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.”
The complete record
Every one of 723 lines we hold for Heng Chiang Meng, in date order, each linked to its source. Free to read, in full, without an account. Page 14 of 15.
“Mr Chairman, Sir, I submitted two amendments under the Ministry of Finance. May I speak on both of them now?”
“Sir, we are just starting on our new economic journey, based on the recommendations of the Economic Committee. The Germans have shown the world their success based on the same philosophy. This year's Budget reflects the same philosophy too. That is why, Sir, I support the motion. 4.16 pm”
“I do not, Sir, bring up these tables to prove or disprove which assumptions are right or which tables are wrong. However, I do want to show how lopsided assumptions can lead to wrong conclusions. Sir, I would like to conclude here but, before I do so, may I provide some food for thought from an article by Peter Drucker. According to Mr Drucker, the German economic performance during the past few years was every bit as impressive as that of the Japanese. He went to list certain statistics as examples to support his point. But I think the part that interests us most is the following and I would like to quote from this part: 'Still the West German achievement is significant enough to demand more than it usually gets.' What explains it? He gave a number of reasons and went on to say: 'But then there is also government policy. The West German government practises unalloyed supply-side economics, albeit with great moderation. Income taxes are being cut by US$8 billion. The government is now contemplating even bigger cuts. Several government-owned enterprises have actually been privatized. Scores of regulations have been abolished or relaxed. Capital markets have been deregulated to give small and medium-sized firms access to the equity market. But the real "secret" of the West Germans is business policy. Managements, with government and public opinion supporting them, have made maintenance of their firms' competitive positions in the world market their first priority and the overriding goal in their planning.' Sir, this article was also reprinted in yesterday's Straits Times. When I read this article very much earlier, I thought I was reading part of the Economic Committee's peport. It sounded so similar.”
“It is, in fact, one step further than what has been asked for because returning the savings back to the people may only induce them to save the savings. I therefore support this move as I think this move will be more stimulative than the return of a portion of the employee's CPF funds. Now, however, they say it is unfair. It benefits the rich and penalizes the poor. The Straits Times even had an article in its 6th March 1986 edition. But, Sir, does it really benefit the rich and penalize the poor? Here, again, begging your pardon, Sir, I would like to distribute another set of Tables. Perhaps while the Tables are being distributed, I would like to say that the first Table is the one that the Straits Times has published in its article. Sir, it can be reasonably inferred from the Table that those earning above $158,000 per annum gain from the combined impact of the 15% CPF cut and the 25% tax rebate. You can also infer that those earning below $158,000 per annum lost. The calculations in this Table are based on the assumption that the annual salary is divided equally into 12 monthly portions. I do not think that this is a true reflection of salary structures in the market. Most salary structures in Singapore have bonuses. Normally the higher the salary level, the greater is the bonus element. In Appendix 5, I have used the assumption that the annual salary of $158,000 is now divided into 13 months, ie, there is a bonus of one month's salary. By using this assumption, there is a loss of $1,973 instead of breaking even. In Appendix 6, I have restructured the top annual salary into what I consider a more realistic assumption. The monthly salary is $10,000 and the bonus element is $120,000. Sir, as you can see, the loss is now very much larger.”
“These cities too have the telecommunications facilities, the legal expertise, the computer link-ups and the people to be successful financial centres. The advances in telecommunications and information technology have made it unnecessary for international fund managers to be in Singapore. If the terms of their coming here are not right, the fund managers will never come here. On another point, Sir, I would like to touch on is the tax concessions given to non-residents but not to residents. This has certainly created a most unusual situation in the Singapore financial market. While banks compete for deposits from abroad, our residents are very busy depositing their own funds abroad. The reason is very simple. It is because interest earned in Singapore is taxed while the interest earned abroad, as long as it is not remitted back to Singapore, is not taxed. Hence, the result is that our residents have substantial deposits outside the country. The latest tax incentive for investment in local stocks and shares by non-residents will only exacerbate the situation. Again, Sir, I urge the Minister to provide some solution to this problem so that our own funds, that means the funds of our citizens and residents, can come back to Singapore to enlarge the base for financial activities. Sir, many have called, and this includes the Opposition Members of Parliament, for a reduction in the employee's CPF contri- bution. It will, so they say, stimulate local demand. In the best tradition of supply-side economics, the Minister has apparently agreed that more money in the hands of our people will indeed stimulate local demand. He has thus given us a tax rebate for this year.”
