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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“This would add up to $5.3 billion in 20 years' time, assuming no income is earned from these funds in the meantime. We know that this is not realistic. If we assume a 5% return on the funds put into the sinking fund, the amount needed would only be $160 million. At a compounded interest rate of 5%, this would add up to $5.3 billion in 20 years' time. This amount is much lesser than one-tenth of what is collected annually from COEs, ARF and the taxes on petrol. Further, the Government cannot look at these expenditures in isolation. The increases in the value that better transport brings to the land around an MRT station are not small. The high prices paid by private developers in Government land tenders for land near MRT stations, whether in Choa Chua Kang or Woodlands, are testimony of this factor. Surely, the Government cannot say that they receive no financial benefit from the MRT system when the higher revenue received from these sales is there for all to see. Even if the land is privately owned, that means the Government cannot put the land up for sale, the Government still will get its due share in the form of higher property taxes. And mind you, Sir, property taxes are in perpetuity. Coming back to the issue of the sinking fund, I would also like the Government to do the same for the funds put aside for depreciation by the SMRT. The rationale is simple. Depreciation is based on the historical costs of the assets. It is considered as expenses, affects the profits, but does not constitute a cash outflow. In other words, unlike other types of expenses, the money still remains in the company, and the company puts it to good use to earn more money, even if it meant only putting it in the bank to earn interest.”
“Sir, in such a case, a financial framework similar to that for the trains could be used. Alternatively, the Government could reduce the taxes, duties, fees or levies paid by the bus operators. Such taxes are transfer payments to the Government and do not add any value to the improvement of the transport system. So, are these forms of transfer payments by the operators really necessary? If not needed for revenue purposes, surely the Government could abolish all these transfer payments and thus reduce the operating cost of the transport operators. Such a policy would definitely help to make public transport more affordable to the public. Sir, am I asking too much? Let us look at what I am asking. All that I am asking is for the Government to take a look at its financial requirements, decide on the class of land transport it wants its citizens to have, whether world class, Singapore class, lousy class, bad class, good class, see how much the people can afford to pay and then act accordingly. Since it has stated that it wants a world class land transport system, ie, a land transport system including all modes of public transport, and that it wants such a system to be affordable to the people, then surely it must be prepared to do the necessary to make its own vision come true. Would such a policy then mean abandoning its financial prudence? Sir, again I do not think so. The White Paper does not mention the details of how the inflation financing would be funded. I would therefore like to suggest that the Government set up a sinking fund for this purpose. For example, based on the estimated $5.3 billion needed to replace the projected price increase of assets for the existing line, the Government could easily put aside $265 million each year in a sinking fund.”
“But from a gut feel, I am pretty sure that the lion's share of the revenue accrues to the Government in the form of COE premia and various types of taxes, levies and fees. Sir, let me state here that there is nothing wrong with a government raising its revenues by way of taxes, levies and fees for its needs. However, when the reasons for levies and fees are for the purposes of control and management, then as much as possible of such revenues should be returned to the system. In other words, up to now, the Government has been taking a lot from the system and not putting back enough, ie, until now. With the new financial framework in which the Government will finance the inflation of SMRT's operating assets, the Government has decided to put a bit more into the system. I have been advocating for such a step; in substance, if not in the manner which the Government has proposed. I thus very much support this proposal to ensure that MRT rides, in spite of the high levels of comfort and convenience, will remain affordable to the majority of Singapore's commuters. The next obvious question thus would be: What about the affordability of the other modes of public transport? Already, SBS has called for the Government to finance the price inflation of its buses. Should the Government do so? Sir, I think not, at least not at this point; not because it is, in principle, wrong but because the bus operators do not need such help at present. But if one day the bus operators need to increase the convenience and comfort levels of bus travel to the point where the fares become unaffordable to the commuters, then LTA will have to do something. This could mean some form of financial help, because I shall not use that dirty word beginning with the letter "s".”
