Heng Chiang Meng
Singapore
“Mr Speaker, Sir, whilst I agree with the approach taken by the Government, especially when I personally think that the economy may well recover in the second half of next year, I would like to ask the Minister whether he could take steps to rectify the situation on the ground, of which I am very deeply concerned.”
“Witness the prices of PCs when they first appeared and the prices of PCs now. Also, without an extensive infrastructure, motoring with a hybrid car will cause more inconvenience for the owner.”
“Sir, I did address you as Chairman. I only once, earlier on, addressed you as Deputy Speaker. Most of the comments I am going to say have been covered by the two earlier speakers. I just want to add that I understand that Newater is biologically very clean.”
“I dare say that Singapore is kept litter-free by the street cleaners, and not because there are no litter bugs. So the real long-term solution is to inculcate good environmental behaviour as part of our habits.”
“For example, one way could be to rank the distance of each household from the school, and the ranking to be used to allocate the available places based on the household nearest to the school having the pole position.”
“Sir, I find it difficult to understand why the Senior Minister of State should bring in other people's arguments, like people being sick, one parent looking after so many children. We are talking about distances away from the school. Let us not bring in other factors. But, in any case, her mind is already made up.”
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“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“I would like to thank the Minister for his reply. But I just have one point before I withdraw the amendment. The Minister compares the profitability of SBS to that of China Motor Bus Company in Hongkong. Does the Minister not know that due to the special situation in Hongkong, because of 1997, the pay-back periods of all businesses in Hongkong are much shorter, which means that returns of capital employed in Hongkong must be much higher? And the best proof of this statement is in the price earning (PE) ratio of the Hongkong stock market. The PE ratio is very much lower in Hongkong than in Singapore. Hence, it is not correct to compare with Hongkong because of the special situation in Hongkong, but you must compare SBS profitability in relation to business risk in Singapore.”
“So as public service vehicles, taxis should also be excluded from the COE system like public buses and MRT. I think the taxi drivers find the explanations given by the Ministry of Communications unacceptable, because taxis play an equally important role in providing public transport to our people. Sir, taxis make 700,000 passenger-trips per day. So it is very clear that taxis are a very important means of public transport. In the public hearing on the land transport system in 1989, our economist and former MP for Whampoa, Dr Augustine Tan, argued that we should take into consideration the important economic service provided by the taxis. Our fleet of taxis makes up only 2% of the car population in Singapore. Yet, they make 700,000 passenger-trips every day. Sir, I would like to once again urge the Minister for Communications to exclude taxis from the COE system, because taxis are public transport vehicles. At the same time, taxis play an important economic and social role in Singapore. If the Minister for Communications is not inclined to exclude taxis from the COE system, then I hope that the Hon. Minister would consider setting up a separate category for taxis under the COE system.”
“Sir, the question of COE has been discussed on many occasions in Parliament and I am very glad to note that on this question, the Government has responded positively to the views of the people by giving the non-transferable COE system a try. The Government's positive response to constructive views of the people and the willingness to try out their recommendation, clearly reflect our Government's esteem and respect for the views and reasonable suggestions of the people. I sincerely urge the Government to carefully reconsider the question of COE for taxis, because taxis are being included in the COE system. When taxi drivers change their taxis, they have to bear the ever increasing cost of the COE premiums. This month, when a taxi driver changes his taxi, he has to pay the prevailing premium of $9,099. One year ago, in March 1991, the prevailing premium was $4,016. As such, over the past 12 months, the cost of COE premium has doubled. And the rise in COE premium for taxis has been very unpredictable over the months. During the period from March 1991 to March 1992, the lowest COE premium was $909 in March 1991 and the highest was $16,602 in January 1992. In recent years, because of the appreciation in value of the Japanese Yen and the increase in diesel tax as well as the increase in spare-parts and maintenance cost, the operational cost for taxis has been rising again and again. Coupled with the unpredictable rise in COE premium, there is a tremendous rise in the operational cost of taxis, and the taxi drivers are finding it extremely difficult even to survive. Although I have raised these points several times in Parliament, I would like to reiterate that the taxi is a means of public transport. Under the Road Traffic Act, taxis are classified as public service vehicles.”
“My question, of course, is: why should they be made to pay the premium for COEs which include these non-economic factors? I would like to suggest perhaps that there should be a different category for taxis. There is also another group of taxis, and here I want to include other vehicles which are up for COE renewals. The owners need to pay a prevailing quota premium based on the COE prices of the past 12 months. Again, this is not fair because the COE prices for the past 12 months are high due partly to the reduction of the ARF from 175% to 150% of the open market value. I would like to give an example here. If the ARF were to be reduced to zero and the demand for new cars remains the same, then logically, COE prices would increase by the same amount as the drop in the ARF. For the new car owners, the overall price remains the same, but for those who are asked to renew their COEs for the second 10 years, they would have to really pay an arm and a leg for the privilege of using the car for the next 10 years. Perhaps I would like to ask the Minister whether, for this reason, he could reduce the prevailing quota premium for COE renewals for all vehicles, including taxis, by the 25% drop in the ARF, where it is applicable. Dr Wan Soon Bee( In Mandarin): Sir, I would like to declare that I am the Chairman of NTUC Comfort. However, I have no personal interest arising from the issue I am going to raise here. Although the issue that I am going to raise here involves members of NTUC Comfort, it is an issue of great concern to all taxi drivers who are also voters.”
