Koo Tsai Kee
Singapore
“Sir, I will forward the suggestion from Dr Wan to JTC because the Chinese Garden and the Japanese Garden are currently managed by the Singapore Leisure Industries Pte Ltd, which is a subsidiary of JTC. The National Parks Board manages a wide variety of public parks to meet the recreational needs of all Singaporeans.”
“Over the years, BCD has made sure that planning approvals have been speeded up. On building defects, this is something that the management corporations must sort out with the developers. If we ask developers to deposit more money with the Government, then this cost will be passed on to the home buyers.”
“Anything that stands on HDB land belongs to HDB. You are not supposed to remove, paint or vandalise it. But it is a small incident. We have to enforce it legally. Otherwise, it will become a precedent. If he wants to put up any signboard, he can just write to HDB.”
“Unless I have not done so, he can seek clarification. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Koo Tsai Kee]. Bill considered in Committee. [Mr Deputy Speaker in the Chair] Clause 1 -”
“Sir, if Mr Chiam has any suggestion, we will be happy to look at it. SENIOR CITIZENS' CONCESSIONARY TRAVEL ON PUBLIC TRANSPORT 13. Mr Yeo Guat Kwang asked the Minister for Communications if he will consider lengthening the period for senior citizens' concessionary travel on public transport which is 10 am to 4 pm in the day time to 9 am t…”
“Sir, I think we are going off tangent here. These are upgraders. Your sympathy should lie with the first-timers, should you not? If we encourage upgraders to upgrade all the time, then the first-timers will be left behind. So we are talking about people who have already taken the first bite of the subsidy cherry.”
The complete record
Every one of 314 lines we hold for Koo Tsai Kee, in date order, each linked to its source. Free to read, in full, without an account. Page 3 of 7.
“The editorial of the ASWJ on 13th April 1995 after the release of the Gancayco Commission report, called the findings of the Commission "sloppy". The newspaper accused the ex-judge of orchestrating a judicial circus. ASWJ is no lover of Singapore. Mr Low Thia Khiang suggested earlier on that we have antagonised all the foreign media, we have no friends in the foreign media and they are always attacking us. But I think the greatest vindication on this case is that a newspaper, a liberal newspaper like the Asian Wall Street Journal, has come on board our side and has made very strong accusations that the whole finding of the Gancayco's report was a fiasco. ASWJ said, and I quote here: `... it would have been fully within its [Singapore's] rights to refuse to cooperate with what has clearly become a judicial circus. Yet Singapore has agreed to reopen the Contemplacion case and repeatedly offered to submit Mrs Maga's remains to outside pathologists'. Mr Speaker, Sir, I am afraid in this judicial circus, there was one - the Workers' Party chose to play the role of the clown to excite the audience in the Philippines and to titillate some of the less friendly, less objective journalists in the foreign media. And what did the SDP do? The SDP provided rich fodder for the already imaginative Filipino press to burn down the Ramos administration, hoping to damage his political standing, and damaging the bilateral ties of the Philippines and Singapore. Mr Ling, when he wrote to Mr Ramos, thought he was doing Mr Ramos a favour. In fact, he was giving Mr Ramos pressure. SDP's press release was picked up by several leading newspapers in the Philippines, including the Philippines Star and Today.”
“Mr Speaker, Sir, thank you very much for allowing me to join in this debate. The Flor Contemplacion incident has clearly been exploited by the SDP and the Workers' Party to serve their own selfish political agendas. The two parties chose to release what I would call misinformation to feed the hysteria and frenzy of the imaginative Philippine and foreign press. Even though there was no substance to their charges, the timing of their press release, I think, was laced with malice and mischief. From what I have heard earlier on, it appears that both the representatives of the Workers' Party and the SDP in this House today, Mr Ling How Doong and Mr Low Thia Khiang, seem confused about their stand. But I think that it is quite clear that the press statements released by them have done them more harm than good. The Workers' Party dropped innuendoes about a possible miscarriage of justice in Singapore when they proposed that the case be referred to an impartial tribunal. Mr Low is not here. But earlier on he suggested that the PAP MPs do not read the Chinese press. But I think that is not an important point. The important point is that we read the original press statement. And the original press statement submitted by his party leader was written in English and the innuendoes are very clear that there could be a possible miscarriage of justice. Mr Low Thia Khiang appears not to pick up the innuendoes perhaps because he was interpreting it from the Chinese translation of the English press release. Yet the trial of Flor Contemplacion was fair and transparent to even our critics in the West and, in particular, to a liberal paper like the Asian Wall Street Journal (ASWJ).”
“However, it was not clear from the Labour Force Survey whether these figures include the large number of foreign workers that are currently working in Singapore. May I ask the Minister: (a) the number of foreign workers that are currently working in Singapore; (b) their classification by occupation, that is, the number of foreign workers working as construction workers, operators, domestic workers, and so on; (c) the amount of foreign workers levy collected over the last three years till the last available date; and (d) any training or training incentives by the Government to improve the qualifications and productivity of these foreign workers. According to the Economic Survey of Singapore, 1994, the Singapore economy expanded by 10.1% in 1994, the same as in 1993. The manufacturing sector grew strongly by 13% compared to 10% in 1993. Manufacturers are concerned that such growth will need more workers. As Singapore has a tight labour market, will the Minister revise the foreign workers' policy and allow manufacturers to employ more foreign workers?”
“Managements are, I understand, reluctant to allow executives to join unions citing possible conflict of interest. Actually there is no conflict of interest. All workers and executives in all the companies must work in the interest of companies. This has been the NTUC's stand all along. This NTUC is a different animal from the other union beasts around the world. This NTUC does not shout the same slogans like the rest of the unions in the west and in the south. For example, the NTUC is the only trade union in all the free world to openly move against the minimum wage, something which unfortunately is catching on in the United States of America after the publication of the work of the two Princetonian academics. To underscore the NTUC's philosophy on this fundamental wage policy, ie, minimum wage, I have in fact written to the Business Times in the Bottom Line page to underscore our philosophy so that business people will understand that this trade union movement behaves very differently. As more executives become available in the work force, their legitimate concerns need to be looked after. Right now, they are on their own. I say it is better that the NTUC look after their interests than allow them to be organised by somebody else. Power abhors a vacuum. If their claims to rights are denied, they would channel their energies and grievances elsewhere, and they will form a power group somewhere else; or otherwise they will go underground. In the light of these developments, Sir, I hope the Minister would look again at section 16(3) of the Industrial Relations Act. Dr Wong Kwei Cheong (Kampong Glam GRC): Sir, according to the June 1994 Labour Force Survey, there were 1,693,100 persons in the labour force, of whom 1,649,300 were employed and 43,800 were unemployed.”