“If the full group consolidation is too difficult, perhaps it can consider the inclusion of the major statutory boards and companies. A budget with large intra-public sector transfers eliminated would certainly present a truer picture. The impact on the economy could also be better assessed. Mr Speaker, Sir, I would now like to touch on only one area identified as having potential for growth. This area is financial services. Yet the measures taken, or rather the lack of measures, differ from those operating in the market. Permit me, Sir, to make some comments on fund management. The Government wants Singapore to be a fund management centre. Over the years, including this year, it has given a number of tax concessions to achieve this goal. Yet it has consistently ignore the most important issue of all, ie, the distinction between trading profits and capital gains. I do not wish to go into technical details of this issue. However, putting it simply, fund managers in Singapore would have to contend with a lot of difficulties. Sir, the management of funds and securities need nimble minds and quick responses. The managers are already operating in a world of extreme uncertainty. They certainly do not need the uncertainty created by the regulations of our Inland Revenue Department. I do not normally like to make predictions but on this issue, Sir, I would predict that Singapore would never become a fund management centre until this issue is resolved to the satisfaction of the market. There are too many cities - Hong Kong, Sydney, Melbourne, Auckland, Tokyo and more - which also want to be fund management centres. These are not cities in underdeveloped countries with poor infrastructure.”
“Hence, the bulk of the intended domestic borrowings by the Government in 1986 would be taken out by CPF whose funds are already with the Government. The issue of the bonds by the Government and the purchase of these bonds by CPF will be like transferring funds from the left pocket to the right pocket. The interest payment will go to CPF where it will again be put as advance deposits with MAS. This increased expenditure of $0.1 billion is therefore more like an intra-public sector transfer. The increased expenditure by the increased grant-in-aid of half a billion dollars to HDB and the increased loans to HDB for land purchases could also be of the same nature. This is because, as what the Minister has said, these increases are for the purpose of purchasing land from the Government at market value. This expenditure, therefore, cannot be considered as expenditure like salaries or payments for services. The private sector does not benefit from this increased expenditure. Table 2 does show an increase in expenditure of $1.81 billion instead of $5.95 billion. Sir, increasing Government expenditure at this time as a means to stimulate the economy is not wrong. However, there is a difference between the stimulative effect of an increase of $5.95 billion and an increase of $1.81 billion. More importantly, Sir, is the disclosure, or rather the lack of disclosure, in the Budget. The Companies Act requires companies to prepare their annual reports on a group basis, ie, consolidation with its subsidiaries. May I ask why cannot the Government follow the spirit of its own laws. Why cannot it also present its budget on a group basis, ie, consolidation with its statutory bodies and subsidiary companies?”
“Appendix 1 simply shows a rearrangement of Table 3 from page 9 of the Budget presentation. Presented this way, Sir, without the transfers to and fro from the various funds, it shows a total intended expenditure increase of $5.95 billion. Put it simply, the intended increase of this amount is about 16% of 1986 estimated GDP of $37.3 billion. It does seem an extraordinary stimulation. However, the Minister has given clues that it will not be so by referring to the increased loans and the grants-in-aid to HDB because of the change in HDB's accounting methods. For a more accurate impact, I would like to refer to Appendix 2. I try to adjust what I would call the larger intra-public sector transfers, ie, transfers between some of the statutory boards and the Government. I have taken the public debt servicing and the HDB items because these are the most obvious and also incidentally the largest increased expenditure items. The Government expects to spend $1.01 billion more in public debt servicing. In the budget it is treated just like another expenditure, such as expenditure on manpower or other operating expenditure. However, I would like to ask whether this large increase in interest payment will ever leave the public sector. The answer, Sir, is a qualified no because the bulk of the interest payment will go to the CPF. To find out why, we must look at Appendix 3. It shows the amount of advance deposits CPF has with MAS. At the end of December 1985, the amount was estimated to be $12.1 billion. What are these advance deposits? Basically, it is the amount that CPF has put aside for purchasing Government bonds. As there are not enough Government bonds available, it has put the money in MAS so that the funds can be used to purchase new issues of Government bonds.”
“Mr Speaker, Sir, I rise in support of the motion in the name of the Minister for Finance. I welcome the move towards the reduction of manpower in the public sector and the scrutiny of whether particular activities in the public sector are necessary. It will surely lead to lesser involvement of the public sector in the economy and hence, hopefully, lesser expenditure. With the lesser need for manpower and expenditure and a greater part of our infrastructure completed, the need for Government revenue in the coming years hopefully should be reduced. This will surely be translated into lesser taxes. Consumption taxes may then not be necessary. Another desirable effect, Sir, is of course that more manpower will then be available to the private sector. If the private sector is meant to be the engine of growth, it will need all the manpower it can get. Mr Speaker, Sir, I congratulate the Minister for a simpler presentation of this year's Budget. However, disclosure of material information still leaves much to be desired. In this respect, I would like to recast some of the figures in another light. May I ask the Clerk of Parliament to distribute some figures. Before proceeding, Sir, may I reiterate that stimulation of the economy through Government expenditure is the increased spending by the Government in 1986 compared to 1985. In other words, it means that the 1985 economic performance was achieved with Government spending in 1985 taken into account. Hence, to increase the impact of Government spending on the economy in 1986, it must be based on the additional expenditure or the increase over 1985 that the Government should be prepared to spend. It is therefore the increase, not the absolute expenditure that matters.”
“Sir, does the Minister not realize that patience may kill the patient?”