“Sir, I just want to say that if we accept that COEs are a means of implementing the quota system and a means of allocating the quota by monetary terms, then if there are other systems of allocating cars amongst various categories of potential car owners, there is no need for COEs. In this respect, taxis have their own control system. The number of taxis is already controlled. If a person has a car and wants to convert it into a taxi, it is not permitted. Since the Government has taken great pains to emphasise that the price mechanism is only used to control the allocation of cars under the quota system, in the case of taxis, there is justification in saying that the price mechanism is really not necessary. It may be good as a means of raising revenue, but then it is really not necessary as a means of allocating taxis. Sir, I must add that even though I say this, I have my doubts that the Minister will be so overwhelmed by this line of reasoning that he will waive the COEs for taxis. Therefore, I think taxis will still have to pay COEs. But a more inequitable fact is that taxis are being made to pay COE premia at private car levels. Why do I say this? Because if you look at private cars, bids are mainly made by the public who are potential car owners at particular premium levels. There are a number of non-economic factors in this premium, eg, the status of being a car owner, because it is a scarce commodity and normally a scarce commodity gives a certain amount of status to the owners. Sir, the ownership of a car can also be an expression or proxy for personal freedom of movement. There is also the convenience for car owners. However, taxis are not private cars.”
“And the Government being responsible for creating the current situation should be more vigorous in ensuring that the two bus companies fulfil these public service commitments. Now, Sir, we have the MRT network. The network, as we know, is fixed, with fixed lines and fixed stations. Therefore, when we talk about MRT-bus service integration, we obviously mean that the buses must come to the trains, and not the trains to the buses; meaning that buses must be used to transport people to and fro the MRT stations. There has been some progress made in this area but, unfortunately, it is too slow and not sufficient. The bus companies appear to be dragging their feet. However, this is not surprising because if you look at the operations of the bus companies before the MRT came into operation, we will find that they provide both what is known in the business as the short feeder bus services as well as the long haul sector. In the long haul sector, the buses are in competition with the trains. Therefore, the better their feeder services to the MRT stations, the lesser the number of passengers will there be for their long haul sector. This means that in one area, if they are complementary and provide very good service, they suffer in the other area because it is competitive to the trains. Sir, the Minister should quickly come up with an economic comprehensive integrated MRT-bus service network for all Singaporeans. In such a network, the bus companies must be made to fulfil their public duties. The protected status given to them demands such a role. Their profitability, due in no small part to such protection, makes it imperative that this role should be fulfilled as soon as possible.”
“The average return after tax on shareholders' equity was 14.5%. This is a better figure, especially given that it is in a protected industry. I will ask the Clerk of Parliament to distribute some charts. [Copies of tables distributed to hon. Members.] Sir, you can see clearly from the charts that both SBS and TIBS have actually out-performed the stock market. Both charts have the words "Cross Rate", the top one for SBS, and the bottom one for TIBS. You will see that there is a gradual trend upwards. This means that basically their share prices have out-performed the stock market. The Singapore stock market investors are a shrewd lot of people and they know a good thing when they see one. They know the companies have been performing well. Sir, my point is: are the bus companies making such good profits because they have smart businessmen, they have smart managers, or are they making these profits because of their special status of being monopolists in a protected industry? Their profits are, therefore, mainly due to profits of protection and profits of monopoly. Why do I say monopoly? Because both SBS and TIBS try to be complementary rather than competitive. We cannot really take the Scheme B buses as competitors because of their sizes. If you take the two bus companies together it is a monopolistic situation. So whatever the reasons for their profits, I think that with their special position and their profitability, the bus companies can be more generous with the unprofitable routes. I am not suggesting that we bankrupt them by insisting that they respond positively to all requests. But the point of contention is their profitability clearly shows that they can afford to run more unprofitable routes as a public service.”
“Sir, from the feedback from residents and issues brought up by other MPs in this House, it is quite evident that there are many areas in Singapore that are not adequately served by the two bus companies. Each time this issue is brought up, we always get a stock reply - there are insufficient commuters and these routes are not profitable. Of course, these routes will not be profitable because if they are profitable, the bus companies, because of profit motive, will want to run these routes as soon as possible and not because of a public service. It is true that bus companies, both SBS and TIBS, do run some unprofitable routes as a public service. But the question is: are these routes sufficient? In this respect, I understand that the bus companies, being privately owned companies, need to balance between the need to be profitable and the need to run a public service. Sir, the question is: are they fulfilling their public role to the best of their abilities? It is very difficult to know because when issues like these are brought up, the bus companies always show you certain figures and certain things that explain why these routes are not profitable based on some sample surveys that they have. They know the internal costing, but we do not, and it is difficult to question those figures. Therefore, I would like to look at the overall profitability of the bus companies. So if you look at such figures, they are not too bad. In fact, I would say they are very good in view of the safe business that they are in, which is relatively riskless, and also, a very much protected industry. Sir, I would like to look at SBS, the major of the two bus services. Over the past three years from 1988 to 1990, the average return on assets was about 8.5%. This is a very good figure.”
“Sir, I beg to move, That the total sum to be allocated for Head I of the Main Estimates be reduced by $100. Sir, under this amendment, I have two cuts. May I speak on them at the same time?”
“This is, in fact, the practice under the Residential Property Scheme. Where a bank provides, under such a scheme, a partial financing for the purchase of a private residential property, the member is allowed to withdraw his CPF money for the difference between the amount financed and the valuation of the property. Sir, under my original proposal, I can see the Minister coming out with one objection and, that is, the current Public Housing Scheme actually also finances the interest of the HDB loan. Under the Residential Property Scheme, the CPF funds cannot be used for the interest financing. Nevertheless, I still hope that the Minister will consider my original suggestion. If, because of this point, he objects, then I would like to further suggest that the HDB apartment purchaser in the secondary market be allowed the choice of selecting either the Residential Property Scheme or the Public Housing Scheme, but with a slight modification. Under the RPS, he need not go to a bank, but he can still use the HDB to finance 80% of the posted price. The reason is very simple. It is cheaper to get financing from the HDB than from a commercial bank.”
