Heng Chiang Meng
Singapore
“Mr Speaker, Sir, whilst I agree with the approach taken by the Government, especially when I personally think that the economy may well recover in the second half of next year, I would like to ask the Minister whether he could take steps to rectify the situation on the ground, of which I am very deeply concerned.”
“Witness the prices of PCs when they first appeared and the prices of PCs now. Also, without an extensive infrastructure, motoring with a hybrid car will cause more inconvenience for the owner.”
“Sir, I did address you as Chairman. I only once, earlier on, addressed you as Deputy Speaker. Most of the comments I am going to say have been covered by the two earlier speakers. I just want to add that I understand that Newater is biologically very clean.”
“I dare say that Singapore is kept litter-free by the street cleaners, and not because there are no litter bugs. So the real long-term solution is to inculcate good environmental behaviour as part of our habits.”
“For example, one way could be to rank the distance of each household from the school, and the ranking to be used to allocate the available places based on the household nearest to the school having the pole position.”
“Sir, I find it difficult to understand why the Senior Minister of State should bring in other people's arguments, like people being sick, one parent looking after so many children. We are talking about distances away from the school. Let us not bring in other factors. But, in any case, her mind is already made up.”
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“Sir, I would like to urge the Minister to look into the implications of this policy, especially at this time when we are encouraging the private sector to be our engine of growth for the economy. We have here apparently an area of conflict. On the one hand, it is right that we should have a fair system; and Sir, tendering is a fair system! On the other hand, we should not rob an entrepreneur's ability to profit from his foresight because it is this foresight and willingness to dare which forms the foundation of the private sector. Take away that incentive and you will take away the rationale for private enterprise. The issue, Sir, as I see it, therefore is, what price this foresight? Hence I would like to suggest that the current practice of tendering permits a concession such as a discount of the tender price for the person who first brought up the idea. The Second Minister for Law (Prof. S. Jayakumar): Sir, I am replying on behalf of the Minister. Sir, the Land Office cannot sell State land on a first-come-first-served basis simply because the first applicant may not be the best developer from the viewpoint of overall development. We will have to ensure that our scarce land resource is utilized in the most beneficial manner. It is therefore desirable to subject State land to public tender so that the availability of these valuable sites is made known to a wider circle and everyone, including businessmen, private entrepreneurs, companies, multi-national developers, etc, has an opportunity to bid for the land. In this way of open competition, tenderers with the best projects could be obtained. Tendering would also prevent allegations of favouritism or corruption.”
“Sir, I beg to move, That the sum to be allocated for Head S be reduced by $10 in respect of Subhead SA-01-1100 of the Main Estimates. Mr Chairman, Sir, I understand that it is the Land Office policy to alienate State Land by tender. If a site is capable of independent development, there is no doubt that this is an equitable procedure, as it gives all interested parties to bid for limited available sites. After all, when the Government decides that a piece of land is suitable for development for whatever use, all interested parties should have equal opportunity to that site. But, Sir, the problem arises when an individual businessman finds that a piece of State land, totally unused for any discernible purpose, has potential for a good business venture. He then applies to the Government for use of the land. After applying for approval to lease the land, after all the hassle that normally comes with such application, after being pushed from pillar to post, from department to department, he probably would be told that even if the site is suitable, that is, if the Government is willing to alienate the land for that particular use, the Government would tender out the site to all interested parties. Sir, entrepreneurship involves opportunities. The successful entrepreneur is one who can see opportunities for profit while others do not, and who dares to act in accordance with his foresight, that is, put his money where his mouth is. If after all the time, effort and money expended into developing a germ of an idea into concrete plans for implementation, all that an enterprising businessman gets is a tender form. I doubt, Sir, that we will see much entrepreneurship in this area.”
“They were enacted for an economy which was leisurely when international travel was by sea, telephones were scarce, overseas calls were expensive, fund transfers were mainly by postal orders and capital flows were a trickle. We have now grown into a manufacturing, communications and financial centre, very much tied into the international grid. Communications and computers have enabled us to transact businesses with our counterparts in far-away countries as if he is only next door. Capital flows now, Sir, dominate the financial markets. Technology, particularly information technology, is becoming more and more dominant in the way we conduct our businesses, be it in manufacturing or services. Sir, let us make no mistakes about it. We are already part of this brave new world and we will become more and more a part of it down the road. Yet, Sir, look at our tax structure. It is still the antiquated system suitable for the past, albeit with tinkering changes and amendments along the way. Sir, it is very much like a computer system. At inception, it was the state of the art. As the market changed, it was amended to meet these changing demands. For a while, together with the new amendments, it worked. However, after some time when subsequent amendments, especially to the software, became too much, the overall system because overloaded and broke down. I think we are fast approaching the same point with regard to our tax system. There are just too many contradictions. I would therefore urge the Minister to initiate a comprehensive review of our tax structure and system so as to formulate a new tax structure more suitable to the modern and future Singapore. 12.57 pm”
“It has permitted the purchases of properties, gold, stocks and shares with tax-free money, thereby artificially encouraging investments in this area, not for its own sake but as a tax shelter. 3. It has encouraged the conspicuous consumption of expensive medical services. 4. With the latest topping-up scheme, another tax shelter is yet created. Hence, the allocation of private sector financial resources has in some way been affected by the tax-related CPF regulations and not entirely considered on market economic factors. At the same time, Sir, these financial flows leave residual balances with the CPF because the outflows for approved utilization from the CPF are only a fraction of the inflows. Therein lies the nub, Sir, because these flows only encourage the public sector coffers to get larger and larger. Where then are the funds for the private sector as an engine of growth? May I also suggest to the Minister, if he is concerned with insufficient tax revenues, that he examine closely into how the CPF reduces its revenues. Perhaps he could also tell us who the main beneficiaries are. After all, Sir, common sense tells me that usually the rich benefit more from tax planning and tax shelters than the not-so-rich and the poor. Sir, there is a reason why I have brought up all these bits of tax issues and anomalies. Tax is more than a financial issue. Because money and tax is central to modern living, the tax system and structure affect us economically, morally, socially and now, with the latest baby budget, even privately. As a local wag says, it is from the boardroom to the bedroom. Our tax laws, Sir, were first enacted for a little trading colony.”