“May I ask the Acting Minister whether he will consider a particular case if I submit the particulars to him?”
“Sir, would the Acting Minister say that, in the circumstances that I have just described, the member's CPF funds will still be secured by the first mortgage, albeit this will be on a new property that he has purchased.”
“Does it mean that the Minister will look favourably on such circumstances, especially in times like this when people, having mortgaged their house to finance their business and who are faced with problems of bankruptcy, now require their CPF funds to pay off their business loans?”
“Sir, would the Acting Minister agree that there is presently nothing in the regulations to prevent a member from selling his present house to repay the original bank loan, and then to use his CPF funds to buy a new house?”
“Mr Speaker, Sir, may I ask the Acting Minister for Labour what would be his advice to industrialists who are looking for Singaporeans to fill the jobs but cannot find any Singaporean, and yet they cannot get work permits for foreign workers?”
“Sir, may I ask the Minister of State what is the rationale for not allowing them to have advertisements in the programmes?”
“It is now time for the whole populace together to take action and change the adverse course. Mr Speaker, Sir, I have every confidence that we are capable of making a recovery in our economy. If we cannot do that, then our future will be at stake and we will also lose our face in the whole world. In the present circumstances, we appear quite united and confident and courageous. I believe that we will be able to overcome the present difficulties. At least in the present circumstances we are able to loan out Dr Goh Keng Swee to be an Economic Adviser to China, a country of one billion people. If we cannot solve our economic problems, it will be a laughing stock. 11.45 am”
“To implement this the Ministers in charge of the various Ministries must issue an immediate directive to all their Permanent Secretaries and chief executives of the statutory boards to make an overall review of the measures and charges that have an effect on the livelihood of the people. They must be told to do their best to minimize the pressure on the standard of living of the people. All kinds of charges, taxes and levies, like the PUB charges, rentals, bus fares, petrol tax, parking charges for lorries, etc, must be reduced as far as possible without hesitation. Do not wait for the public to make repeated calls before the changes are made or even not made. In the past when our economy was good the statutory boards had very efficiently made an upward revision of charges and fees. Now the economy is in a bad shape. They must show equal efficiency in making downward adjustments of their charges and fees. Talking about efficiency, it is also my hope that the Government will be able to maintain the morale of the thousands of civil servants. It has already been mentioned that the civil servants will suffer a cut in their CPF and forgo the half-month incentive pay. I want to know whether the Government has any plan to ensure that the efficiency of the civil servants will not drop with the cut in CPF and the loss of incentive payment. Personally I feel that employment in the civil service has the greatest security and the remuneration is quite good. So although they suffer some sacrifice, they should work harder and should not be demoralized. On the whole, Sir, we have all understood the whys and wherefores of the economic recession. We have also charter out the course and planned the measures for solution.”
“To convince our workers to swallow the bitter pill, there are three things to do: (1) everybody should be made aware that whether or not the workers are able to make this temporary sacrifice is the key to success or failure in ensuring our economic recovery. (2) We must increase our vigilance and guard against people who use fallacious arguments or make misleading speeches to instigate our workers and to fan their feelings of dissatisfaction. (3) We must find all possible means to lighten the suffering to be borne by the workers, especially the lower income group. I feel that apart from Government leaders and trade union leaders who have to patiently and carefully explain all the circumstances to the workers, leaders in the business community, the community leaders, local leaders and the mass media, including SBC, newspapers, etc. should also have an active role to play in explaining the new economic policies to the people of Singapore. Mr Speaker, Sir, I have mentioned three points. I feel that the third point I have raised is especially important. The Government has announced the cut in the employer's CPF. It has also announced measures to help the people in keeping up with their housing loan repayments from CPF. These are very reassuring measures. But I feel that the Government has to go one step further to show the people that it has the interest of the people at heart. The Report of the Economic Committee has stated that the Government should continue to reduce other costs within its control. The statutory bodies may have reduced their charges but they must also continue to pass on to the public any further savings resulting from higher efficiency or lower fuel prices. I feel that this is very important.”
“Will this younger generation be able to manifest their concerted effort and ability to survive together in unity in times of crisis and trial? What will be the outcome of this test? The answers to these questions will determine the long term future of Singapore: Whether the future would be bright, stable and predictable or grim, unstable and unforeseeable? If we cannot stand united and put together all our effort to bring the economy onto the right track, then we will be faced with social instability and the future will be much less foreseeable. The present situation is like a little boat fully laden and tossing in the high seas. Right now the urgent task is to ensure the safety of all the people in this boat. We must all recognize that everyone in the boat shares the same fate. If the boat sinks, then everyone is in danger of losing his life. Therefore, we must do our best to lighten the burden on this boat. We must throw away things or try to jettison from the boat to lighten the burden of the boat, ie, to make some sacrifices. So the cut in the CPF, in corporate tax and income tax are measures similar to jettisoning the things from the boat in a storm to ensure and enhance our safety. Undeniably it is the wage earners who are bearing the brunt of the impact because they are in the majority. The cut in CPF and the removal of the mid-year incentive payment, wage restraint, etc. are all sacrifices and sufferings to them which they have to bear. However, this is a bitter but effective medicine that the people have to take for our economic recovery. We must convince the wage-earners to accept this suffering, this bitter pill which will cure our economic ills. So this is a very important and difficult task. It is a task that we must succeed and must not fail.”