“This is an important point, because so long as the remaining number of years left in the lease when the member reaches 55 is a reasonable one and there is some reasonable value left in the property, the CPF Board should allow members to withdraw their funds for investment in properties with leases below 75 years old. What this reasonable figure, that means the number of years left in the lease when the member is 55 years old, should be, I will leave it to the CPF Board. But I am aware that some banks use the figure of 21 years, that means, there must be a minimum life of 21 years left in the lease, when the loan matures for a bank to consider financing such a loan. Perhaps this figure could be used. Sir, the second area concerns the financing of HDB flats which are purchased in the secondary market under the public housing scheme. Withdrawal from CPF is limited to 140% of the posted price. However, often the amount of withdrawal at 140% of the posted price is less than the market price. The purchaser, hence, has to cough up a large sum in ready cash for the difference. In some cases, this could be as high as $50,000 or more. This is a large sum for any potential home purchaser, let alone one purchasing a HDB flat. I would, therefore, like to suggest that the CPF Board allows a secondary market HDB apartment purchaser to use his available CPF monies to fund his purchase. The HDB can still provide 80% of the posted price financing, if necessary. And then the purchaser can utilise the difference between this amount, that means, the amount of financing by HDB, and the market valuation, not the purchase price, of the apartment, and use this money from CPF to fund the difference. It makes sense and removes the difficulty of raising cash.”
“Sir, today, there are two schemes for the withdrawal of CPF funds for purchase of residential properties, the Public Housing Scheme for HDB apartments and the Residential Property Scheme for private residential properties. These two schemes have helped many Singaporeans to own their homes. Such financing is perhaps the single most important contributor towards the Government's objective of a high home ownership level in Singapore. For many of us who have benefited from this policy, we have a lot to thank the Government for its foresight. First, in establishing the CPF and, second, in allowing our savings to be used to purchase our homes. Although one cannot complain about this policy, I still believe that there are two areas which need improvement. The first concerns the CPF ruling which does not permit withdrawal for properties with remaining leases below 75 years. Sir, I believe this ruling is much too protective. As it stands, it is not necessary. I know that the CPF Board's duty is to protect and safeguard members' savings but only up to the withdrawal age of 55. At this age, members can withdraw all their CPF moneys except, of course, for the sum under the minimum sum scheme. Sir, therefore, a more appropriate form of protecting members' interest should be based on (a) the member's age, so that the number of years remaining to age 55 can be known; and (b) the lease remaining when the member reaches 55 years old, that is, how many years are left in the lease when the member is 55 years of age.”
“Sir, in view of the rather positive answers given by the Minister, I am very glad to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $369,695,290 for Head N ordered to stand part of the Main Estimates. The sum of $318,792,900 for Head N ordered to stand part of the Development Estimates.”
“But my purpose of my bringing up these few controls is to show that there are ways of controlling tax loss companies from becoming general tax shelters, because I think that is the main fear of the Minister. Sir, may I continue with my second cut?”
“At this stage the poor entrepreneur will normally try to interest a large company to buy a part of the company. Large companies normally will want a controlling interest; provided the price is right. Tax losses then can become an issue. For if the losses could be carried forward, it might be worthwhile for the company to take over the majority of the ailing company. Because of this issue, sometimes the deal falls through. But even if the deal gets carried through, often the entrepreneur has to sell it off at a very paltry price. My question is this: Should we not help such enterprising Singaporeans, considering that we are trying to promote entrepreneurship? Should he not be allowed to recoup some of its losses via a better price, if the tax losses can be carried forward even if there is a change in ownership? Sir, in such cases, if we do allow the tax losses to be carried forward, I think we will definitely encourage more entrepreneurship and perhaps more struggling companies with a good future may be saved. And who knows, some of these companies may become our future SIAs and Keppel Corporations. Sir, I would like to ask the Minister to consider my proposal of waiving the substantial ownership rule for such companies. And in case he is fearful of abuse, I can think straight away of a number of controls for him. For example, tax losses could only be offset against profits in the same trade. Another one could be that the qualifying companies should be smaller companies like what I have described above, say, for companies of $10 million of shareholders' fund or below. And the third could be that the limit be for the tax losses incurred for the past few years prior to a substantial change in ownership for three years. I am very sure that there are many others.”
“Sir, I beg to move, That the sum to be allocated for Head N be reduced by $10 in respect of Code NN 1500 of the Main Estimates. Sir, under our current system of corporate tax, losses of companies are allowed to be carried forward to offset subsequent years' profits. But if there is a substantial change in ownership, these tax losses are not allowed to be carried forward. In 1988, the rule was modified to allow certain situations of substantial change of ownership in which companies could continue to make use of these tax losses. These situations were mainly those of forced mergers, such as changes as a result of nationalisation or privatisation or the company's shares being widely traded on a recognised stock exchange, and provided that such changes are not made for the purpose of tax benefits or advantage. Sir, although this concession in 1988 was better than nothing, it still falls short of what is required in the market. I do agree with the Finance Minister that there is merit in not allowing loss-making companies to be tax shelters. But I do feel that there are some groups of companies that require some form of relief from this rule, in particular, the young start-up companies. These are companies started by enterprising, daring entrepreneurs with good ideas and with little money, mainly from their own savings as well as support from their friends, but with lots of guts and belief in themselves and their ideas. Sir, for such companies it is quite usual for them to suffer losses in the earlier years, especially when they are small, having difficulty getting finance, and trying to develop their ideas into marketable products and services. Often, after a while, new capital is necessary.”
