Lee Tsao Yuan
Singapore
“My last point and, perhaps, the most important, is that the fundamental tenet of democracy is that it must bring the greatest good to the greatest number of people.”
“Clarification, Minister. I think my question was really regarding the last part of your comment which said that you would change the Constitution in order to state whether what part of NII would belong to past reserves and to current reserves. Perhaps I was wrong in this matter.”
“As I see it, Minister, if the change of the Constitution is to define the portion of NII that belongs to past reserves, then would the Minister also consider at the same time including in the Constitution the definition of "reserves" that was stated in the White Paper? Because right now it is not in the Constitution.”
“The Minister stated that he would consider changing the Constitution in order to define NII or the part of NII that goes to current or past reserves. Would the Minister also consider at the same time changing the Constitution in order to incorporate the definition of past reserves in the Constitution?”
“Another clarification, please. As far as I understand from the White Paper, and I could be obtuse, supposing you have a future government that informs the President of the day that it disagrees with the definition of the value of State land, in other words, the value of State land at fair market value at the point of transaction, then tho…”
“The Minister said that the principles in the White Paper are binding and that if a future government so decides to define fair market value as not at the point of transaction but at the time it took over office, then that is clearly in violation of the definition of past reserves.”
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“I would like to ask the Minister whether, in the light of the current difficulties with Malaysia, the Government would consider accelerating its plans for desalination.”
“Sir, what is the Minister's assessment of the potential use of the Euro as a reserve currency?”
“Would the Minister elaborate on whether there has been an increased willingness on the part of workers to go for retraining in view of the economic uncertainty and downturn?”
“Two questions, Sir. The first is: what is the difference between operating on the platform of Woodlands and operating within the Woodlands Checkpoint? And the second point is, he mentioned about a travel advisory. What exactly would that mean for those holding Singapore passports and Malaysian passports, respectively?”
“Notwithstanding what the Minister said in his last statement, could he give us the figures for those who have withdrawn up to 90% and 95% of the full amount respectively, so that we can get an idea that if, let us say, the CPF is cut by 5% or 10%, how many will be affected? Because the Minister did say that 19.4% are withdrawing up to the full amount. Dr Lee Boon Yang: Sir, as I stated in my answer, 101,914 CPF members are withdrawing the full amount. I do not have the figures of people who are withdrawing 95% or 90%. And as I said, even if we have the figures, it would still not reflect the actual scale of difficulties faced by CPF members because the cut can be spread in a number of ways, depending on the actual circumstances. And how they will be affected is also linked, as I said earlier on, to how much existing savings they have in their Ordinary Accounts. CENTRAL RETRENCHMENT BENEFITS FUND (Setting up) 15. Mr Low Thia Khiang asked the Minister for Manpower whether the Government will consider (i) setting up a Central Retrenchment Benefits Fund in which individual companies are required to maintain an account with the Fund; and (ii) requiring companies to contribute a certain amount to the Fund yearly from their profits for the purpose of ensuring that workers who are retrenched and are eligible for retrenchment benefits will get the payment.”
“Have the Ministry and PSB received any complaints about difficulties in terms of filling in the application form for loans?”
“I notice from the figures in Table 1 that there was actually a drop in the number of approvals even though there was an increase in terms of the dollar amount of loans approved. It seems to me a bit odd that there was actually a drop in the number of approvals because the LEFS scheme is meant to help the SMEs and one would expect that there would be an increase in the number of approvals unless of course there was a drop in the number of applicants. Could the Minister kindly explain the drop in the number of approvals?”
“Could the Minister kindly give the corresponding figures for the total number of those who applied for the loans?”
“However, while the economic hardware and the material side have developed rapidly, the software, including social and political institutions, has been slower to evolve. As a result, I believe that there is this disequilibrium situation of excess demand where public policy discussion is concerned and, hence, in this context, I believe that Parliament can be more effectively used as a major channel for such consultation and feedback.”