“A green paper on this was produced by SDP. Sir, I do not mean the Singapore Democratic Party, but the Social Democratic Party in England. They have produced this green paper as an alternative to the income tax in the UK. I think it will be worth our while to look at this paper to study whether this system could be used in Singapore. With that, Sir, I support the motion. Mr Goh Choon Kang (Braddell Heights)( In Mandarin): Mr Speaker, Sir, in his address the President pointed out that in these trying times of an economic recession the entire people of Singapore should collectively and cohesively assist the Government in overcoming our difficulties. I believe that all duty-conscious Singaporeans will accordingly respond to the call by the President. The First Deputy Prime Minister announced yesterday that the Government accepted many policy recommendations of the Economic Committee. These recommendations will be implemented soon. I feel at this moment that political solidarity is very important. It is only when we are united that we will be able to concentrate our efforts on carrying out the necessary measures to revitalize our economy. The overthrow of President Marcos shows very great courage in the Filipinos. However, if by some misfortune Singapore is thrown into a political turmoil like the Philippines, and there should be disunity in Singapore, then the vitality of the country will be seriously affected. Economic recovery in such circumstances will then be just castles in the air. The economic crisis that we are facing is a political test of our people. Those who are subject to this test are the new generation of Singaporeans and the new generation of political leaders, ie, the younger Singaporeans.”
“In this respect, while the principle is right, I would like to see what these non-essential items are. But in the meanwhile, taking all things at face value right now, I think that the poor will probably pay a greater percentage of their income in taxes, if we try to shift the burden of tax from a direct income tax to an indirect sales tax, or consumption tax. However, Sir, I do agree with the economic objectives of the consumption tax. Tax should be on spending and not on savings. But unfortunately a consumption tax such as sales tax, has undesirable effects. I would like to propose that the Government seriously consider a certain form of tax known as the expenditure tax. This tax is based on a very simple premise that your income minus savings is equal to expenditure. You take your income for the year, and if you minus your net savings, the residual is assumed to be your expenditure. Net savings means a higher level of savings at the end of the year when compared to the beginning of the year. Then you minus it. But if you save less, ie, if your level of savings, this year is less than the level of savings last year, then you have to add the difference to income. To give a numeric example, Sir, if your income per year is $10,000 and, as at the end of last year, your savings was $1,000, your expenditure would be $9,000. If at the end of this year, your savings is $2,000, one can therefore presume that $1,000 is saved.Tax then, Sir, is imposed on this $9,000 because that is what you spent. Therefore, Sir, it is a substitute for income tax but based on expenditure and this tax can be taxed on a progressive basis. This means that the more you spend the higher the amount of tax you pay because the marginal rate goes up. Sir, this is nothing new.”
“Besides the administrative difficulty, the leakages and the abuse that can arise from such taxes, there are two other points I would like to bring up. These refer to tourism and the fact that this tax is a regressive tax. Sir, tourism is presently one of our major sectors in the economy and it will continue to be a major sector. Unlike other places which have a lot of cultural heritages, sights and other things for tourists, unfortunately, Sir, many tourists come to Singapore because we advertise Singapore as a major shopping centre of the East. Therefore, such a tax will make things very, very difficult for that. There are of course various ways for making things easier. One is that they should have a refund of the sales tax imposed on items that they have purchased. But in order to avoid abuse, these refunds are normally not given at the point of sale since items could be purchased for local friends. Refunds are normally given when the tourists leave the country. Sir, I had an occasion many years ago to purchase something in London and I wanted to claim a refund at the Heathrow Airport. The tussle and the difficulty I went through trying to carry my purchase to the customs officer and waiting for a refund is something that I would not wish on any tourist coming to Singapore. And I am very sure when this happens if we adopt such a system, our tourist trade and our retail trade will be very much affected. The other point, Sir, is that it is known that the lower your income, the greater is the percentage of your income spent on consumption. Unfortunately, as long as you spend, whether you are rich or poor, you will pay the same percentage of sales tax. The First Deputy Prime Minister has said that it will be on some non-essential items.”
