Lee Hsien Loong
Singapore
“Yes, of course, every time I sell the land, I put money into the Reserves, but I am not putting the money into the Reserves all today. I am putting it in a stream of payments, 30 years apart.”
“Speaker, Sir, I do not think it was a very difficult question to figure out, that when I spoke to MTI, I spoke to the Minister, because Mr Gan Kim Yong is the Minister for Trade and Industry.”
“" I think that would have been unjust because he has not been charged. If there is a case, the case has not been heard, he has not been found guilty or acquitted or whatever. I cannot prejudge a case based on an incomplete investigation – started recently, or a partial investigation, just entered into the formal phase.”
“Mr Speaker, Sir, first, Mr Leong is quibbling over words. In February, Mr Tan Chuan-Jin told me, "I offer to resign". I said, "Yes, sort out your constituency first". In other words, decision taken. The moment to execute it, I will decide. So, it is quite clear. Legally, he has not resigned.”
“Sorry, Mr Speaker, to respond to Ms Poa on why not no pay leave. It is my judgement to make. The Civil Service works in one way; their basis is if you have been convicted, then you are on zero pay and other consequences will follow.”
“I am very happy to note that Assoc Prof Jamus Lim appreciates the second key and is seeking a third. And I hope that it portends a change in your attitude towards the Elected President and his custodial powers. But I think the Brazil example is a very interesting one.”
The complete record
Every one of 1,557 lines we hold for Lee Hsien Loong, in date order, each linked to its source. Free to read, in full, without an account. Page 26 of 32.
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolution. Resolution reported. "That the sum of $1,200,000,000 shall be supplied to the Government under the Head of Expenditure for the Public Services shown in the Supplementary Main Estimates of Expenditure for the financial year 1st April 2002 to 31st March 2003 contained in Paper Cmd. 10 of 2002", put and agreed to.”
“A lot of it is sponsored, but some of it are operating cost. And that is why it costs a certain amount to have the festival which went to the opening ceremony. But Mr Tan's point is well taken and it is a message which the Ministry of Finance reiterated to all Ministries, including ourselves, regularly, and especially before next year's Budget. SUPPLEMENTARY SUPPLY (FY 2002) BILL (Motion) Resolved, That, notwithstanding the Standing Orders, the second and third readings of the Supplementary Supply (FY 2002) Bill for FY 2002/2003 may be proceeded with immediately after the conclusion of the proceedings on the Supplementary Estimates of Expenditure for FY 2002/2003. - [Mr Lee Hsien Loong]. SUPPLEMENTARY ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 2002 TO 31ST MARCH, 2003 (PAPER CMD. 10 of 2002) Order read for consideration in Committee of Supply [Allotted Day]. [Mr Speaker in the Chair] 1.25 pm”
“How can we afford as much of this as possible while living within our means? They will have to cut and it will be things like travel and perks, and non-essential things, that is, when you renew your computer, and so on, every two years, it may be every three or three and a half years. When you are renewing your school building, instead of 20 years, it may be 25 years. We will have to live within our means. These are adjustments which we have to make. When they opened the Esplanade building, they also have to live within their means and decide what they are going to do. The Esplanade, which Mr Tan raised, is an issue. Before we had the opening ceremony, we considered this matter and we discussed it carefully with MITA because, in fact, we are doing this at a time when the economy is down, the mood is down. We do not want to be extravagant because we cannot afford the money. Anyway, it is a wrong signal to send to the people. And MITA understood this. On the other hand, they said, "We are making a very big step. We spent a lot of money building it. It is a long term investment. The purpose is not just for Singaporeans but really to register ourselves internationally." So we become one of the spots where people believe and know that there are cultural activities and it is a place which people want to come to perform. Therefore, you need a series of events to launch the theatre as well as the concert hall and to make ourselves known to Singaporeans and internationally, and it costs money. The fireworks cost money, yes. I would have preferred far fewer fireworks. But it is not the fireworks which are the most expensive thing. If you want to have Jose Carreras here, that costs money. If you want orchestra here, that costs money.”
“I was just discussing with my staff yesterday evening and they told me that in fact many of the companies prefer to do business with the Government, precisely because of this reason, they can be sure to pay you and they would not drag the matter. Whereas if you do business with the private partner, if he runs into financial difficulties, you have a problem. And they have confidence that the Government will not run into financial difficulties, and it is my job to make sure the Government does not run into financial difficulties, which is why we are proceeding with the GST increase to four percentage points. I agree completely with what Mr Tan said, that it is not just what I said, but also how we practise it and how the civil servants internalise with the need to be parsimony and to be careful with money, and to spend as if it is effortless for MOF to produce the next dollar, and we are in different circumstances and we have to be very careful. As I said, we are going to have a very tight Budget next year and the Ministries are going to cut back both on substantive programmes as well as on frills. On education, for example, they have been planning on a certain percentage of GDP to spend. But we have also been expecting a certain rate of growth of GDP, that if you have 5-6% growth per year, therefore, education will have 5-6% more to spend per year, plus extra percentage on that because we think this is a priority area. Now, our base has shrunk. The GDP is growing less rapidly. Educational need has not shrunk. Your children still need good schools, computers, laboratories. You still want more people to go to university and more people can benefit from going to university. All these cost a lot of money.”
“Mr Speaker, Sir, may I respond first to Mdm Halimah. She talked about the problems of small businesses and retailers. We are very much aware of it. I think it is not just because of the GST increase. Even this year, without any GST increase, they have been having quite a slow and difficult time. It is partly a structural problem because there are too many of the businesses which are in HDB estates, ie, there are whole rows and many of them are selling similar goods. It is partly a matter of change in habits and customs of our younger generation. Instead of people with two-income households, instead of shopping in the wet market every day, they will shop once a week in the supermarket and put the stuff in the freezer, and they are going for a different range of goods and different range of services. Or they may even go to JB, or some place, to shop instead. So it is a structural problem and it is one which is being studied by one of the Economic Review Committee working groups. They have some ideas to ameliorate the difficulties. But I do not think there is any quick solution to make the sector bloom and prosper again overnight. As for transactions with the Government and expediting payment, I agree with Mdm Halimah that it is important that Government be a prompt paymaster. I am not aware of any complaint that the Government has been slow. If Mdm Halimah, or any of the Members, comes across any such cases, please let me know and I will look into it. It is our practice to administer and pay promptly. It is most important to our reputation that we do because, if we start paying slowly, then whoever is providing the services will start factoring in that and the interest cost in his next tender to us. Then we will have a problem.”
“Poor people buy food, middle income people buy more food, rich people buy even more food. So if you decide to exempt food, for every one dollar which helps the lower income, you have to spend nine dollars helping the non-lower income. So the expense of this tax expenditure is much more and the result is that revenues are less, and the result of that is to keep your revenues even, we will have to push the GST rate, instead of being 5%, it will have to be 6%, 7%, 8%, or if you take the British example, because you said the British have such exemption, 17% GST. So it is not a good way to help lower income people. Therefore, we have decided we will have a GST which covers everything and if we have target groups which need assistance, let us help them directly. I think that is the best way to do it. Ms Braema says why not be a little bit more generous. ERS is good, more is better. Well, more is always better but, in fact, we have been quite a lot better already because although we say ERS is five years' worth of GST for everyone, actually for the lower income it is, in many cases, 9-10 years' worth of GST. So, in fact, you are well looked after, and if you are an old person, 10 years is a long time. So, this is something which we have already seen to. If it is still not sufficient because conditions are very hard, I think we can do more, but we should target it specifically rather than go on the basis of essentials and non-essentials.”