“This is particularly the case when providers of the feedback may not wish to be identified with the point made or that confidentiality of the policy is crucial, for example, in formulating the Budget. But public consultation and feedback is, I believe, becoming increasingly important. And it is in the latter case that Parliament can be more effectively used as a channel for such debate. I would now like to discuss briefly my views on the first part of the motion, that of a less adversarial Parliament. I do not believe that our present system is adversarial. I agree with the Member who spoke just now on this matter. If anything, apart from a few isolated incidents, Parliament is conducted in a very civil manner. The expression of differences of opinion should not, in my mind, be considered adversarial. Parliamentary debates should be encouraged to emphasise the objective to give all, and especially the best ideas, the opportunity to be heard. While I agree that I would not like to see a situation where there are fist-fights and hair-pulling in Parliament, I also do not envisage that this situation is likely to arise in this House in the near future. Hence, while I am fully supportive that the motion should be debated in the House and for which reason I have supported the motion to be debated, and I am also fully supportive of the second clause of the motion, I am unable to give my full support to the first clause regarding the less adversarial system of Parliament. In conclusion, allow me to reiterate my argument. The telescoping of the economic growth process in Singapore is unprecedented in world history. What took the developed countries 60 to 70 years to achieve, Singapore has achieved in 30 years, half that time.”
“If necessary, if it calls for a serious policy change in debate, a White Paper could be prepared, for example, in the case of the Ministerial salaries. Where specific and municipal policy issues are concerned, Question Time should suffice. However, the one hour allotted for Questions for Oral Answer is, in my opinion, too short for all such matters to be raised. The frustration that some Members experience is that there is insufficient time for all Questions to be answered as occurred today. There is of course the alternative of a Written Question. But an answer in written form does not permit the Member to seek further clarification on the spot and to wait for another month for further elaboration would really be too long a delay. My third proposal therefore is that Question Time be lengthened to 1� hours. One could argue that even this is insufficient. But a 50% increase is, in my view, a major improvement. There are two additional aspects of the public consultation process that I would like to discuss. The first is that we need to establish ground rules for this public discourse. I fully understand that elected Members will make statements with political objectives in mind. That is the essence of politics. But we should make every effort to debate in an objective and rational manner. At times, the debate can and should be robust, even heated. But such engagements should not be personal and should not be taken personally. The second aspect which I would like to discuss is public as opposed to private consultation and feedback. I believe that there is room for both. There are occasions when the Government would gather feedback on a private basis away from the public eye.”
“I would have liked to see this major policy change brought to the House for debate, not because I do not agree with The Desired Outcomes, in fact, I was glad to see the list, but because such a major policy deserves public airing and discussion. Such public discussion allows for good suggestions to be taken on board for future policy refinement, and concern and misconceptions to be clarified. One way in which this could be done would be for a motion to be moved, for example, "That the House endorses The Desired Outcomes of Education." My second and related proposal is that the Government Parliamentary Committees (GPCs) play a more active role in such public policy discussions. For example, the motion on The Desired Outcomes could be moved by a Member of the GPC for Education. In fact, the GPCs already are utilised to some extent in this manner. GPCs could be utilised to get the feedback on these major policy changes. These views could be aired in the House during the policy debate. This is already the case, for example, during the Budget debate when the Members of the GPC for Finance and Trade and Industry bring to the attention of the House the feedback which they obtained from the business community. The system of debating major policy changes in the House has been done on occasions in the past. I recall that motions were moved in the case of the benchmarking of Ministerial salaries with the private sector in 1994 and for the second Cost Review Committee Report in 1996. However, what I would like to propose is that every major policy change be debated in the House and that the GPCs play an active role in this discussion by gathering feedback and moving the motion.”
“There is no reason why Singapore should be so different. Parliament, mainly comprising the people's representatives, is the key institution for the conduct of public policy debate. In fact, this is already happening today. When the elected MPs speak, they often represent the views of their respective constituencies. However, there can be better use of Parliament as an institution for public debate on policy issues of current interest. In other words, in addition to passing legislation which is in itself a primary responsibility of Parliament, it would be desirable for Parliament to be used even more as a major channel for policy discussion. Policy issues range from the strategic and national to the specific and municipal. I would like to see greater discussion of major policy changes in Parliament when they are announced. What is currently occurring is that Backbenchers use the Committee of Supply debates as the main occasion for bringing up issues under the specific Ministry cut. But why lump them all together at one sitting and not discuss these policies when they are hot off the press? A case in point is there are many changes in educational policy which have occurred in recent years. Many of these are not merely refinements of the system but represent systemic changes, indeed, a major rethinking of the very philosophy of education. One such example is the recent announcement on The Desired Outcomes of Education. At all stages of the educational system - tertiary, junior college, secondary, primary - this set of Desired Outcomes will be used to assess the performance of our formal education system.”