“Sir, section 16(3) of the Industrial Relations Act specifically prohibits executives from joining unions. This piece of legislation was put into the Industrial Relations Act in 1968 to prevent the will of the majority of workers from usurping the will of the minority executives. At that time, the industrial relations climate in Singapore was characterised by bitterness and distrust. Strikes, like my colleague, Mr John De Payva pointed out earlier on, were the order of the day. Today, however, the industrial relations climate in Singapore has completely transformed from confrontation to negotiations. From a strike riven country, Singapore has, since 1978, become a strike-free country. The industrial peace which we have achieved has ironically been the chagrin of trade union movements around the world. The NTUC has, in fact, been the target of heavy projectiles from the free trade unions of the rest of the world. In the light of these new developments, the Ministry of Labour ought to look at the relevance of section 16(3) because the labour landscape has changed completely. In 1993, statistics show that about 31% of the labour force was classified as executives. This is vastly different from the 1968 scene when the Industrial Relations Act was first enacted when, I suspect, less than 10% of workers were classified as executives. By imposing the will of section 16(3), a large segment of our work force is thus locked out from union representation. Apart from the fact that we are unable to represent them, these people are also locked outside the vast network of NTUC benefits which impact on their daily lives. No company today in Singapore can provide the range of benefits which the NTUC family can provide, and that includes the civil service.”
“The Minister of State did not answer whether he will lobby the Minister for Finance to provide tax incentives for training.”
“If we want to have the Swiss standard of living, it is not enough to have the Swiss GDP per capita. On a per capita basis, our income is higher than Britain, Australia and many developed countries. We can be an OECD country, but I do not think we are developed and we can only be called developed when we have two things; when we have technology and high TFP. Therefore, I want to ask the Minister for Trade and Industry if he would join hands with NTUC and all workers in Singapore to ask the Minister for Finance, to badger him, to look at tax incentives for companies which are committed to training.”
“Sir, the Government, as well as the NTUC, has been talking about placing the training of workers, young and old, at the top of the agenda. Unfortunately, exhortations to increase in-house training grants to over 2% of the company's payroll has fallen on nearly deaf ears. Certainly, the results are discouraging. Why is this so? The answer is not surprising. Employers have little incentives to invest in training. Employers will always try to capture increases in productivity through one solution, ie, to pump in money to increase capital investment. Why? Because there are incentives. What are these incentives? First, capital investments increase the productivity immediately. This is important to companies because their shareholders, looking at the stock market everyday, are all short termers! Second, depreciation on capital equipment makes capital investments attractive. Third, machines are less quarrelsome than people. Machines obey orders, humans try to defy you. So even as we are talking about training and putting training at the top of the NWC agenda, I would like to ask the Ministry of Trade and Industry to lobby the Ministry of Finance to give tax incentives to companies for training. So basically I am enlisting the Minister's help. The Ministry of Trade and Industry's job is to make the GDP grow year after year with low inflation and that we have an even spread of the money across the population of Singapore. They have been doing a good job so far. The Ministry of Finance's job is to make sure that surpluses grow to the sky. Both are commendable, but until our workers have what Mr Chay Wai Chuen talked about yesterday, ie, high Total Factor Productivity, we will not be able to achieve either. This is because the productivity level of our workers today is low.”
“Sir, every year the SDF is collecting less money than it is spending. My question to the Minister is what is the Ministry going to do about it. If I may use this opportunity to ask the Minister of State a question on START. He said that a retrenched worker can still enrol himself or herself in START. My understanding is that he might be able to do that but he cannot claim the SDF subsidy. So it is a non-starter.”
“I understand the rationale because these are strong companies with good in-house training programmes that can provide comprehensive, meaningful training programmes for employees. But I think this pool is rather small and with the large number of retrenched workers, it is difficult to match a retrenched worker with so few eligible employers. My second question to the Minister is: can the Ministry enlarge the list of eligible employers to include not just the big strong MNCs with good strong in-house training programmes but also companies that are mid-way between SMEs and MNCs?”
“Unless, of course, management is enlightened and tells the union or the workers in advance that they are going to be retrenched one month from now or two weeks from now, then the workers can do something, to contact the union or search for information. One example of a good employer was Black and Decker. Black and Decker retrenched quite a lot of workers, a few hundreds. They were going to move their entire operations in Singapore to Kuantan. Black and Decker knew it was coming. It was retrenching its workers in phases and they arranged for the union and the employees to meet and arranged for the employees to undergo the START programme. So these employees were still employed by Black and Decker but they were asked to go for the START programme. But, I think, Sir, it is too much to always expect management to be so enlightened. Most managements are so caught up with their own problems of relocation, the trauma of down-sizing, that retraining employees during that critical period of down-sizing is perhaps the furthest thing from the management's mind, because management themselves are also being retrenched. So they are also losing jobs. So the first question I have for the Minister is: can the Ministry expand the START scheme to include workers who have been retrenched for up to one month, ie, if a worker has been retrenched on, say, 1st March, he or she has up to 31st March to enrol in the START programme. In other words, while he is applying for the START programme he has already been retrenched. Sir, the second problem with START is that a select group of employers, usually the big MNCs, are allowed to come on board.”