“I purposely said "hopefully" because we all know that the rate of failure of these companies is high. In the US where venture capital is a big industry, people are talking about one in 20 succeeding, or at best one in 10. But if they succeed, they provide the sunrise companies of the future. And in this respect, I do not think that 16(r)% tax savings is a sufficient incentive for investments in venture capital companies. Look at the tax breaks given to plant and machinery investments, including the 100% write-off in the first year for computers, and special rates of 50% investment allowances on some types of plant and machinery if approved by the EDB. They are in fact very much more favourable than those being proposed for investments in venture capital companies. Instead, I would like to propose that the Government consider a 100% deductibility for investments in these companies. It will only give them a tax savings of 33%. Even the odds are still not good but at least it will give them a fighting chance and give them an incentive to invest. Sir, I do not think that this is too much to ask because the approval of these investments still requires the official stamp of the Economic Development Board. As it is, the proposals are for approved venture capital projects, business expansion and venture capital funds. The Government will still have the final say. If this is too much to ask, perhaps they can have a sliding scale from 50% to 100% deductibi- lity. Let the EDB to determine whether a project should have 50% or 100% deductibility, or something in between. My final point, Sir, is in regard to indirect taxation. The Member for Fengshan has already brought up this issue and I would like to support his views.”
“Mr Speaker, Sir, I spent some time bringing up these two examples not so much as isolated incidents or cases. These two examples merely illustrate that the formulation of policy as contained in the Economic Committee's Report are mere words. The First Deputy Prime Minister has called for the people of Singapore to implement them. I say, "Good, the people will do so." But similarly, Sir, the public sector must also do its best to implement these policies to make them into flesh. And, in this respect, sometimes I think the civil servants do not know what their political masters want. Sometimes I believe that policies are implemented solely from their viewpoint and not from the viewpoint of the nation. In this respect, Sir, I hope that there will be some Ministry or some body in the Government looking at this and to ensure that implementation of policy be made as expeditiously and as favourably as possible. Sir, I would now like to touch on two policies which have been stated in the Economic Committee's Report that these are policies necessary for future growth. Both refer to taxes. The first one I would like to touch on is the tax deduction for equity investments in venture capital and business expansion. Sir, the Committee has proposed a 50% deductibility for such equity investments. This means that at the new proposed corporate tax of 33%, the tax break for these people is only 16(r)%,. For every dollar of investment they make, they will save 16(r) cents in taxes not paid. Sir, we are aware that these will be the companies that will provide the cutting edge for the long-term growth of Singapore. These will be the companies, hopefully if they grow, will provide employment for us.”
“So with the Government's new objective, he thinks that he will not be penalized by the Government for being too successful. Sir, I think this is one of the best moves the Government has made in its qualitative philosophy and policies. But I would like to ask: Why is it that recently we heard that Telecoms is now going into the business of providing PABX systems to private companies? I do not believe that this is one industry or one sector that concerns issues of national security or defence. And I do believe that the market is competitive enough with various companies providing PABX systems. Sir, the other issue I would like to bring up refers to the formation of the Business Enterprise Committee. Here we have a committee chaired by a Minister of State with its members consisting of senior civil servants. These are people who formulated the policies in the first place. These are people whose good intentions and good wishes, with all their power at their command, have formulated the policies from their viewpoint, from the viewpoint of the Government. It is difficult for those in the private sector to understand how these people can now look at policies from the viewpoint of the private sector. Since the stated objective of this Committee is to remove red-tape and bureaucratic road blocks to facilitate business and entrepreneurship, it is indeed strange if this committee has absolutely no private sector representation. Sir, the Government Divestment Committee has as its Chairman a private sector businessman, Mr Michael Fam, who was recently voted Businessman of the Year. I think if the Government can entrust the Divestment Committee to a private sector businessman, the least it could do in its Business Enterprise Committee is to have some private sector representation.”
“They can then learn new skills on a full- time basis and can take advantage of the next boom when it comes along. They would then have skills relevant to the future, and not the skills of today because these skills learnt on the job are normally non-transferable and skills learnt in sunset industries. Again, looking at this aspect of unemployment, there is also another large group that we may have to face. Here I am talking about the large group of school leavers. They too have little skills or maybe no skills at all. Although a number will be going for further studies, there will be a number that will need, for some reason or other, such as family background, to enter the employment market. They too will find difficulty in seeking employment. Could the Government not also provide full-time training for these people? And again pay them some wages or some stipend so that they can support themselves. Sir, coming to the Economic Committee's Report itself, I would like to touch on one key issue, ie, the Government's faith and belief that it will be the private sector that will have to act as the engine of growth. In this respect, I would like to bring up two important points. One is the Government's goal of privatizing its companies and its goal of not getting into the private sector unless for national security reasons. Sir, I think the best reaction to this is summed up by a business friend of mine when he said, "Hooray, now I can afford to be successful", When I asked him what he meant by "I can afford to be successful", he said that in the past, he was afraid to be too successful because one statutory board or another would start a company to compete with him.”
