to the President for his Address. 3.35 p.m.”
“No doubt, expenditure beyond the requirement of CPF will have to be incurred. Government should bear this extra cost, if necessary, and not let this be the reason for preserving the status quo. A Minister's judgement is no better than his information. In other words, wrong economic policies through lack of prompt and reliable data are more costly than the expenditure incurred on the collection of such nationally important statistics. Turning now to maritime and port services, I note with surprise that the Ministry of Communications is developing new transportation technologies and facilities to "regain Singapore's position as the regional warehousing and transhipment centre". I thought we have always remained pre-eminent in our position as a regional transhipment centre. I never realized we have lost our status! But let us be even bolder and more imaginative and not stop short at being just a regional transhipment centre. We can, because of our geographical position, be an international shipping interchange or a world transhipment centre. Shipping systems have been revolutionized over the last few years with the advent of containerization. Ports can become obsolete if they do not keep up with development in ship designs. Investment in containerships exceeds investment in port facilities. With such expensive investment in ships, shipowners must maximize usage of the ships through fast turn-round and high load factors. Singapore can help shipping companies achieve this. I shall give an example of how we can become a world transhipment centre. The Far East/Europe trade is characterized by imbalance - more cargoes move from East to West than the other way round.”
“Job-hopping is not an easy problem to tackle, for whilst we should discourage job-hopping, defined simply as too many frivolous job changes in too short a time, we should not strangle genuine labour mobility. In an expanding economy with new industries being set up, labour. like all resources, must be efficiently allocated. The market mechanism, the invisible hand, generally allocates economic resources amongst competing uses effectively. The more perfect the market mechanism the better. Job-hopping is, therefore, a consequence of too rapid an economic growth more than a cause of economic ills. Let me make it clear that I am not supporting job-hopping - I am against it, but if job-hopping becomes a national disease, we should not just stop it through legislation - we should look into the cause of it. Labour turnover should, therefore, be monitored. I am not sure that this is being done. I would like to suggest here a source for improving the timeliness. range and quality of labour statistics. As all employers have to make Central Provident Fund contributions on behalf of their employees, this is a good source for labour statistics. This source has not been sufficiently tapped and much labour force data which could be a by-product of CPF collections have to be separately collected. Admittedly, the CPF Board does not require labour statistics in the administration of its responsibilities and is therefore understandingly reluctant to incur expenditure for its own account to capture and process labour data for use in the formulation of national labour and economic policies. I suggest the Government look into the possibility of using the CPF machinery to compile salient data on labour for use in economic and manpower planning.”
“Singapore has always recorded a chronic deficit in merchandise trade. This is not worrying per se as we have no natural resources and must import most of the things we need. What is worrying, however, is the continuous growth of the deficit. Our merchandise trade balance recorded, for example, a deficit of $3.0 billion in 1972. In 1975, it has doubled to over $6.0 billion. The deterioration can be partly attributed to world-wide inflation and the sharp increase in crude-oil prices. But it also signals the need to pay more attention to exports. Overall, however, our balance of payments is healthy. It has a surplus of $700 million, for example, in 1974, though this was reduced in 1975. The strength of our international payments situation is reflected in the strength of our currency. But the strength of our balance of payments is derived mainly from the capital account, owing principally to the inflow of foreign investment and foreign funds. But we cannot always expect foreign investments to flow in in abundance. The point which I wish to make here. Mr Speaker, Sir, is that as a people we must export in order to pay for our imports. We cannot always depend on capital inflows. If Japan, which has relatively little natural resources, can have current account surpluses, so can we, provided we work hard for it. I suggest, Mr Speaker, Sir, that Government highlights the performance of our domestic exports just as we always highlight economic growth rates. I move now to a problem associated with economic growth - job-hopping. I note that official disincentives are now being considered to discourage job-hopping.”
“Mr Speaker, Sir, I fully support the Motion moved by the Membei for Ulu Pandan in expressing our thanks to the President for his Address at the opening of this Parliament. The general tenor of the President's Address and the various ministerial policy statements is that we must work even harder, keep costs in check, be vigilant, so that we may achieve a modest economic growth rate of 6-8% per annum. Few Singaporeans, if any, should dispute this and the underlying philosophy of the Government, "From each his best, to each his worth", as we in Singapore are like men in a boat rowing upstream. We have to keep on rowing just to remain stationary. To make progress we have to row with all our might. If we stop rowing we will be pushed back by the current. This is the inescapable fact of life of nations without natural resources. The Minister for Finance in his addendum to the Presidential Address has not stated whether the 6-8% expected growth rate is real growth or growth in monetary terms. I presume it is the former. Still, it would be interesting to know what sort of inflation rate has been allowed for. The world is fearful of another bout of inflation. Inflation hits different people with different force. It may be good for the businessmen but it crushes the salaried employees and the lower income group. In reviving the vitality of our economy, it is my hope that this is being done without the orchestral accompaniment of inflation. We also do not know whether the expected growth in the country will be export-led or generated mainly by domestic pump-priming. We know, however, that the Government will make finance for exports more easily available. This is a correct step. It is important that future growth in Singapore be export-led.”