“Sir, the Ministry of Trade and Industry now implements a programme known as Skills Training and Retraining. Its acronym is START. START is a wonderful programme. It allows workers waiting for retrenchment to attend a two-day course organised by the Ministry. Upon completion of the course conducted by the Ministry, the retrenched worker is given a coupon. When the worker becomes retrenched and joins one of the selected group of employers, this coupon is given to his or her new employer, and then the new employer can use the coupon to redeem the training cost spent by the new employer on the new recruit, that means, the retrenched employee who is now employed by the new employer. This is a good programme. I think it does help to emplace retrenched workers to selected groups of employers. But like all good things, it can be made better. And there are two problems with START. The first problem with START is that it is a non-starter. First, from the worker's perspective, retrenchment in most companies comes like a bolt of lightning. Most managements, understandably, are reluctant to release their hit list of retrenched workers because managements have their own problems. And also many MNCs receive instructions from overseas not to release the hit list of workers affected by retrenchment to the unions or to the workers. So if you were a worker, you know that retrenchment is coming, but you do not know whether you will be on the list. So you cannot benefit from the START programme because the START programme is only applicable to an employee in employment, not a retrenched worker. By the time you know you are retrenched, when you get a pink slip, it is too late to enrol for the START programme.”
“" In the context of a lack of a Direct Sales Act in Singapore, I would like to ask the Minister two questions. First, when can we have a Direct Sales Act? I know it will take some time. So the second question follows. In the absence of this Direct Sales Act, whether the Ministry could enforce a cooling-off period anywhere in our existing legislation.”
“Irate consumers have been complaining to CASE, of which I am the President. Because of the tough stand taken by CASE in this particular episode, the agent for Kirby vacuum cleaners, Crossley Management Consultants, has written to CASE to apologise and tell us that he has disciplined his sales staff. He is also taking measures to make sure that companies selling his products conform to strict codes of direct sales. He reassured CASE that such activities would not repeat themselves. He claims that he would also put in a voluntary seven-day cooling-off period in his contract. While this episode has a happy ending, I am sure future episodes would follow the same story line. When the law allows people to cheat, they will do so. If they do not, they are not optimising. Recognising the increasing trend to direct sales, most developed countries already have what they call the Direct Sales Act. Malaysia, for example, not yet developed, but developed in this respect, has a very comprehensive Direct Sales Act enacted in 1993. This Act governs the rights of consumers and the duties and obligations of companies engaged in direct sales. For example, the Act will require companies to register themselves and their sales staff. Also, the Act will define the hours during which sales persons could knock on a person's door. Sales after 10.00 pm perhaps could be illegal. I think the most important aspect of a Direct Sales Act is that it allows a cooling-off period to exist. The cooling-off period in most countries range between 7 and 10 days. The cooling-off period is a period which allows a consumer who has signed a contract to purchase the item during a door-to-door session to rescind his contract. In other words, he walks away from it and says, "I do not want to buy your product.”
“Sir, I am told that direct sales, ie, door-to-door sales, account for the employment of about 45,000 people, both full-time and part-time, with a turnover of about $200 million. Door-to-door sales provide a direct and valuable service to consumers. It brings the products right into the comforts of the homes. In the United States of America, door-to-door sales are a preferred form of shopping for those shopping for expensive up-market consumer products like jewelleries, high pressure vacuum cleaners, things like that. For this reason, direct sales are also known as "private shopping". Just like private banking, you get privacy, security, exclusivity. I have no doubt that with rising affluence in Singapore, more Singaporeans will want to indulge in the luxury of direct sales where customers are treated like pseudo-VIPs. But direct sales could be troublesome if there are no laws to protect innocent consumers from intimidating sales persons who misrepresent their products or use high pressure sale tactics to push their sales. CASE recently received several complaints from consumers who were duped into buying expensive Kirby vacuum cleaners from unscrupulous sales persons. This is one of the worst case that I can quote. There are several other examples. These sales persons targeted innocent and kind-hearted families and offered free demonstrations for their vacuum cleaners. Upon entry, sales persons literally camp in homes and use high pressure and harassing tactics to close sales. Sales persons refused to leave until deals were signed and sealed. Usually they enter a house in the early hours of the evening at 6.00 pm to 7.00 pm and then they might stay way beyond midnight, in one case past one o'clock in the morning.”
“Sir, recently, Mr Alan Greenspan, the Federal Reserve Chairman, had asked the US Bureau of Labour Statistics to find a way to eliminate the built-in bias of the core CPI in America. Mr Greenspan is saying something that many economists have known for sometime now that the CPI always overstates inflation. Mr Greenspan estimates that the core CPI in America is between 0.5% and 1.5% higher than the real inflation. He said that one month ago, he said it again on Tuesday. The US Congressional Budget Committee has also come out to support Mr Greenspan and said that the CPI is higher by 0.5%. Sir, the reason for Mr Greenspan's suspicion is well known. But, to put it simply, the CPI captures the price movements of yesterday's basket of goods, but consumers live for today and today's basket of goods has yet to be defined. By consuming cheaper goods and services not defined by yesterday's basket of goods, consumers can beat the CPI and therefore register a lower inflation for themselves than what the CPI tells them. In a way, the CPI is like a road map. It always reflects yesterday's topography, not today's landscape. Like maps, the CPI is out of date the moment it is released. But like maps, that is not the fault of the survey department, nor the fault of the bureau of labour statistics. In the light of the American debate on the CPI which has focused Congress and Senate, I would like to ask the Minister how much lower is our real inflation. In fact, I am asking, is our inflation not lower than 3.6%?”
“Sir, in most developed countries, universities are ranked according to their areas of excellence. Departments are ranked against departments and universities against universities. The purpose of ranking universities is to allow students a means of making informed choices about the courses and universities they wish to enrol in. Ranking also allows employers an objective means of assessing the relative worth of their employees. Ranking is also advantageous to the universities themselves because it motivates staff and the ranking list guides them as to where they stand. I suggest that we rank the two universities in Singapore. The problem, however, is that ranking only two universities does not add up to much because the best is number 1 and the last is number 2. I would like to suggest that the Government or perhaps some magazines, maybe Straits Times or Lianhe Zaobao, find a way of ranking our universities against some of the better regional universities. In America, for example, magazines like Fortune, Business Week, New York Times, routinely rank schools, colleges and universities. Our graduates need to know where they stand against some of the other universities in the region like Hong Kong University, National Taiwan University, University of New South Wales or similar universities like that. Already our students are competing with these regional universities in other areas, for example, in debates, etc. Also, our graduates are working abroad and ranking our universities against their universities allows employers overseas, maybe in Hong Kong or China, to know the relative worth of our graduates from the NUS or NTU. I hope the Minister would give it some thought.”
“I do not know whether the Ministry of Education, the Police or the Ministry of Community Development have any reaction to this - whether the Ministry of Education has taken any action to prevent the teddy girls and teddy boys from misbehaving themselves outside the school.”