“Mr Speaker, Sir, I think the VWOs is a separate issue. The transitional arrangement was made for them when we first introduced GST and this transition arrangement is phasing out. If we need to assist the VWOs it is best for us to assist them directly with grants and other forms of assistance, rather than putting it into the tax system of the GST. That is what we have done with the foreign worker levy because we used to exempt them from the foreign worker levy, now we subject them to the levy but we give them a grant, and it is up to them whether they want to employ a foreign worker or they want to get a labour-saving equipment, or whether they want to find a Singaporean and do double the work, it is up to them. So I think that should be our approach to VWOs. On whether to split between essentials and non-essentials, this is an issue which we have discussed many times when we first introduced the GST and again when we raised the issue of GST this year. And we have taken the approach of having the GST applied to all products in Singapore, whether essentials, non-essentials, goods, services, high-end, low-end, everything. And there is a reason for this. The reason is that we want to find the best way to help the lower income people bear the tax and to make ends meet in Singapore. We impose the GST, it imposes a burden on them. What is the best way to help them ease this burden? It is to identify who the lower income groups are and target the assistance at them. So the ERS, the S&CC package, plus the rental package, if you add it all together, in fact, the people living in the one and two-room flats get the most, three-room a bit less, and four-room, and so on. Essentials are not just bought by poor people. Everybody buys essentials. Let us say food.”
“Mr Speaker, Sir, first of all, I would not advise anybody to bet against the Government. Secondly, on the hypothetical question, we will have to wait and see. We are not magicians who can show you empty pockets and put our hands in it and produce more money, but we will have to wait and see what the state of the economy is next year. As always, making an adjustment to the GST increase would be our last choice. We will try to do many other things first before we consider that.”
“Mr Speaker, Sir, I thank Mr Nithiah Nandan for his full support for this move. Next year is 12 months from now, but we have to plan on the basis that we are going to proceed with the second phase of the increase because next year the increase would already be twelve months late. But I understand his concerns. We will track what is happening in the economy next year, very closely, and if need be, we will make many adjustments to the economy to keep it on track. But the GST programme, we have made rephasing, and we have to be very careful that the rephasing does not become an indefinite postponement, which would cause us a lot of trouble.”
“Mr Speaker, Sir, we will continue to track the state of the economy very closely. This is a time of considerable uncertainty. It does not mean that all the signals are black. Two or three weeks ago, I think, the mood was significantly gloomier, but looking at what has been coming out, the data, the indicators from America, there has been a significant pick up in performance and in sentiments, and similarly in Singapore, from our own indicators. How it goes forward next year it is very difficult to say. Normally when the Ministry of Trade and Industry puts up a forecast for next year they plus or minus 1% and you more or less know where it will arrive. This year, they set 2-5%, which means it is really a very wide uncertainty and it is an educated guess of how things will turn out, because it just does not depend on the economic trend, but also on the security situation and political developments. So we will keep on tracking what is happening very closely, and if there is a need to make further adjustments, you can be sure that we will not be slow in noticing it and doing so.”
“Because if we do not let emergency programmes lapse, when emergencies pass, the next time we have an emergency, we have to pile on additional programmes, and eventually end up with more and more items meant to deal with previous problems. As the position stands now, we are not in a recession. Our economy is growing. It has been growing in the second quarter and third quarter. I think it is growing in the fourth quarter, and people are being looked after. Going forward, we will monitor the situation. If we have another sharp downturn, another economic crisis, we will look at the need for an EDRS. But, as of now, I do not believe that we need one. Dr Ong Chit Chung (Jurong): Mr Speaker, Sir, first I think the new announcement would be most welcomed by the people and the business sector, and I believe this is a very clear and unmistakable signal that the Government is hearing the voice of the people, and addressing the people's concern. Not only is the phasing in of GST, it is also having the offset package remaining. I think it is a double blessing, and I believe it will boost public confidence and market confidence as well. We should congratulate the Government for making such a bold move and I would ask whether the Deputy Prime Minister would continue to monitor the situation and adjust, if necessary, with other measures to move the business sector, and have more money in circulation in the market.”
“Mr Speaker, Sir, Mr Leong Horn Kee asked whether this 1% increase in GST will still be a dampener. I do not believe so because, if you look at the sums, it is quite clear that, in fact, far from dampening the economy, we are administering a major stimulus to the economy. First of all, the reduction in personal and corporate income taxes is going to pump $1.3 billion into the economy. This will be offset by the GST increase, which will now only raise $650 million. On the other hand, we are going to put into the economy, through the Economic Restructuring Shares on 1st January 2003, about $1.2 billion. So, actually on a net effect, if you add up these sums, we are putting $1.8-1.9 billion into the economy next year. Far from dampening the economy, the overall impact is highly expansionary and stimulative. Secondly, if we have a deficit, how would it be funded? I think, best of all, it is not to have a deficit, then we do not have to worry about funding it. I did not say that we would have a deficit. I said we are not likely to have a budget surplus and, at best, we would be able to just balance the budget, and we will try hard to do so. Thirdly, should we re-introduce the EDRS? The EDRS was introduced last year as a one-year programme specifically to deal with the very sharp economic downturn. People were out of work. They needed help. It was something of an emergency. We had a package to deal with that. As Members know, over the last few months, applications to the EDRS have tailed off significantly. I think the most urgent cases have already been seen to, and people have other sources of assistance available to them - from the CCCs, CDCs and welfare organisations. So the EDRS demand has tailed off and we decided, at the end of the one-year, that we should let it lapse.”
“Effectively, the Government will be putting an additional $650 million into the hands of Singaporeans. As a result, the Government is not likely to have any budget surplus in FY2003. At best, we will be able just to balance the budget. All Ministries will have to economise on spending and trim back on non-essential programmes. I hope the phasing in of the GST will lessen the burden on Singaporeans, and help them cope with the uncertainties that we are now facing. This change is a fine-tuning to the original tax restructuring plans. The Government is making a tactical course correction while still heading for the same destination. We remain committed to bringing down top direct tax rates to 20% within three years, and to offer a more attractive business environment to bring talent and investments to Singapore. Mr Speaker, Sir, I am now submitting an amendment to the GST (Amendment) Bill, to provide for the GST rate to be raised in two steps, from 3% to 4% from 1st January 2003 and from 4% to 5% from 1st January 2004. I will ask the House to consider the amendment in the Committee Stage of the Bill later this afternoon.”
“We do not want to add to the burdens and worries of Singaporeans at a difficult time. The psychological impact of the GST increase could result in consumers cutting back on spending and business putting off investments. The uncertainty over economic prospects for next year, as to whether and how soon the US and the Singapore economies will recover, reinforces the need for caution. Although, on balance, another downturn does not appear likely, the possibility of one occurring still cannot be ruled out and it would be prudent to be cautious. I have therefore decided to phase in the increase of the GST rate, and implement it in two steps instead of one. The GST rate will go up from 3% to 4% from 1st January 2003, and then from 4% to 5% from 1st January 2004. I believe that a phased introduction will have more impact than proceeding with the full tax increase to 5% and enhancing the offset package. Many Singaporeans have not made the link between the benefits they will receive from the offsets, and the additional GST they will have to pay. Phasing in the tax increase is a more direct and easily understood signal. Despite the phased introduction of the GST, I have decided to maintain unchanged the offset package announced in Budget 2002. I am happy to announce that Singaporeans will receive the original amount of Economic Restructuring Shares in January 2003, and the same schedule of rental and S&CC rebates as announced earlier. I have also decided that the increase in the Public Assistance rates and the Singapore Allowance paid to Government pensioners will proceed in January 2003 by the full amounts originally planned. The details will be announced next week. The lower GST increase will cost the Government $163 million in FY2002 and $488 million in FY2003.”