“Thank you, Sir, for the opportunity to speak on this motion. The vision of a world class land transport system as painted by the White Paper cannot but excite all of us to what is in store for us in the future. I support the vision of the White Paper and the objectives that the Land Transport Authority wishes to achieve. They are indeed laudable goals. Having said so, however, there are some missing areas which, if included, would make the White Paper more comprehensive and perhaps a little better. I would like to touch on some of these areas. The triangular relationship between the commuters, ie, the people, the transport operators and the Government is equivalent to the concept of a 3-way partnership. To me, a partnership should be one of equality. Only then would such a partnership be enduring. Unfortunately, the partnership in the land transport enterprise is not one of equality, but one of inequality. Sir, permit me to explain. If we look at the total expenditure spent on land transport, ie, expenditure such as the cost of building roads, the land costs, the prices of vehicles, including taxes, the operating costs and so forth, we can liken it as the total revenue to the system. This is quite obvious, as from a systems viewpoint, somebody's expenditure is another body's revenue. It is like saying that when I buy a bag of rice, what is my expenditure is the shopkeeper's revenue. Sir, such revenue goes towards the various parties for the import cost of vehicles, the cost of materials to build the roads, manpower cost, cost incurred by transport operators, including their profits, the Government in transfer payments such as taxes and levies, etc. I do not have the means of calculating the magnitude of individual items.”
“Sir, therefore, in such cases, if the HDB dwellers co-pay for the linking up of this cable television network, then the HDB's deficit would be much smaller and the grant would also be smaller. But because HDB now pays the share of the cost and the residents do not have to pay, the grant is bigger. BG George Yong-Boon Yeo: Those living in housing estates and who subscribe to SCV would have to pay an installation charge and, in addition, they have to pay a monthly subscription charge. CONVERSION OF ZEBRA CROSSINGS INTO PUSH-BUTTON PEDESTRIAN CROSSINGS 4. Mr Teo Chong Tee asked the Minister for Communications whether the Land Transport Authority will convert zebra crossings into push-button pedestrian crossings for greater road safety.”
“Sir, does the Minister deny that the HDB actually gets a grant from the Government to cover its operating deficit on an annual basis? BG George Yong-Boon Yeo: Yes, of course, HDB does get such a grant. And it would require less when SCV takes over the central antennae system because the maintenance of that system would then be done by SCV instead of HDB.”
“Sir, I think the Minister has missed my point. My point is that the HDB's link-up is being paid for by the Government because, although HDB pays for it as a landlord, one must remember that HDB's yearly operating deficit is being funded by the Government through a grant to HDB. If HDB had not paid for this cost, HDB's deficit would be smaller and the Government therefore grants a smaller amount. In this sense, although it is being paid by HDB, it is actually being paid by the Government. And I am saying that if it is being paid for by the Government, then the people of Singapore living in private estates should also get the same benefit. BG George Yong-Boon Yeo: I do not think that logic applies. HDB estates are generally subsidised. They are not being additionally subsidised for cable television. HDB is paying what it would have to pay anyway for the MATV system. In fact, HDB would have to pay less in the future because the future maintenance of the CATV system would be undertaken by SCV, and not by HDB.”
“Let us try it out on a voluntary basis first, find out the extent of their problem before deciding whether legislation is necessary.”
“Sir, my point is what if some private households cannot afford or will not do it on the principle that the Government is paying for HDB households? So why should it not pay for private houses since HDB actually shares the cost with Singapore CableVision? When HDB has a deficit, the Government actually gives HDB a grant for covering the deficit which means that in actual fact, in the end, the cable links to HDB flats are being paid for by the Government. In such a case, why should the Government not pay for private houses? BG George Yong-Boon Yeo: Mr Speaker, Sir, in general, HDB is not paying more than it would have to pay to maintain the existing cable system, which we call the MATV system, as opposed to the new cable ready central antennae system which we call the CATV system. For new flats which are already wired for cable television, the full cost is recovered from the buyers. For old flats where MATV systems are due for replacement, HDB will pay what it would have to pay anyway for the MATV system and the rest will be topped up by SCV. For flats which already have the MATV system and are not yet due for replacement, HDB will cough up an amount roughly in between zero and what it would have cost them to completely replace the system. So it is not as if the laying of IT infrastructure for HDB estates requires additional funding by HDB. In general, they are paying what they would have to pay anyway. I think Mr Heng's question concerns what happens if private housing estates voluntarily opt out from the cable TV system and whether we would require them by law to install such a system. I think this is a bridge we will cross when we come to it.”
“Sir, may I ask the Minister whether it is true that cable TV will also be a platform for IT2000 and whether the Singapore Broadcasting Authority has the intention to link it to every home so that every household can take part in the national programme? May I ask what the Government will do in cases where the private households just cannot afford the link-up? BG George Yong-Boon Yeo: For new developments, we will require the installation to be done. For existing developments, this will have to be phased in gradually and I do not see a problem for most private estates because the cost involved is not huge. If management corporations find it difficult to foot out a high upfront cost, SCV is prepared to negotiate a low upfront installation cost but recover the cost back later in higher subscription costs. But the objective is eventually to have all the households in Singapore wired onto the information highway.”