“In January 1991, the Bulletin of the Singapore Chinese Teachers' Union published a letter written by Mr Tan Keng Guan, the Principal of Pei Chun Public School, which was carried in Lianhe Zaobao on 22nd October 1994, with the caption: "Restore the Respect for the Professional Status of the Teachers". He expressed his views on corporal punishment and disciplinary action against the students. I think this article deserves our attention. We hope that the Ministry of Education will make reference to this article and adopt some of the recommendations by Mr Tan, the school principal. The Ministry of Education can also make a study on how China, Taiwan, Hong Kong, Japan, South Korea punish their students and maintain discipline in the school. On the discipline of students, I think it is a very serious matter. For example, a few years ago, in a school in Toa Payoh, some students beat up the principal. I think such students should be sent to a reformatory home. Two years ago, I think it was somewhere in District 9, a school principal wanted to impose corporal punishment on a student. The parents were notified, but when the parents turned up in the school, they instigated their son to beat up the principal. I think such matters must be taken very, very seriously. We should look very seriously into the problem of discipline of our students. In addition to this, student-gangs are also a matter of concern to me. Yesterday, it was reported in the newspapers that a female student was beaten up by girl-gangsters at Junction 8. This may well be just an isolated case - not a very common occurrence, but it was serious enough to be reported in the newspapers.”
“If parents do not want their children to be disciplined or punished in the school, they should put it down in writing, that is, they should opt out. Corporal punishment is a very sensitive issue and, in this respect, I hope that the Ministry of Education can formulate or re-formulate a set of guidelines which must be effective and capable of producing a deterrent effect so that the students will realize the importance of discipline. As for parents, I think we must instill the awareness of respect for the teachers as a virtue. Disciplinary action and corporal punishment should only be imposed on recalcitrant students. Most students do not require such punishment or disciplinary action. On the other hand, I do not think our teachers will impose such punishment on their students at random. So I feel that the Ministry of Education should give its strong support to the schools, teachers and principals and, together with the cooperation of our parents, I think the standard of discipline in the school can be enhanced and the respect for teachers can be re-established. Just as there are laws in a nation, and rules in the family, the schools must also have a set of rules for maintaining discipline in school. As parents, when we punish our children, we do so out of love. Similarly, the teachers also do the same out of love and concern for the students. Surely, the teachers will not punish students without reason or without any justification. If you do have such teachers, I think they will be dealt with by the Ministry of Education or the principal of the school.”
“People join the teaching profession because they want to make a difference to the children's lives. I urge the Ministry to give teachers some autonomy to discipline the pupils. Every time a difficult parent complains to the Ministry, the Ministry sends in its feared investigation team, and it does not help lift the morale of teachers who are caught with the task of educating young pupils. Would the Ministry consider discipline as an attribute in their yearly ranking exercise for schools? I think in the present attribute list for ranking, you have got "O" levels, ECAs and various other types of attributes. Perhaps it would like to rank discipline as an attribute. Some parents might look at that as a plus point. Mr Choo Wee Khiang (Jalan Besar GRC)( In Mandarin): Sir, recently there were a number of newspaper reports on the problem of discipline of students and corporal punishment. I have very deep feelings about these matters. First, I hope the Ministry of Education will take a clear stand on the two incidents concerning students beating up their teacher and the teacher imposing corporal punishment on the students. The Ministry should make a fair judgement on these matters. Whatever it may be, the newspaper and television have played up their reports and such reports have aroused the attention of the public. Generally, the public opinion is that there is a need for corporal punishment in the schools. I personally feel that the teachers should have the absolute right to impose corporal punishment and take disciplinary action against students who are unruly, and such actions may include the recording of major demerits, minor demerits, or even expulsion or corporal punishment, or a combination of these. I agree with Mr Peh Chin Hua.”
“Sir, if one believes the story of some teachers, there appears to be an erosion of discipline in some of our schools. Teachers, I am told, are being intimidated by naughty pupils, obsessive parents, bureaucratic principals, an interfering media and a public relations conscious Ministry of Education. These allegations may not be true, but they are in town. I think a clarification from the Ministry will be instructive. Sir, I believe in one philosophy, and I share that with my hon. colleague, Mr Peh Chin Hua, that the more our pupils are disciplined in schools, the less they will bleed on our streets. When I visited a friend in the States recently in November, my friend told me he searched high and low for a school for his daughter. He wanted a school which insists on strict discipline. Finally, he found a private school quite far from his house. This school insists that pupils wear uniforms to school - quite a strange phenomenon in America, because most American students go to school in whatever attire they like. This school also insists that it reserves the right to discipline its pupils without interference from their parents. Any parents not happy with the system are welcome to take their child to another school. And the school fee is not cheap; it is about US$400 per month. My point is that most private schools abroad prize discipline as a virtue and they sell their discipline as an attraction to parents. Parents seek out good schools and these are mostly schools that maintain high to very high discipline. Only lousy public schools have the reverse: no discipline. No respectable teacher worth his or her salt would want to teach in a public school. Unfortunately, that is the case in America. Sir, teaching is a calling.”
“Right now, they have no tag. Something is better than nothing.”
“In fact, quietly, many bankers have told me that they prefer legislation because it makes their job easier. I urge the Minister to compel banks and finance companies to provide full disclosure through legislation quickly. Similar legislation already exists in Britain, in Australia and in the United States of America. Why are we behind? We are trying to be a developed country by 1999. I think we are way back as far as the Consumer Credit Act is concerned. Consumers need protection. I need protection, Sir. We all need protection. Sir, if a bank can openly defy the Minister only nine days after he has suggested in this House that banks should volunteer information, I think the Minister should start wielding the big stick.”