“Sir, may I ask the Minister whether the 332 cases he mentioned include those cases from the Yio Chu Kang/Jalan Kayu area and, if not, may I ask the Minister how many cases were there from the Yio Chu Kang/Jalan Kayu area, and how much money was recovered? At the same time, may I also ask on those cases that have been closed, whether all the files have been returned to the Resettlement Department by the CPIB, and payments due to the resettled farmers have been paid, and no excuses will be made on the basis of the files being kept by CPIB. Also, no accounts are being frozen for the purpose of investigation by the CPIB.”
“On another point, coming back to the earlier address by the Member for Bukit Gombak, I would just like to say that, as the Vice-President of the National Kidney Foundation, I am very pleased that he somewhat reluctantly agrees that the National Kidney Foundation (NKF) is doing quite a lot for the poorer kidney patients in Singapore. But I would like to inform him that the Government has also helped a lot by providing free of charge to the Foundation its land and premises to house the patients and also by providing free of charge the services of doctors and other medical personnel. Sir, without such help, I am very sure the National Kidney Foundation will either have to raise more money from the public or cut down its number of patients. Perhaps he would like to take into consideration this help given by the Government for all kidney patients in Singapore. With that, Sir, I support the motion.”
“Sir, on a general point related to this privatisation, chances are that the issue would be divided into local and foreign shares. If one of the goals of privatising Government companies is to enable Singaporeans to invest directly in the growth of the nation, then I must say that the current system of local and foreign shares sadly misses this goal. The record has been that foreign shareholders, as opposed to Singaporeans, have benefitted much more from the system. If I may, I would like to use Singapore Airlines (SIA) as an example. The division of SIA into local and foreign shares was undertaken in June 1988. At the end of June 1988, the local share price was $11.30 while the foreign share price was $12.70, representing a premium difference of 12.4%. More than 3 1/2 years later, on 10th January this year, the local price was $13.20 while the foreign price was $20.30. The difference was 53.8%. In other words, foreign shares gained by 59.8% while local shares only 16.8%. Put it in another way, foreign shares have risen by 3.56 times the gain in the local shares. The same phenomenon is seen in the other Government-linked companies, DBS, Singapore Petroleum, Singapore Aerospace and so on. The Government can come out with any amount of arguments to defend the system, but there is no running away from the bottom line. The foreigners have benefitted more from the system. The point is this. For whom are we working for? For Singaporeans or for foreigners? May I suggest that with the coming offer of Singapore Telecom shares, we explore other alternatives whereby Singaporeans can benefit as much as foreigners, if not more. There is no lack of proposals; what may be lacking is the political will.”
“Surely it must be the aim of Medifund to help these poorest of the poor. I would strongly suggest that the greatest priority be based on the means of those seeking help. Perhaps it is understood that the means test is the top priority. If so, a confirmation from the Minister for Health would be helpful. Sir, one final point. And on this, I would like to inform you that I am an interested person. This refers to the comment made in the Addendum by the Minister for Communications that Singapore Telecom would be privatised this year. In this House in 1987, I brought up the issue of privatisation of Government-owned companies; that the ultimate owners of these companies are the people and that selling the shares of these companies to the people of Singapore is akin to selling to them what belong to them in the first place. The public listing of Singapore Telecom, if the experiences of similar issues in Malaysia and New Zealand are anything to go by, will be a large issue. Singapore Telecom is a statutory board, much more a public sector institution than a private Government-owned company. I think it is about time that the Government put its money where its mouth is. If Singaporeans are to participate in the progress of Singapore which, by definition, must include its institutions, then every Singaporean must be permitted to share in the growth of Singapore Telecom. The most appropriate way would be to allocate a portion of this large issue to all Singaporeans free of charge for it belongs to them in the first place. This could be done through the CPF with the necessary controls to prevent the investment from becoming an immediate means for consumption. The details could be worked out, but would the Government have the political will?”
“Surely we must realise that the upgrading will ease such traffic jams. Yet how many of us will take up pen to write to the press to compliment and thank the Government? How many of us realise that such expenditure is only possible because of the revenue collected? Is this not an example of returning the revenue to its source; that the upgrading of roads will mean smoother traffic flow - benefitting all commuters, even those in buses and other public transport? If the Government wants to maximise its financial surpluses, why trouble to spend this large sum? Sir, the truth is: very few Singaporeans would bother. All the good things are taken for granted. Often it takes foreign visitors to compliment the Government on a job well done. But, Sir, sometimes it is nice to receive bouquets from our own kind now and then, that a simple "thank you" from our own people means a lot more than the many accolades from others. So, I would like to urge the people of Singapore to criticize if you must, if there is a need to, but please also do not forget to speak out where credit is due. Sir, coming to details, I must say that I am, however, disappointed with one aspect of the proposal on Medifund. That health care cost is rising is a fact and the creation of Medifund to complement insufficient Medisave accounts is truly a welcomed step in the right direction. But the point about Medifund giving priority to helping those who have consistently contributed to their own Medisave accounts raises an important issue. True, it would encourage self-employed Singaporeans to contribute to Medisave. But what about those who cannot, not because they do not want to, but because they cannot afford to. These are the unemployed, the odd-job casual labourers and the such.”