“These include the grassroots organisations, such as the RCs and CCCs under the People's Association, the recently expanded Feedback Unit, the Ministries' specific committees and groups, formal and informal, established for the purpose of consultation and feedback. There are in addition other more general dialogue sessions, for example, the two recent occasions where the Prime Minister met young Singaporeans and professionals, respectively. In addition to the Government channels, there has also been more active use of the Forum page of The Straits Times as a channel for expression and feedback. And if I may say so, the Institute of Policy Studies, where I work, has, as its objectives, the twin role of furthering public policy discussion by means of research and conferences and being a bridge builder among the various sectors of Singapore society. How then do I know if there are now more channels for consultation and feedback if there is still an excess demand? I will be the first to admit that I have no statistics, no hard and fast evidence. But when one hears the dissatisfaction regarding the existing situation repeated over and over again, different forums by different people, then surely it amounts to more than just a passing fancy or a temporary phase. And if anything else, this dissatisfaction seems to have intensified and not diminished over the years. It would appear that this demand is strongest among the professionals and the younger generation. It may not be a major concern of the HDB heartlanders. But with education, this demand will strengthen and not diminish. All over Asia, economic well-being has led to the emergence of a middle class that is better educated, more socially and politically aware and more demanding of a voice in what affects them.”
“Therefore, we find that of those aged 15 to 39, 72% of the workforce now have secondary level education and above and soon 60% of those in their 20s would have tertiary level education. The third reason is that globalisation, including access to information via the Internet, has created greater awareness of the larger socio-political environment internationally, regionally and domestically. As a result of these three factors, there are more and more in Singapore society today who are interested in public policy, have an opinion on these issues and want to have a say. They may not necessarily be interested in joining a political party per se. But they hold the view that, as citizens of Singapore, they should be concerned and that this concern should be expressed by speaking up on public policy issues. Some of these views may be frivolous, some criticise for criticism's sake. But there are also some which are sincere and well-thought-through in their views. Although some in this group would insist that they are right and the Government is wrong, many would consider it sufficient that there be serious engagement. They wish that they be given the space to express their views, critical or complimentary, without fear of retribution that these views be heard, given due consideration and that the merits and demerits of these views be objectively and rationally debated in public, in the intellectual marketplace of ideas and may the best idea win. What about the supply of mechanism for public policy discourse? The number of channels has increased in recent years and more effective use has been made of them as well.”
“As in the case of economics, I believe that such a disequilibrium situation is unhealthy and that steps should be taken to rectify the situation. Why has demand for public policy discourse increased? I can offer three reasons. The first reason is that our very economic success has satisfied our basic human needs and has engendered the desire for higher order needs, such as that for participation and belonging in society. Over the last 30 years, Singapore's GDP per capita has increased by more than eight-fold. This increase in real per capita income has enabled our material quality of life to improve by leaps and bounds. Home ownership, ownership of consumer durables, life expectancy, all of these have shown marked improvement. In short, our basic material needs are by now more than taken care of. A generation ago, our parents' prime concerns were mainly over making a decent living, owning a home, giving their children a good education. While these needs are still important today, economic success has added a new dimension to society's needs and aspirations. There are many in society who are no longer satisfied with the mere pursuit of material gains. They aspire towards something more and, that is, a sense of belonging in society. Part of that aspiration would include that of having a say in policy, particularly those policies which affect their lives as citizens of this country. The second reason is that our population, particularly the young, are now more highly educated. We have made significant strides in education since the 1970s. The entry ratio of polytechnic students increased from 2% in 1965 to 37% in 1995. Similarly, the entry ratio of university students increased from 4% to 20% during the same period.”
