Hon Sui Sen
Singapore
“Sir, I must inform the Member for Rochore that the companies are run on the basis of private sector companies, i.e. their budgets are drawn up by their boards of directors. I do not know to what extent their budgets follow Government budgets but they are certainly not regulated in the sense that Government budgets are rigidly enforced.”
“Perhaps the Member is referring to PIE's operations with respect to the Armed Forces. PIE provides some of the supplies for feeding our army and other armed forces. If the private sector is equally viable, equally able to supply foodstuffs, I see no reason why they should not also compete with the PIE.”
“Jeyaretnam asked the Minister for the Environment and Minister for Communications if he will request the Port of Singapore Authority to consider providing transport alternatively paying a transport allowance to all employees of the PSA who have been moved out of the PSA Staff quarters in Blair Plain and as a result of which have been put…”
“INTRACO is a company in which the Government has some equity. I believe the proportion is somewhere around 20%. So in a sense it is not exactly a Government controlled company, although 20%, of course, is a fairly considerable share. In the case of PIE, the answer is yes, it is a Government company.”
“The dividend yields for the three holding companies were nil, The yields for the operating companies were nil for 34 companies (including eight which have yet to commence operations), 1% to 10% for five companies, more than 10% but less than 20% for 10 companies, and at least 20% for nine companies.”
“Sir, the simple answer to that is no, for the purpose of this Bill. This Bill merely enacts legislation to implement the 1982 Budget concessions.”
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“Sir, the provision in subhead BAA 8102 has been increased because of a change in the procedure for submission of proposals for new development projects. Under the previous procedure, proposals for new development projects had to be submitted in time for consideration for the annual Estimates. Owing to the great number of proposals that were submitted for consideration and the tight schedule that had to be met to ensure that the annual Estimates were presented to Parliament in time, inevitably only a cursory assessment of the proposals could be undertaken. For those that merit further consideration, the allocation was entered provisionally in the annual Estimates subject to the approval of the Development Planning Committee. In the course of the new financial year, the Budget Division, in consultation with the Ministries concerned, then made a more thorough assessment of these proposals and appropriate recommendations were put up to the Development Planning Committee. In order to avoid the situation whereby projects involving Government policy are entered without the proper approval and also to reduce the workload at the peak of the Budget period as well as to allow a more thorough assessment of development proposals, a new procedure has been introduced. Henceforth, Ministries will submit proposals for new development projects at any time during the financial year. Such development projects will then be processed in the normal way and because the rush of preparing the Budget is avoided, more accurate estimates can be obtained. The vote has, therefore, been increased as funds for new projects are no longer provided under each Ministry's head of expenditure.”
“Sir,I think the properties that he referred to were really housing units, i.e, flats, whereas these are houses, and houses are treated differently.”
“Sir, the Member is correct in saying that I was wrong when I said that the maximum was 23% for all HDB owner-occupied properties. The position is that in those areas which were at 23% before the rates were increased, the owner occupiers were allowed to retain their 23%. That was the maximum for them. But in areas which have been at 36%, like Stirling Road and St. Michael's Road, then there was no question of bringing this down. They were in an area which was rated at 36%. All the houses in that area were rated at 36%, so they were given the same rate. I think I misled the hon. Member. I was myself misled into thinking that that was the situation: that 23% was the maximum.”
“Sir, at the moment I cannot see any good reason why the expenses incurred in the upkeep of private roads and other amenities meant for the exclusive use of residents of condominium estates should be deductible. Even residents of Housing and Development Board estates have to pay conservancy charges for upkeep and maintenance of the estates, and the conservancy charges they pay are not tax deductible. In old housing estates like Serangoon Gardens, they do not pay conservancy charges for roads which are public roads where members of the public have right of passage. In a condominium, I do not think there is a right of passage for the public. Nevertheless if the Member can make out a better case, we will be prepared to give consideration as we have given consideration to all the suggestions of Members here.”
“Sir, may I say that some of these operations involve risks and that, if these risks turn out to be unacceptable and result in losses, the Government will have to finance these losses from its Consolidated Fund or Development Fund or from some other fund which it replenishes through taxes, The question of income tax or other taxes is not totally irrelevant.”
“Sir, the size of the operations in financing oil rigs, for example, would be of such a degree that the Government itself would not be able to assist very much. If we have to provide the resources from which the banking sector, such as the DBS, were to lend to oil rig builders and so on, the amounts would be so considerable that the Government would have to find greater sources of finance. And I am already having difficulty in this House in trying to convince Members that there is a need for broadening the base of taxation or in increasing the taxes. So I think on this point, perhaps the financial centre should try and do what it can to finance these rather specialised operations. I believe there are merchant banks that specialise in ship and oil rig financing and I think we must leave this mostly to them. The Government, of course, is very happy to provide the basis for the financial centre operations. We will give as many licences as are required for anyone wishing to enter into this business. But that is all that we can do. Maybe through the DBS we can take some part in the syndication, but even in that, there is a limit to what we can do. Mr Hwang Soo Jin: Sir, can I just add a bit more? Taxation is totally irrelevant to the question of syndication for the financing of shipbuilding. On the question of syndication, someone should come forward to provide the positive lead. In this case, may I suggest that the hon. Member for Kallang through the DBS, should come forward and provide the lead which is sadly needed.”