“Note that the DBS Finance's car loans are priced from 6.77% to 7.8% on an ARR basis. So it is much higher than Citibank's 3.75%. I am suggesting that DBS Finance's honest and transparent advertisement is commendable. But by allowing Citibank to quote non-ARR rates, the playing field is not level, because consumers could be fooled into thinking that the Citibank's rates are low, and DBS Finance's rates are high. DBS Finance's policy of stating its ARR carries a cost. Sir, the Association of Banks, Singapore (ABS) has written to CASE, of which I am the President, and the Finance Houses Association of Singapore to set a date to discuss the matter of information disclosure by banks and financial institutions. But the important thing here to note is that the ABS in a letter to the Straits Times' Forum page, dated 28th February 1995, has admitted that the problem of less than full disclosure exists. The ABS wants self-regulation, not legislation. Understandably so. But, Sir, self-regulation has failed, will fail and will continue to fail. Sir, I would like to point out to the Minister again that the ABS had circulated a note to its members on 21st February 1990 asking them to state their interest rates in ARR. Clearly, self-regulation has not worked. It will not work because there is always the temptation to use creative marketing techniques to seduce borrowers into thinking that non-ARR rates are low. Legislation will help. In fact, legislation will help all banks and finance companies in Singapore, because then they can promote their loans on a level playing field based on quality of service, based on information and based on other attributes other than non-ARR rates.”
“On 10th March, a full-page advertisement placed in the Straits Times by the Citibank - the Minister can take a look at this advertisement - nine days after his speech in this House, Citibank proudly touted its low auto repriceable car loan of 3.75%. There are no clear explanations as to what the 3.75% means, except an asterisk - the Minister cannot see this but I will send this advertisement to him - trying to explain what the 3.75% means. It says "subject to prevailing market rates". I do not understand what that statement means. What that means is really ambiguous. But I am extremely doubtful if the 3.75% quoted in the advertisement is the Annualised Reference Rate. Citibank is offering much higher ARR on time deposits. How could it offer car loans below the ARR? Certainly, if the 3.75% was the ARR, Citibank would have said so. Perhaps Citibank should explain itself. And I think the Minister should ask the MAS to ask Citibank for a written explanation. This is one example where the Minister's moral voice has been ignored and totally kicked aside. And this trend is dangerous. If the Minister's moral guidance is ignored, it is dangerous. To be sure, Sir, Citibank has not done anything wrong at law. But should we allow such practices to carry on? The fact is that most banks in Singapore, including financial institutions, are rather honest about disclosure. But honesty may not pay, because innocent and financially illiterate consumers could be fooled and have been fooled. Let me contrast Citibank's advertisement to DBS Finance's honest advertisement on 14th March 1995 in the Straits Times. DBS Finance's advertisement is honest because it states clearly in one column the "special rates" and in the next column the "effective annual interest rates".”
“Sir, consumers in Singapore need legislation to compel all banks and financial houses to give full disclosure on information regarding loans. All developed countries have consumer credit legislation. The USA has its Truth in Lending Act. Britain and Australia have their Consumer Credit Acts. Essentially, these consumer credit Acts ask banks and financial houses to disclose all relevant information which will impact on the consumers adversely upfront, not when consumers ask bankers. This information includes: (a) The annual effective interest rates, which I would refer to as the Annualised Reference Rates (ARR). And a statement in the Act as to what the ARR means, so that nobody is in doubt as to how it is interpreted. (b) The Act should include the total amount financed and total cost of the interest charged in dollar terms for the entire duration of the loan, including all hidden transaction costs. (c) The method and timing of calculating the interest rates. (d) The early repayment penalty. (e) The repayment schedule, the frequency and the commencement date. (f) Any other legal and financial liabilities which would normally be encountered by the consumer during the period of the loan. Among this information, the most important figure is the Annualised Reference Rate, because it is a simple number that can be immediately digested by almost all consumers. On 1st March 1995, the Minister for Finance said in this House that he would ask the Monetary Authority of Singapore to remind the Association of Banks Singapore (ABS) and all the other financial institutions to volunteer such information. Unfortunately, Sir, the problem has not been arrested.”
“But up to now, not a single cent has been repaid. My question is: why should the Ministry of Finance give such a loan to Temasek Holdings? Secondly, what are the conditions under which the Government can grant loans to Government agencies and Government companies? Is interest chargeable? Is there any fixed repayment period and how is repayment to be made? Thirdly, under what circumstances can such loans be granted? Which agencies are eligible to apply for such loans?”
“It is the average of the CPI over a period of two to three years. The CPI is set by the economy. The regulators will then determine what the value of X is on a regular basis. They review the RPI formula once in every two to three years. This formula is good because it is transparent. Consumers know the basis for the pricing and, second, it allows operators to keep their profits if they maintain efficient and lean operations. On the one hand, consumers understand why their bus fares, their gas rates, their water rates are charged so much based on the formula. And the operators are happy because they can keep their profits. To me, the most important attribute of the British model is that the price mechanism is simple to understand. But whether the Government wants to adopt the British, the American or a hybrid model, I think the Government should make it clear to consumers which system we want to follow, so that the issue of profits earned by our operators will not be politicised by politicians out to become popular. Already we hear people saying that SBS is making obscene profits and why are they removing services. Why are they curtailing services? Charges like this will come on and off and I think there must be a clear, transparent, defensible policy, both for the operators to keep their profits and for consumers to understand that the profits are not obtained through monopolistic positions. I hope the Minister could tell the consumers what is the policy in Singapore. Mr Low Thia Khiang( In Mandarin): Sir, in the Budget book, page 95, there is a loan of $303,992,000 granted to Temasek Holdings. According to my understanding, the loan was given in 1991 to enable Temasek Holdings to take over the National University Hospital.”
“Apart from benchmarking, that is, comparing the prices of similar services provided by operators overseas, there are two distinct models for regulators to follow and, perhaps, the Government might want our operators to accept one or the other or a hybrid of the two. The first model is what I would call the American model. The American regulators cap the operators' profits. In other words, they tell their gas companies, their telecommunication operators, that they can only earn so much profits in a certain year. What they are saying politically to the consumer is that the US regulators do not allow US operators to make obscene profits through their privileged position. 4.00 pm Unfortunately, this model runs into some problems. The first is that it retards management's incentive to work hard. After all, if you cap my profits, then why should I work hard and push efficiency to a level where my profits are capped? The second problem is a spin-off from the first. Capping the operators' profits may not result in low prices which is what consumers want. Prices can still be high and profits still low because of inefficiency. But politicians in America like this model, because they go round their constituencies telling the people, "Here you are, I've told the operator not to make X million dollars. They cannot make more than X million dollars." This model needs to be modified if the Government wants to adopt it for our regulators. The second model, Sir, is what I would call the British model. The British set a certain formula. That formula is called the RPI +(-) X for their operators. Operators cannot fix prices of their services like gas, water, telecommunications, beyond what is allowed by this formula. The RPI is the relative price index, like our CPI.”