“Another aspect I would like to touch, before I go on to the Economic Committee's Report, will be on that of the unemployed. Whatever may be said in this House, Sir, the unemployed are still unemployed. It does not matter whether there are 150,000 to 180,000 work permit holders in Singapore, although this presumes that there are jobs available if the Ministry of Labour will not issue work permits. Sir, we must look also at the human aspect of it. Could it be that it is not just a matter of the unemployed not willing to work hard? Could it be that the pay is simply insufficient to support them and their families? Sir, we all know that these jobs require a lot of physical labour. This means that even if they take such jobs they might be too tired to moonlight on a second job in order to support their family. Sir, more importantly, if you look at it from a national viewpoint, if these unemployed are asked to take on these jobs, they will forever be the unskilled or the semi-skilled workers. And when the next recession comes along, they will be the first to be hit again. Sir, should we ask them to remain forever in this low-paying jobs? Should we not instead help them to improve themselves? By this, Sir, I mean that they are presently unemployed and they presently have free time. Why can't the Government give them full-time training? In this respect, I would like to propose that the Government set up a fund to train these unemployed people on a full-time basis. Perhaps they should also be paid a stipend to help them to support their families in the meanwhile. This stipend could continue as long as they are under training. I am not talking about much, Sir, perhaps about $400-$500 per worker.”
“Hence, I hope that I will be able to contribute by adding some suggestions, Sir, for improvement to some aspects of the Report. I also echo the call made yesterday by the Member for Alexandra - that the Government will listen to this side of the House, and that it will consider all the suggestions and modifications made by Members of this House when they formulate new policies. But, first, I would like to support the plea from the Member for Fengshan regarding the tax rebate to be given to corporations for the Year of Assessment 1986. Sir, there are a lot of ailing companies that are experiencing cash flow problems. The tax rebate will certainly help them and, I hope, will certainly prevent further retrenchment. We must not forget that tax is based on profit that has been calculated on an accrual basis. Whereas you have to pay tax when it is due, you may not get your income when it is due. By this, I mean that tax is based on company profits that are based on the assumption that your creditors will pay you. It is only, after some period of time, when creditors do not pay you that you are allowed debts to be deducted as bad loans or losses. But in the meanwhile, whether the creditors pay these ailing companies or not, the companies will have to pay tax on that income. The other point, Sir, is that on residential properties. There are those people who have purchased second houses for investment purposes with their CPF from about two years ago. They too are suffering from the present recession and the downfall in property prices, including the very bad rental market. They too need help. And I see no reason why the rebate on property taxes cannot be extended to them.”
“Mr Speaker, Sir, I rise in support of the motion standing in the name of the Member for Changkat. Sir, yesterday the First Deputy Prime Minister stood in this House to make a clarion call to all the people of Singapore to stand as comrade-in-arms in the battle against the current recession. He did not promise us an easy time nor an easy task. Instead, we will have to sacrifice. Our expect ations need to be lower. Our standard of living will probably drop. But in the end, we will come out leaner, stronger and more prepared to face future challenges. In the end when the battle is over, that nation of excellence will be ours. In the past few days we have witnessed in one of our Asean neighbours, the Philippines, the awesome strength of people power. They have shown the world how people with one heart and one mind can perform miracles. Sir, I would like to ask the people of Singapore: Are we any less patriotic than the Filipinos? Are we any less capable? Are we so blind that we cannot see that we need people power to overcome our present recession? Sir, this is our economic Dunkirk and the First Deputy Prime Minister has called upon the nation to take up arms against it. Our weapons shall not be the weapons of war, but shall be the weapons which we call hard work, cooperation, our will to succeed, and our desire to excel. I am confident that the people of Singapore will respond to that call as one nation, one mind and one heart. The Government's policy in the economic field appears to be based on the underlying philosophy that is contained in the Economic Committee's Report. The President has said so, and the First Deputy Prime Minister has confirmed it.”
“Mr Deputy Speaker, Sir, here my concern is not so much with the mini-turf clubs which I think one really sees that are big time operators. But very often neighbours get together to gamble for the fun of it. They can also actually fall under the term of "common gaming house". I am sure we have heard many stories where gaming in one neighbour's house can lead to some form of arrest. Here, I am therefore very concerned with the enhanced penalties on the common gaming house both in terms of the minimum amount of fines as well as the mandatory jail sentences. Would the Minister please assure the House that this clause is not meant for such situations?”