“Mr Deputy Speaker, Sir, judging from the earlier speakers, it is clear that they welcome the establishment of the Land Transport Authority of Singapore, specially since the LTA is meant to have the total perspective of all the land transport policies and implementation in Singapore. Sir, just as clear is also the call, especially from the two earlier speakers, for the Government to give the LTA adequate resources and, in this case, I specifically mean the funds and the money to carry out its responsibilities. If the LTA is to be successful, surely it must be in the best position to know what is needed in terms not only of policies to ensure the smooth flow of traffic and other land transportation modes but also what is needed in terms of infrastructure. Therefore, it must also have its own resources to build this infrastructure. It should not be dependent on the generosity of the Ministry of Finance. Otherwise, what we are doing today is nothing more than a reorganisation of some Government functions. There will be little or no value added if resources are not forthcoming. Sir, in this respect, I just want to correct one point of the hon. Member for Potong Pasir, ie, under the present Bill, the LTA cannot be one of the richest statutory boards in Singapore, because the bulk of the funds from COEs and ARF actually goes to the Ministry of Finance. In fact, the Minister in his speech mentioned that LTA's projected surplus would be about $5-$10million a year. Sir, I hope that the Minister will be able to persuade his Cabinet colleague to give the LTA adequate resources, not when the LTA needs the funds but from the start. In this way, the Land Transport Authority of Singapore can have the means to properly plan its objectives from day one. Sir, I support the Bill.”
“Sir, as the MINCOM's statement has indicated that $5 billion is a huge sum to spend on the North-East line, may I ask the Minister whether he would consider a much cheaper option by having a fish-hook loop, branching off from Yio Chu Kang station of the North-South line to pass through Jalan Kayu, Kangkar, Punggol and Serangoon New Towns? And if it stops there, many of the stations would be above ground. I believe it would be much cheaper. Unfortunately, it will also have the unintended effect of bypassing Potong Pasir.”
“Sir, may I ask the Minister whether he would therefore look into the reduction of the foreign workers' levy from the traditional sources as part of his review”
“Sir, may I ask the Minister whether this means that we expect to see more changes from the other Ministries for a fairer system soon?”
“Sir, again I thank the Minister. I would further ask the Minister to help me with another matter. Could the Minister also persuade his Cabinet colleagues to do likewise for the other Ministries?”
“Sir, I would like to thank the Minister for his generosity. I would like to ask him whether there are other types of fees which are similarly charged, ie, on the current basis, by his Ministry and its related organs. If so, I would like to ask the Minister whether he would also change the basis, so as to give the payers of these fees a fairer deal and for them to enjoy the full period for which the fees were paid.”
“Sir, I thank the Minister for his replies and beg leave to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $71,390,120 for Head I ordered to stand part of the Main Estimates. The sum of $790,592,100 for Head I ordered to stand part of the Development Estimates. Head M -”
“Sir, may I request your indulgence to say that it is evident that there are many in this House who are interested in the findings of the feasibility studies of the North-east line and the Changi Airport extension line. Therefore, may I propose that the Minister present the feasibility studies to Parliament when they are completed in the middle of this year?”
“Sir, I beg to move, That the sum to be allocated for Head I of the Main Estimates be reduced by $10 in respect of Code IF 3100. Sir, under this amendment, I just want to stand up to be counted as a supporter of the Member for Braddell Heights in his quest for a North-East line. A North-East line would go to my constituency, ie, the Cheng San GRC. I believe my GRC colleague, Dr Michael Lim, will elaborate more on this issue.”
“Sir, before I withdraw my amendment, I would like to inform the Minister of State that bus companies in Singapore are not like any other company in Singapore. No other company in Singapore has been helped and assisted so much by Government policies to improve its bottom-line. Sir, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“The benefits to the commuters of higher productivity is that bus fares can be maintained and service standards can be adhered to or even improved upon in spite of the rising costs. The ROV and PWD have implemented bus priority schemes like bus lanes and B-signal to smoothen the movement of buses on the roads, so that buses can adhere to schedule and provide more reliable service to commuters. The PTC has also encouraged the bus operators to instal automatic vehicle location system in another effort to improve reliability and regularity of service, and to provide real time service information to help commuters plan their journeys. All these measures are aimed at improving service levels for the benefit of commuters. Higher levels of service will mean more resources and consequently increase in operating cost. There is therefore a need to strike a balance between the quality of service and bus fares to ensure that commuters get the best value for money. Mr Heng is right that the Government has done a lot to improve the efficiency of the public transport system to facilitate the movement of buses. I believe the bus companies should take note of the concerns expressed by Mr Heng. But commuters must also understand that ultimately how much the service level can be improved also depends on how much the commuters are prepared to pay.”