“Sir, I am not quite sure in what way we can prepare workers for industries that have not yet come. We do have Government industry training centres which train people in tool making and so on and I assume that the very general training would fit them not only for particular industries but also for other industries which have related technology. But the first thing really is to have our engineers trained in the particular industries. And, as I say, one of the ways is, first, to acquire a company in high technology industry in the developed countries, and then send our people to this company for training. And, in fact, we should still keep that company in existence for such training purposes and exchange of information with other companies in the same technological field, and then bring back the engineers and maybe some of the trainees to start similar operations in Singapore.”
“The last question I have to consider is that raised by the Member for Potong Pasir as to what is being done in regard to the transfer of technology to Singapore. In fact, I believe that the transfer of technology has been taking place all this while, for the whole period of industrialisation, and that we have had some success from such transfers through the activities not only of our own industrialists but also those of the many foreign industrial firms we attract here. The advantage of the multi-national companies is that, we hope, they bring their most advanced technology from the West and that in the process of establishing themselves here, the technology rubs off on our local population. I do not know exactly how we can speed up this transfer, There are a number of other methods we are able to pursue. One of these is that we should perhaps acquire some of the industries in the US and other advanced technological centres and try and transfer them to firms in Singapore. I think some of our local industries are already doing this, and I hope that in the coming years there will be more and more of them doing the same, especially in the products which require not too much capital but a lot of entrepreneurial, scientific and technical ability from the entrepreneurial personnel such as in electronics.”
“As in the OECD schemes, credit facilities under the Singapore scheme are not extended to oil rigs, as the amount involved is fairly large and the credit risks are different from ship financing. I think the financing of oil rigs is a matter for syndication by our merchant banks and other banks in our financial centre activities. Dredgers are also excluded as they are not ships but are specialised forms of marine and earth excavating equipment. However. I think such financing can be considered on a case by case basis provided borrowers can comply with appropriate terms of financing. [Mr Deputy Speaker in the Chair] 6.00 p.m. I think the case of the dredger referred to by the Member was actually considered on the merits of the proposal, but the financing fell through as insufficient information was disclosed and the Bank which was to provide the guarantee had already exceeded its credit lines from the DBS. Under the Japanese EXIM Bank credit scheme, credit facilities are generally extended to builders instead of to buyers directly. In our case, direct lending to buyers are considered on a case by case basis. The interest rates of 8% to 8.5% per annum under the DBS scheme are more attractive compared to other existing bank going rates of 8.75% to 9% per annum. Furthermore, the Japanese scheme is only available for vessels above 10,000 deadweight tonnes. Our scheme is, therefore, in fact more liberal compared to the Japanese one in quite a few areas. I would like to say, however, that the Member's concern for the shipbuilding industry is shared by the Government and that we will do what we can to alleviate any distress which the shipbuilding industry is facing at the moment.”
“The Member has himself in his speech spoken of the difficulties shipbuilders face, and I quote: `Due to unforeseen circumstances or international events beyond their control, buyers may be unable or unwilling to take delivery or, after taking delivery, the buyers may go bankrupt before repaying the loan.' The DBS and other banks also face the same difficulties when they have to return the money which the Government may have advanced them so that some caution from them is surely reasonable. The existing ship financing scheme of the banks, and of the Development Bank of Singapore particularly, is modelled on the Japanese EXIM bank credit scheme which in turn is based on guidelines laid down by the OECD. The scheme was started in 1971 for vessels above 5,000 deadweight tonnes and subsequently extended to cover also vessels of below 5,000 deadweight tonnes. Although it is not Government's policy to subsidise the local shipbuilding industry. Government is prepared to assist the industry wherever appropriate to enable them to compete effectively with other countries. At the same time, I ought to say here that we do not have the same resources that Japan or the developed Western countries have for assistance to their shipbuilding industry. As to the alleged bureaucratic red-tape, perhaps the following clarification should be made. The disclosure of personal particulars of potential buyers is an accepted international practice. Such information is required to assess the debt servicing activity of the borrower. I would be very happy to learn from the Member for Boon Teck what particular countries give credit without even inquiring into the particulars of the borrower.”