“Last year, I spoke on the funds that Singaporeans have deposited abroad because our tax system encourages them to do so. At the same time, we spend much effort to attract funds here. Surely, Sir, this is a lunatic state of affairs. I have already submitted a Question for Written Answer about the tax that we make from such interests. Therefore, if revenue lost is affordable, I would like to appeal to the Minister to consider the abolition of tax on interest in Singapore altogether. The Minister proclaims that he wants to develop the fund management industry in Singapore. Yet the Government's policies do all they can to stop the development of a domestic fund management industry. The monopolistic position of the CPF resulting in the near absence of long term investible funds and the tax treatment on transactions on local stocks and shares are cases in point. And, Sir, let me point out that the development of a domestic industry is paramount if we wish to develop into a world class fund management centre. With the exception of Switzerland which, for very special reasons peculiar to itself, major fund management centres in other parts of the world have developed only on the back of a strong domestic fund management base. Unless the Minister comes out with some concrete measures to encourage the growth of the domestic industry, Sir, I am afraid that the Fund Management Centre would just be a beautiful concept on paper. Let me come to the biggest tax anomaly of all - the CPF. While the Minister is concerned about falling tax revenues and budget deficits, he has created the biggest tax shelter and tax planning vehicle out of the CPF. Let me list the ways that the CPF has affected out financial flows. 1. It has askewed monthly salaries in favour of bonuses. 2.”
“Traditional entrepot trade, ie, regional third country trading, is already a sunset business as neighbouring countries bypass Singapore. With advances in telecommunications and cheaper travel costs, it is now very easy to trade in Singapore and book transactions elsewhere. As I said earlier, it is already happening in the oil trading. If we care not, Sir, trading in other types of goods will more and more follow the same route. In the end, we may lose both the traditional entrepot trade and the new business of third country and counter trading. Promotion of Services Sir, before I touch on this area, I would like to declare my interest as a bank employee. The Minister said that we have a comparative advantage in knowledge-based and skill-intensive services. I agree with him and would like to add, particularly, banking and financial services. After all, if the market talks about currency traders earning $1 million or thereabouts per year as employees working in a bank or a financial institution, or if we read more news about major international financial institutions willing to pay hundreds of thousands of dollars to have Singaporeans working for them in New York, then surely this is proof that Singaporeans must have some comparative advantage with the best in the world in this area. Hence, one would expect that the Minister would do all he can to encourage this type of business in Singapore. Here, I must add, Sir, that he has. Over the years, much has been done to stimulate the growth of the financial services business in Singapore. But, Sir, for the foreigners, ie, the foreign depositors, the foreign investors, the foreign fund managers and all types of foreigners except the locals. Let me give some examples to illustrate this point.”
“I guarantee him that it will be an eye-opener. The few businesses that have succeeded despite the odds have succeeded not because of the incentives given to them. Unfortunately, these are too few to form a base. Promotion of Trade This is not new as the Minister last year identified third country trade in com- modities and countertrade as areas of emphasis in our economic restructuring. These are more sophisticated forms of entrepot trade which our traders have been experts for a very long time. Now it suddenly appears that they have lost their touch. Or is it because they have gone elsewhere to do this business? Perhaps the situation of oil trading may be a telling example. It is known that there is an active market in oil trading in Singapore. It should generate spin-off effects in increased activities in financial services, telecommunication services, legal and other related services. Unfortunately, this is not the case and the reason is that these transactions, while they are being done from Singapore, are actually booked elsewhere, such as in Hong Kong. For tax reasons, of course! Hong Kong plays an important role because if these transactions were booked here, the profits would most probably be taxed at 33%. Sir, this is not a new phenomenon. Most of us are aware of this. Yet why do we let this situation continue? Well, without knowing the Minister's mind, I can only guess. But, Sir, third country trade is presently treated as entrepot trade in Singapore. The fear appears to be that if we give tax concessions to third country trade we may reduce the overall Government revenue, ie lesser tax being collected on the traditional entrepot trade. While this is a legitimate concern, Sir, I think the Government should look at this problem in another light.”
“I will. Perhaps I think that the First Class Mandarins in the Ministry of Finance can really make sense of the actual impact of these financial figures. I am, after all, Sir, only a poorly educated Backbencher. That, Sir, however, does not prevent me from appealing once again to the Minister to help me and people like me. Please give us a simpler presentation of next year's budget. Sir, may I now touch on several areas of the Budget iself. The Budget rightly focuses on two broad areas - restoring the economy to full health, including more healthy bouncing babies, and setting the direction for the long term transformation of the economy. However, I do want the Minister to know that these broad policy statements are simply inadequate. There are just too many obstacles in the various Government bodies which, taken together, will present almost insurmountable barriers to these policies becoming flesh. Unless some action is taken in these areas, I am afraid the Minister's beautiful policy statement would be precisely just that - statements. Sir, permit me to illustrate. Upgrading of Local Businesses Sir, before local businesses can be a solid base of thriving and resilient companies envisaged by the Minister, I would advise him to take a cold hard look at what I call "the non-tariff barriers" of local businesses. Let him look at all the rules and regulations of the HDB, the DBCD, the Fire Service Bureau, the Land Office, the JTC, the Ministry of the Environment, and a host of other Government regulatory bodies. If he thinks that capital and training are the only keys to the success of local businesses, then I think he should speak to those businessmen who are not so successful or who have failed. Ask them for the reasons for their lack of success.”
“However, I do wish to point out that since FY 82 the Budget has always been presented with deficits of more than $3 billion. Yet, except, for financial year 1985, the actual picture has been one of surpluses and not deficits. These do not even take into consideration the surpluses in the statutory boards and other Government-owned companies, such as those in SIA, DBS, etc. Also, we have the sales from the proceeds of Government investments in the other companies, such as RDC, UIC and various other companies. Sir, on this basis, the Minister now comes to this House to say that he wishes to introduce consumption tax because of budgetary deficits. May I remind the Minister of the boy who cried wolf too often. Surely then, Sir, it is not too much to ask the Minister to improve his budgetting estimates. Perhaps we should initiate a system to reward accurate budgetting and penalize inaccurate budgetting in the public sector. After all, we seem to be very fond of incentives and disincentives to influence behaviour. Yet, Sir, in another sense I cannot even say whether these surpluses or deficits were right or wrong in that they were based on intra-public transfers taken as expenditure or revenue. Last year I tried to show that the distortions caused by these transfers had actually misrepresented the budget and appealed for a simpler presentation of a consolidated public sector budget. This year, Sir, I have tried again but I have given up deciphering the figures. It is just too taxing for my simple mind. An hon. Member: Keep trying.”