“Sir, I beg to move, That the sum to be allocated for Head I of the Development Estimates be reduced by $10 in respect of Code IC 5100. Sir, recently, the Government implemented the B-signal project to improve the efficiency and service standards of buses. This definitely will add inconvenience to other road-users by giving priority to these buses. Of course, the result is that the buses would have higher efficiency and, presumably, higher productivity, resulting, presumably, in lowering cost and increasing profits. In line with such priority pilot projects, the Ministry, I believe, is also asking the bus companies to further improve their services through, for example, better quality buses as well as facilities like global positioning systems (GPS). In this respect, I welcome such measures by the Ministry, but I hope that the bus companies and bus operators will not use this as excuses to later on increase their fares. And when they are trying to increase their fares, they should remember that the priority given to them by all other road-users in Singapore, in fact, has helped them to increase their bottom-line over these years. Sir, would the Minister give this House assurances that such improvement projects of bus operators will not result in higher fares? The Minister of State for Communications (Mr Goh Chee Wee): Sir, Mr Heng commented on the bus priority scheme and he also expressed concern about the possible impact of the new project undertaken by SBS on bus fares. Like other companies, SBS and TIBS have to face the pressure of cost increases due to rising wages and other factors. And like other companies, bus companies must keep improving productivity to neutralise or offset the impact of such cost increases.”
“Sir, I thank the Minister for his reply, especially on his childhood's travelling experience. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head I of the Main Estimates be reduced by $10 in respect of Code IC 1500. Sir, first I would like to thank the Minister for his earlier enunciation on basic bus standards. However, I think there is a need to have these basic standards, that means, the actual numeric numbers, and not just broad statements of policy, to be prominently displayed, so that commuters can know what these standards are. In this way, the commuters could become the main component of a very good monitoring system. At the same time, it should also make it very easy for commuters to provide feedback on compliance or non-compliance with the standards by the bus operators. In short, I believe it is the Ministry's responsibility to come out with a simple system for the commuting public to play a key monitoring role in this issue of bus standards.”
“Sir, I thank the Minister for his reply and I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Yes, Sir, I will. Sir, this means that, under this system, the market will eventually determine what type of vehicles and what type of categories are required. I believe such a system will cater for better future demands. I am not suggesting that the change be made now as the system is currently undergoing an experiment on double transfers. However, I would suggest that the Ministry seriously study this proposal and consider implementing it after the double transfers experiment.”
“Sir, last year, I suggested a single bidding category for COEs. This year, I am still suggesting that the Minister considers this system. In case he has forgotten, let me roughly repeat what I suggested last year. Sir, bids should be for COEs, without the need to state a category. Only when registering the category, then the successful bidder would need to register a vehicle in that particular category. And to retain the progressive nature of the prices, perhaps vehicles with higher engine capacities could pay higher COEs than vehicles with lower engine capacities, that means, at particular multiples. The progression could be based on those progressions that are currently being used for road tax. Sir, I believe there are three benefits for this suggestion. First, the progressive nature would be institutionalised, that means, cars with higher capacity engines will always pay more than cars with lower capacity engines. This would be unlike in the present system when sometimes the COEs for higher engine cars can actually be lower than COEs for lower engine cars. The second benefit is that it will be a more orderly market. This is because the numbers available for common bidding are larger. Hence, they will provide greater stability. Unlike now, given the small numbers in each category, prices can fluctuate wildly from month to month. Most importantly, the third point is that this system actually makes it unnecessary for the open category. I think the Minister has said that the open category is actually for fluctuation between categories, which means that you want to provide a flexibility for changes in demand in different categories.”