“In December 1973 we had, what is called, the Restrictions on the Supply, Distribution and Use of Petroleum and Electricity Act, which was passed, empowering the Government to restrict energy usage. This Act is still in force. Since then we have continued to encourage the conservation of energy through various campaigns. As the Member for Marine Parade has suggested, amendments to existing regulations to incorporate energy conservation requirements in building design would also help to cut down energy wastage so that now a sufficiently close and effective vigilance on energy usage can be coordinated and sustained through the work of the Department of Trade and the Public Utilities Board. But the problem is admittedly a very complex one requiring a sense of economy on the part of all energy users, whether they be Government ministries, industries, businesses, motorists or individual households. I think our immediate requirements are ensured, however, by the Agreement which we signed recently for preferential trading arrangements in ASEAN which, under one of its provisions, gives us preference to the supplies of energy from our neighbours. Because of this particular agreement, I think there should be less worry on our part on the supplies necessary for Singapore. I now come to the Member for Boon Teck. He has raised the question of Government's scheme for the credit facilities to the shipbuilding industry. He has suggested that I would answer him with the usual platitudes. I hope I do not, although I could say that even if I did so in the terms in which he suggested that I would do. I would only be suggesting normal banking prudence.”
“Mr Speaker, Sir, first of all, I want to take the question raised by the Member for Marine Parade on the necessity for energy research and conservation of energy supplies. I agree with the Member for Marine Parade that, as far as research is concerned, the size of our economy is such that we cannot afford to spend large sums of money on research programmes which are already being done by countries like Japan, the United States of America and other developed countries. In any case, the research in nuclear power and in solar power must be on a long-term basis. As far as Singapore is concerned, it is likely that we shall have to rely upon conventional sources of energy supplies, such as oil and coal. Whilst it is possible that we can buy nuclear power. I think the size of our country is such that there is really no place where we could safely put a nuclear power station and, unless we have absolutely no other alternative, we will have to give up the consideration of nuclear power station as a solution to our energy problems. As far as conservation is concerned. I think we can do something. In fact, when the sudden and steep increase in crude oil prices began in October 1973 we had a national "Save energy" campaign. This was conducted on a voluntary basis without any element of compulsion. A committee chaired by the Director of Trade was set up. The result was initially encouraging. The rate of increase of energy consumption fell to 4% the following year, that is, 1974, and 7% in 1975. As a result of economic recovery last year, the rate of increase rose to 10% but still well below the average rate of increase of 20% in energy consumption in the years before the oil crisis.”
“I Divs II & III 1975 782 1,588 4,108 1976 1,777 1,528 6,722 The Institute does undertake course evaluations and follow-ups on the results of these evaluations to find out whether the participants have benefited from the courses, and to improve and modify them in the light of its findings. For example, participants of courses on management do subsequently carry out organisation and system improvements in their respective departments. In the English courses, pre-course and post-course test results show that participants' language ability has improved. The Institute's courses also enable civil servants from various ministries and statutory boards to meet and discuss common problems. This has helped in improving communication and coordination in the service.”
“Sir, I welcome this opportunity to comment on the courses that Government officers attend at the CSSDI. The Administrative Officers, Medical Officers, Engineers. Legal Officers, Inland Revenue Officers and other Division I officers who are recruited fresh from the University attend a two-week induction course at the CSSDI within six months of joining the civil service. The object of the course is to make these officers aware of their role and responsibilities as civil servants, to give them an understanding of Government policies and the environment in which the Government operates. They are required, as part of the course, to attend meet-the-people sessions conducted by MPs. At the end of the course, each participant is asked to comment on the various elements in the course. Their comments on the meet-the-people sessions have invariably been favourable. They found the sessions relevant and valuable to their work. In particular, the sessions have given them a much clearer idea of the various problems confronting our citizens and the effects of various administrative acts on the people. The participants would be expected in the course of their work to pass on to their colleagues the benefits of the training which they receive. The Member for Anson has also asked questions about this. As regards the objectives of the Civil Service Staff Development Institute, these are to enhance the effectiveness of the public sector by providing in-service training courses in management and supervision, Government relations, current affairs and English language. The following figures on course attendance in 1975 and 1976 give an indication of the Institute's activities:- Attendance at Total No. of Year Institute's Courses training hours Div.”
“Our Trade Investment and Diplomatic Offices will be strengthened in key centres. We will also set up permanent exhibition centres in West Asia. As Members are aware, we are not considering the establishment of a Trade Development Council. The Member also spoke about the Philippines and Thailand and across-the-board reduction of 10% of existing tariffs. Our bilateral agreement with these two countries is a concrete step forward in cementing closer economic ties and we have briefed Indonesia and Malaysia on these arrangements. Consideration is being given now to the implementation of bilateral tariff reductions under the ASEAN Agreement. I think I have answered all the questions raised. Mr P. Govindaswamy: Sir, although I am not satisfied with the Minister's reply because all the newspapers, the Straits Times and the Nanyang Siang Pau, have put up a report criticising the 13th month allowance and that the Government did not consider them. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“A sound and orderly system of wage increases linked to productivity has also helped us to remain competitive and, externally, key personnel have been deployed overseas to step up the promotion efforts. We also give more assistance from the Capital Assistance and Small Industries Finance Schemes. I know that up to date the amounts given have been dismal, but that is because we have started with these two schemes only over the last year or so. The Member also asked for an assurance that no levy of taxes be raised for the rest of this year. I have already answered that question - that a Minister for Finance never gives such assurances. He also asked about the trade figures and spoke of our trade deficit of $6 billion. With a developing economy and with no natural resources like ours, a trade deficit is inevitable. We require large imports of capital goods and equipment to build up our productive capacity and we are dependent on external sources for the bulk of our food supply and raw material inputs for our industry. We expect to continue with this trade deficit as we go into more sophisticated servicing industries. Industries like shiprepairing which require heavy capital equipment add to our trade import bill, but the services they render are not shown in the trade account as the product of these industries is registered only in the services account and not in the export account. We have, however, as an objective of our trade policy, the reduction of the trade deficit. Over the years we have diversified into new products and new markets. We have, for example, gone into production of television tubes and chassis and quartz crystals requiring high levels of technology. Our exports to West Asia have also developed by 12 times over the last six years.”