“Mr Deputy Speaker, Sir, I wish to focus on the second part of the motion, that is, that the House recognises the need to evolve a parliamentary system which will further strengthen the process of consultation and consensus. I would like to make three broad points. First, that there is a relative lack of effective mechanism for public policy discourse in Singapore. Second, that Parliament which represents the elected voice of the people can be more effectively used as a major institution for public policy engagement; and Third, I shall then propose several means by which Parliament can more effectively serve this purpose. I would like to submit to this House a hypothesis regarding the current situation where consultation and consensus building is concerned. As an economist, I think in economic terms, so please allow me to use an economic analogy. I believe that there is at present a disequilibrium situation of excess demand for public policy discussion. There is now a greater demand for public consultation and feedback than in the past, and this demand is likely to increase even more in future. At the same time, particularly in the 1990s, the supply of channels for public policy discourse has also increased. There are now more channels, both formal and informal, for consultation and feedback. However, I would submit that the increase in demand has outpaced the increase in supply resulting in a disequilibrium. In the marketplace, such an excess demand situation would be corrected during adjustment in prices. However, in the intellectual marketplace of ideas, there is no such automatic mechanism to adjust for a situation of excess demand. As a result, a disequilibrium situation of excess demand can persist for some time.”
“I recall that in the case of Thailand when their financial crisis first started, I think IMF had said that they actually mentioned to Thailand that there was trouble but no action was taken. So supposing that in this case, the surveillance results do show that there is actually a potential problem in one of the ASEAN countries, what sort of follow-up action will be taken then?”
“Could the results of the analysis of the ASEAN surveillance mechanism be publicised? Dr Richard Hu Tsu Tau: Initially, the data would be exchanged between the participating countries themselves. I do not think at this point of time it has been considered whether the data should be published.”
“Is the bilateral trade financing scheme contingent on the IMF resuming its loan to Indonesia? BG Lee Hsien Loong: Sir, the first priority for Indonesia is to establish political certainty, stability and confidence because these are critical for economic recovery. And confidence has to be signalled by international agencies like the IMF and G7. If there is confidence, then our scheme can be of help. If there is no confidence, it is very difficult to make an impact.”
“Sir, with regard to the impact of the recent turmoil in Indonesia, surely the Minister will agree that that impact would be negative in terms of the impact on the Singapore economy. To the extent that the growth forecast of 2.5-4.5% was made earlier on this year and the situation in Indonesia has since deteriorated, surely that would mean that the growth forecast for Singapore, even if it remains within 2.5-4.5%, would actually hover around the lower end of the range or that the forecast range would be lower than 2.5-4.5%. Would the Minister agree?”
“Sir, may I ask the Minister when will the second quarter results be known since the Minister did say that off-Budget measures will be decided only when the second quarter results are known?”
“Sir, if the Indonesian government is not sufficiently encouraged by the pressures from external sources to take action against illegal burning, does that mean that we, in Singapore, would have to suffer the haze again this year and next year and subsequent years then?”
“Sir, could nothing be done then about illegal burning which is really the genesis of the fires? When you talk about the fires in Sumatra and about the highest priority being taken, could not also measures be taken against illegal burning, which probably would be the genesis of these fires again?”
“Sir, may I ask the Minister, regarding the fires in Kalimantan last year and the haze which it caused, was it not known that a large percentage of it was actually caused by illegal burning on large plantations?”
“Sir, may I ask the Minister: (1) what measures are being taken to contain the fires in Kalimantan; and (2) is there any evidence of illegal burning in Sumatra?”
“To facilitate closer collaboration, the Committee should be headed by the advisor of the grassroots organisations or a person appointed by the advisor. Members should include principals, School Advisory Committee chairmen and other appointed members. With this structure, the advisor will be able to harness the resources of both the schools and grassroots organisations. The advisor will also be able to deploy staff and resources to ensure the smooth running of the schools. Principals, teachers and grassroots leaders will thus have the opportunity to work together and share their experiences. In this way, we not only develop the community service value system in our students, but also that of our teachers and principals. At the same time, we can develop a community culture in our neighbourhood schools.”