“Mr Deputy Speaker, Sir, I am not too sure whether I should support the motion in the name of the Minister for Finance because I think he can do better. However, I do want to assure him that I can be persuaded. On paper, Sir, it appears to be a mild expansionary budget. The total budgetted expenditure is $18.7 billion, an increase of 14% over the revised total expenditure of $16.3 billion for financial year 1986. Sir, I say "it appears to be" because the revised estimates for financial year 1986 themselves are $3.1 billion short of the original budget of $19.4 billion. So therefore if this budget is again over-estimated by the same amount, then we probably will have at the end of the financial year a revised budget of $15.6 billion. In that case, Sir, it will not be expansionary but a mild contraction. Sir, I bring this up not so much as to do magic with figures but more to remind the Minister that the Budget represents the Government's financial intentions for the coming year. Based on these intentions and the longer trend of such intentions, taxes, rebates, reliefs, and other forms of tax matters affecting the economic lives, financial survival and very often, even the social behaviour of our people, we have intentions legislated as laws. For example, last year and again this year, the Minister reminded the House of the need to introduce consumption tax. The reason given was to compensate revenue shortfall and that the Government cannot afford a permanent budget deficit. But then, Sir, what do we actually have? Many Members of this House have brought up the Government's consistency of over-estimating the expenditure and under-estimating the revenue. I really do not wish to take up more of your time in this area.”
“Sir, given the manpower constraint, if certain new things come up, eg, during the Committee of Supply, will the Minister of State reconsider the order of the queue? Because we do understand that you cannot set up all the NPPs at once but I am just talking about the order of the queue.”
“Supplementary questions, Sir. (1) How many constituencies already have neighbourhood police posts? (2) Are there already any constituencies with more than one neighbourhood police post? (3) If so, how many? (4) Since the original schedule for building NPPs was drawn up, has the original order of establishment been changed? (5) On what basis was this original schedule drawn up?”
“Mr Speaker, Sir, in view of the Minister's reply on the subsidy for students of medicine and dentistry, where the absolute figures of subsidy are larger and the recovery rate is smaller, may I ask the Minister whether he has figures, say, over the last 10 years, of the number of our citizens who have been trained by our University in medicine and dental surgery; and how many of these are presently practising in Singapore. It appears that we are spending most on those students who have the greatest ease of emigration to other countries. Secondly, the Minister said that the granting of these loans will be on a very liberal basis. One can presume that a lot of students will be asking for loans; even foreign students. Therefore, I can foresee that there will be a high cost of collection of these loans, since they allow a maximum of 15 years to repay. May I therefore ask the Minister whether these costs have been worked into the scheme. In this regard, I would like to echo the Member for Ayer Rajah's call on the Minister to try and persuade his Cabinet colleague to allow the use of CPF funds because, according to the Minister for Education, money spent on education is investment whereas, according to the Minister for Labour, money spent on education is consumption.”
“Sir, does this mean that his Ministry would take up all cases of unjustified price increases when they receive complaints from consumers?”
“Sir, may I ask the Senior Parliamentary Secretary whether his Ministry has any plans to combat any general price increase by the hawkers because of this new policy?”
“Mr Deputy Speaker, Sir, I would also like to join the debate in saying that I support the amendments to the principal legislation. However, regarding the Topping-up Scheme, may I ask the Minister two points for clarification. One is whether this scheme could also be extended to grandparents. The second question is if one or both parents do not have any CPF account right now; upon the implementation of this scheme, can an account be opened for this purpose? In the handout here, the Minister says that the topping-up may also be by cash and the Ministry of Labour is discussing with the Ministry of Finance to provide tax relief for such cash contributions. This, of course, opens up another avenue for tax planning.”
“Sir, if it is so low, why would the Ministry want to charge? After all, it is a gesture just for national service registration. Mr Dhanabalan: Mr Deputy Speaker, Sir, parents are likely to go to this car park once in their life-time if they have one son, or maybe twice, if they have two sons. Surely the fee of 60 cents per day is just not worth talking about. Do you think the service that the national servicemen give to the country should be measured in terms of 60 cents? I think it is not worth discussing. I have been there to send my own son off. Yes, it was an inconvenience. There was a big traffic jam. But it is only once in a life-time. I do not think we should waste our time talking about this. VACANT HDB SHOPS (Allocation to resettled shopkeepers) 14. Mr Goh Choon Kang asked the Minister for National Development (a) how many Housing and Development Board shops were vacant as at 31st December, 1986; and (b) how many shopkeepers affected by resettlement are awaiting the allocation of such shops.”
“Mr Deputy Speaker, may I explain my question again? I am talking about resettled shopkeepers. If a resettled shopkeeper has been resettled to Town A, will he be given priority over another resettled shopkeeper who is not residing in Town A, or are they treated exactly on the same basis?”
“Mr Deputy Speaker, Sir, what I am asking is whether residents have priority over non-residents in respect of shops in the same town? Or are they treated exactly on the same basis as resettled shopkeepers regardless of where they reside?”
“Sir, in view of the Minister's reply regarding priority to shopkeepers for shops in a new town if they are already residing in that new town, may I ask whether any sort of priority is given with respect to shopkeepers from other areas?”
“Mr Speaker, I would like to say that life is a gift of God. Anybody who does anything to extend the gift, in fact, is helping him or her, as the case may be. I would also like to say that anybody against such an organ or kidney donation plan is perhaps denying life itself. Listening to the comments and the arguments in support of the Bill, I find it strange that one very important issue has been missed out. All these arguments are very rational arguments, very logical arguments. The objective of this Bill, Mr Speaker, Sir, of course, is very logical, that is, to save lives. But unfortunately the decision whether one wishes to donate the organs or not is not a rational issue. It is an emotive issue. It is an issue to be found in superstitions the fear of the unknown. Again, unfortunately, when people look for answers in this area, they do not look towards the Government. For issues of this sort, touching on religion, on culture and social values, most of them look towards their religious leaders. It is in this realm and in this area that I think we have to focus our attention. Over the past months we have heard various religious leaders of all denominations coming out in support of this proposal. Mr Speaker, Sir, I would like to appeal to all of them to say it loud and clear in their churches, in their temples and in their mosques to ask their people and their congregation to support this Bill.”