“These attributes can be grouped under three factors - qualification, merit and experience. In the nature of things, however, in every promotion exercise there is bound to be a number of unsuccessful candidates who become dissatisfied with the conduct, and outcome of the exercise. I now come to the Member for Kim Seng who asked whether husbands of married civil servants could be eligible for consideration under the medical benefit scheme of the Government. While I can appreciate the arguments which he has provided, we are still living in an age where in any divorce case, the woman is never asked to pay alimony to the husband, and I think it is generally considered that husbands are capable of taking care of themselves. In the same way, the regulation has been framed on that assumption but in the unlikely event that a woman officer has a husband who is completely dependent upon her. I am prepared to consider the case for medical benefit as a special one. 4.45 p.m. The Member for Sembawang raised a number of questions. One was on the real growth likely for 1977. I have gone into this in some detail and there is a good chance of our achieving a real growth of 6 to 8% this year. He asked whether there was any likely difficulty due to the lack of investments, and what further steps were being taken to attract such investments. We have tried to ensure that domestically the conditions are conducive to attracting new investments. We offer an attractive tax package and have always given priority to providing adequate industrial facilities and services. Efforts have also been made to upgrade skills in our labour force to meet the requirements of industry.”
“I do not think I can do better than to repeat again. The nature of the non-pensionable allowance is a 13th month salary supplement payable to people who are in service on the 31st December. It is no use suggesting that this annual allowance should be of a different nature and that it should be a token of appreciation to officers who have already done some service but are not in service on 31st December. It was not so conceived and there is no way in which I can change the nature of this allowance to make it a matter of compassionate allowance. The difference is like the difference between a cat and a dog. It is no use suggesting that the cat should be a dog and should be friendly and compassionate. The fact is that it was born a cat, and the non-pensionable annual allowance likewise, by its very nature, is a payment made only to serving officers on 31st December and not necessarily to officers who have done good service and should perhaps be considered for a certain consideration by Government, whether in the form of an appreciation or by way of ex gratia payment. My Ministry would have no objection to any statutory body exercising a discretion in special circumstances of extreme hardship to waive recovery. Let us not mix the two matters. One is a matter of ex gratia payment, and the other is a matter of entitlement to a non-pensionable annual allowance. I think there was one other question I have to answer on the Civil Service. The Member for Anson has some doubts whether there is fairness and impartiality in the selection of persons who are promoted. I think we ensure such fairness and impartiality by getting officers who are carefully selected to serve on promotion panels. Promoting authorities are concerned, I think, only with the attributes of candidates.”
“I suppose we must be patient and persistent, and we believe that the American people who are fair minded will allow SIA eventually to show its paces across the Pacific. The Member for Anson also asked about our trade with Western countries. Trade with the US. Canada, the EEC and the remaining countries in EFTA has expanded from $4.2 billion in 1971 to $11.4 billion in 1976, an increase of 160%. During this period, our exports grew more than 3 1/2 times from $1.5 billion in 1971 to $5.5 billion in 1976. Our domestic exports to these markets have fared even better as they have increased by about 5 1/2 times from $610 million to $3.4 billion over the period 1971 to 1976. Our export performance is due partly to the preferential access to the markets of the US and the EEC we enjoy under their GSP schemes. It is also the result of a joint effort by Government and the private sector to increase the range and sophistication of our products. However, we have our share of trade problems with the Western countries. With high levels of unemployment. Western governments are subjected to domestic pressures for greater protectionism. About 40% of our total exports of textiles and garments are subject to import quotas imposed by the Western countries. Our more competitive electronic exports have also triggered protests from some countries as we attempt to upgrade and diversify. Therefore, while we have performed satisfactorily in these markets, we will remain alert and intensify our export promotion efforts. Sir, I think the main query that I have to answer here is the payment of the 13th month allowance. I have already answered quite a number of supplementary questions during Question Time. But I notice that it has not satisfied Members. However.”