“It will take the worry off the parents' minds, regarding what the children were doing after they finished the morning session or before they started school in the afternoon. This would be particularly relevant in the case where both parents work and there are no relatives or maids to look after the children during the day. In 1987, 38% of married women worked. Today, 47.5% of married women work. Broadly speaking, then, nearly half of all households in Singapore are already dual income households. In 10 years' time, it could well be that 60% of households could be dual income households. In the eventuality that all schools are converted to single session schools, I have one more suggestion - start school one hour later at 8.30 am, instead of 7.30 am. Then, there will be greater coincidence of parents' working hours with children's school-going time. This will enable parents to spend a longer time with their school-going children in the mornings and will take care of the child care aspects as well. For these reasons, I urge the Ministry to consider extending single session schools to primary schools. Dr Teo Ho Pin: Sir, my topic is on School Cluster. Sir, I must commend the Education Ministry for introducing the six hours per year per student community service requirement for school children. This exposure will definitely inculcate community service values among our students. In fact, a further step will be to encourage more principals and teachers to be involved in community work. Thus, I would like to urge the Ministry to restructure the school cluster management committee so that both the schools and grassroots organisations can work together for the benefit of the community.”
“Sir, I rise to speak in support of single session schools. It is commendable that $150 million or 17% of development expenditure on education in fiscal year 1998 will be spent on converting secondary schools into single session schools. I would like to propose that the Ministry go one step further to extend single session schools to primary schools. The same reasons which apply to single session secondary schools also apply to primary schools. These reasons are: first, students can spend the morning covering the curriculum and the afternoon in enrichment programmes, extra-curricular activities or remedial lessons. Not only does this give students a more all-rounded education, it also offers students from different classes greater opportunities for interaction. This promotes bonding among students and helps develop a stronger sense of community in the school. Often, the learning which occurs outside the classroom can be just as important as the academic learning within the classroom. Attributes such as the give-and-take, of being a team player, learning to win and lose gracefully in sports and games, are important in the development of the overall person which the Ministry has announced as the aim of education in Singapore. The second reason is that teachers have a greater flexibility in arranging their schedules. They could concentrate on the academic syllabus in the morning and spend the afternoon in a variety of ways, such as helping the weaker students or overseeing the students' enrichment programmes. The same would apply, of course, for afternoon school at present. The third reason is that this would also benefit parents. Single session primary schools, by keeping children in school for a longer time, will fulfill an important component of child care.”
“I would therefore urge the Government to seriously consider a national cohesion scheme for women. The objectives are clear. First, it is to develop social bonding among women at the national level and, second, in developing that social bonding, it will also foster a greater sense of community, of national identity, of what it means to be Singaporean. The best time for such a scheme to occur is after `A' levels where there is a window of about six months before the university term begins. The scheme could involve a range of duties, including social work, health care and administrative support services. It should include a physical training programme to develop physical fitness, much like the Outward Bound School. In conclusion, I believe that social cohesion and social bonding should not just be for men alone, simply because they have national service and women are excluded. A scheme should be started for women. The beneficial effects of such a scheme are of strategic importance for Singapore. I also believe that in this day and age, this is the time to implement such a scheme. It is a scheme for which the time has come.”
“Sir, in 1995, during the Committee of Supply debate, I proposed a national volunteer services scheme for women. I would like to resurface that proposal today. I believe, that as Singapore matures, we need to pay more attention to the issue of social cohesion. If we are not careful, stratification of our society along socio-economic lines could occur. Over time, the poor will become better off, while the rich could become even richer so that the gap between the haves and the have-nots could widen, particularly where property and other assets are concerned. In other words, we need to make an effort to develop social bonding at the national level, particularly across socio-economic lines. One of the greatest institutions of social bonding that we have in Singapore today is national service. During their two and a half years, men of diverse social backgrounds, eg, the Hokkien speaking, or shall I say Hokkien swearing primary educated man, together with the Cambridge-trained son of the rich tycoon are thrown together. They train together. They eat together. They suffer together. They relax together. And because of these ties, bonds of friendship are forged which transcend socio-economic status. As a result, an understanding and tolerance of others from entirely different social backgrounds is developed, which will stand them in good stead throughout their lives. However, this form of social cohesion is absent for women. Schools offer some opportunity but this is limited. As a result, a Chinese girl may grow up never having been to the home of a Malay friend and vice versa. A girl living in a district 11 bungalow may never understand the concerns and mindset of someone who grew up in a rented 3-room HDB flat. There is simply no opportunity to do so.”