“Sir, on the second point on traffic congestion at expressways, again, the Minister said that his Ministry is going to try out the Road Pricing scheme pilot project on certain parts of the ECP because of traffic jams during peak hours. Again, the method used is monetary means without looking for other causes. Sir, what are the causes of these jams? Why would residents in the East Coast area want to get caught in traffic jams daily in their journeys to their places of work, perhaps in the West Coast, in the city, or in Jurong? Again, they get caught when going home. Why do they not take the MRT or the express bus services? Is it because of inconvenience? Or is it because of discomfort? Even if such trunk services like the MRT and express bus services are first class, what about the feeder services at their point of starting and point of destination, that is, at their residences or at their places of work? Are these convenient to bring them from where they stay to the terminus to take the trunk services and then bring them to where they work from the terminus? Sir, I think the Ministry should give more thought to the causes of these peak hour jams before resorting so readily to more fees. The Ministry should study and see whether there are other reasons, not just on expressways but elsewhere, for these jams. Perhaps resolving the problems elsewhere may help to reduce the jams on the expressways. Sir, can I continue on the third point on COE?”
“If it were so, the Minister for Finance might as well increase the company's tax rate to, say, 100% and then give a rebate of 73%, therefore, saying that "Oh, it should be 100%, but I am giving you a rebate of 73%. So you are only taxed at 27%." It is quite ridiculous, is it not?”
“In this way, the revenue raised through discouraging people to use private transport can be used to increase the convenience and comfort factors at reduced cost of public transport. Sir, the objective is to reduce the convenience and comfort differential and to increase the cost differential between public and private transport. In this way, more people can be encouraged to use public transport. Is this what the Minister or the Government will call it by their dirty word "subsidy"? No, Sir, I do not believe it is, because it is actually different parts of the same issue. It is not subsidy, in the same way that we do not say that the first class travellers in a flight subsidise the economy class travellers although they pay vastly different prices and both reach their destination at the same time. I would say that if the Minister is really serious on providing public transport to improve the mobility of Singaporeans, I hope he will thus consider the following suggestions: (1) To reduce all forms of duties, taxes and levies which increase the cost of operating mass public transport. Why increase the cost of mass public transport through these artificial Government-induced measures if the Minister wants his vision to be a reality? (2) Provide grants to improve the frequency and quality of feeder services not only in HDB estates but also in private residential areas. Such grants can be partially recovered through a higher usage of MRT and trunk route services. (3) To reduce the tax burden of operating taxis, as taxis are a form of public transport, albeit at the higher end. Before I conclude, I wish to remind the Minister again that abolishing the tax burden is not a subsidy or a concession.”
“Sir, I beg to move, That the total sum to be allocated for Head I of the Main Estimates be reduced by $100. Sir, on 14th March 1995, the Minister for Communications gave his policy statement on land transport which he entitled "Improving Mobility". His main conclusions were that it is not possible to give every Singaporean a car. Hence, that is not his main challenge. His real challenge is to meet the aspirations of Singaporeans for increased mobility. Sir, I cannot say that I disagree, but I would prefer to put this issue in a slightly different perspective. Sir, the aspirations of Singaporeans are not just for increased mobility, but really for convenient and comfortable mobility at affordable prices. If this is not possible, then more Singaporeans would want to do so through private transport, ie, to own cars. If owning cars is too difficult and expensive, then it becomes a political issue. Here, I must add that emphasis by the Minister on public transport to increase mobility is not incorrect. However, public transport involves the three Cs - convenience, comfort and cost. Unfortunately, because today's public transport does not provide the three appropriate Cs, many Singaporeans have to use private transport, ie, owning cars despite the high cost. Most Singaporeans do not believe that the Government has done enough to make public transport a viable alternative to private transport. I therefore welcome the establishment of the Land Transport Authority (LTA) to look at the problems of land transport in its totality. In this respect, I would like to urge the LTA to look at both public and private transport pattern modes as a single issue. That means they should not look at buses and MRT as one, and cars as the other, but look at buses, MRT and cars as a single issue.”
“Just one point, Sir. I would like him to show me the actual economic study on this. I am very sure that he cannot come up with any economic basis for his statement. Mr Koo Tsai Kee: Mr Speaker, I will try to send him something.”
“A clarification, Sir. I was mentioned five times in Mr Koo's speech. I do not know whether to be upset or flattered because I am not too sure whether it was honourably or dishonourably mentioned. He said that a reduction in corporate tax would overheat the economy. I would like to ask him how he arrives at this conclusion. He uses the US as an example. Does he not know that one of the key financial instruments of policy by the Federal Reserve Board is money supply. In Singapore, the MAS has stated categorically that money supply does not have any significant impact on inflation in Singapore but the preferred instrument of policy for MAS is the exchange rate, and not money supply. So I would like to ask him how he arrives at the nexus that a reduction in corporate tax would overheat the economy.”