“For it means that in advocating a free enterprise system, despite its attendant Darwinian philosophy of survival of the fittest, we will not let the jungle rule us, but we will rule the jungle and that little bit of animal in all of us. In any society, there always will be those who are less capable; this the Government cannot change; but that they be allowed to suffer its consequences; this the Government can prevent. This point is clearly recognised in the policies and programmes for the Next Lap. Yet for all the prosperity and gd life the PAP Government has brought to Singapore, it is sad to discern a weakening of the social contract, the social bond, between the Government and the people. Mr Goh Choon Kang, Member for Braddell Heights, has amply addressed this issue yesterday. I agree with his views. I would like to add to them with the illustration of an example. Only on Monday, the Straits Times reported a comprehensive upgrading programme for Singapore's older expressways and major roads. The whole programme, I believe, would cost about $1 billion. My point is this. When COEs are bid by the market to ridiculously high levels, many point accusing fingers at the Government, accusing the Government of devising the system to raise revenue; conveniently forgetting that it is the market which has pushed the prices to these high levels and that the system is price-neutral. If not, how is it possible that for some COEs, the price is a minimum of $1? Yet, now that the Government is spending about $1 billion to upgrade the roads, I do not hear any voices crying out, "Well spent. Well done." Sir, how many times have we been caught in traffic jams along the PIE at the Thomson Road flyover or at the CTE/PIE junction near Toa Payoh?”
“Sir, I wish Mr Chiam would not interrupt when I am speaking. However, I feel that such an important issue cannot be passed without me telling him this: If we do not want to be flotsam drifting aimlessly in the ever-changing sea where fads and fashion are often taken for values, we better hold on to some ballast. What better ballast, I would like to ask him, than our own cultural roots? Like Mr Chiam, I was monolingually educated in English, and I am more familiar with Wordsworth than Li Bai. But knowing some aspects of Western cultural values from books is quite different from an emotional attachment to values when these values are acquired from our lives and loved ones around us, especially in our childhood. Coming from a dialect-speaking home, it was the stories of Yue Fei, The Three Kingdoms, Chinese operas, and such other stories, narrated to me by my parents and their generation which created that emotional spark - that spark which made all the difference between a mere story and the genesis of a value system. That is why we have to extract from our own cultural roots the strength to establish strong values. And it is only when we can establish strong values in ourselves that we can have the confidence to become good Singaporeans. As a matter of fact, Mr Chiam's question, "What type of Singapore do we want?" is more than amply answered in the President's Address. In the final analysis, the end will be determined by the means, ie, the type of Singapore we inherit will be determined by how we reach there. And that is summed up in one key phrase in the President's Address - "to be a meritocratic, but not an individualistic society".”
“Sir, if you are now hard of hearing, I could understand because I was. I did not hear you when you called the Minister to speak, because sitting in front of the Member for Bukit Gombak while he was speaking, my ears are still ringing from his sound and fury - 90% sound and 10% fury. Perhaps I should make a request to you to change my seating position. Sir, I support the motion to thank the President for his Address. In this respect, I would like to applaud the Government for taking the first steps into the Next Lap. More so in the caring nature in which these steps are being taken. For if there ever was a central theme in the President's Address, it would be one of human resource development to level-up all Singaporeans, to as high a level as possible. The focus on education for a sound mind, health for a sound body and housing to provide quality homes for sound bodies and minds is, well, if I may say, sound. Earlier, Mr Chiam, the Member for Potong Pasir, asked in his speech, "What type of Singapore do we want?" Sir, it is a very good question but, unfortunately, he provided the wrong answers. Hopefully, my colleagues who spoke earlier have put him on the right path, so I will not belabour this point. Mr Chiam See Tong (Potong Pasir): It is not for you to decide, but for the voters to decide.”
“Sir, does this mean that the Ministry's idea is that the Neighbourhood Police Post in Block 108, which is in another constituency, can actually serve residents of my constituency, including block to block visits?”
“Sir, does the Minister of State realise that these two Neighbourhood Police Posts are about 3-4 kilometres away? Surely, he does not think that this is the concept of a Neighbourhood Police Post.”
“Sir, I believe the Minister of State misunderstood my question. I said the Ministry should consider building some shops in Serangoon North Neighbourhood 5, and not in the neighbourhood centre.”
“Would the Minister of State tell the shopkeeper of Block 523 to open his shop for service because, although it has been tendered out since April of this year, it is still closed. The other shoplets seem to be still under construction. Would the Ministry also consider not only building these three shoplets but also some rows of shops for the residents there?”
“My point is: is the Government not concerned about the social implications, rather than just the fraud and the credit expansion?”
“Sir, with your indulgence, may I ask another question? I think the Minister misunderstood me. My point about high interest rates charged is to show the Minister that those who have to use credit card extension or credit have not been able to borrow funds at lower interest rates and these are normally the people least creditworthy to borrow funds at lower rates and therefore least able to afford the cost of living on borrowed money.”
“Sir, may I ask the Minister whether he meant that the Government is concerned about fraud in credit expansion in Singapore, but not concerned about the social implications of those least able to afford credit to have such credit extension available to them.”
“Sir, the figures show an increasing trend. I would like to ask whether the Minister will consider taking steps to deter, prohibit or to regulate the increasing amount of credit extension by these card issuing companies since (a) such credit extension would be illegal under certain circumstances given a recent legal ruling; and (b) at the high interest rates charged, there is a strong implication that such credits arebeing used by those not able to obtain loans at lower cost and, by implication, are those least able to afford such high cost of borrowing or living on borrowed money.”