“From a fiscal point of view, the tax changes announced in May remain appropriate despite the less vibrant economic conditions today. We should not hold back on our restructuring on account of the adverse climate; indeed, this makes it even more important for us to press on and strengthen our competitiveness and resilience. To individuals, because of the ERS and other rebates, the GST increase should not cause hardship to any Singaporean, or result in consumers cutting back on spending. To the Government, the combination of direct tax cuts to 22% and a GST increase to 5% plus the first tranche of the ERS shares together result in a revenue loss of $1.2 billion in the first year (2003). Therefore, the overall effect of the tax changes and offsets on the economy is expansionary, rather than contractionary. Some have suggested that the Government should defer the GST increase completely for 12 months or longer. But this approach risks leaving the Government with insufficient funds for urgent needs, especially in education, healthcare and defence. And if later we have to defer the increase again, the Government may wind up with a structural deficit, which would have serious consequences for the exchange rate, for inflation, and for the value of Singaporeans' CPF savings. I have therefore decided against deferring the GST increase. However, I am also mindful of the current mood of apprehension and uncertainty among Singaporeans, because of the economic troubles this year and the security concerns in the region. MTI's recent downgrading of this year's growth estimate, and the NWC's recommendation to extend the wage freeze for another six months, also contribute to the sense that things are not yet back to normal.”
“As Alan Greenspan recently said, the US economy was "going through a soft spot". Likewise, the Singapore economy is now projected to grow only by 2-2.5% for 2002 as a whole, at the low end of the 2-4% that we had projected in May. Going forward, prospects for 2003 are still uncertain. The risks are not only economic, but also security and political, eg, the impact of another major terrorist attack, or of a war in Iraq. The EU and Japanese economies are slowing down. In the US, most analysts expect a gradual recovery, supported by steady growth in consumer spending and a more substantial pick-up in corporate investment in the second half of 2003. In recent weeks, US economic indicators have improved, and the mood has become more optimistic. However, some respected analysts still worry that the US could yet experience a second recession next year. Singapore has been affected not only by the slow US recovery, but also by the problems in Southeast Asia, including the terrorist attack in Bali. Hence the downward revision of this year's growth estimate to 2-2.5%. However, early indications are that we will enjoy positive growth in the fourth quarter. Our exports to key markets are growing, albeit slowly. Non-oil domestic exports rose by 6% in October, and improved further in November, according to preliminary estimates. The manufacturing sector has also continued to grow. Output rose by 12% in October, similar to the 11% in September, driven by an increase in semi-conductors, petrochemicals and pharmaceuticals. On a month-on-month basis, manufacturing output increased by 1.3%, the first increase since May 2002. For 2003, MTI has forecast growth of 2-5%, although we cannot yet be certain how things will turn out.”
“Mr Speaker, Sir, in the Budget Statement in May this year, I announced tax changes to support our economic restructuring and to secure economic growth. We must bring down direct taxes to stay internationally competitive, attract investments and create jobs. And to make up part of the loss in revenue, we have to raise indirect taxes; in other words, the GST. We have cut corporate and top personal income tax rates to 22% for the Year of Assessment 2003, and we will lower them further to 20% within three years. At the same time, we announced that we would raise the GST rate from 3% to 5% on 1st January 2003. To help Singaporeans adjust to the higher GST, the Government implemented a comprehensive offset package. This includes the Economic Restructuring Shares (ERS), rebates on rental and service & conservancy charges (S&CC), plus full absorption by the Government of GST for subsidised healthcare and state education charges. A full listing of all the assistance measures is provided to Members as an Annex (Cols. 1987-1988) to this statement. I have left copies on your seats. And you can see that the offset package costs $4.1 billion, and is enough to offset the additional tax that nearly all Singaporeans have to pay for at least five years and, in many cases, 10 years. Annex - GST Offset Package At the time of the Budget Statement, expectations were that the US economy would pick up this year, and the Singapore economy would also complete its recovery from the sharp downturn in 2001. As events have turned out, both the US and the Singapore economies have done less well than expected. The US economic recovery has been weak and below expectations, even though the US has avoided entering a second recession.”
“This will also make it possible to extend participation in such real-time gross settlement systems to institutions other than banks. Accordingly, section 59A of the Banking Act will be repealed and a new section 29A will be inserted into the MAS Act. Conclusion In conclusion, Sir, the Bill provides the broad legal foundations for the operation of stable payment and settlement systems, thereby reducing the risk of systemic disruptions to Singapore's financial system. This is essential for Singapore's competitiveness and development as a major financial centre in the world. Sir, I beg to move. 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 Lee Hsien Loong]. Bill considered in Committee; reported without amendment; read a Third time and passed. RAPID TRANSIT SYSTEMS (AMENDMENT) BILL Order for Second Reading read.”
“For instance, if a person had made a payment to another by mistake, and this mistaken payment was routed through a designated system by banks that were participants in the designated system, the person who received the payment would not be immune from a legal action that might be available to the payer for the recovery of the mistaken payment. The Bill is intended to prevent the unwinding of transactions made through a designated system. It is not intended to accord additional legal protection or benefit to the recipient at the end of the payment chain. As the protection given by the Bill will only apply to transactions entered into a designated system before or on the day a participant becomes insolvent, the system should not accept any transactions from a participant as soon as it has notification that the participant has become insolvent. To facilitate this, clause 16 of the Bill imposes an obligation on the participant that is insolvent to give notice of that fact to the operator of the designated system. Clause 17 protects MAS and its officers from liability in connection with any action taken in good faith in MAS' capacity as the designating authority. Clause 18 empowers MAS to make regulations for carrying out the purpose and provisions of the Bill. With the enactment of the Bill, MEPS will be a designated system and clause 19 accordingly provides for this. Clause 20 deals with the migration of the current section 59A of the Banking Act to the Monetary Authority of Singapore Act. It is more appropriate for the statutory provision relating to the operation by MAS of real-time gross settlement systems such as MEPS to be in the MAS Act.”
“Secondly, clause 8 provides that the regime established by the rules of a designated system is to take precedence over the insolvency law principle of equal and pro-rated distribution of assets. Clauses 9 and 10 then go on to make clear that the legal provisions providing for the "claw-back" of transactions that are unfair preferences or transactions at an undervalue, and other like provisions, are not applicable to transactions effected through a designated system. Clause 11 gives effect to the default arrangements that are provided in the rules of the designated system and provides that only the net sum, following completion of action taken under the default arrangements, shall be provable or payable. Clause 12 establishes the end-date for the protection accorded by Part II. Transactions effected after the date the participant goes into insolvency will not have the benefit of the protection under Part II. In Part III of the Bill, clause 13 makes netting available to a designated system where a participant becomes insolvent. In such a situation, the operator of the designated system may net all obligations owed to or by the participant incurred before or on the date the participant goes into insolvency, with the result that only the net sum shall be provable or payable. Clause 14 fortifies the position by providing that a court in Singapore is not to recognise or give effect to an order from a foreign court in so far as that order would be contrary to the provisions of the Bill. Clause 15 clarifies that the protection accorded by the Bill will not affect the rights of persons arising from the underlying transaction or under the general law.”