“30 pm, Secondly, SIA spends very considerable sums in advertising and promotion. During the year ending 31st March it spent $18 million overseas, Thirdly, SIA has invited a considerable number of travel editors and travel agents to Singapore to see for themselves the attractions. Fourthly, Singapore has developed a package of holiday programmes which are targetted for its main tourist originating ideas. Finally, SIA has spearheaded the establishment of attractive excursion fares in its main tourist-generating areas overseas. The sum total of SIA's efforts is restricted in the number of passengers it carries to Singapore. In the calendar year 1976, SIA carried 541,000 passengers, excluding returning residents and West Malaysians into Singapore, comprising 43% of total arrivals. The Member asked about SIA's progress and competitiveness with other airlines. Given equal opportunities, SIA can hold its own with the world's airlines, Unfortunately, it is not always allowed to spread its wings. A case in point is the series of traffic rights discussions with the USA. After five rounds of negotiations starting as far back as 1974 there has been absolutely no progress. At the last round of talks, the US delegation made a demand that SIA should obtain rights for a US carrier from the Indonesian and Filippino governments. This is, of course, absolutely absurd and raises serious doubts as to whether the US delegation was sincere in its efforts to reach agreement. A US airline has been operating flights to Singapore for the last 40 years but SIA is still denied the opportunity to operate even one cargo service a week to the West Coast of the USA. However.”
“Mr Speaker, Sir, there are quite a number of questions which I have to answer. The first one is from the Member for Anson. He spoke about the Post Office Savings Bank and the Giro system, and asked whether it could not be used for the purpose of a central collection system. The Management Services Department has been studying for some time the setting up of a central collection agency with collection points throughout the island to collect fees and rates payable to Government and statutory boards. While the concept of multi-purpose centres for the collection of bills has been found to be feasible, the actual physical setup has not been determined and several possibilities are being explored. One of these, of course, is the use of the POSB which has branches throughout the island. However, the POSB Giro system, despite the advantages that it has, does not appear to be sufficiently popular. For example, only about 3% of POSB account holders are paying their bills through the POSB Giro system. Next, he asked about tourism and what SIA was doing to encourage tourists to fly by SIA, and how our national line was progressing, and how it was competing with other airlines. The tourist industry, of course, has been very buoyant. We hope to register an increase of 15% to 20% per year in tourist arrivals this year. We do not think too high a figure would be very desirable because there is already a danger of a drop in the standard of courtesy in our hotels, restaurants, shopping and other service establishments. But SIA is continuing with its efforts to promote tourism. It has now, firstly, a well-balanced network of services serving 27 cities in 22 foreign countries. It is constantly striving to expand this network. 4.”
“Sir, I am not in a position now to discuss a revision of the whole Pension Ordinance or the CPF or the gratuity or ex-gratia payment. In this instance, I am saying that the non-pensionable allowance is not a pension. In fact, it is called a non-pensionable allowance. It is an allowance and the terms of this allowance are stated exactly in the circular which was issued. The first payment was in respect of the year-end 31st March, 1972. MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1977 TO 31ST MARCH, 1978 Order read for consideration in Committee of Supply [5th Allotted Day]. 3.00 p.m. [Mr Speaker in the Chair] Head W (cont.) - Resumption of Debate on Question (18th March, 1977). `That the sum to be allocated for Head W be reduced by $10 in respect of subhead BAA 1101.' - (Mr S. Dhanabalan). Question again proposed.”
“Sir, that is another question. If he suggests that some gratuity, pension, or other allowance should be given, let us consider it on that basis, and not make the non-pensionable allowance which is not intended to be a gratuity, a pension or an exgratia payment to him under those terms. Mr Ng Kah Ting (Punggol): In the light of the Minister's reply, would he consider favourably the question of the Member for Jalan Kayu by enlightening this House further on this aspect?”
“The answer is no. It may be that there should be a pensionable allowance based in the manner in which the Member suggests, but we did not frame it in that manner, and therefore there is no entitlement. I do not think we would be prepared to change the nature of this concept of annual non-pensionable allowance to the nature suggested by the Member concerned. In fact, the first idea was that this would be in the form of a wage increase except that, instead of giving it in 12 instalments for the year, we suggested that it may be desirable to give it in one lump sum payment, and therefore the first annual allowance was given to officers serving on the 31st March. Members may note that it was not intended that it should be for service for the calendar year. The first payment was made on 31st March and subsequently we thought that perhaps the end of the year would be a more desirable time to pay because that is the time where there are festivals - the Christmas and the Chinese New Year.”
“The answer is simply no. It does not fall within the definition. But the terms of re-employment are such that they can be renegotiated to include whatever may be necessary - a higher salary or a lower salary; or a salary to include consideration for whatever he may have lost.”
“The answer is no. The allowance is not a bonus. I think I must stress this. It is not payable like, say, bonuses, in companies where maybe a proportionate amount can be paid, because it is for services rendered during the year. The intention of the non-pensionable - annual allowance is to reward officers who are still with us on 31st December and who will continue in service with us for the rest of the year, and to give their loyal service to the Government.”