“With increased literacy, affluence and travel, many Singaporeans are now exposed to more liberal lifestyles and attitudes. The current censorship parameters need to change. 2.00 pm The Minister has on several occasions mentioned the need to broaden our censorship boundaries with particular reference to film censorship. May I ask him to provide this House with more details, including those not related to films. For example, would videotapes be also similarly classified? If so, will enforcement be a problem? Should the Government be too concerned because parents can also exercise their right of censorship? Another example, what about books and publications and magazines?”
“Financial support given now should be considered as supporting an infant industry. If properly nurtured, such support could reap huge dividends in the future. Sir, the other is the role of arts in the economy of a modern industrial nation. As Prof. John Kenneth Galbraith, a prominent economist, has said, "Artistic achievement has become essential for other and more orthodox industrial development." Sir, in this context, I can do no better than to continue to quote from the Professor, and he said: 'The basic point is a simple one. It applies to the widest range of industrial products. After things work well, people want them to look well. After utility, comes design. And design depends not alone on the availability of artists. It evokes depth and quality of the whole artistic tradition. It is on these that industrial success comes to depend.' Sir, as our industries move from contract manufacturing to making our own Singaporean designs, brands, labels and products, I hope the Government quickly realises the importance of an artistic base to our industrial programme. Sir, I have advanced both aesthetic and economic reasons why arts should be supported, not according to the whims and fancies of the Consolidated Fund, but with a firm and strong financial base of its own. Hence, my appeal for an arts cess and part of the tourism cess. I hope the Acting Minister for Information and the Arts agrees with me, and likewise, convinces his Cabinet colleagues. Sir, if arts and culture are to flower as envisaged, we, unfortunately, cannot afford to ignore the question of censorship. Singapore was never an island in terms of influences by the arts, culture and information from abroad.”
“Sir, there are more, but I think these examples are adequate to show that the concept of an arts cess is not a linkage, but it is in fact being practised right now in various Government bodies. So why reject it on that basis? The point is that the proposed Arts Council needs adequate funds to carry out its functions. Sure, it can solicit funds from the public, from the private sector, from well-wishers. But would such donations be adequate? If the Singapore Tourist Promotion Board can have its Tourist Promotion Fund, if the Trade Development Board can have its Trade Development Fund, why can the Arts Council not have its Arts Promotion and Development Fund? Sir, perhaps the Government can consider giving an endowment fund to the Arts Council, like Edusave, for example. In the context of Singapore in the next lap, is proper and adequate funding for the arts and culture any less important than those for tourism, trade and broadcasting? If the aesthetic arguments for better financial support of the arts are not strong enough, perhaps I can just be as hard-headed, and let me advance two economic arguments. I hope economics will succeed where aesthetics have failed. One is that such funding could be viewed as supporting an infant industry. Looking at the arts industry in London and New York, I see no reason why Singapore cannot be a major arts centre if we put our minds to it. We have a rich heritage of Asia's major cultures right here in Singapore. We are in the midst of a culturally rich area - Indonesian, Thai, Filipino, Malay, and so on. Already, more than four million tourists visit our shores annually. Sir, all the necessary ingredients for the promotion of arts as an exportable industry are here.”
“Arts and culture cannot survive in such an environment. Financial support for it must be regular for it to flourish. That is why I am arguing for its own stable sources of finance. Sir, during the budget debate, I suggested the conversion of the remaining entertainment duty of 5% to an arts cess, and the diversion of 1/2% of the tourism cess to the Arts Council. It was summarily dismissed by the Finance Minister on the basis that revenue should not be linked with expenditure, or rather expenditure should not be linked with revenue, and that all revenue should go to the Consolidated Fund. Sir, I am aware of the arguments put forward by the Minister for Finance, but I was not suggesting such a linkage. I am suggesting that since the amount is only $7 million he abolishes the entertainment duty altogether. But at the same time he allows the Ministry of Information and the Arts to impose a 5% arts cess on entertainment, similar to the tourism cess. However, if the Finance Minister feels that the Consolidated Fund cannot afford to lose this amount of $7 million, then keep the entertainment duty at 5%. But, nevertheless, allow the cess to be imposed over and above the entertainment duty. In any event, lest the Finance Minister still feels that my suggestion contravenes the holy grail of public finance, let me give three instances where versions of my suggestion are today being practised. There is the tourism cess and it goes to the Singapore Tourist Promotion Board. The TV and Radio licences go to the Singapore Broadcasting Corporation. The export levy on garments goes to the Trade Development Board.”
“Sir, I beg to move, That the total sum to be allocated for Head R of the Main Estimates be reduced by $100. Sir, first I want to assume that two points are taken as givens. One is that the Government wishes to promote the arts and culture for various obvious reasons - to enhance the quality of life in Singapore, needed as part of a more affluent lifestyle in Singapore, as a necessary ingredient in preserving our cultural heritage, racial and religious harmony, as a bulwark against undesirable external forces, and so on. The second point is that the Government recognises that the arts and culture must be financially supported, not only by the community alone, but also by the Government. Sir, I have no disagreement on these two crucial points. But what I dispute is the manner in which the arts is being supported by the Government. Let me quote part of the Prime Minister's speech he made at the opening of the National Museum in November last year: 'Now that we have achieved our economic goals, we can spend some money on the finer things in life. We can build more art galleries, theatres and concert halls. We will bring in world class performances and exhibitions for Singaporeans to enjoy. At the same time, we will help Singaporeans to develop their own talents to the fullest.' Sir, there is nothing wrong with that, except that he also added a caveat, which was, and I quote: 'We can afford to do this only if the economy continues to grow steadily.' Sir, this is precisely what is wrong with the Government philosophy of financial support. Treating arts and culture as a luxury, supporting it only when there is spare cash, and letting it to be the first to lose its financing, perhaps even all its financing, at the first sign of trouble.”