“The three local banks in Singapore have established the capability to join CLS as participants in December 2002. As one of the largest foreign exchange trading centres in the world, Singapore's participation in CLS will reinforce our position as a key node in the global financial system. The Payment and Settlement Systems (Finality and Netting) Bill will provide an omnibus solution to the legal risks that surround the operation of payment and settlement systems by according legal protection to systems that are designated by MAS. It will allow us to provide for the integrity and finality of transactions in systems such as MEPS and CLS, as well as any new payment and settlement systems that may be introduced in the future. Sir, I will now highlight the major provisions that are being introduced in this Bill. Major Provisions in the Bill Clause 3 gives MAS the power to designate payment and settlement systems to provide them with the protection offered under this Bill. Clause 4 gives MAS the power to revoke the designation in certain circumstances. In determining whether to designate a system, MAS will take into account a number of factors, in particular the systemic risks associated with that system. Part II of the Bill sets out the protection that is accorded to transactions effected through a designated system when a participant in that designated system is bankrupt, in judicial management or winding up. Firstly, clause 7 gives statutory backing to any rule of the designated system that provides for the finality of fund transfers into and out of the accounts of participants, as well as the finality of transactions settled in the system.”
“There is therefore a strong case for the law to recognise the importance of the integrity and finality of transactions in payment and settlement systems in maintaining financial stability and for the law to protect these systems from the legal risks that I have just outlined. The legislatures in countries such as Australia, the United States of America, Canada and in many European countries have already taken steps to address these legal risks by enacting similar legislation. Enhancing Singapore's Legal Framework to Protect Designated System In Singapore, section 59A of the Banking Act has provided for the finality and irrevocability of transactions made through MEPS since 1998. However, section 59A is not wide enough to cover payment and settlement systems that are not operated by MAS. We are an important international financial centre. With the continuing advancement of technology, greater competition and increased scale and sophistication of financial players, there will be new payment and settlement systems in Singapore that require the same legal protection. The Continuous Linked Settlement (CLS) system is one such system. The Continuous Linked Settlement system is a global payment and settlement system that aims to reduce foreign exchange (FX) settlement risk. Launched in September this year, with the participation of over sixty international banks and seven major currencies, CLS has already reached a daily settlement value of US$300 billion and it is expected eventually to settle a large percentage of the US$1.2 trillion a day global foreign exchange market. The Singapore Dollar is expected to be included as a CLS currency in the second quarter of next year.”
“6 trillion of payments; this was more than 75 times the Gross Domestic Product (GDP) of Singapore over the same year. Clearly, any disruption to the sound operation of MEPS would have a significant impact on Singapore's financial system. Therefore, payment and settlement systems with systemic implications like MEPS must have a robust architecture, well-planned contingency arrangements, proper operational procedures and clear rules for participants. It is equally important for these payment and settlement systems to have a sound legal basis. The rules, regulations and agreements relevant to such systems must be legally enforceable. In particular, transactions that have already been settled by the systems should be final and irrevocable, and must not be unwound or otherwise adjusted by any legal proceedings. Any netting arrangements in the payment and settlement systems should likewise be enforceable. While the payment and settlement systems should have contractual arrangements and rules in place to set out these provisions, existing laws can operate to override them. For instance, the law of insolvency allows a liquidator of an insolvent corporation to reverse, or "claw-back" payment transactions that have already been settled if these transactions are deemed to be unfair or to have been made at a significant undervalue. Such claw-back provisions are based on the general principle that favours the equal distribution of assets to the creditors of an insolvent corporation. This principle must, however, be balanced against the disruption that might be caused to payment and settlement systems and to the participants if it applies to a disposition made through these systems.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The Payment and Settlement Systems (Finality and Netting) Bill seeks to make provision for the protection of payment and settlement systems from disruptions that may lead to risks in the financial system. Proper protection of such systems is critical to the effective functioning of the financial system. The Bill strengthens the legal environment for operating stable and secure payment and settlement systems by empowering the Monetary Authority of Singapore (MAS) to designate payment and settlement systems. These designated systems will be exempted from the application of certain legal rules, including the rule in insolvency law for the unwinding of certain types of transactions. Sir, before I go into the Bill proper, let me first give some background on the importance of protecting payment and settlement systems from disruptions. Importance of protecting payment and settlement systems from disruptions Payment and settlement systems consist of sets of instruments, banking procedures and funds transfer systems that ensure the circulation of money. They are therefore an important part of the market and economic infrastructure. However, payment and settlement systems also provide a channel for shocks to be transmitted across financial markets. This is especially true in large value inter-bank payment and settlement systems that are systemic in nature, where one disruption could trigger or transmit further disruptions to the financial system. Take, for instance, MEPS, the Real-Time Gross Settlement system operated by the MAS for the settlement of funds between banks. In 2001, MEPS processed a total of $11.”
“This amendment will prevent opportunistic attempts to acquire the liquidating company's assets with minimal stamp duty. Sir, I beg to move. 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 Lee Hsien Loong]. Bill considered in Committee; reported without amendment; read a Third time and passed. PAYMENT AND SETTLEMENT SYSTEMS (FINALITY AND NETTING) BILL Order for Second Reading read. 2.28 pm”
“Objections to the Commissioner's assessment Currently, objections to the Commissioner's assessment under section 37 of the Act must be made within 30 days. Section 16(3) of the Act also empowers the Commissioner to impose an additional dutiable amount when he assesses that the consideration is far lower than the market value. However, there is no finality to the time period within which a taxpayer can object to the Commissioner's assessment under section 37. As such, it is possible for a taxpayer to dispute the assessment many years after the assessment. Clause 8 amends section 39A(1) such that any objection to the Commissioner's assessment of an additional dutiable amount must be made within 30 days. The 30-day time period is the same as that currently provided in the Income Tax Act for a taxpayer to raise any objections to the assessment of income tax. Levying two sets of Stamp Duty on exchanges of properties Presently, for an exchange of properties, only one set of stamp duty is payable, based on the property with the higher value. However, a transaction involving the exchange of properties between two parties should be treated as two transactions involving two parties each buying and selling a property at the same time. Hence, an exchange of properties should be levied with two sets of stamp duty. Clause 9 amends the First Schedule of the Act to effect this. Stamp duty on distribution of assets in specie upon liquidation Clause 9 also amends the First Schedule of the Act such that if a person becomes a shareholder only after winding-up proceedings have commenced, he would be charged ad valorem duty on the transfer of shares or properties instead of a fixed duty of $10.”
“In addition, the transfer must take place within one year of the date of solemnisation of the marriage, and the property must be used as the matrimonial home of the couple. These conditions are put in place to ensure that the transfer represents a genuine gift to the couple for their marriage. Stamp duty on disposal and re-issue of shares Currently, no stamp duty is levied on the cancellation and issue of shares. Thus, a company intending to sell existing shares to a buyer may avoid incurring stamp duty by cancelling existing shares followed with an allotment and issue of new shares to the same purchaser for a consideration. Clause 5 will close this loophole by amending section 33 of the Act to impose one set of stamp duty on a document that effects such an arrangement to cancel and re-issue shares. Limiting stamp duty exemption only to co-operative societies Currently, section 36(e) exempts instruments executed by or on behalf of co-operative societies from stamp duty, if the underlying transaction in the instrument relates solely to the business of the society. Both the co-operative society and the party it enters into a contract with are exempted from stamp duty. Under the current laws, parties entering into such commercial agreements with co-operatives would stand to benefit from stamp duty exemption. There is no good reason for parties transacting with the co-operatives to enjoy the exemption from stamp duty, as they have entered into the agreement based on purely commercial considerations. Thus, clause 6 amends section 36(e) of the Act to limit the exemption from stamp duty only to co-operative societies, and not to extend it to the parties transacting with co-operative societies.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill will amend the Stamp Duties Act to give legislative effect to the following measures: a) To specify the conditions under which stamp duty relief may be granted for gifts of property made as a consequence of marriage; b) To charge stamp duty on an arrangement to dispose of shares by cancelling existing shares and re-issuing new shares; c) To limit stamp duty exemption only to co-operative societies, instead of granting exemption of stamp duty to all parties transacting with co-operative societies; d) To give finality to the assessment by the Commissioner of Stamp Duties if the taxpayer does not object within 30 days from the date of assessment; e) To treat an exchange of properties as two distinct transactions and to levy two sets of buyer and seller stamp duty; and f) To charge ad valorem duty on transfer of shares and/or properties to a shareholder where he becomes a shareholder only after winding up proceedings have commenced. Sir, I shall now explain the main amendments in the Bill. Transfers made in consideration of marriage It is common for parents to transfer property to their children, when they marry, to provide a matrimonial home for them. The current Act already provides stamp duty relief for property that is transferred to a newly-wedded couple by their family as a wedding gift. However, the conditions to qualify for this relief are not specified. Clause 3 of the Bill amends section 16 of the Act by inserting a new section 16(3A) to specify that the relief is only granted for the transfer of property to a party to the marriage. The property must be transferred from their spouse or a parent, grandparent or sibling of a party to the marriage.”