“To-date, the Government has privatised Singapore Telecom. In the pipeline are other statutory boards, like PUB and maybe PSA. There are also companies in the market, like Singapore Bus Services and TIBS, which are guided in their operations by their regulator, the Public Transport Council. I think it is time to make explicit to consumers how our regulators guide the pricing policy of our operators, like ST, SBS and TIBS. I am suggesting that this task has a new urgency and purpose because our operators are good operators. In other words, they are profitable companies and they make lots of money. And critics have unfairly charged that they are making excessive monopolistic profits. What consumers do not understand is that profits per se may not be a bad thing. We must look at how the profits are earned. But in order for our consumers to make an informed judgement, to be fair to consumers, regulators must set clear pricing guidelines, not just for the operators but for consumers to understand and digest. But one may ask: this is a free market and are operators not allowed to set their own prices? The answer is "yes" and "no". Yes, operators must be allowed to set prices within limits because they are accountable for their operations. But no, they cannot set prices at their whims and fancy because they have been granted the privilege of maintaining either a monopoly, like the power and gas to be, or a duopoly, like SBS and TIBS, or oligopoly of sorts through public mandate. You take away the mandate, they are out of business.”
“But after a while, economists, bankers, financial analysts begin to discount Government estimates and add on spurious constants, something plucked from the air, and add on to the Government estimates and this could be dangerous. In their enthusiasm to project a different figure, because they think that Government's figures are under-estimated, they could project an overly optimistic picture of the economy and Singaporeans might be lulled into a party and think that the night is still young. I hope the Minister will ask his staff at the Ministry of Finance to be more accurate in forecasting revenues and expenditures, receipts and outlays. By all means, undershoot but he should set a target for his staff, ie, maybe, plus or minus, X%. I am suggesting that X to be within 5% to 10%, under-estimate it by 10%. The science of forecasting is never difficult if you overshoot or undershoot by 200% or 300%. Anybody can forecast. The key to accurate forecasting is to shoot within the target, within a certain defined range.”
“Sir, during the last few years, the Government's sterling economic performance has been spectacular. Its budget surplus has consistently been under-estimated. My quarrel is not with the budget surplus which I think is not a bad thing. In fact, it is needed contrary to what many of my colleagues think because we should build up the budget surplus now so that our reserve as a percentage of our imports, is roughly about 80%. Right now, that position is about 45%. My quarrel is that the Ministry of Finance has consistently under-estimated the surplus. When the Minister delivered his Budget speech last year, he estimated that the budget surplus could be $2.18 billion. In fact, that target was achieved within the first three months of the financial year. The revised budget surplus is now $7.06 billion. The margin of error is over 200%. Similarly, receipts over expenditures estimated last year at $6.33 billion has now been revised to about $12 billion. The margin of error here is about 88%. Certainly, and unexpectedly, the economy grew at a higher than expected 10%. But this alone could not account for the huge variance between revenue and expenditure and receipts and outlays at the estimation stage. After all, last year, the Minister forecast that the economy could grow by up to 8%. Forecasting is always a difficult science. I understand the difficulty of getting good economic data one year ahead of time, and the economic weather is not a tame animal to predict. However, to consistently undershoot the target for so many years implies that there is a philosophy of excessive conservatism in our estimates. This could be a virtue and not a bad Asian culture, to be modest, to be a little bit pessimistic.”
“Sir, there are no price-tagging laws in Singapore. But in most developed countries there are laws on price tagging. Even Malaysia has such a price-tagging law. Sir, I think price tagging of every item in every shop is certainly not justified because it adds to the administrative cost of the retailers and it may even detract from the joy of bargaining from the consuming point of view. But I think price tagging in GST-registered shops should be made compulsory. Why? Because these are relatively big retail outlets where the adminstration can back up the price-tagging exercise. Also, a 3% GST on a big ticket item can come to quite a substantial amount and consumers need to know at the outset how much the product costs and how much he or she needs to pay on the GST. Price tagging will also help tourism in Singapore and I note that the global tourism seminar is still currently being held. Tourists need transparency. Shopping in Singapore is no longer cheap, but it can be pleasant. Big spenders, high value-added consumers, are not so much concerned with price per se. What they want is efficiency, transparency, service. Price tagging prevents misunderstanding between the retailer and the consumer and it can be a significant part of the shopping experience. CASE - Sir, I am the President of CASE - receives many complaints from tourists because they have some misunderstanding on the prices. And I think many of this misunderstanding can be prevented if we ask GST-registered shops to price tag their products. I hope the Minister will consider my proposal.”
“Sir, last year, I raised this issue in the Committee of Supply debate. I am raising it again because I think the matter is important. I would like to ask the Minister why is it that new citizens are not required to take a test before they are granted full citizenship. There are citizens who know little or nothing about our culture, our shared history, our National Anthem and our mission. If these citizens do not know our mission, then how are they going to understand our national policies. If they do not know our culture, how sensitive can they be to our racial and religious tolerance? If they do not know our history, how does the Minister expect them to understand the rationale for some of our tough policies? If they do not understand what our National Anthem means, how are they going to appreciate Total Defence? I put it to you, Sir, if they have no reason to die for Singapore, they have no reason to live for Singapore. If the Ministry says no to a test for citizenship, then the Ministry is saying that all the components that make up nationhood are irrelevant and not important.”
“Mr Speaker, I said it very clearly in my speech that the economic growth cannot exceed the sum of two numbers. The first number is the productivity growth. The second number is the supply of labour growth. If you add up these two numbers last year, they came up to about 8.69%. Our economy grew by 10%. So there was really a mild over-heating. If you were to reduce corporate tax this year, it will almost certainly overheat it. I do not know what the MAS has said, but these are economic fundamentals.”