“It was this period that gave the very strong financial foundation to the Mafia, and to this day they have used that money to good use according to their objectives. Sir, I do agree that presumptions in law are something that are quite odious and we should try to avoid as much as possible. Nevertheless, I think even with cur- rent legislation having the presumptions, the Minister has come to this House to say that they are not sufficient, that the operators and the organizers of such mini-turf clubs have been caught by the Police and have, in fact, laughed at us in our courts and willingly paid the fines, and then next week go back to such operations. Sir, should we therefore tie the hands and legs of our Police, other enforcement agencies and our courts to such an extent that we cannot move at all? Looking at the presumptions, I would say that if really you are not in the business of providing outlets for gambling or of running betting information centres, there is sufficient proof in other ways to show in court that you should not come under this legislation. After all, many of our legitimate organizations - the banks, the finance companies, and other businesses - have many many telephones in their offices, and I am sure they are not the ones to worry about the existence of three or more telephones. 5.00 pm”
“Mr Speaker, Sir, I think he did say that you can infer from this. In any case, I fully support these three Bills because I think it will give more teeth to the Police to try to eradicate illegal gambling. I think we should bear in mind that it is not that gambling is wrong but that illegal gambling has many connections with crime. We should take a lesson from the USA when they had its prohibition and the business of providing drinks was left basically to the hands of organized crime. Historians today have said that it was during that period -”
“If my memory serves me well, I think it was not so long ago that the former Member for Kreta Ayer and the former First Deputy Prime Minister once said in this House that you can take two sets of completely unrelated factors and create a correlation from them. While he is entitled to his inference that people are diverting money from the grocery bills to indulge in gambling, I think that is a matter that is very much open to -”
“Mr Speaker, Sir, a lot has been said about double standards of the Government. Here, I would like to say that is really not the key point that is at issue. Basically the Minister has come with the complaints that he has received as well as comments from grassroot and community leaders that the present law is inadequate to deal with illegal gambling and the mini-turf clubs. He is simply asking this Parliament to amend those laws. Whether legal gambling is moral and illegal gambling is immoral is not really the issue. In this respect, legality has nothing to do with morality. But I also join in the chorus to say that the Government should have no business in the provision of gambling. Perhaps they can put the controls, exercise the necessary supervision, as well as institute the necessary taxes and licence fees to be collected. The Government can, therefore, collect revenue through the normal way of taxation and should not be responsible in providing the instrument for gambling. In this respect, I would like to go as far as to say that the Government should perhaps close down the Singapore Pools Pte Ltd or even privatize gambling to the extent of allowing enterprising businessmen, if they want to, to enter into this business. Gambling in this respect as many have said, including the Member for Queenstown, is like drinking, maybe like smoking. There is nothing wrong with it in moderation. It is only in excess that we find problems. The Member for Whampoa quoted an example of the aftermath of the California State Lottery and the drop in the business of the grocers.”
“Mr Deputy Speaker, Sir, I rise in support of the Bill which has been put forward by the Minister for Home Affairs and Second Minister for Law. We have heard the moving arguments by both the Members for Clementi and Fengshan and I do not wish to enlarge them any further. But it always strikes me as very strange, Sir, that while we are here on a barren piece of rock without any form of natural resources, there are many people, including a number in my own Constituency, who wish to be Singapore citizens. After all, I think, as Singapore citizens we do not lead an easy life. There is no oil under our feet; there is no gold in our backyard, and even our welfare assistance payments are very minimal. They cannot keep body and soul together.”
“I am not asking a question, but I would like to state a point of clarification on my question.”
“Point of clarification, Sir, on the Leader of the House's point of order.”
“Mr Deputy Speaker, Sir, I would like to raise a point of clarification. The Minister has said that it is a matter -”
“Sir, is the Minister of the opinion that the probability of losing the CPF balances from education is very much higher than the probability of losing from property investments? The Minister for Foreign Affairs and Minister for Community Development and Leader of the House (Mr S. Dhanabalan): Point of order. I think it is quite clear in the Standing Orders that Ministers cannot be asked to express their opinion. Supplementary questions must address very clearly to the original Question and not ask Ministers to express opinions on all kinds of unrelated matters.”
“Sir, is the Minister not aware that the losses of those CPF members who have used their balances to buy houses during the last two years have been very much more than they would have been had they (the members) used the money for their children's education?”
“Sir, would the Minister of State consider extending the times of operation at the pasar malam at the Handicraft Centre to other days of the week?”
“I just want to point out to him that the use of maritime law is a very specific case. Whether it can be applicable to land law or not depends really on how the law is enacted here.”
“Here, I would like to suggest to the Minister for Labour to consider changing the law to put the workers' wages and CPF contributions, regardless of whether they come from the workers' wages or from the employers, ahead of secured creditors. This is not something new, Sir, because under maritime law, the seamen's wages come ahead of secured creditors. In this respect, I must admit that we are likely to get objections from secured creditors, such as the banks, which, normally in most cases, will be holding legal mortgages on the liquidated company's assets. Hence, to prevent abuse by unscrupulous employers who may pay themselves millions of dollars and high salaries, I would like to propose that this suggestion should only be applied to workers covered by the Employment Act. In this case, hopefully, the amount would not be too much and the secured creditors would have less objections.”