“Clauses 2 to 32 inclusive ordered to stand part of the Bill. Clause 33 - Amendments made: (1) In page 48, to leave out line 31 to line 2 in page 49, and insert - "(4) Notwithstanding that a Singapore company beneficia- lly holds, directly or indirectly, at least 75% of the ordinary share capital in another Singapore company, it shall not be treated to have satisfied subsection (3) unless additionally it is beneficially entitled to at least 75% of -". [Mr Lee Hsien Loong]. (2) In page 50, line 14, to leave out "not exceed", and insert "be". - [Mr Lee Hsien Loong]. Clause 33, as amended, ordered to stand part of the Bill. Clauses 34 to 65 inclusive ordered to stand part of the Bill. Bill reported with amendments; read a Third time and passed. STAMP DUTIES (AMENDMENT) BILL Order for Second Reading read.”
“The Act is amended to close this loophole by extending applicability of the withholding tax to the current year also. The Act is amended to allow the Minister to remit, for a good cause, the 5% penalty for pre-retirement SRS withdrawals. The Act is also amended to make clear that an individual must be a non-Singaporean SRS account holder for a continuous period of at least 10 years to qualify for a waiver of penalty and 50% tax discount on his SRS withdrawals. Clauses 8 and 50 amend the Act for these purposes. Foreign income taxed at concessionary rate Clause 10 amends the Act to make clear that Singapore-based companies may offset their losses from local operations against certain foreign income remitted into Singapore at a concessionary tax rate under section 13(8) of the Income Tax Act. Capital allowance for purchase or development of websites Clause 27 amends the Act to provide for a 100% write-off of capital expenditure incurred on the purchase or development of websites. This will encourage businesses to leverage on information technology to expand their customer reach or offer new electronic services. Securities, lending or repurchase arrangements Finally, clauses 3, 7, 9 and 26 amend the Act to provide the tax treatment applicable to certain securities lending or repurchase arrangements. Sir, I beg to move. 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 Lee Hsien Loong]. Bill considered in Committee. [Mr Speaker in the Chair] Clause 1 - Amendment made: In page 2, line 13, after "13,", to insert "27," - [Mr Lee Hsien Loong]. Clause 1, as amended, ordered to stand part of the Bill.”
“For the Year of Assessment 2002, a corporate tax rebate of 5% was granted. (b) The Government would grant an additional 5% personal income tax rebate to individuals on their income tax payable for the Year of Assessment 2001. For the Year of Assessment 2002, a 10% personal tax rebate was granted. The Government would remove the income tax on gains from short-term property transactions, contracted on or after 13th October 2001. Clauses 5, 6, 49, 59 and 65 amend the Act for these purposes. Global Trader Program With effect from 1st June 2001, the Approved Oil Trader scheme and Approved International Trader scheme were merged into a generic trading scheme called the Global Trader Program. Clauses 41, 42 and 44 amend the Act for this purpose. Comptroller of Income Tax's powers to access and seize records At present, the Comptroller of Income Tax's powers to access and seize records is limited only to physical documents. The Act is amended to enable the Comptroller to have access to and take possession of information and records kept in electronic or other formats. Clauses 55 and 56 amend the Act for this purpose. Property Trusts The Act is also amended to provide that property trusts that are in the business of making investments, like other companies that are in the business of making investments, will not be allowed to carry forward to future years the excess of expenses and capital allowances over income. Clause 4 amends the Act for this purpose. Supplementary Retirement Scheme Under the Supplementary Retirement Scheme (SRS), non-Singaporeans are subject to withholding tax on withdrawals in excess of contributions made in the preceding years, but not in the current year.”
“(s) The original objective of granting double child relief to subsidise the overseas education of expatriates' children is no longer relevant. The Government therefore decided to reduce the quantum of the relief from $4,000 to $3,000 for the Year of Assessment 2003, and to withdraw the relief altogether with effect from the Year of Assessment 2004. Clause 64 amends the Act to provide for this change. (t) To reduce compliance costs, a final income tax of 15% will be levied on the gross income of non-resident professionals. However, non-resident professionals can still opt within a specified period to be taxed at 22% on income net of expenses if it is more advantageous to them. Clauses 38, 51 and 52 amend the Act to provide for these changes. (u) To promote the spirit of philanthropy in individuals and corporations, the following measures were introduced: (i) Donations to Institutions of a Public Character (IPCs) will be allowed double tax deduction; (ii) Tax deductions for donations to IPCs can be carried forward for up to five years of assessment; (iii) Some IPCs name their buildings or scholarships after their donors. These and other donations with similar naming opportunities will be allowed a single tax deduction; Clause 31 amends the Act to provide for these three changes. Tax changes not announced in the 2002 Budget Statement Sir, I shall now move on to tax changes that are not covered in the 2002 Budget Statement. 2001 Off-Budget Measures As part of the 2001 Off-Budget package, the following measures were introduced: (a) The Government would grant a 50% corporate tax rebate on the first $25,500 of tax payable and a further 5% rebate on any tax payable above $25,500 to companies on their corporate income tax payable for the Year of Assessment 2001.”
“Correspondingly, gains from stock options granted in respect of Singapore employment will be taxed no matter where the stock options are exercised; (ii) Where there is a moratorium on the shares, the taxable gains arising from the shares acquired will be taxable only after the moratorium is lifted; (iii) The scope of existing stock options incentive schemes is also extended to include employee share ownership plans so long as there is a holding period requirement that achieves a similar effect as the standard vesting requirement; and (iv) Departing employees who are neither Singapore citizens nor Permanent Residents, or who are Permanent Residents leaving Singapore for good, will be deemed to have exercised their stock options at the time they cease employment, and pay taxes accordingly. Clauses 2, 18, 19, 26 and 57 amend the Act to provide for these changes. (p) To further recognise the contributions of NSmen, the current NSmen reliefs will be increased by 50% with effect from the Year of Assessment 2003. Clause 34 amends the Act to provide for these changes. (q) The Government recognises that withdrawing the procreation tax rebate from divorcees can add to their already difficult burden. Divorcees will therefore be allowed to continue to claim their procreation tax rebates with effect from the Year of Assessment 2003. Clause 37 amends the Act to provide for this change. (r) To encourage families to look after aged parents in their own homes, a handicapped parent relief of $3,000 on top of the normal parent relief will be introduced with effect from the Year of Assessment 2003. Clause 34 amends the Act to provide for this purpose.”