“Sir, I am not quite sure I understand the gist of the Member's question. The present position is that all serving officers on the 31st December get the allowance, and all officers who are not serving on the 31st December do not get the allowance. Under the present system there is no question of any one being entitled to any proportionate payment.”
“Sir; the numbers of civil servants who retired on reaching the age limit are:- 1973 - 505 1974 - 340 1975 - 217 1976 - 326 The non-pensionable annual allowance is payable only to officers who are in service as on 31st December and therefore those who leave the service in the course of the year, on account of resignation or retirement, are not eligible for the allowance.”
“Sir, that is a consummation devoutly to be desired. I think the Property Tax Department and the Ministry of Finance have been trying for many years to rationalise the rates of property tax. If Members will have noticed when I read out the concessionary rates, it varies from 14%, 16%. 18%. 19%. 20% to 23%. I cannot myself imagine that a fine distinction can be drawn between properties which are only worthy of 14% and other properties which are worthy of 15% rates. Members will also notice that there are attap houses where the rate is $6 a year. I have been trying to revise the property rates to a uniform consistent rate. The difficulty is not to revise the rates downwards from the higher rates of up to 36%, as I think most Members would like me to do. The difficulty is really raising the other lower rates upwards, so that there will be a uniform rate MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL, 1977 TO 31ST MARCH, 1978 Order read for resumed consideration in Committee of Supply [3rd Allotted Day]. [Mr Speaker in the Chair] 3.06 p.m. Head S (cont.) - Resumption of Debate on Question (16th March, 1977). "That the sum to be allocated for Head S be reduced by $10 in respect of subhead AAA 1004*." - [Mr Ngeow Pack Hua]. (*The same amendment also stood in the name of Messrs Teong Eng Siong, P. Govindaswamy and Ahmad Haleem).”
“So if they are to be encouraged to base the annual values on rents, then I think they should raise it upwards as rapidly as they are expected to bring it downwards.”
“Sir, this may be due to the kind-heartedness of the Property Tax Department which does not always raise the annual values in accordance with the rents which property owners receive.”
“Sir, I assume the rates would also go down with the values and with the rents which are collected. Since this is a percentage of the annual value, and the annual value is based on rents, I assume there would be a reduction. I do not propose to reduce the rates as well as the annual values.”
“I believe that may be so. I am not quite informed of this particular instance. But I will look into it. Did the Member say HDB houses?”
“Mr Speaker, Sir, Singapore is divided into several zones for purposes of applying property tax assessment rates as prescribed under the Property Tax (Rates) Order, 1971. These zones are shown in the Property Tax Rate Plan which is available for inspection by members of the public in the Property Tax Office. Under this Plan, the highest assessment rate of 36% is levied on residential properties in the central city areas and in the southern islands comprising Sentosa, Sarong Island, Pulau Brani. Pulau Selegu and Pulau Hantu. Residential properties in the less developed areas are assessed at 27% while those in the rural areas, including all other surrounding islands, at 18%. All HDB owner-occupied flats purchased under the Board's Home Ownership Scheme are assessed at the concessionary rate of 23%. For other owner-occupied dwelling houses, concessionary assessment rates of 14%, 16%, 18%, 19%, 20% or 23% apply. Properties with annual value of less than $240. whether owner-occupied or not, are also subject to the same rates. The assessment rate of attap and wooden houses is $6 a year. Residential properties developed under approved urban redevelopment projects are assessed at a concessionary rate of 1 2% for 20 years before the full assessment rates applicable are imposed. For FY 76, the revenue collection for all properties, excluding contributions by statutory boards, is expected to reach $265 million, which includes a substantial amount of back tax. The estimated revenue collection for FY 77 for all properties, except statutory boards, is $230 million. No records of collection according to the different assessment rates for residential properties are kept. I regret, therefore, that I am unable to give the required breakdown.”
“Mr Speaker, Sir, I think the NTUC does not have any special expertise in importing cheaper sugar. Anyone can do it at world prices.”
“Mr Speaker, Sir, the answer is no. When the price went up to about $2,300 per metric tonne, I found no pressure in this House for an increase in sugar prices. I think the fact is that we have been able to maintain over the last three years a sugar price which has been entirely stable and I can see no reason why the public cannot pay this same price of 75 cents. We hope to be able to maintain this price because discussions are now going on with the Australians and if the parallel negotiations in Japan and Malaysia are favourable, I think we will also benefit to the same extent that concessions are made to these countries.”
“Mr Speaker, Sir, it is not the policy of the Singapore Government to reduce taxes in order to maintain prices I think we need our taxes and the revenues from them in order to satisfy the needs of our country. MPs, social services, economic development and other requirements.”
“Mr Speaker, Sir, I would think that the tendency would be upwards. Of course, there are other factors in the world sugar market which decide the price from time to time. Some of these are what prices are being negotiated, the effect on growers. that is, whether they grow more sugar cane, and also the effect of the new processes of making liquid sugar of a different kind, not cane sugar but from wheat and corn. All these have an effect on prices. If anyone can tell me whether the price is going upwards or downwards, I would be very pleased. I am sure the Sugar Industry of Singapore will also be very pleased if anyone can give a guaranteed forecast of prices over the next five years.”