“He could be 75 or 80 or even 85 years old. Has the Government any financial plans to take care of these people?”
“Mr Speaker, Sir, may I seek some clarification from the Acting Minister. Sir, I would like to congratulate the Acting Minister because it is a gem of a scheme. It maintains the withdrawal age at the age of 55 and yet still leaves room for our citizens to who have at least some funds for their twilight years. Sir, the Acting Minister did say that the sum of $30,000 for subsistence living has been carefully worked out. I would like to ask the Acting Minister whether he could perhaps at a later date show how this sum was derived. The second point is this. According to the Scheme, it appears that the retained sum at age 55 would not be touched until the member is 60 years old. Does this mean that the interest earned during this five-year period could be withdrawn as a lump sum at the age of 60 or even earlier, between 55 and 60? Or does this mean that the accumulated interest is to be treated as part of the sum set aside? The third point, Sir, is that if a member decides to place the fund in a bank or to buy an annuity from a insurance company, would the interest earned either from the deposit or the annuity be subjected to income tax? On this point, Sir, I would like to say that I have some interest in it because I am working in a bank. The fourth point, Sir. I realize that the Scheme provides much flexibility. However, would the Acting Minister consider other schemes which are in line with the spirit of this new CPF proposal? For example, would the Minister consider another method which could be a type that permits deductions to be put into an account which at age 55 will automatically be converted into an annuity, and the deductions to be made from the current CPF contribution? Finally, Sir, I would like to ask, what happens when the sum is exhausted by the member?”
“Sir, may I ask the Hon. Minister whether the policy of not buying back HUDC flats would be extended to HDB flats, considering that there are quite a lot of flats unsold and not wanted at this moment in estates like Yishun, for example?”
“Mr Speaker, Sir, may I seek a point of clarification from the Hon. Minister? He has mentioned that in the case of sale of properties, the funds to be returned to the CPF would be the sum withdrawn including imputed interest or the sale price, whichever is lower. May I ask, in the case where the sale price is lower than the sum withdrawn plus the imputed interest, would the member still be personally liable to CPF for the shortfall? What I am asking is, has he fulfilled his complete liability to the CPF or would the CPF at some future point in time ask him to refund the shortfall? Mr Lee Yock Suan: The answer is no. There will be no further liabilities. These are spelt out in the regulations already gazetted, ie, either the capital plus the interest or the sale proceeds, whichever is less. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Yock Suan]. Bill considered in Committee; reported without amendment; read a Third time and passed. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Prof. S. Jayakumar] Adjourned accordingly at Twenty-three minutes past Five o'clock pm to a date to be fixed. papers - FEATURES OF THE NON-RESIDENTIAL PROPERTIES SCHEME, ANALYSIS OF MEMBERS WITH INVESTIBLE FUNDS (AS AT END OF FEB 86) (Cols. 1489 - 1490)”
“Of course, Sir, they do so because they hope to make money on the price movements which, unfortunately, for this type of investment, are rather frequent. However, history has shown that such practices usually end up in more losses for the so-called investors rather than gains. Hence the payment of incidental expenses out of their own pocket would discourage such a practice from developing.”
“Currently, there are owners of properties under the ARPS scheme who would like to sell off their investment to cut losses but they cannot do so as the values of houses have fallen below what they purchased for. Thus, if they sell off these properties under the present regulations they are liable to CPF to make good losses or make good the funds they have withdrawn, including the imputed interest. If this principle were to be applied to those withdrawals under the ARPS scheme, perhaps it will help some members to make rational decisions based on the fact that they want to take their losses now instead of later. However, without such a principle being applied and where they are liable to the CPF to make good the shortfall their decision today is more influenced by their inability to make good the shortfall. Sir, may I now turn to clause 7 (c) which permits the reimbursement of fees, charges or incidental expenses from CPF. I feel that this should not be permitted. Instead, members should be asked to pay for those items for two reasons. One, these are expenditure items and do not add value to the underlying investment. Two, since members can claim reimbursements for such items, it may encourage them to trade instead of invest. By trading, Sir, I mean buying and/or selling on a frequent basis thereby incurring large expenditure. Of course, they could do so now. They could do so even if they have to pay for the incidental expenses themselves but then it incurs an expenditure out of their own pockets immediately. If clause 7 (c) goes on as it is, they will be encouraged to do so because then they would not have to incur any additional expenses.”
“" We can say, "Investment in precious metals and stock market carries great risks which you may not want to undertake." If they are forewarned of such risks, then those who are on the borderline cases, ie, those members who may not really have the intention of making such investments, may be forestalled or prevented from making such risky investments. In such cases, then, I do not think the CPF would really put members' funds at risk or their old-age savings at risk through such a scheme. Now, Sir, if I may, I would like to come down to the specific amendments. If one looks at clause 6 it assumes that the total proceeds from the sale of investment in precious metals and securities must be paid into the fund. This means that gains from such investment cannot be prematurely withdrawn. Does it therefore not also mean that losses need not be made good by the member? I will give you an example. If somebody takes $10 to buy a share and subsequently the person sells the share at $12. Then according to clause 6, the whole sum of $12 must go back into the fund. However, if he sells at $8 instead of $12 then, again, according to clause 6, the whole sum of $8 must go into the fund. From clause 6, it appears that he cannot take out the $2 that he made had he sold the share at $12. Does this therefore not imply that he need not make good the loss of $2 had he sold the share at $8? If this be the case, would the Minister therefore not consider applying this principle to those who have purchased residential properties under the current Approved Residential Properties Scheme (ARPS).”