“Clause 10 amends the Act to provide for this purpose. (m) To reward effort and achievement, promote entrepreneurship, and attract and retain talent, the top marginal income tax rate will be further reduced to 22%, with corresponding cuts in all income bands. In addition, the personal income tax structure will be simplified by consolidating the existing 10 bands to 7. This will take effect from the Year of Assessment 2003. Clauses 34 and 63 amend the Act to provide for these changes. (n) To attract talent to relocate to Singapore and use it as a base for regional activities, as well as create favourable conditions for Singaporeans who have been away for some time to re-establish themselves in Singapore, special tax treatment will be given to these taxpayers classified as `not ordinarily resident' or `NOR' taxpayers. An NOR taxpayer will be exempt from tax on income earned before he came to Singapore and on his employer's contribution to his overseas pension fund. In addition, an NOR taxpayer who spends at least 90 days a year outside Singapore on business will pay tax only on his Singapore employment income, based on the number of days he spends here. This is subject to a floor rate of 10% on his total employment income. The NOR scheme will take effect from the Year of Assessment 2003. Clause 20 amends the Act to provide for these changes. (o) To further enhance our share option incentive scheme, I announced the following changes to the tax treatment of stock option and other forms of employee share ownership plans: (i) Gains from stock options granted in respect of overseas employment will not be taxed.”
“(g) To further develop our bond market, the 10% concessionary tax rate on interest from qualifying debt securities will be extended to bodies of persons. Clause 36 amends the Act to provide for this change. (h) To enhance Singapore's competitiveness as an insurance centre, approved general insurance companies will be allowed to claim tax deduction on special reserves set aside for certain offshore risks with effect from the Year of Assessment 2003. Clause 25 amends the Act to provide for this purpose. (i) To encourage Singapore-based companies to tap research and development (or "R&D") capabilities globally to upgrade their operations in Singapore, I announced a single tax deduction for expenses incurred on R&D activities which are outsourced to any R&D organisation, whether local or overseas. In addition, the scope of further tax deduction for R&D expenses will be extended from specified services to all services. Clauses 22 and 23 amend the Act to provide for these changes. (j) In order to enhance our attractiveness to international shipping companies, the scope of the Approved International Shipping Enterprise Scheme will be expanded to include towage vessels and salvage ships as qualifying ships for the purpose of the scheme. Clauses 10 and 15 amend the Act to provide for this change. (k) To further support regionalisation, the unilateral tax credit scheme will be extended to cover all services income remitted from all non-treaty countries with effect from the Year of Assessment 2003. Clause 54 amends the Act to provide for this change. (l) I will now cover changes related to individuals. To promote the international arbitration industry in Singapore, payments to international arbitrators will be exempt from withholding tax with effect from 3rd May 2002.”
“(c) To reduce the cost of doing business in Singapore, a loss-transfer system of group relief will be introduced with effect from the Year of Assessment 2003. Transfers of the current year's unutilised capital allowances, losses and donations will be allowed between group companies. Clauses 28, 31, 33 and 62 amend the Act to provide for this purpose. (d) To boost our fund management industry, the qualifying investment income of foreign investors from funds managed by all fund managers in Singapore will be exempt from tax. Clause 13 amends the Act to provide for this purpose. (e) To further enhance the attractiveness of managing a foreign trust in Singapore, the tax exemption granted on income from foreign trusts administered by an approved trustee company, will be extended to income derived through an eligible holding company. Clause 16 amends the Act to provide for the change. (f) To encourage further development of the equity capital market, income derived by Asian Currency Units of financial institutions and Approved Securities Companies from managing the initial public offering of securities of foreign companies listing on the Singapore Exchange will be taxed at a concessionary rate of 5%. In addition, corporate SGX members who are ranked amongst the top 20 in terms of annual trading volume generated for each approved new derivative product denominated in any foreign currency will enjoy a concessionary tax rate of 5% on total income derived from transactions in each product. This will apply to new products that commence trading on SGX during the period 1st January 2002 to 31st December 2006. Clauses 39 and 40 amend the Act to provide for these changes.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 2002 seeks to give legislative effect to the income tax changes that I announced in this year's Budget Statement. I have also taken the opportunity to make other amendments to the Income Tax Act to allow for changes that were not covered in the Budget Statement. Tax changes announced in the 2002 Budget Statement I shall begin with the tax changes announced in the 2002 Budget Statement. (a) To help us maintain our tax competitiveness, the corporate tax rate will be reduced from 24.5% to 22% with effect from the Year of Assessment 2003. Clauses 30, 38, 47, 48 and 52 amend the Act to provide for these changes. (b) In a move to simplify the tax code and reduce tax compliance and administration costs, the current full imputation corporate taxation system will be replaced with a one-tier corporate tax system with effect from 1st January 2003. Under the new one-tier corporate tax system, tax will only be imposed at the corporate level and any dividends paid by the company will be tax-exempt in the hands of its shareholders. The flow-through of exempt dividends will be for unlimited tiers of shareholders with no minimum shareholdings requirement. As an anti-avoidance measure, preference dividends paid out of exempt income currently subject to tax under the imputation system will be deemed as interest and so will be taxable. In addition, dividend franking credits available during the 5-year transitional period for the change in the tax system and exempt dividends will be capped in proportion to the shareholder's shareholding in the dividend paying company. Clauses 10, 11, 12, 14, 17, 45, 46, 52, 58, 60 and 61 amend the Act to provide for these changes.”
“The Civil Service reviews its medical benefits regularly. Under the Medisave-cum-Subsidised Outpatient (MSO) Scheme, introduced in 1994, we have aligned the treatment in medical benefits between male and female officers. They receive the same additional 1% monthly contribution to their Medisave account which they can use for other family members, including dependants. The only slight difference is in outpatient benefits. Women officers are not eligible to claim outpatient subsidy for their husbands or dependent children. However, this difference was effectively removed in 2001 when the Government decided to transfer any unused balance in the annual cap of $350 to the officer's Medisave account at the end of each year. The officer can then use this amount in Medisave according to Medisave guidelines. The basic philosophy of the civil service is that its medical benefit schemes should reflect the values and practices of our Asian society, where typically the husband is responsible for taking care of the family. We should be careful to avoid inadvertently sending a signal that husbands no longer have this responsibility, by changing long-established practices before the social reality has adjusted. However, as I mentioned at the last Committee of Supply, this is not set in concrete, and the civil service will continue to review the MSO scheme periodically as our society evolves. INTERNATIONAL LABOUR ORGANISATION CONVENTION 100 22. Ms Irene Ng Phek Hoong asked the Minister for Manpower in view of Singapore's ratification of the International Labour Organisation Convention 100 on Equal Pay for Equal Work, whether the Singapore Civil Service is in compliance with this convention.”
“In Singapore, if you have talent, in one generation, you can make the leap, and "Li Yu Tiao Long Men", become a dragon! So, I think this is a cause well worthwhile fighting for. We are beginning to develop a national identity, but this is far from complete. But you see the signs of it, sometimes in crisis, sometimes in moments that you do not notice. When Michael Fay happened, Singaporeans in the US were stout hearted. They stood up, and they were not ashamed of themselves. They were not afraid to say, "I am a Singaporean. We are doing the right thing." When we send SAF and Police officers overseas, on UN missions, peacekeeping operations, they do us proud. They are multi-racial contingents. They all wear the Singapore flag with pride, and they serve with pride. And people know that, when you have Singaporeans in the contingent, they do real work! When East Timor became independent, one of the soldiers lowering the UN flag before midnight, the man in front, blue beret, blue uniform, but red and white Singapore flag on his shoulder patch. Our hearts go with them, and they mean something to all of us. So, I think we have a long journey. If you look up, it is far and steep. If you look back, we have come a long way. So, let us work together, year by year, and as we do so, we will strengthen our sense of nationhood and shared destiny. [Applause.]”