“After all, looking at the size of POSB, the leakage is already wide enough and opening the floodgates a bit more to allow banks and finance companies into the scheme will not really decrease by too much the amount of revenue which the Government collects. Sir, on the question of tax on dividends, if the Government is encouraging us to be a nation of shareholders of companies, I would again ask: how does one get the money to buy shares? Normally, for most of us, it is from savings again. So when we use our savings, as I have said, after taxed income, to buy shares. The benefits accruing from those shares in the form of dividends are again taxed. They should not be taxed. I also know that if at all the Minister answers these points, he will come up with lots of arguments to defend his current policies. I would do the same if I were him. But even as I say that, Sir, I would like to urge him to seriously consider what I have just said. The huge surpluses are no longer necessary. They are no longer economically beneficial to us. They may in fact be a political embarrassment and liability. I think it is time to make drastic changes to the system to reduce the surpluses. If the Government wishes to continue with monetary means to achieve policy objectives, the surpluses must be reduced in other areas. Reducing direct taxes which penalise hard work and thrift fits in with the values we need to succeed in the brave new world of the 21st century.”
“Therefore, to encourage greater fruits of labour accruing from greater efforts, the Government should strive to keep direct income taxes lower and lower as long as it can afford to. The chronic surpluses show that the Government can still lower such taxes. The second point is: why do we tax on interest from savings? Surely savings is one area we would like to encourage people to do more and more. After all, I believe the Deputy Prime Minister, in one of his speeches, said that one of the foundations of our economic growth is the high savings rate of the people. Here, I believe the Government should actually look into this issue of abolishing the tax on interest from savings. After all, savings are actually the residue of income minus the expenditure. In this respect, the residue of that income is already taxed because income is already taxed. When you tax on the interest on that savings, it is actually like double tax. So they are taxed twice. This is one reason why in a lot of countries where there are high inflation rates people want to spend more and more currently because they know that the interest from their savings in the future will be taxed. It is better to buy the things now rather than to keep the residue in the bank and let the interest earned be taxed. Of course, the Minister can always say that there are two avenues where the Government does not tax on savings. One is the CPF which is a compulsory savings scheme and the other is POSB where it does not tax interest from savings. If there are already these leakages, then I would urge the Government to consider that it does not make any difference if this same concession is extended to other forms of savings, like savings in banks and finance companies.”
“If the Minister agrees, the question is how do we do it. To reduce indirect taxes? Frankly, I do not recommend that we do this because, generally speaking, the indirect taxes usually have policy objectives. The primary objectives are not to raise money but to achieve policy objectives. The side effect of course is increased revenue which is good. I am not saying that increased revenue is bad. But it must be balanced with some form of corresponding drop in direct taxes. Sir, I would therefore like to urge the Minister to consider three areas of direct taxation. One of course is the greater and faster reduction of income tax. The second one is the abolition of interest on savings which is now computed as part of income. The third area is to abolish the tax on dividends which is also now considered as part of income when individuals receive dividends from companies. Sir, this is logical because the Government has always been harping that indirect tax is a voluntary tax in the sense that if a consumer does not want to pay the tax the decision is in his hand. If he does not want to pay GST, obviously do not buy anything in Singapore. Buy them overseas and make sure that they are below $600. If you do not want to pay COE, do not buy cars. In these three areas that I have mentioned, such comment is not true, because surely the Government does not want the people to earn so low that they fall below the income tax threshold. To become a more productive worker, a higher salaried employee, or a successful entrepreneur where your income rises, one automatically has to pay tax. One cannot say that he does not want to pay income tax and therefore he has a low salary. It is not the right way to do so.”
“Mr Speaker, Sir, thank you for allowing me to join in the debate. Last year, we had a $7 billion surplus. Is this because of good economic growth? Yes, Sir, it is. But I do not believe that that is the full picture because, to economic growth, we must add that the overall tax burden on Singaporeans, both individuals and companies alike, is much too high. So why do I say this? The reason is very simple. Besides direct taxes on income and revenue, there are many areas of indirect taxes in Singapore, including various transfer payments to the Government in the form of levies and import duties. We have GST, COEs, import duties, ARF, maid levy, foreign workers levy, property tax, water conservation tax, cess tax, etc. Even the method of computing corporate tax ensures that companies usually pay higher than 27% because companies normally have other companies under them as subsidiaries and when they lose money they are not allowed to offset against the subsidiaries which make money. So even the company cars are only allowed depreciation charges on a very much reduced basis. The result is that we are clearly overtaxed. If the Government needs the money, I do not think we have any quarrel with it in getting so much money into their coffers. But the question is: does it need the money? The huge surpluses of last year's plus the previous years' tell us a definite no. While the Government preaches a balanced budget, it actually practises a surplus budget system because within the budgeting process there is a surplus-biased method of calculation. If the Finance Minister presents a balanced budget year in year out, we are very sure that we will get a surplus budget year in year out. I would like to urge the Government to reduce this overall tax burden.”