“Mr Speaker, Sir, I rise in support of the Bill. The Bill seeks to change CPF policy on four issues: (1) limit the maximum amount of Medisave balance; (2) allow members to use their Special Account to repay housing loans; (3) permit the purchase of non-residential properties with CPF moneys; and (4) permit investment in precious metals and securities. Sir, the first three issues have been well covered in previous debates and I do not wish to touch on them. However, on the fourth issue, ie, the permission for members to invest a portion of their funds in precious metals and securities, I would say that, first and foremost, this is very much an elective type of option which means that members who do not think they want to risk their money in either the stock market or investment in precious metals, then these members need not use their funds for such purposes. In that case, they can still leave their funds in the CPF and earn a Government-guaranteed return which in the long run might be better for them. However, Sir, we must realize that there are members who feel that they are very much better investors than the CPF and they think they can get better returns than what the CPF can give them. For such members, giving them the flexibililty and liberty to invest their funds in the stock market or in precious metals is not amiss with the objective of giving more flexibility to the people of Singapore. These members who wish to avail themselves of this scheme normally would have some knowledge of the market as well as knowledge of the risk that is inherent in such investment. Perhaps the CPF should take one step further, that is, to give them a warning similar to the one against cigarette smoking where it says "Smoking is hazardous to your health.”
“Mr Speaker, Sir, regarding clauses 5 and 10, where a person makes a statement, and before making the statement he does not disclose that the statement may tend to incriminate him, then by virtue of the subsections, it appears that the statement can be used against him in court. So here it depends on the person. If he knows his rights under these two subsections, he can make the statement that the statement that he is going to make may incriminate him. If he does not know and without making that prior statement, then the statement can be admissible in a court of law in criminal proceedings against him. I think here, Sir, it is not fair on the person because it requires the person to be knowledgeable in law, or knowledgeable of his rights. I therefore think that it might be a good point for the authority to make it as a part of the procedures that they should inform anybody making a statement of their rights under these two subsections. Could the Minister please clarify?”
“Finally, Sir, I would like to come to Part IX, starting from page 74, and this deals with false trading, market rigging, share manipulations, insider trading, and etc. If we look at clause 105 in this Part, here it deals with the right of an aggrieved party to seek compensation from a person convicted of an offence under this Part. Sir, this is a good move as often aggrieved parties have nowhere to turn to. However, I question the need to limit a potential action to two years after the date of completion of a transaction. Does this mean that an aggrieved party could not wait until the guilty party is convicted as by then two years may have passed? Worse, he may not even know that he is an aggrieved party, except or until the authority brings a charge against a guilty party. By then, we may not know, more than two years may also have passed. I would like to propose that this be amended to two years after conviction instead of two years after the date of completion of a transaction. 4.04 pm”
“This means that if he tells the MAS officer that, "This statement may incriminate me", then that statement is not admissible in a court of law for criminal proceedings. Whereas if he forgets to tell, then the statement becomes admissible in court. Sir, I think such a law is not fair to persons who may have no knowledge of their rights under the law, and therefore I propose that either such statements are totally inadmissible in criminal proceedings, with or without prior claim; or prior to making a statement it must be the obligation of the MAS to inform the person of his or her right under these two sections. I would now like to come to clause 39 on page 41 on the appeal to the Minister or the High Court regarding licences. In this I wish to add that I support the Member for Whampoa because, Sir, if you look at clause 39, you will see that it is appeal to the High Court for revocation of licence and appeal to the Minister for non-renewal of licence. It, therefore, must imply that a revocation of licence is more serious than a non-renewal of licence. Yet, Sir, a licence is only issued for a year and thus effective revocation can come about through time, which means that officials in the MAS can simply wait for the passage of time and not revoke the licence but just wait for the passage of time so that the licence may not be renewed. In this case, appeal to the High Court becomes meaningless. Sir, since this revocation as well as non-renewal of licence concerns existing practitioners, ie, means people who are already in the business, could not non-renewal appeal be also heard by the High Court instead of by the Minister where his decision is final?”
“Penalties provided under such administrative regulations even carry jail sentences. In fact, if one looks at this clause, the rest of the 117 clauses are unnecessary. Clause 118 alone will be sufficient. May I ask whether this is necessary? What I wish to impress upon the Minister is that the future of the securities industry lies not in the legislation before us. Instead, Sir, it lies in the hands of MAS who will implement the legislation. The MAS could rule the industry with an iron fist in a velvet glove or it could rule with an iron hammer in its iron fist. How the industry will prosper depends which method it will take. It could supervise by reducing the uncertainty in the market, ie, reducing uncertainty due to regulations to a minimum or it could supervise by creating much uncertainty by telling practitioners to do something but .....; or not to do something but ..... Sir, I now come to certain parts of the Bill which I hope the Minister will clarify. Clause 5 and clause 10 of the Bill empower the MAS to seek and to obtain information from, I would say, practically anybody connected with the securities industry. But if we look at clause 5, sub-clause 12, (page 17) and clause 10, sub-clause 7, (page 21) it says that if a person making a statement to MAS claims, before making that statement, that "the statement might tend to incriminate him, evidence of that statement is not admissible in evidence against him in criminal proceedings other than proceedings under this section." Therefore, it implies that any person making a statement to the MAS must know the existence or know his rights under this Act.”
“I say "restrictive" because the signs were in the early 70s which continued on to the 80s that when the rest of the world caught up, the US found that its laws did allow their banks and other financial institutions to compete effectively with financial institutions from other countries in the world. Hence, we have the great Act, what they call "de-regulation", which mainly, Sir, is to remove the restrictive laws that were enacted during the aftermath of the great Wall Street crash. Sir, I thus urge the Minister for Finance that we do not fall into the same mistake. Given the stock market difficulties and the Pan-Electric fiasco right now, it is very easy to over-react. The USA had and have the economic strength to overcome the handicaps imposed on their financial market. Unfortunately, Sir, we do not have. The financial market today moves rapidly, more so because of instantaneous communication. They must be given the flexibility and the liberty in order for them to react to changing conditions. The Bill, as is presently drafted, is a good one. Overall, the powers of the Authority are more clearly defined thus making it easier for interpretation. The clarification of the Bill over the 1973 Act makes policing of the stock market easier. However, the Bill is definitely a more restrictive Bill. This in itself may not be a bad thing because what is needed right now most urgently is perhaps the restoration of confidence. If confidence could be restored by tighter controls, so much the better for the Bill. The Bill, however, gives almost complete power to the Monetary Authority of Singapore. Besides many sections giving various types of powers, a wide interpretation of clause 118 gives MAS the power to enact any regulation by administrative means.”