“It is an honest, clean and efficient Government in a continent where corruption is an endemic problem. It is a system based on equal opportunities and open competition, and one which has delivered a high and rising standard of living for 3 million Singaporeans. So, I think it is precious and it offers individual Singaporeans something special. In this environment, each one of us has the maximum opportunity to develop ourselves to the fullest, and to make a difference to society, much more than anywhere else in the world. At the lower end, Singaporeans enjoy a standard of living better than nearly any other country, certainly better than China and India with their billions, probably even better than the US with the many homeless and destitute. In Singapore, you can be poor, but the chances are you have a roof over your head, and there will be help available. For all Singaporeans, rich or poor, there are exceptional opportunities - through the education system, through the scholarships we give, through working with companies, big and small, through public service, to develop ourselves and to be exposed to what is going on in the world. Because of our small talent pool, we go to great lengths to develop our people. So, when we go overseas, the quality of our people is not in doubt. Many top universities in the US and the UK have disproportionate numbers of Singaporeans. In fact, Stanford University in their intake, of all the high schools in the world, the one which sends the most students to Stanford every year is Raffles Junior College (RJC). So, our standards are high, and the opportunities are there. It is not just for the few. Recently, A*STAR gave a scholarship to a young girl to do a PhD in the life sciences. Her father is a butcher.”
“But, unfortunately, this is not a history shared by Singaporeans of other races, or even by most English-educated Chinese. So, it is valuable, but it does not go far enough. Furthermore, regrettably, its impact on the younger generation will be less. Yes, we teach it in school. Yes, they know it. I asked my children what did they know about it. They said, "Well, the mother carved some words on his back." What does it all mean? Where does it fit in? Into what world view? That is not the same. I discussed this with George Yeo. George Yeo is more optimistic. He says, "Let them learn the story first. Maybe the significance will sink in later." I hope so, but I think that the generations are changing, and we have to move. Inherit this, but we have to move forward and develop our own heroes over many, many years. We have made English our common language. That is a mixed blessing. On the one hand, we bring the different communities together; on the other hand, we merge into the greater globalised world, the Internet world, and we lose our moorings unless we have some knowledge of our mother tongues and our roots. It is different. Hong Kong wants to keep Cantonese. The Taiwanese want to keep Min Nan Wei, not Guo Yu (the standard Mandarin), to be different from the mainland, to have a separate Hong Kong and separate Taiwanese identity. We sometimes half seriously ask ourselves, should we learn to speak Singlish? But if we did, where is our future? So, we are back to English, and back to this dilemma. But our society is still evolving, still progressing. We are building something rare and precious here. It is a secure, stable society in an uncertain world. It is a harmonious, multi-racial society in a global environment where race and religion are rising and disruptive forces.”
“I checked with my children. Yes, it is still taught in schools, and to my relief, yes, they do know about the story. These are events 900 years ago in China, a dynasty long gone and extinct, but still a powerful impact on all Chinese-educated Chinese everywhere - in PRC, Taiwan, Hong Kong, Singapore, even, I am sure, in the West. In 1991, I visited China. I had some MPs with me. And we visited Hangzhou. Hangzhou was the Southern Song capital. At that time, they called it Lin An. And that is where Yue Fei was murdered, and that was where his temple is. We visited his temple. I wanted to visit it. Outside his temple, there are two statues of Qin Hui and his wife, kneeling, asking for atonement. And generations of Chinese have gone there to spit on these two statues out of utter contempt. And they put out signs there saying, "Chinese Government says, `You shall not spit down here anymore.'", to no effect whatsoever. Mr Chiam was with me, and he will remember. I had Chinese-educated members in my delegation and, I can tell you, I could see the powerful influence it had on them. It was an emotional moment. In fact, it was a noble ideal which makes Chinese-educated Singaporeans better citizens of Singapore. I remember, when I was small, I used to have at home a statue of Yue Fei, having the words "Jing Zhong Bao Guo" carved on his back by his mother. It was given to the Senior Minister by an admirer on one of his constituency tours, and we had it at home for many years. I studied in Chinese school, and we memorised all the poems. We know the history, we know the story, and we identify with them. We all did. Liu Thai Ker, recently reporting on arts, on behalf of the ERC, quoted "Ba Qian Li Lu, Yun He Yue" - it comes back to the same root.”
“The Chinese in Singapore were also patriotic, but not to Singapore. They either sided with the Kuomintang or the CCP in China. So, Sun Yat Sen visited Singapore and Penang to raise funds for his tong meng hui, for his revolutionary activities. And so when the Japanese took over and captured Singapore, they massacred the Chinese, not because of what the Chinese did here, but because they saw these Singapore Chinese as helping the Chinese in China fight them, as indeed they did. We had Mr Tan Lark Sye, as Mr Low Thia Khiang pointed out, but Mr Tan Lark Sye was a champion of Chinese culture and language, and he was motivated by the success of Communist China. So, the different communities all had different objectives and loyalties, but none strove for or were loyal to an independent multi-racial, multi-religious Republic of Singapore. In fact, such an idea did not exist and would have been dismissed as being ludicrous. Today, we have closed these chapters, more or less. Those loyalties and struggles have all become part of our history. Yusof Ishak became our first President. We have an Indian National Army Memorial at Connaught Drive. The Sun Yat Sen Villa has been restored by the Chinese Chamber of Commerce and Industry. And in the Nanyang Technological University, there is a Tan Lark Sye Professorship. So, it is a phase of our history, but that was not Singapore yet. If you go back beyond that, then we inherit from the great Asian civilisations - the Chinese, the Indians, and the Malay civilisations - valuable and essential for us, part of our being, but not a complete basis for nation-building. For example, Mr Gan Kim Yong cited the story of Yue Fei and Qin Hui. I knew exactly what he was talking about. He asked: Is it still taught in schools?”
“Furthermore, our loyalty has to be based not on race, language or religion, which are the most powerful loyalties, but on shared ideals and shared history. That takes time. We have history before independence, yes. But they were separate histories before independence - multiple histories. The Malays identified with nationalist movements in Indonesia and Malaya. Before the war, and even after the war before independence, it was not uncommon to see pictures of Sukarno and Hatta - Sukarno was the first Indonesian President and Hatta was another freedom fighter - hung on the wall of honour in the homes of those who originated from the Indonesian islands. They may be Javanese, Boyanese or Sumatran, but they would have pictures of Sukarno and Hatta. Mr Hawazi told me this. He lived in a pondok in Crawford area. And even as he was growing up in the 50s, in the hall of honour, there were pictures of Sukarno and Hatta. They looked upon the brave Indonesians as heroes and freedom fighters and idolised them. Even the Malay intelligentsia who had no roots in the Indonesian islands looked upon them as leaders who should be emulated. And it is not surprising, because these were freedom fighters putting themselves on the line as anti-colonialists to fight the Dutch and gain independence. On the Malayan side too, we were really one society. The Jawi version of Utusan Melayu was first published not in the peninsula but in Singapore in 1939 by Ambo Sooloh and Yusof Ishak. They were members of Kesatuan Melayu, a quasi political party for the Malays - not Malays in Singapore but Malays in Malaya including Singapore. The Indians looked to India. Therefore, in 1942, after the Japanese had come, the Indian National Army was formed in Singapore to support the Indian independence struggle.”