“Sir, in view of the Minister's comments on public transport which obviously is to get more people to use public transport instead of private transport, would the Minister now reconsider taxis, which are the closest to public transport, as a mode of public transport and remove the onerous requirement of COEs and the high duties on taxis?”
“How about the other question on the pay-as-you-bid system and double transfers?”
“Sir, I have got two supplementary questions. But before the question, I would like to beg your indulgence to thank the Minister for inviting my GPC to participate in this experiment? The first question is: could the Minister explain why the experiment on pay-as-you-bid as well as the double-transfer method could not be carried out simultaneously because these things cannot be done with policies of too little too late? The second question is regarding the Minister's comments on public transport. In view of his comments, may I ask whether the Minister will consider giving a subsidy or grant to the public transport operators so that the quality of service of public transport can be at an extremely high level and yet very affordable to members of the general public?”
“Sir, based on what the Minister said about the regulations and the complaints, may I ask whether he considers those with lesser educational qualifications less responsible, in the sense that they cannot take responsibility for their businesses? On the question of responsibility, may I also ask whether the Prime Minister, though first among equals in the Cabinet, is also responsible for the whole Government regardless of what his other Ministers or Ministries may do, although he may not actually be doing the work himself? Finally, Sir, may I ask, with such regulations, would a man such as the late Goh Tjoei Kok be able to start a bank called the Tat Lee Bank, because he had only a few years of Hokkien education in Fujian before coming to Singapore?”
“Sir, firstly, does this mean that those with higher education are considered less likely to be detrimental to their clients than those with lower educational status? Has the Minister not heard of the saying that a smarter crooked person making a smarter crook? Secondly, does this mean that education is now so important that those less educated but with an entrepreneurial bent are denied of an opportunity of venturing into this business? In addition to this, what about those who are late developers, with 10 to 20 years of working experience, although they may not directly be relevant? Also, may I know what other businesses the Government now wishes to control in this manner, ie, based on education? Thirdly, may I also ask the Minister why a person without the necessary educational qualifications, but with adequate capital and can employ others with the appropriate educational qualifications in its management team, should be denied a licence? Does this not imply that, based solely on educational status, such a person is considered to be more likely to be detrimental to their clients' interest? Surely those with lesser educational status should reject such an implication.”
“Sir, may I presume that there is more than one person waiting, which means that not all people with kidney problems who want a transplant can get a transplant at subsidised levels. This means that some of them are forced to go to non-subsidised places. In such cases, may I ask the Minister to reconsider the policy of subsidy on cyclosporin? BG George Yong-Boon Yeo: Sir, I think all over the world, in every country and in every society, there is a shortage in the supply of kidneys which are needed by renal patients. If we encourage Singaporeans to go overseas, say, to India or China or other countries, to get those kidneys, then obviously those kidneys are somehow diverted from their own societies to be given to Singaporeans. One can reasonably ask how such kidneys are obtained in the first place, because no Health Ministry in those countries is going to volunteer and offer such kidneys to Singaporeans for altruistic reasons. CPF MINIMUM SUM SCHEME (Effect on bank loans secured against HDB flats) 8. Mr Chng Hee Kok asked the Minister for Labour whether the Minimum Sum Scheme is affected by bank loans secured against Housing and Development Board flats.”
“Sir, may I ask the Minister what is the number of persons on the waiting list for subsidised kidney transplants? BG George Yong-Boon Yeo: Sir, I do not have the number here. But if the Member were to table a Question, I will surely answer him.”
“Okay, Sir. This is not so much a clarification but to tell the Minister not to frighten the upgraders about the five years'requirement. By my own back-of-the-envelope calculation, there will be roughly about 10,000 units available for the upgraderseach year, based on 40% of 85% of 30,000. The luckiest upgraders will get their flats in the first year. The most unlucky ones will probably get their flats in the fifth year. So the average waiting time as a whole will be 2 1/2 years.”