“The Wall Street crash did not cause the Great Depression of 1930 although it precipitated the depression. In other words, Sir, the depression occurred because the US then had economic structural difficulties, high prices, over-capacity and other economic ills. The Wall Street crash was simply the first visible sign that things were wrong. However, Sir, during that emotionally charged period it was the easiest thing in the world to point accusing fingers at Wall Street and the bankers as the cause of the depression. What followed then was perhaps inevitable - a series of legislation protecting investors, curbing the financial institutions and other measures were passed. The major ones were the Glass-Steagall Act of 1933 and the "Truth in Securities" Act of 1933, the Banking Act of 1935. The Securities and Exchange Commission was established in 1934 and the purpose was to police the stock market. For those of you who are interested, the New York Stock Exchange also objected very much to the formation of the SEC. However, the objections stopped when a former Chairman of the New York Stock Exchange was jailed for larceny. Sir, I regret taking a little while to go briefly into this little part of American financial history. However I think our present situation parallels quite closely to the situation then. What is more interesting perhaps is that the US financial and securities market did prosper since then but it was not because of the Acts. From the end of the depression years to the mid-70s, Sir, USA was the economic power-house of the world. Hence, despite the restrictive nature of the laws, US banks and financial institutions were able to prosper.”
“Mr Speaker, Sir, I rise in support of the Bill in the name of the Hon. Minister for Finance. However, I also support the move to refer this Bill to a Select Committee; not that the brokers or the securities industry participants are against this Bill or have questions against this Bill but more that this Bill actually affects many more people other than the stockbroking industry. It affects all those who may at some time or other purchase securities, whether for their own investment or on behalf of their parents or friends. It also affects those who may not be involved in the securities market but simply may be officers or financial controllers in companies where their securities may be listed in the stock market. Hence, I think the effect will be on a large proportion of our population and, as such, I do support the move to refer this Bill to a Select Committee. Sir, our present situation, I reckon, will be quite similar to that of the US during the late 20s and early 30s. As such, Sir, if you will bear with me, I would like to recollect briefly that part of the Great Depression years which is relevant to the business this afternoon. The Wall Street crash, as everybody knows, occurred in 1929. However, during the period of several years before that crash, the prices of stocks and shares on the New York Stock Exchange were rising so very rapidly that they bore little resemblance or relation to the earning power or the underlying value of the corporations which issued these securities. What was not very well known then was that during this period there was very little control over the activities of the stock market. Speculation and manipulation by all and sundry, including banks, investment houses and other financial institutions, were rampant.”
“Recently, during my tour in my constituency, some residents also asked me whether it is illegal to play mahjong at home. We know that many people, including perhaps the Member for Clementi and some old journalists and editors, like to play mahjong at home or at clubs with relatives or friends around the square table as a form of recreation. The purpose of my raising the matter here is the same as that of the Member for Clementi, that is, to ask the Minister to clarify the Police action. There are some people with ulterior motives who want to twist the meaning of the anti-gambling laws and purposely spread rumours and fear among the people regarding the meaning and intention of the law. So I hope the Minister will clarify and explain this matter so that these Singaporeans who indulge in these games may feel safe playing mahjong or cards as a form of recreation at home.”
“Our community leaders have also invited the NPP police inspector to functions and both sides have struck up good and harmonious relationship, mutually contributing to law and order and the security of the estate. Therefore, I would like to praise the efforts and the good performance of the Police in this respect. But I notice that in the 1986 manpower expenditure estimates of the Police Force, there is a reduction of $13 million whereas manpower will be reduced by 61 posts, namely, from 9,663 posts reduced to 9,602 posts. The Minister for Finance mentioned in his Budget statement that the Government is trying to reduce manpower expenditure in the public sector. I would like to ask the Minister whether in this exercise of cutting costs, neighbourhood police posts will also be affected. If this exercise does not affect NPPs, then the Member for Jalan Kayu and other Members will feel more assured. On the question of gambling and mahjong mentioned by the Member for Clementi, I must declare that I do not like to play mahjong and I cannot play mahjong. Some people complained to me that the Police in carrying out raids on illegal gambling have been too enthusiastic. They confuse recreational games with gambling. They kill both the flies and the tigers. An old constituent reported to me that once she and some relatives were playing some card games at home, and they were arrested and put in CID lock-ups for some hours and had their fingerprints taken.This was a great shame to her because she felt that she was treated like a criminal. This has caused a strong reaction. I have told the Officer in Charge of Queenstown Police Station about this complaint. I am not raising a complaint here to the Minister, but just quoting an example.”
“In matters of law and order and safety for my constituents, I would rather be silly than sorry. May I now, Sir, touch on the Singapore Fire Service. Firstly, I would like to ask the Minister why there were so many fires in 1985. Was arson linked to most of these fires? In this respect, how many of the fires were related to commercial and industrial properties? During difficult economic times, it is not uncommon to hear of businessmen in financial difficulties setting fire to their own properties to collect insurance money. Fires may also be started by jealous business rivals competing for a dwindling market in these difficult times. I am aware that when I say this I am only stating possible scenarios and not actual cases that I know of. However, what I want to emphasize is that we cannot rule out the possibility of a correlation between the number of fires and the severity of the recession. I do hope that there is no proof of this possible correlation. In any case it will certainly ease the minds of all Singaporeans if the Minister can tell us of the steps being taken to ensure that the Singapore Fire Service has the capability to deal with all possibilities. Dr Ow Chin Hock (Leng Kee)( In Mandarin): Sir, I am different from the Member for Jalan Kayu. I will raise only two points. There is something to praise and something to criticise about the Police. The point of merit is the setting up of the Neighbourhood Police. It has improved the relationship between the Police and the residents. In my constituency, since the setting up of neighbourhood police post, I was told that the residents wanted to present the NPP with bonsais for decoration. Children have treated the NPP policemen as friends.”