“Mr Speaker, Sir, the answer is simple. The Sugar Industry of Singapore made a commercial judgment and decided that a long-term contract was desirable. Therefore, it entered into the terms of the present contract. At that time, of course, it was favourable. As I have said, the price was then very low. The escalation clause was built into the contract, because this was related to the cost of labour in Australia. The intention was that the long-term contract would enable Australia to expand their growing of sugar cane and that the price would be sufficient to enable their growers to pay their labour at the expected escalation in wages which would result in the following years. There was no possibility of a reduction in price downwards because of the nature of the contract. The reason why we are paying 75 cents in Singapore instead of 65 cents as in Malaysia is that we kept the excise tax at a level which we have always been charging, that is, 10 cents, while the Malaysian Government thought it possible for them to waive the tax altogether. That is the reason for the difference between their price and our price. I think I have answered all the questions.”
“Since the Sugar Industry of Singapore is making a loss at prevailing prices, I have no proposals at present to ask SIS to make any revision of the price downwards, If necessary, I will consider whether the Sugar Industry of Singapore may be allowed adjustments to the domestic retail price of sugar when discussions are completed. However, any adjustments made will have to take a long term view of the market rather than to follow the erratic movements of world sugar prices.”
“Mr Speaker, Sir, sugar prices often fluctuate rapidly on the world market. To ensure uninterrupted supplies of raw sugar and to help maintain a stable domestic selling price for refined sugar, the Sugar Industry of Singapore has had to enter into long-term supply contracts. The current long-term contracts with Australia and Fiji, concluded towards the end of 1974, assured us of raw sugar supplies fully for 1975 - 77 and thereafter up to 85% of our domestic requirements until 1980. The contracted price at S$689 per metric tonne was then extremely favourable compared with the prevailing market price of about S$2,580 per metric tonne. Thus, the Sugar Industry of Singapore was able to maintain the domestic retail price of refined sugar at 75 cents per kati since 1974 to date. Otherwise, Singapore consumers would have had to pay as much as $2.25 for their kati of sugar if we had to buy on the open market at the peak of world price fluctuations. Taking the period between 1974 and now, the price paid by our consumers on the average is about 24 cents per kati lower than the average world price of white sugar. Members are no doubt aware that the price of raw sugar on the world market has fallen. The price of sugar paid under the current contract, however, has increased because of the escalation index tied to prices paid by the Australian sugar industry. The Sugar Industry of Singapore is at present trying to discuss with Australia some improvements in the terms of the contract. Apart from a lower price, it would be desirable that the new contract should enable us to diversify our sources of supply, especially to buy from other ASEAN countries.”
“MAIN AND DEVELOPMENT ESTIMATES OF SINGAPORE FOR THE FINANCIAL YEAR 1ST APRIL,1977 TO 31ST MARCH, 1978 Order read for consideration in Committee of Supply [1st Allotted Day]. [Mr Speaker in the Chair]”
“Sir, briefly where shows are organised for profits and not for charitable, philanthropic, educational or sporting purposes, entertainments duty exemption is a discretionary matter but will generally be granted to performances of intrinsic cultural value. It is difficult to define precisely what shows are of cultural value. Exemptions have, however, been granted to such performances as symphonic concerts, chamber music ensembles, operas, ballets, plays and national cultural shows. Other factors that have been taken into consideration are whether the artistes are of international status and whether the performances would attract a reasonably large public audience. The unduly esoteric or the mundane will not normally qualify for exemption. As regards encouragement of more cultural shows of local content, my Ministry has granted exemption from entertainments duty to shows and performances presented, sponsored or organised by such organisations as the National Theatre Trust, the People's Association and the Kreta Ayer People's Theatre Foundation. Favourable consideration will continue to be given to applications for exemption from entertainments duty on shows and performances displaying the various facets of our rich multi-cultural heritage. SUPPLY BILL (Business Motion) 3.00 p.m. Resolved, That, notwithstanding the Standing Orders, the second and third readings of the Supply Bill for the financial year 1st April, 1977 to 31st March, 1978 may be proceeded with immediately on the conclusion of the proceedings on the Main and Development Estimates for the financial year 1st April, 1977 to 31st March, 1978. -- [Mr Hon Sui Sen].”
“Certainly. All matters of policy are the concern of the Minister for Finance and consequently, since he is accountable to Parliament. he is accountable to Members of Parliament. CULTURAL SHOWS (Exemption from entertainment duty) 7. Mr Ch'ng Jit Koon asked the Minister for Finance what are the criteria for exemption of cultural shows from entertainments duty; and whether he will revise the criteria to encourage more cultural shows with local content to be staged in Singapore.”