“The basic point is that because of the increasing importance of the second wing to Singapore, we should begin to develop a measure of economic performance that includes both wings. The fact that there are problems and that very few countries do this are surely not sufficient reasons for Singapore not to pioneer the effort.”
“I think that it is more because a major portion of Hong Kong's manufacturing has already shifted offshore, to China, for example, so that Hong Kong's dynamism is no longer adequately reflected in its GDP figures. Similarly, for Singapore, in the next 10 years, our GDP growth may no longer adequately reflect our true economic activity, because a large percentage of our growth may be in our external as opposed to domestic economy. At the moment, the main indicator of economic performance in Singapore is Gross Domestic Product (GDP) which measures economic activity within Singapore, and we all know how GDP growth rates are watched with an eagle eye, regardless of whether one is in the public sector or in the private sector. I would urge the Government to consider how the external economy can be taken into account in a measure of overall economic activity. There are basically two concepts, the Gross National Product (GNP) or GDP plus factor income from abroad, which I shall call GDP plus, for short. At present, neither of these are computed in real terms, so we do not at this present time know the real growth rate of either GNP or this other term called GDP plus factor income from abroad. As the discussion is quite technical, I would not want to elaborate here in Parliament. But I realise that there are a number of statistical difficulties in doing so and that very few countries, for example, compute this concept of GDP plus the factor income from abroad, which I believe is really the best measure that we can have of the overall economic activity of our domestic economy plus the external economy; in other words, the first wing as well as the second wing.”
“Sir, thank you for letting me speak. Singapore's regionalisation effort intensified in the 1990s. Although Singapore-based companies have been expanding overseas for decades, Senior Minister's speech in 1993, regarding the need for Singapore to develop a second wing gave a major thrust to regionalisation. We now know quite a bit about the external economy. For example, we know that the size of the external economy has continued to grow, and that it is now roughly one-tenth of the domestic economy. We also know that Singapore's earnings from the external economy, as a proportion of total income, has also increased to 14% in 1997. We know, for example, the distribution of overseas investments in terms of region and activity. But what we need is a clearer picture of the extent of benefit to the domestic economy of our regionalisation efforts. I recall that this was the raison d'etre for regionalisation. There must be clear and direct positive linkages to Singapore. I would therefore like to suggest that because of the increasing importance of the external economy, our indicators of the economic performance should include the performance of the external economy as well as that of the domestic economy. For example, in the current crisis, what has been the rate of growth of the external economy? What about in boom times? A case in point is the Hong Kong economy. In the 1970s and 1980s, the average annual growth rates of Hong Kong and Singapore were roughly the same 9.5% in the 1970s and about 7.5% in the 1980s. However, Hong Kong's average annual growth rate in the 1990s was 5.1% compared to Singapore's 8.4%. But is this an indication that Hong Kong has become less economically vibrant than Singapore? I would suggest not.”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“National service for men? Is it more than that? I would urge the Government to define the parameters in order to give the discussion a better focus. While welcoming foreign talent and making it easier for them to work and live here, the Government should also spell out at the same time the privileges and responsibilities of Singapore citizenship. Foreign talent and citizenship are two sides of the same coin. Both have important contributions to make to Singapore, economically, socially and culturally. Both define the essence of Singapore, its cosmopolitanism, its ancientness, that which makes our country and culture uniquely Singapore. The Singapore 21 Committee, of which I am a member, will consider this issue. But it would be good if the Government could, at some point, elaborate on what it means to be a Singaporean.”