“Can the Minister tell the House what measures the Police are taking in their efforts to harness the support of the community in crime prevention and whether the Police have achieved any success in this regard? But before the Minister gives us his answer for the nation, may I appeal once again for more measures to be taken for my constituency. Last year, I appealed for a neighbourhood police post in that part of Ang Mo Kio which is in Jalan Kayu constituency. The reasons then are still valid today. I was told that the NPP date for that part of Ang Mo Kio is 1988 but as the Government is now trying to hasten development projects to stimulate the economy, could it not also stimulate the building of more NPPs and hasten its time-table? It will definitely benefit the residents. It will also benefit the contractors who get the job. It will also benefit the policemen who will become friends of the community at a sooner date. You see, Sir, it will benefit everybody. Yet I do not understand why this cannot be done very much earlier. However, Sir, this is not all; because Jalan Kayu is a large constituency and I understand that another NPP is supposed to be built in 1987 in Seletar Road. I now understand that even this is to be postponed. Perhaps the Minister can give me an explanation in this House. I was told by residents there that even the frequency of bicycle patrols in the private residential estate has been reduced. Again, this is something which I find strange. I would like to tell the Minister that perhaps the lack of crime or little crime in my constituency is more because of the good work that they have done, and in order to continue the low level of crime the good work should be continued. Sir, I make no apologies for bringing these parochial issues to the House.”
“I am sure that there are a few of us in this House who would disagree with his observations. However, Sir, I think he did miss out on one observation, or at least it was not reported. Here I am referring to those obnoxious creatures of the road which we normally call road hogs. How often, Sir, have we driven behind such drivers chugging along merrily on the road, on the right hand side of expressways? How often have we in frustration resort to overtaking on the left, thus risking not only our lives and our passengers but also other road users? The tragedy of all this is that many of these road hogs sincerely and truly believe that they are not in the wrong as long as they are driving within the appropriate speed limits. Expressway driving is relatively new in Singapore. Many still do not know the rights and wrongs of expressway road sense and etiquette. Yet at the same time, high speeds and slow reaction more often than not mean fatal accidents. There is indeed an immense need for education in this area. Greater publicity must be given to ensure that Singapore drivers understand the concept of road sense and safety on expressways. Perhaps legislation of some sort may be required. In this respect, I hope that the Minister will not forget that education and rewards for good driving also go a long way towards higher standard of road safety. The Traffic Police should not rely too much on punishing the bad drivers only. May I now, Sir, turn to community oriented policing, the marvellous plan of turning policemen into friends of the community instead of ogres to frighten little children.”
“I am aware that the Civil Defence authorities have a host of programmes such as hikes, quizzes, contests, to keep their spirits going. However, Sir, these do not seem to be enough. Hence, I would like to propose that the Ministry organize on a nation-wide basis an annual series of telematch contests. These contests could be on an inter-constituency basis. The skills needed for this contest must be related to those skills needed for Civil Defence work. Most important, the concept of this contest must be geared to television coverage as it is only through television that the interests of the whole nation could be captured. Sir, I remember several years ago a telematch series from Europe that was shown on the local television station. I think it was a rather successful programme. If Singapore viewers could be interested in telematch games played between obscure European towns, I do not really see any reason why the same viewers would not be interested in their own version of telematch games. So I would think that there would be interest in this and the games will certainly help to create more interest in Civil Defence work. Sir, I would now like to touch on the subject of road etiquette and education. But first may I ask the Minister whether it is true that there had been a significant improvement in the rate of road accidents. Could he please elaborate on this to the House? I would also like to ask the Minister what are the policies and the measures which the Traffic Police will take to further reduce the accident rate, especially those on our highways and expressways. Only last Monday, Sir, the Straits Times carried a report on the observations of a British transportation expert currently working with the Traffic Police to promote expressway safety.”
“Mr Speaker, Sir, I would first like to congratulate the Minister for Home Affairs on the work that he and his multi-disciplined team played in the rescue of the people trapped by the Hotel New World disaster. It is heartening indeed to see our forces on the alert, ever ready to do their duty. Sir, I do not think that I am exaggerating when I say that all Singaporeans salute the marvellous work done. Nobody could have done any better. While all involved in the rescue work, Sir, deserve commendation, I would however like to single out the Civil Defence Force for special mention. Why? Because, Sir, the majority of them are volunteer; because many Singaporeans may not have been paying much significance to Civil Defence; because they were seen by many to be Cinderallas of Total Defence; and because they were ridiculed as Singapore's version of "Dad's Army." Well, now we have seen what Dad's Army can do and what they have done. However, I must add that it is sad that it took a major disaster of this scale to show the need for Civil Defence. In this respect, Sir, I hope that the Ministry will follow up on this good work and drive home the point to all Singaporeans that Civil Defence is absolutely necessary. I hope too that the Minister will consider a special award to this group of brave volunteers, ordinary people like you and me, yet so determined to risk their lives that others may live. However, Sir, in the longer term we know that it is difficult to hold the interest of Civil Defence volunteers. We know that it is difficult to get the womenfolk and the older menfolk to attend training. Yet we also know at the same time that training and being alert at all times are crucial.”
“If so, how many are there? (3) Are there Singaporeans who are prepared to work as full-time domestic servants for roughly about $400 per month, which together with CPF contributions would come to about $440 per month? The reason for this figure is that they are currently spending roughly about $500 per month on their foreign maids. And with the recession and the CPF cut of 15% on their own salaries, they find it difficult to make ends meet. Sir, they have also ended their request with the comment that if it is difficult to get Singaporeans to be maids, would the Ministry reduce the foreign maid levy by 60% which is the same percentage as the reduction in the employer's CPF contribution? After all, they are also employers and need to cut costs in these times. Mr Chairman, Sir, I happen to agree with these views. Sad to say, as I said earlier, I cannot answer these questions and I would really appreciate if the Acting Minister could provide the answers. More importantly, the Acting Minister should also realize that the quantum of $120 per month was imposed at a time when the economy was booming and when incomes were high. However, we are now in a recession and incomes are low. Further, I think I would not be too far amiss if I say that there are not many Singaporeans who are prepared to work as full-time maids although I do not know the figure. Sir, based on this, I do think that there is a case for a reduction of the levy. Mr Jeyaretnam rose -”
“Sir, their parents would like to send them overseas but for the lack of money. On the other hand, they do have large balances in their CPF accounts and they are prepared to use these monies to further the education of their children. However, the Ministry has always said no to such pleas. May I therefore suggest that in the current review of the CPF Act, the Board should set aside a percentage, maybe 10%, of the balance to be permitted for withdrawal for the use of educating members' children. Mr Chairman, Sir, this is not the first time this matter has come up. Last year, I mentioned and I hoped that the Minister would finally allow this to be permitted. But he has refused. Last year, although I added one more "P" to the politics of perseverance, persistence and patience which did not pay off, this year, Sir, if I may, may I add one extra "P" and say "please" to the Minister. The other point that I would like to bring up is in regard to the foreign maid levy. I am aware that the Acting Minister, in his reply to an oral question on foreign worker's levy several days ago, has stated that there would be no change in the quantum of the foreign maid levy. In his reply, he said that Singaporeans should employ locals and provide employment to Singaporeans, especially during this recession. Sir, a number of my constituents have called me to express their agreement with the Acting Minister's comments. However, they have also asked me a few questions and because I am unable to reply, I am redirecting them to the Acting Minister. They asked, (1) where can they get Singaporeans to be full-time domestic help? (2) are there any Singaporeans registered with the Employment Service Department in the domestic help category so that they can go to the Department to employ them?”