“The Minister for Finance is ultimately the owner. This is a corporation which is enacted under an Act of Parliament, so that ultimately the Singapore Government is the owner of all the monies of all the Government companies. Mr Hwang Soo Jin: Sir, would the Minister not agree that since we are all representatives of the people, and the people own the money, but which the Minister alleged that he owns them, are `we not shareholders in all these companies?”
“Sir, the object of this exception is to inform Members that, in operational details, there is really no purpose in the House enquiring nor is there any purpose in the Minister enquiring why in a particular company, the SIA, for example, chooses Boeing 727 instead of the Airbus. This is a matter of commercial judgment and the details are best left to the company concerned. The Minister would himself not be in a position to make any better judgment nor would the Members of this House if the details were known.”
“Sir, I do not consider it appropriate, as a rule, that I should be called upon to explain operational decisions on investments, particularly where they involve transactions between one Government company and another. I shall, however, make an exception in this case. Singapore Airport Duty-Free Emporium was set up in October 1974 as a joint venture between the Government, Singapore Airlines, and Singapore Airport Terminal Services. SIA is owned by the Singapore Government while SATS is owned by SIA. The joint venture company is therefore essentially a Government company. The Government's shares in both SIA and SADE are now held by Temasek Holdings (Pte) Ltd, which is a Government company. In March last year the SIA Group suggested that its stake in SADE should be increased to reflect more closely its major involvement in SADE's operations: 1. The Group was managing the company. 2. SIA was promoting SADE not only in its ticketing outlets in Singapore but throughout its network. 3. SIA would prefer to sell duty-free goods at the Airport than on board its aircraft. This was agreed, and after negotiations, a suitable transfer price was agreed. The benefits to Government from the transaction are presumably that credit is given where credit is due, higher profits accruing to the organisation striving to promote increased business.”
“We would welcome an early agreement with Indonesia as this would contribute to expansion of intra-ASEAN trade and would encourage greater investments among member states. However, pending the conclusion of a tax treaty with Indonesia, Singapore grants exemption from tax on income derived from certain approved Singapore investments in Indonesia which enjoy pioneer status or tax holidays in Indonesia. SINGAPORE AIRPORT DUTY-FREE EMPORIUM (Sale of Government's equity) 6. Mr Ho Kah Leong asked the Minister for Finance what is the rationale behind the sale of 31 per cent of the Government's equity holding in Singapore Airport Duty-Free Emporium Private Limited to Singapore Airlines Limited; and what are the benefits to the Government from that transaction.”
“Tax treaties therefore invariably have provisions for the prevention of tax evasion and for the exchange of fiscal information. We have concluded avoidance of double taxation agreements with all the major EEC countries and Japan. In ASEAN, agreements with Thailand and Malaysia are in force, while an agreement with the Philippines was recently initialled. There is no simple method of assessing the benefits which Singapore derives from the conclusion of avoidance of double taxation agreements, but it is significant to note that it was only after the conclusion of tax treaties with Germany. Netherlands and Japan that big multi-national corporations from these three countries such as Rollei, Philips and Mitsubishi established themselves in Singapore in response to the various tax incentive measures granted by the Government. The tax treaties with these countries ensure that these benefits are not eroded through increased taxation by the home countries. Rollei Singapore Private Limited has invested $106 million, Philips Singapore Private Limited $45 million and Mitsubishi Singapore Heavy Industries Private Limited $110 million as at June 1976. The principal benefits flowing from tax treaties are the encouragement of the inflow of capital and technical expertise. In the process, local technical and managerial skills are upgraded and more employment opportunities are provided. Preliminary discussions were held in Djakarta in November 1973, on a Double Taxation Agreement between Singapore and Indonesia. An Indonesian team is expected to come to Singapore for the next round of negotiations, but the date has not been fixed.”
“Sir, it is easy to understand that the inflow of funds, investments and technical expertise to Singapore from another country would be greatly discouraged if full taxes have to be paid according to the laws of both countries. In the absence of any agreement otherwise, income which arises and is taxed in Singapore and is then remitted home by a foreign company would still be subject to tax in its own country. At prevailing income tax rates, such cumulative taxation by two countries would be prohibitive. It would completely deter foreign investment in Singapore. The converse is also true for Singapore companies which have plans for substantial investments overseas. In bilateral tax treaties to avoid this situation, double taxation is eliminated through full or partial tax credit or exemption on interests, royalties, dividends, etc. Another important feature found in bilateral tax treaties between Singapore and the developed countries is "tax sparing". This is a means of ensuring that the tax on the profits of foreign-owned companies foregone by the Government through various tax incentive measures is "spared" from tax by the foreign government. Without such bilateral treaties, incentives such as tax holiday benefits granted to such companies could be nullified if the foreign country should unilaterally decide to increase its tax by an amount equivalent to the tax remitted by the Singapore Government as a tax incentive. Besides the avoidance of double taxation, tax treaties also contribute to the prevention of fiscal evasion. As a company's books and records in one country are generally not available to another country, effective control is only possible if the two countries agree on the exchange of information.”