“The savings gap is now prohibiting investments in Germany. Thomas Mayer's views mirror the intellectual and financial elites in Germany. I move on now to the rebates and the CPF Share Ownership Top Up Scheme. The Government has done the commendable, in my mind, by giving a generous one-off rebate to tax payers, and offering to pay some of the rent, and service and conservancy charges of HDB dwellers. But I hope that the beneficiaries of these tax rebates will not factor these rebates into their expenditures and adjust to a different lifestyle. I urge these beneficiaries to save the rebates and treat the rebates as a bonus to be saved. There are critics who charge that the CPF Share Ownership Top-Up Scheme is no big deal. I think these people do not know the real value of money to ordinary folks. I see these folks in Shenton Way queuing up for long hours just to catch the opportunity to buy one or two Transit Link cards, hoping that these cards would go up in value. But how much can the value of a Transit Link card go up? Certainly less than the few hundred dollars that the Government is going to put into our accounts. I think the CPF Share Ownership Top-up Scheme deserves support and it should not be belittled. In conclusion, Mr Speaker, Sir, this year's Budget is a good one. I would like to congratulate the Minister. He is not here, but I hope that RAdm Teo Chee Hean will take it up with him. I hope that his staff will think seriously about the expenditure tax because he and I may not be in Parliament when the expenditure tax is finally implemented. But I think they will get the credit for seeding the idea into the Ministry. I support the Budget.”
“The Chinese saying goes: bu yao tian chang di jiu, zhi yao ceng jing yong you [ ]. Translated, in a commercial sense, it means the present is more important than the future. Mr Speaker, the idea of an expenditure tax was first proposed by Prof. James Meade, a British, in the early 1970s. But the idea is now uniting unlikely political bedfellows from both the left and right of the political spectrum, precisely because the present income tax system is putting people into debt. Mr Dick Armey, the US House Majority Leader, is already pushing for the expenditure tax in Congress. A variant of the Armey expenditure tax has now been proposed by Senator Pete Domenici, Republican Chairman of the Senate Budget Committee from New Mexico and also an unlikely bedfellow, Democrat Sam Nunn from Georgia. I do not expect them to push through the expenditure tax so quickly, but the idea is that it is at the top of the political agenda and is taking centre stage. We move from America to Germany. Germany, once a bastion of financial prudence, has chalked up successive current account deficits and budget deficits and this has forced a serious rethinking into the present income tax system which has discouraged households to save. Instead they want to spend. I urge my fellow MPs, particularly the Ministry of Finance staff, to read an article by Thomas Mayer. The article was reprinted in the Asian Wall Street Journal on Wednesday, 25th January 1995. Thomas Mayer is the financial analyst from Goldman Sachs & Co. He tells of how the German culture of savings has turned into a culture of spending. Mayer calls for the expenditure tax to be implemented quickly in Germany because the present tax system discourages Germans - once one of the world's most prolific savers - to spend and spend.”
“I do not know whether Mr Heng says we need it now, but I am saying we do not need it now. We just need to study the idea and keep it on the front burner. Policy entrepreneurs in the Ministry of Finance and the Ministry of Trade and Industry should start looking at different facets of the expenditure tax in a new light. There is nothing wrong with our system of taxation for now because everything balances out. Savings are still high. But as a method of taxation, the direct tax and GST combination would be out of date in the early part of the next century. I am convinced that in the next 10 years, one of the developed countries will gather enough political courage to implement the tax. Why? Because the present tax system discourages savings, interest is taxed, it promotes profligacy and is screwing up all the economies of the developed countries except Japan. Mr Speaker, the gross domestic savings in Singapore are very high - 47% of GDP. But if we look at the disposable savings, ie, savings minus the enforced CPF savings, we find that our savings rate is not that impressive. In fact, many Singaporeans think that thrift does not pay. Unfortunately, events have proved them right. Over the last few years, savings earned negative returns. First, the CPI was higher or about the same as the interest given by banks on saving deposits, and then the interest earned was taxed. But what was right for them was not so good for the nation because people are going into debts to capture asset inflation and asset inflation is becoming a problem for the masses. Is it any wonder that young Singaporeans have decided to live today and let tomorrow take care of itself? There is an advertisement on watch which Mr Speaker might be familiar. It is in Chinese.”
“This reliance on direct taxes is still, I think, too high. Since the Government is committed to holding the GST at 3% for the next four years, this pattern of revenue source will be more or less the same for the next few years. When I first came into Parliament, I proposed that we look at the expenditure tax seriously, and I mean seriously, but the Ministry has not looked at it at all. This expenditure tax idea is an idea whose time has come. The idea has moved from the academic area to the policy area, and now in America and Europe, into the political arena. An expenditure tax is a tax levied on expenses, not on income. So it is a fundamental change. But like an income tax, it can be progressive. Many people fear that expenditure tax will hurt them, but the expenditure tax will not. The tax can exempt a typical household from paying taxes by raising the limit of tax expenses. For example, if a typical household needs, let us say, $10,000 to keep a family healthy and happy, then taxes need only be levied on expenditure in excess of $10,000. So on $11,000, he is taxed the $1,000 at the marginal rate. A higher threshold can be fixed which would exempt most households from paying taxes. But the important thing, as Mr Heng Chiang Meng has correctly pointed out, is that savings are not taxed, and should not be taxed. The Ministry has told us several times in this House - in 1976 when Mr Heng first mooted it, and in 1992 when I mooted it - that the tax is difficult to implement and that it violates confidentiality. Of course, they are not true. Yes, there are problems but the only major obstacle is the political will, or the lack of it. To be sure, I am not saying that we need a tax now.”
“Indonesia is a country high on the target list of devaluation by this investment firm. In the same article, Tom Riley quoted Singapore as the safest of the emerging countries, followed by South Korea, Taiwan and Hong Kong. Singapore is different because we have two pluses over a period of time. The first plus is the budget surplus, and the second plus is the current account surplus. If our current account surplus is strong, that is good. If our budget surplus is strong, it is even better. But if you look at the budget surplus in relation to the foreign reserve, our budget surplus is no big deal. If we were to run down our surplus or to have a smaller surplus, this might lull people into thinking that we can be liberal with our expenditure. The truth is until our reserves reach a position of about 80% of our imports, we should continue to build up our budget surplus. The budget surplus will come in handy when we need to spend extraordinary amounts of money on infrastructural projects like developing water resources or build desalination plants, or maybe build underground road tunnel systems. In a crisis, we may even have to buy water from afar to barge it in. These crises are real. Technologically, the problem can be solved, but the solutions are expensive, and the surplus should provide one way to the solutions. I would like to move on to the income tax philosophy. Here, I am supporting my Parliamentary colleague, Mr Heng Chiang Meng, on the fundamental change in income tax philosophy that needs to be looked at in the years to come. If we look at the major sources of revenue for 1994, the lion's share came from direct taxes. It is about 37% of the revenue. The GST only contributed about 4.8%, which is a minuscule amount.”