“You look at the Jews in Israel and all over the world with their powerful sense of shared history and a common future, going back to Moses and the Exodus, the Books of the Torah, the Holocaust. If you are a Jew, you will never forget it. And if there is a problem with another Jew somewhere else in the world, you feel a sense of obligation and you will be there to help, if necessary, with your life. So, when they have an emergency and they press the button to mount a mobilisation, Israelis from all over the world go back to Israel in order to fight. We have mobilisation exercises, but that is a test. If the mobilisation is for real, if we ever go to war and press the button, will people come back, or will people leave? But they have the Torah. They have 5,000 years. They have Masada. When they dedicate their national servicemen, they bring their tank corps recruits up to Masada and they hold a night-time ceremony with lamps and present rifles, and you remember Masada and the sacrifices. When we have national servicemen dedication ceremonies, we hold it in our camps. We spread a blanket over the table, we put out some lamps. What is the resonance? It is what we can do. But it is not 5,000 years old. So, it is different. Or you take the Palestinian Arabs - refugee camps scattered all over the Middle East, Jordan, Syria, Lebanon and the Gulf - scattered more than a generation but determined to go back to Palestine - not the West Bank of today, but the Palestine as they remembered it in 1947 before they were chased out when Israel was formed in the first Arab-Israeli war - to villages which no longer exist. But that ideal, that drive, that determination, that hatred for their enemies, that holds them together. In Singapore, we are all of 37 years old.”
“This society has made you what you are. It has given you what you have. Therefore, we have an obligation to the country and to the system to contribute back to the society, and to help others succeed as we have done. It is a rational argument in a way, but it is an altruistic argument. It is also an abstract argument, which every individual has to consider how it applies to himself. Do I or do I not feel that I owe Singapore this? Or can I say, "Thank you very much. Now, I am off. Good luck to you." I think we would like to bring up Singaporeans who feel some moral sense of pride when they look at themselves in the morning in the mirror and say, "Yes, I have not let others down." But the third and deepest level of motivation for staying are the emotional ties - the family, the friends, the places where you grew up, the memories, both individual and shared, of things you have done, things which your society has experienced together, or even things which earlier generations of your society have experienced together. This is the fundamental glue which binds a people together - a deep emotional commitment. And this is the fundamental problem for Singapore, because of our short history and also because of our ethnic diversity. Compare Singapore with other societies with long histories and strong senses of commitment and belonging. Take a Japanese - maybe 3,000 years since the sun goddess - Amaterasu. He is a Japanese wherever he goes in the world, the way he speaks, dresses, his attitudes, he bears a life-long permanent imprint. And if he leaves Japan permanently, he will feel deep pain cutting his ties with all that it means to be Japanese, and all the things which he holds dear.”
“Therein lies a profound truth about Singapore society. And the fact that this was noted by a Chinese journalist in the Zaobao is a further confirmation that that is how Singapore society is. So it is not an issue of policies. It is an issue of rootedness, of identification, of deep values. Why do people want to stay in a country or in Singapore, whether he is emotionally committed or whether he is physically here? I think there are different levels to this. One level is rational reasons. They make a cost benefit calculation, it comes out positive. We can look for the rational reasons why it makes sense to be here, and then we can say, well, there is a good living, I have a chance, my children have a chance. I can afford a car or I cannot afford a car. Check the bottom line, and it all adds up. And, indeed, rational reasons are relevant, because if conditions are really hard and life is miserable, if the family is starving and there is no future in the country, then people will leave, ideals, loyalty or patriotism notwithstanding. But rational calculations alone can only make fair weather citizens. The next question is: do we have a moral obligation to others? We cannot leave. Why? Because we grew up here. We drew sustenance from this society. We gained the opportunities to advance ourselves, and to have the education and skills and the marketability to move and to opt out. Had we been born in almost any other country in Asia, we would not have enjoyed the same opportunities and our lives would have been quite different. You can be very talented. If you are in some inner province in China or somewhere deep in Indochina, or elsewhere in South East Asia, I think you would not have the opportunities that you have had. You have made it.”
“Mr Ahmad Khalis, yesterday, gave two vivid examples of meet-the-people session cases, constituents who had personal problems, and because they could not get satisfaction from their MP, threatened to go. I do not know how he dealt with them. He must be a very skilful and diplomatic MP by now. But those are just the most extreme examples of this problem. There are many issues which we have to deal with. We have to discuss them. We have to consult. We have to involve people. We have to take views. At the end of which we have to decide what we have to do. What happens then? Ideally, most people will agree with the decision. But if some do not, then if you are a Singaporean, you should stay on and fight, argue your case and persuade more people to believe you, and one day change the policy, not opt out and leave. Because no policy is set in stone forever, no consensus lasts permanently. And if you think the Government is wrong, argue it, pursue it, persuade others of it, take it up in elections. That is what a good Singaporean will do, even the Opposition Members. Even Mr J B Jeyaretnam will continue doing that, even though I think, in many cases, he is doing the wrong thing, but he believes in it and he will fight for it. The problem of rootedness is much deeper than having favourable policies. I point out one observation by Chen Hwai Liang in the Lianhe Zaobao this morning. In this debate, there has been a clear difference in the views of the Chinese educated MPs and the English educated MPs. Both made the same analysis of the problem of rootedness. But both came to diametrically opposite recommendations. The Chinese educated MPs wanted more moral education, Confucian values and such approaches. The English educated MPs wanted more freedom of choice.”
“The Government will also participate as a member. We are likely to start it off in seven cities where there are many Singaporeans working - in Beijing, Hong Kong, London, New York, San Francisco, Shanghai and Sydney. We will leverage and build upon the existing Singapore Clubs. Our idea will be to facilitate networking and interactions among the members. We will organise events and activities, including an annual homecoming event here. Through the network, we hope we will generate business opportunities, share ideas and knowledge and help Singapore companies to internationalise. This effort was a spontaneous one. Mr Khaw Boon Wan suggested trying it, and I agreed. It was a success. It demonstrated that it is both feasible and also worthwhile and valuable to maintain links with overseas Singaporeans. It also shows that for many overseas Singaporeans, their hearts are still with Singapore. But, at the same time, I would like to sound a note of caution or realism. There is a limit to how far modifying policies will solve our problem of rootedness, for several reasons. First, when we modify policies, there are trade-offs. For example, in education, even from the debate, you will know that there were those MPs who wanted more things in the curriculum such as National Education, Moral Education and Civics, and there are those who want less things in the curriculum, including less mother tongue, less stress. And we have to make a choice. There are trade-offs to make in the balance. So, we cannot satisfy all requests. Secondly, we cannot view all policies from the angle of how they will affect Singaporeans' commitment; will it cause some people to be unhappy; and if they are not happy, will they leave? In other words, humour me, or I quit.”
“Singaporeans say they are not quite satisfied because they do not have enough say in what goes on in Singapore. I think we can create more say but, most important of all, we will have to be realistic about it. Singaporeans can have more say here in Singapore than they can have anywhere else. If you go to China and you want to change the system, it will take you several generations, and your great-grandson may succeed. If you go to America and you want to change the system, it is not so easy. It is a very complicated and large society. But in Singapore, if you have an idea, a dream, something which you want to achieve, you can make a difference. It is 3 million people. However modest your intentions, you cannot hide your light under a bushel, it will be seen and if it makes sense, it will be taken up and implemented. So in Singapore, we can do that. One idea which we have developed, arising out of the Economic Review Committee's experience with the students and the Singaporeans overseas, is to set up what we would like to call the "Majulah Connection". Our exercise with the students in America and Hong Kong involved, I suppose, a few dozen enthusiastic Singaporeans working overseas, activating their friends and colleagues, meeting late at night, discussing over the Internet. They called themselves the Singapore Overseas Network (SON). Now that we find that it is working, we would like to institutionalise this and set up what they have decided to call the "Majulah Connection". The vision is for the "Majulah Connection" to be a global business network of overseas Singaporeans. It will also include the friends of Singapore, which means expatriates who used to work here and foreign businessmen who are friendly to and want to help Singapore.”