“And as far as courses are concerned, certainly the CPF Board is not going to approve somebody doing a Ph.D. in, say, the mating habits of butterflies. But, Sir, if one is going to do a proper course like economic development, computer studies, I am sure this is something within the approved list of the Psc. The mood, as the Member for Kebun Baru said, seems to be more liberal today; in the sense that there is talk to allow CPF members to have a greater say and responsibility over their funds. it is in this mood, Sir, that I hope that the Minister concerned would add another P to the four Ps, ie, that the politics of perseverance, persistence and patience will finally pay off. Sir, another point I would like to make is that we have read in the papers recently about the non-payment of CPF contributions by some employers. The present system and the present situation of workers' CPF payment under the law and the monitoring of the CPF payments by the Board is not satisfactory. We have read or we have heard that the CPF contributions do not have much priority in terms of the ranking of payments when companies are liquidated. In fact, presently, if the CPF contribution is deducted from the employee's salary, I think, it ranks about second or third. And if it is the employer's contribution, ie, the other 25%, it ranks even lower. Sir, we know that workers in Singapore today use the CPF contributions for many things, the most important being the purchase of a roof over their head. And it must be a shock to those workers who find that they are actually not paying for their houses when they thought that they are. Currently, the CPF contributions rank below secured creditors and receivership costs.”
“This presumes that the funds are completely used up for their children's education. But, Sir, I do not think this would be the case. Just like property investment where you can withdraw only 90% of the Ordinary account balance and up to 80% of the valuation of a property, I think similar controls can be instituted for withdrawal for children's education. Also it does not necessarily mean that every child will completely ignore his parents if the child fails to pass the course or if he does not get a good job. I would think that since his parents have sacrificed their savings to secure the best for his future, he will definitely be more motivated to support his parents. Sir, we are an Asian society. That has been said many times in this House. And I would say that it is in the nature of our values that we want to sacrifice our own future for our children's future. This sacrifice is the stuff on which filial piety is built upon, and I fail to understand why the Government which is trying to promote these values is dead against this idea. At the same time, I understand that another objection is that the child may fail. It is not necessary that the child must pass his examinations or complete his tertiary education. But it is because of this sacrifice that the parents are prepared to make that we create or further the concept of filial piety and strengthen the bonds between the parents and the child. Finally, there is the objection of abuse in terms of the institute as well as the course. Here, I am sure the Public Service Commission has sufficient controls and means to make sure that the university they go to, whether it be in Singapore or abroad, must be an approved university.”
“Mr Speaker, Sir, I would like to follow up on the idea of allowing members to use their CPF monies for their children's tertiary education proposed by the hon. Member for Kebun Baru. Sir, this is not a new idea. It has been brought up almost every year but, for some strange reason, this idea has always been turned down. However, as somebody said, if it is a good idea, we must play the four Ps, ie, the politics of perseverance, persistence and patience. Sir, I do not wish to go into the benefits of such a scheme. I think the Members, past and present, especially the Member for Kebun Baru, have gone into this. But I would like to touch on some of the points that have been raised by Ministers in previous years when they refused to consider this proposal. Briefly, they fall into four areas. The first area, Sir, is that they said such a scheme is consumptive, which means that the funds are withdrawn before the age of 55. This is really not an acceptable argument because, similarly, the funds withdrawn for purchase of houses, especially when prices of private houses fluctuate very widely in our market, are also withdrawn before 55. In fact, I would like to say that with tax benefits for CPF contributions, I know a number of companies that pay low salaries, high bonuses and high CPF contributions so that CPF monies can be withdrawn later for the purchase of houses. In this way, employees get their funds for the purchase of private residential properties as well as getting the tax deduction for their CPF contributions. Sir, if property investment is considered as something that is desirable, then I think more desirable would beth e investment in the children's future. The second argument is that if the funds are used, the CPF member could be destitute in old age.”
“Proper controls to prevent abuse and the erosion of the tax base could be instituted; controls such as EDB-approved investments and, perhaps, limits on the amount of deduction allowable. Surely this will encourage the movement of capital from those who have to those who need.”
“Mr Speaker, Sir, I did not submit an amendment. So I will be brief. Sir, the Hon. Minister for Finance in his Budget Speech has called for the private sector to be the engine of growth. I agree completely with this objective. However, Sir, to do the job, the private sector requires large amounts of capital. I am not implying in any way that there is insufficient private capital in Singapore. However, I believe that this capital is in the hands of the professionals and probably the senior corporate employees, and not in the hands of the entrepreneurs. This is because of our successful economy that has been led at one time or another by the multi-nationals, by the large corporations, by construction, by public Government spending. Sir, without any encouragement these capitals unfortunately are invested in relatively safe investments like bank deposits and the like, and not in riskier investments such as new technology companies. Sir, the future of Singapore lies not in building more mouse traps but in the invention and the designing of better mouse traps. And it is in these areas that the risk would be the greatest. Last year, an investment allowance was given to local companies to invest in new technological projects. This was, to quote the Minister then, "to encourage our local investors to venture into frontiers of technological advancement and should serve to broaden our present technological base." This year, Sir, I am disappointed that there was no follow-up in this direction. I hope that the Minister for Trade and Industry will consider this suggestion for next year's budget; which is to permit the investments of the individual taxpayers in new technological industries to be deducted against their assessable income if such investments fail.”
“Sir, may I know why are NPPs set up on a constituency basis and not on a logical basis, such as a whole new housing estate to be covered by a number of NPPs?”