“I know many Singaporeans, including Mr Heng earlier on, have said that the Government surpluses are becoming an embarrassment. I think the critics should look at two things. First, the surpluses as a percentage of the GDP is growing smaller. That is the first thing. Second, if we were to look at the surpluses in the context of our foreign reserves, Mr Speaker, we see a totally different picture. The accumulated reserves standing today at about $70 billion as a ratio of our imports of $156 billion is only about 45%. What does this number mean? To get a feel for this number, I refer Members of Parliament to the 6th March issue of Fortune magazine. That issue has kicked up a row in Malaysia, because the magazine quoted a survey by Tom Riley who is a research director of an investment firm, Gary Shiling & Co, who said that the Malaysian ringgit is on the target list of devaluation, following Mexico. Those countries which face a higher risk are the Philippines, Indonesia and Brazil. I think the survey definitely exaggerates the risk of the ringgit. Still, it is one survey which has found its way into Fortune. Fortune and Economist are two magazines read seriously by financial analysts. Obviously heads turned in Malaysia when this fact was published. After all, Malaysia had a balanced budget. The inflation in Malaysia for 1994 was only 4.3%, slightly higher than ours, and their relative reserve position, ie, reserve as a percentage of their imports was much stronger than Singapore's. If we look at the Malaysian reserve as a percentage of their imports, their number is 60, ours is 45. So they are 15 points higher than ours. Our reserve position is more like Indonesia which has a reserve position of about 40%.”
“Because companies will have to retrench older workers and employ young, more educated workers. The urgent task facing the Ministry of Finance is how to encourage employers to train smarter workers on the job. The NTUC and the Government, especially the Ministry of Labour, have been exhorting companies to spend more than 2% of their payroll on training. But most companies do not do so and for good reasons, because there are no incentives to train workers, especially the rank and file members. In order to facilitate a behavioural change, we have to make training worth its while. Make it worth its while for companies, make it worth its while for employees. And I think the best way is through tax incentives. Companies and people respond to incentives, especially monetary incentives, not through Ministerial exhortations. They just shut off their ears. I ask the Ministry to find a way to reward companies meaningfully and substantially. The Government has several tax instruments to do so. And I hope that in next year's Budget or the year after that, the Government can come up with some concrete tax incentives. The tax gain for the companies should be substantial enough. The Government should not worry about the tax loss because the Government can recapture the gains through higher total factor productivity in the 21st century, only five years away. Mr Speaker, Sir, I move on to tax rebates and surpluses. Many people including Members of Parliament feel that the Government could have been more generous with its surpluses. On the contrary, I think we should build up our surpluses quickly. This is not to say that we should not along the way hand out some rebates to the ordinary folks.”
“But to justify the higher labour cost, we need to push up productivity quickly. Since our growth in the labour supply will be constant for many years to come, unless we accelerate our landed immigration programme, sustainable growth in the next few years can only come from productivity increase. If we want to be a developed country, we must have the absolute productivity levels of the developed countries. Here, we still have a long way to go. This brings me to the question: how to increase productivity? We can throw in money for capital goods and increase productivity in the short term. But for the long term, we must depend on how clever our workers work the machines and squeeze higher productivity out of existing machines, instead of just buying new machines all the time. In short, we need to increase our, what we call, TFP - Total Factor Productivity. I think this is where the Government should come in and give incentives for companies to train workers. The problem here is very serious. Out of a total workforce of 1.6 million, more than half or 850,000 have Primary Six or lower secondary education only. The figures are depressing enough. We do not have either the quality or the quantity to be a developed nation in the next 5-10 years. Companies are loath to spend money on training when they think that the value added will accrue to another company once the trained staff leave to join their competitors. Hence, companies will always take a short cut. They prefer to upgrade machineries to capture higher productivity. The fact that they can write off the depreciation as expenses is another strong incentive not to spend money on labour training. But this method of capturing productivity in the short term leaves our mature workers poorer in skills. Why?”
“Mr Speaker, Sir, thank you for allowing me to join in this debate. The media covered this year's Budget with little fanfare. The Business Times called it an "unspectacular" budget. The Straits Times called it a "prudent" budget. I think such uninspired descriptions of a carefully crafted budget is precisely the reason why the Budget is a good one. I think it deserves accolades. I think the Minister was wise not to introduce a corporate tax cut. Contrary to what Mr Heng Chiang Meng has said, I think a corporate tax cut this year would almost surely overheat the economy. Last year's economic growth of 10.1% was spectacular, but it does come at a small price. After two years of double digit growth, the economic engine was beginning to run up against available resource constraints. We know that the economy cannot grow faster than what two numbers add up. These numbers are (1) the productivity growth; and (2) the growth in labour supply. Last year's productivity growth was 5.6%. The labour growth, I estimate, was about 3%, making a total of 8.6%. But the economy grew at 10.1%. So the over-heating must appear somewhere. True enough, that figure turned up in the higher CPI which registered a gain of 3.6%, higher than 1993's CPI growth of 2.4%. Sir, I think the implementation of GST increased the CPI only marginally. The larger increase came from the increase in labour cost. The unit labour cost for 1994 increased by 1.9%, vindicating my suspicion that labour cost, not the GST, was the main culprit in the higher CPI. But even though the unit labour cost has gone higher, there is nothing to worry about. All developed countries have higher unit labour cost. That is the price of progress. That is the price of development.”
“But why is it that legislation is so difficult?”
“Would the Minister agree that we are under-regulated? Dr Richard Hu Tsu Tau: Not in this particular case.”
“The point is that you are implying there is no need for legislation in Singapore because we are a free market economy.”
“Would the Minister say that America, Britain and Australia are free market economies?”
“The directive that they should state the effective annual interest rate somewhere prominently so that consumers can see it at first glance.”