“Sir, may I ask the Minister just to reiterate this point. He said that the scale fees are to protect the interest, and that includes the financial interest, of the public, and not to protect the earning capacity of lawyers.”
“Sir, may I ask the Minister for a review of the current system of standard pricing for conveyancing matters. In this review, Sir, may I also ask the Minister to consider allowing para-legal persons, other than solicitors, to handle conveyancing matters, particularly with regard to titles registered with the Registry of Land Titles and Deeds which, I understand, constitute the majority of real estate titles in Singapore, and the competition will make sure that there will be no over-charging.”
“Sir, as we are fast becoming a country where time is a very precious commodity, should not the saving on time and also the saving on increasing transport cost be a more important consideration in the allocation of places in primary schools? The second question is: Does the Minister of State not think that current changes in population policy require a fresh relook at the registration system?”
“If so, it is still not too late to include them. However, if it is not, could the Minister be giving us some subtle message? One could be that finance companies already have so much general provisions and the managements of the finance companies are so altruistic that they do not need tax incentives to assist them. If so, may I request the Minister to immediately remove the instructions prohibiting most public sector bodies from interacting with finance companies. For example, the public sector bodies are not allowed to place deposits with finance companies. They are also not allowed to accept guarantees issued by finance companies. Sir, that was a good implication! A more sinister one could be a subtle message not to place money with them. I do not think that this was the message. Certainly I hope not. But surely the exclusion of finance companies raises a big question mark. Given the current restrictions on finance companies, they are already second class financial institutions. To deny them the tax deduction for general provisions will push them into third class. Is this the intention? Could the Minister please clarify? Sir, I support the motion standing in the name of the Minister for Finance.”
“) In fact, I believe the reasons are more applicable to finance companies than to merchant banks, especially those relating to using depositors' savings for productive investment and the need to maintain depositor confidence. Sir, with your permission, I would like to ask the Clerk of Parliament to distribute some figures. [Copies of table circulated to hon. Members.] Sir, if you look at these figures, from the year 1985 to November 1990, the total loans and advances made by finance companies were much more than the loans and advances made by merchant banks. I am comparing the finance companies to domestic unit operations of merchant banks. I use the domestic unit operations because merchant banks have large ACU operations. It would be unfair to compare them with the operation of finance companies which are in essence domestic. Moreover, the ACUs already have a 10% concession on many of their operations. If you look at the total deposits versus the borrowings of finance companies versus the borrowings from non-bank customers of merchant banks, again you will find that the figures for the finance companies are very much larger. Moreover, most of the depositors of finance companies are the men-in-the-street, whereas most of the depositors of merchant banks are large corporations. So here, therefore, if you want to look at the argument of the need to maintain depositor confidence, surely there is more need for the finance companies than the merchant banks. And if one uses the reason that depositors' interest should be used for productive investment, surely these figures show that finance companies have more need for the tax deduction than the merchant banks. Sir, the exclusion of finance companies could perhaps be a simple oversight.”
“Unfortunately, promoting arts and culture needs money, tons and tons of money. Some of the money needed should rightly come from the Singapore Tourist Promotion Board. It is not as if the Board cannot afford this assistance. Based on its Annual Report as at 31st March 1990, the 1/2% would amount to about $8 million. Its surplus for the year was about $14 million. Moreover, it has sufficient fat to meet the lean years, if and when they come. Over the years, its Tourist Promotion Fund has increased steadily, from $46 million in 1980 to $104 million in 1990. If my suggestions were to be accepted, there would be about an annual revenue of about $15 million for the Arts Council, hopefully adequate for its mission to promote the development of a vibrant arts and cultural scene in Singapore. Sir, these suggestions merit some consideration, and I hope the Minister will not reject them out of hand. Because besides disappointing me and lots of other Singaporeans, he would also be disappointing his Senior Minister of State. General Provisions for Banks and Merchant Banks Sir, this is one tax change which should have been made several years ago. That it was not and banks still made the general provisions without the benefit of tax deductibility said a lot for the persuasive power of the Monetary Authority of Singapore. In any event, Sir, I am not complaining; better late than never. The reasons given by the Minister for this change are also applicable to finance companies; hence, my surprise at their exclusion. (Sir, here I would also like to declare my interest as a director of a finance company.”
“My hope is that the Minister will include in his White Paper, ways and means to resolve such issues connected with GST. For example, basic necessities, such as rice, sugar, baby milk powder, could perhaps fall outside the ambit of GST. Or maybe a form of "reverse" income tax or coupon system whereby the Government gives poorer citizens money for certain types of expenditure. This could also be another solution. The Edusave is already one such coupon system. The CPF could be an ideal place for a comprehensive coupon system. Entertainments Duty The reduction in entertainments duty is welcomed. However, I do not suppose that prices to patrons will drop as a result of this reduction. All it means is more profit for promoters of shows and owners of cinema halls. Would this lead to a more vibrant cultural and entertainment scene in Singapore? Sir, it is debatable. If the Minister is really committed to creating such a scene in Singapore, he should not have simply reduced the entertainments duty by half, but rather channel the duty that he is willing to forgo to the proposed Arts Council for its use, something like an "arts cess", similar to the tourism cess. It is, however, not too late. There is still the other 5%, and the amount is only $7 million, a paltry sum in the overall context of the budget. May I be so bold as to suggest to the Minister that he considers the conversion of the remaining 5% into an "arts cess" for the Arts Council. While on this topic, I would also like the Minister to consider 1/2% of the tourism cess to be diverted to the Arts Council. After all, the tourism cess is for the promotion of tourism and a really vibrant arts and cultural scene is one of the best promotional materials of any country.”