“Thank you Mr Speaker for your indulgence. I actually want to seek clarification on the Minister's reply to my suggestion of having one zone, because I think he has missed out my point when I gave an example. I am asking for a combination of the old queuing system, where we try and match supply to demand, and the current system where we have balloting. Mr Speaker, Sir, let me once again show that a matching system is not really necessary under my suggestion. Let us take this present group of 93,000 applicants, and let us say that they are given allotment No. 1 to No. 93,000. The queue is there already. The registry is there. If we have got a new development, say, in Kangkar of 7,000 units, HDB can always advertise these 7,000 units in the newspapers, like the current system, and invite applications. There might be 10,000 applicants. The 10,000th applicant might be numbered 52,725. It may not be the 10,000. But all you need to do is therefore to select the first 7,000, and these people will qualify for the new development in Kangkar. Those who do not go for the selection or do not apply will retain their queuing position. They do not lose it at all. And I see no reason why this cannot be done. He spoke about holding the position on the queue. But, basically, I do not find anything wrong with this because after all, they were there first. There is no reason why they should not retain their position and let others behind them go ahead of them, if they are not interested in a particular estate that is being developed. But even if that is the case, there are ways and means of discouraging this. For example, you can have a ---”
“I think the HDB should really look into this question of allowing people in this situation to downgrade.”
“My point is that a single registry will work better and we avoid this problem of cross-overs and whether they will lose their priority when they cross over. The second point I would like to bring up is about the eligibility status. For those with housing assets of $200,000, or less, is their eligibility considered at the point of application, or at the point of allocation? Under the previous system, it was at the point of application. But apparently, under the current system, ie, the balloting system, it is at the point of allocation. So I think this should be clarified by the Minister. Finally, I would like to come out with an old hobbyhorse of mine concerning the ageing population. There are people, just husband and wife, living in 5-room flats, or Executive flats, when their children are all married and have moved out, and they want to downgrade. Why should we always think of upgrading? Is there anything wrong if a couple has some CPF left, and they have got an Executive flat that is probably worth about $300,000 or $400,000 on the open market and now they want to downgrade to a 3-room flat which, if they had purchased from the HDB might only cost about $70,000-$80,000? And assuming that this couple had only purchased one unit during their life-time, why can't they be allowed to downgrade to a smaller unit? The other way round, they are allowed to upgrade from a 3-room flat to a 5-room flat and HDB gives a number of incentives for them to upgrade. But there are absolutely no incentives for them to downgrade. What is wrong with downgrading; especially when it means having a large sum of money left for their old age. It is a form of retirement, or a pension, for them.”
“Mr Speaker, Sir, first, I would like to thank the Minister for this new scheme because, as he said, it is a more equitable scheme. But I would like to give my support to the Member for Ayer Rajah's suggestion about having one register. Let me explain why. If we go back to history, in 1989, when the balloting scheme was introduced, it was then to replace the various registers on a queuing system. It was partly a response to cross-overs where, after a while, when they built the flats, for example, in Woodlands, they found that they were not popular and a lot of flats were empty in Woodlands. Now, with three zones, we may have this problem of cross-overs. Are they allowed to cross over? If so, will one zone be less popular and the flats be empty? Of course, the bigger the zone, the lesser the chances of a Woodlands' situation happening. On the other hand, there is no reason why we cannot have a whole national register and, using the experience that we have had from the balloting scheme, make sure that we will not have empty flats. Let me give an example. If there is one registration book, for example, and assuming that these 93,000 applicants go in, then you have, let us say, No. 1 to No. 93,000. Before you build the flats in a particular estate, you can still advertise as under the present system. And, let us say, 10,000 units will be built there. You can invite applications. The number of applications might be 15,000. All you need to do is to allocate according to their queuing position, and you choose the top 10,000 applicants who qualify. Although the 10,000 applicants may not have a queuing number of 10,000, they may have a queuing number of 80,000, or 80,000-odd; it does not really matter.”
“In this way, all Singaporeans are assured of some minimum financial support in their old age; first, from their own voluntary savings; next, from their CPF savings; then from their children; and, finally, if all else fails, from the State. Sir, another comment is that the procedures for seeking maintenance are not appropriate. If so, I would like to suggest that the Government with its experts come up with better procedures. Let this Bill, as already suggested by the Acting Minister, be referred to a Select Committee for better procedures. But let us agree on the substance or the principle. The Government can help to improve the form, if not now, then later. The Acting Minister has already promised that. Let us support the Bill. If not the actual Bill, then at least let us support the principle of legislation so that this Bill can go to a Select Committee.”