“Sir, during the past year, we have seen many changes made to the utilization of CPF funds. We have seen the CPF allowing members to purchase non-residential properties. Although the rules are not out yet, I understand that the Minister will soon come out with the rules regarding this. We have also seen an allowance of 10% to be made for investment in stocks and shares, gold, trustee bonds and the lot. For these, Sir, I understand that the CPF would allow what they call a substitution of stocks and shares or gold for money, which means that when the new rules come out, members already with stocks and shares in their names can submit them to the CPF and in return, the CPF would release the funds. So it is not a new purchase. Sir, I would like to ask the Minister whether he considers these new avenues of so-called investments speculative and consumptive. We do know that the prices of these so-called assets can vary very drastically, especially during these times. Hence, it is beyond understanding why the Minister has steadily refused the most important investment of all, that of investment in our children's future. Sir, here I am referring to the perennial question of asking the Minister to allow the use of CPF funds for children's tertiary education. Sir, we all know that the entry into our University is on a competitive basis. Last year, I understand that there were many qualifiers who could not secure a place in our University because standards were high and places were limited. These persons have no place to go for their tertiary education except overseas. Their results are not good enough for scholarships. But the same results are good enough to gain acceptance into recognized universities abroad.”
“It will thus appear that the Medisave has all the disadvantages of an insurance scheme as outlined by the Minister of State last March, but then, Sir, what an insurance scheme. Because this is a scheme whereby all the patients are in fact their own insurers since the payment for the bills come out of their own pocket, that is, their Medisave Account. I would therefore urge the Minister for Health or his Minister of State to reconsider after these two-odd years of experience that the Ministry will allow a health insurance scheme to be paid for by Medisave funds. At present consideration of an insurance scheme for only catastrophic illness is simply not good enough. After all, if it is cheaper in the long run for members to cover their medical bills by a private insurance scheme, I cannot see any reason for the Ministry's objections. May I, Sir, conclude by saying that Medisave funds belong to the CPF member. And as long as he has arranged to cover to pay for his medical expenses in such a manner so as not to tax public coffers, I do not think the Government should object. 5.15 pm”
“Sir, it appears that the Member for Toa Payoh has sort of read my points here because they basically cover the same thing but in a slightly different way. Last year, in reply to a question that I submitted, the Minister of State for Health and Foreign Affairs said that the Medisave Scheme was introduced to avoid the pitfalls of a general medical insurance scheme. He added that experience in other countries has been that (a) it gives consumers an illusion of free medical services resulting in increased demand for such services; and (b) it provides no incentive for providers of health care to economise since they are reimbursed on the fee-for-service basis. Sir, from personal experiences with those who have used their Medisave Account funds for their medical bills and comments from various doctors, it appears that the Medisave after about two years of existence have helped patients to make more use of hospital facilities. It certainly has not discouraged potential patients from abusing these hospital facilities. This is because in order to make use of their Medisave funds patients may insist on being hospitalized, although such hospitalization may not be necessary. Some doctors may simply just go along with them to avoid problems or arguments with them. Worse, there may be some other doctors who may prescribe expensive preventive medicine, but perhaps unnecessary medicine. Sir, although these expenses are paid for by the patients with their Medisave funds, most of them do not realize that Medisave is their own money and not a Government fund or an insurance scheme because they do not see the funds in the Medisave Account.”
“It appears that there is a correlation between recession and the number of cases of reported fraud and malpractices in the companies. The CAID must today be extremely busy investigating large and small cases. Sir, what I do not understand therefore is that the expenditure on manpower for the fiscal year 1986 for the department has been reduced from $888,000 to $875,000. And this is in spite of the overall general increase in this item for the overall civil service by 2.9%. The staff strength of the CAID is also budgetted to remain at 38. But during these busy times when more time is used by them to handle large cases, there is a great fear among the business community that the smaller cases may simply be ignored by the department. Sir, very often we see in the newspapers reports saying that so and so or somebody is helping the CAID in its investigations. I am aware that this is unpaid assistance from members of the public. But I do not think the Minister should rely too much on such unpaid help. Although I proposed an amendment to cut the expenditure in the CAID, I am actually hoping that the Minister would consider an increase in manpower and expenditure for CAID so that it will have more resources to fully discharge its duties in these trying times.”
“Sir, the first one I would like to touch on is the micro-computer loan scheme for public servants. Several years ago, the Government introduced a loan scheme at 5% interest per annum on a monthly rest to encourage public sector employees to purchase their own micro-computers. This scheme has helped to spread the use of micro-computers amongst them, especially at home when they have more time to tinker with the computers. Their children too have been exposed to the use and the knowledge of micro-computers at a very young age. Also, this move by the Government has encouraged many private sector companies to provide similar schemes to their own employees. Mr Chairman, Sir, the reasons for the introduction of such a scheme then are still valid. Hence, it is with great surprise that the interest rate for such a scheme has recently been increased to 7% per annum. This increase was explained as a move in line with the general policy of the Government to trim public costs. However, Sir, may I say that this is one case of the Government throwing the baby out together with the water. How much can the Government hope to trim costs in this instance by raising the interest rate from 5% to 7%? I do not think that the amount is large. Hence, the savings may not be worth the withdrawal of this incentive to encourage widespread use of micro-computers. Worse, the Government may be seen as sending a wrong signal to the private sector and I hope that the Minister will reconsider this increase. The second point I would like to touch on is on the Criminal Affairs Investigation Department (CAID). The CAID has been in the limelight lately, especially when cases such as Chop Hoo Thye and Pan-Electric made the headlines.”