“Now is the question of capital outflow, as foreign direct investment into other countries. So why can't we do the same to encourage Singapore-based companies to expand overseas, especially those companies belonging to Singapore nationals? Sir, investing overseas is not just a matter of a tax change on foreign dividends. Nor is it just the establishment of a Singapore school in Hong Kong, nor companies incurring extra costs in tax equalisation schemes for their staff posted overseas, nor losses incurred in overseas investments not allowable for tax deductions against profits in Singapore. A total look at all the issues and problems of globalisation is required, and I would like to recommend that the Government set up a Committee to review these problems. For obvious reasons, the committee should include representatives of the private sector, across-the-board, in different industries and in different operations in different countries. The time is right for such action and perhaps even for an agency such as Japan's MITI or JETRO. Goods and Services Tax (GST) Sir, for several years, I have argued against this tax because of its regressive nature and the problems it may bring to one of our growth industries - the tourist industry. However, since the Minister cannot be convinced otherwise, I hope that these two issues will be thoroughly covered in his White Paper. But then, Sir, this regressive nature is not new to Singaporeans. The user-pay principle espoused in the health and education services in Singapore is already a forerunner of the GST. The independent school assistance scheme is an implicit acknowledgement that the poor is much more adversely affected than the rich when coming to pay independent school fees.”
“After all, if a company with about 40% of its workforce of, say, 2,000 workers, wishes to relocate its labour intensive production overseas, it needs to train its workers for the new location very rapidly. And even if you want to transfer that part which consists of all foreign workers, it needs almost 800 workers as quickly as possible in this example that I have given. Worse is that the company will also be required to pay the normal foreign workers levy - as if the trainees are going to be part of a long term workforce in Singapore. We all know that relocation is expensive, training is costly, and very often the stay for such trainees in Singapore is too short to be of any use to the Singapore operations. Why then the extra burden imposed by the Government? The usual answer: because of possible abuse; because the Government is worried that there might be companies who will take advantage of a more liberal system to abuse or to violate the foreign workers rule. But surely, Sir, there are more equitable ways of controlling abuse than lumping together the genuine investors overseas and the crooks into the same category. I understand that the EDB aids those companies which invest in Batam with some sort of financial assistance for such training schemes. So why can this not be extended to other parts of Indonesia and even to other ASEAN countries? Sir, as I said earlier, there is a whole host of problems related to the question of globalisation. In the 60s, in order to attract foreign investment into Singapore, we established various committees and a central body to examine the issue in all its aspects. We created the first one-stop investment development agency - for capital inflow.”
“The message is very clear - relocate to a country with cheaper labour cost if you need significant labour input in your products, especially those of low productivity labour; or else, close shop in Singapore, because we have no place for low productivity labour industries in Singapore. Hence, the encouragement to our local businessmen to globalise, especially to invest in the economies of our immediate neighbours in ASEAN. Sir, it makes good economic and even political sense. Sir, it is a first-class policy, but then what about its implementation? The Government has helped but in a very ad hoc manner. Globalisation is not just removing tax inequities to encourage local companies to sell or invest overseas. There is a whole host of related problems which should be resolved. Unfortunately, many of these problems are beyond the capabilities of individual companies to resolve. Perhaps an example will suffice. Here I would like to declare my interest as a director of various companies expanding overseas. Sir, a company relocating part of its production overseas normally would already have an existing market for its products. In order to maintain the quality of its products and to protect its reputation, it is important to train the workers from the new location to the same standard as its Singapore workers as quickly as possible. What better way than to train them here in Singapore, especially if these workers are from ASEAN countries. But when they are brought into Singapore for training, they are not treated as trainees. Instead, they are treated as any other foreign worker. Sure, a small token concession on the total numbers is provided, but even this concession cannot exceed the normal foreign worker complement, which means that it is actually not a concession.”
“Thank you, Sir, for allowing me to join in this debate. Sir, once again, I would like to take this opportunity to clear up a contradiction in the argument put up by the Non-Constituency Member of Parliament. In one breath, he derides the across-the-board tax rebate as being more beneficial to the rich than to the poor. In terms of absolute dollars, he is not wrong. Yet, in the next breath, he argues for an increase of personal and wife reliefs, even using the Malaysian reliefs as an example. May I remind him, Sir, that increasing the reliefs will benefit the rich more than the poor. I believe I said that last year, and I am saying it again. A taxpayer at a 30% marginal tax rate will save $300 for every $1,000 increase in relief, whereas a taxpayer, at a 5% marginal tax rate, will only save $50. Is this what he wants? Sir, of the inflation rate last year of 3.4%, only 0.4% was attributed to external sources, while 3% were due to domestic factors. One of the main domestic factors was the tight labour market, which in turn affected sectors with a relatively high content of labour, especially the service industries. Sir, it is clear that for us to remain competitive, labour must continue to be productive, as already mentioned by a number of labour MPs. As we move towards greater emphasis on service industries, productivity gains become that much more difficult. Moreover, the Government's policy on foreign labour means that a large portion of our foreign labour force will remain transient which translates into low productivity.”
“If he meant "some Singaporeans" as two Singaporeans, I suppose he and his supporter can object to this.”