“Sir, I beg to move, That the total sum to be allocated for Head V of the Main Estimates be reduced by $100. Sir, the Prime Minister, during his National Day Rally Speech last year, discussed the reasons for a greater inflow of foreign talent. It is to continue to develop Singapore into a dynamic, vibrant city state, an important node in the network of global cities such as New York and London. However, the announcement of the foreign talent policy has set off some disquiet in Singapore. Concerns expressed range from whether foreigners will take away our jobs, or our children's jobs, to whether this will result in landed property and cars being even more out of reach of the ordinary Singaporean. I agree with the importance of attracting foreign talent into Singapore and they will augment our limited human resources. This policy has benefited us in the past, and will benefit us in the future. Some of the foreign talent will leave after a short stay while others will sink their roots here and obtain either permanent residence or Singapore citizenship. When they adopt citizenship, they are every bit a Singaporean, as those of us who are born and who grew up here. I believe that part of this disquiet stems from uncertainty as to what it means to be a Singaporean as distinct from a foreigner in Singapore. What are the rights and privileges of Singapore citizenship? Is it merely the right to vote? Is it eligibility for subsidized HDB housing? But what about those whose income levels are above the ceiling and do not qualify? Does it include the promise of Government funding for basic education and retraining so that local talent can be developed and fulfilled, utilized to its maximum potential? What are the obligations and responsibilities of citizenship?”
“There is no need for us to suffer unnecessarily this time around.”
“Just like an investor, an undue concentration in any one sector or market could cause us to be vulnerable to upturns and downturns in that sector or market. In this context, I am happy to note that the Minister for Trade and Industry has announced that we would continue to emphasise the continued development of both manufacturing and services as twin engines of growth. Within each sector, there should also be sufficient diversification in terms of industries and export markets in order to develop resilience in our economy. In 1985, the world economy grew by 3% as did the growth in world trade. The US economy slowed down compared to 1984, but still grew by 2.4%. In other words, in 1985, the external environment was not unfavourable. But in spite of that, Singapore suffered a recession. One main reason was because of the 43% increase in unit labour cost during 1980-1984 which caused an erosion of competitiveness domestically and this coincided with the slump in external demand in the key oil and marine-related industries. In addition, fiscal policies had a contractionary effect, and there was a slump in the property market. The lesson we learn from the 1985 recession is the importance of sustaining domestic competitiveness. The 43% rise in unit labour cost in 1980-1984 was one major factor which tipped the scales and caused the recession instead of a mere slowdown as occurred in 1975. In short, the recipe for developing resilience is sustained competitiveness combined with diversification. To conclude, while I agree with the main thrust of the Budget, I hope that the Government will indeed not hesitate to respond with off-Budget measures if the need arises. I also hope that the Government will not consider 2.5% growth too high to activate such off-Budget measures.”
“It has occurred since 1990, except for the year 1996, and I would urge the Government that it does not happen for this particular year. My last point is that one of the major lessons that we can learn from this slowdown is the need to develop resilience in the face of international economic shocks. The current slowdown is a painful reminder that there is no guarantee of economic growth in any economic system, whether capitalist or planned. The global economy will continue to exhibit cycles of booms and recessions. It will also occasionally be subject to shocks, which by definition are unanticipated. The Singapore economy has experienced an economic slowdown only twice since independence - in 1975, where growth was 4.1%, and in 1985, with a growth rate of -1.6%. The world recession which began in 1974 worsened in the first half of 1975. The OECD growth rate for 1975 was -2�%. World trade in real terms declined by 12% in 1975, and the volume of imports by OECD countries fell by 10%. And yet in spite of the world recession, the Singapore economy grew by 4.1%. This was in large part due to the diversification of the economy. While manufacturing declined by 2%, the services sectors, in particular, transport, storage and communication; and finance and business services sector, provided 88% of the growth in GDP in 1975. Similarly, in this current economic slowdown, it is expected that those sectors with final output destined for the US and Europe, namely, manufacturing will fare better than sectors which are regionally-oriented, namely, services such as tourism, retail and healthcare. The lesson we learn from this comparison is the importance of diversification, in terms of sectors and markets.”
“Consider, for example, the unit business cost index of manufacturing. It is noteworthy that of its three components (unit labour cost, services cost and Government rates and fees), it is the Government rates and fees component which has increased the fastest since 1988. While the unit business cost index as a whole has increased by 26%, Government rates and fees, which include property tax payments, increased by 93%, or nearly doubled since 1988. While businesses are all scrambling to cut costs this year, Government charges should not contribute to costs. In as much as wages still constitute a major portion of domestic cost, the NWC recommendations this year become even more important in cost determination. The decision to freeze the salaries of Ministers and top civil servants was a significant gesture in this regard, both politically and as a signal for caution and restraint in wage increases this year. The Government's estimated budget invariably errs on the conservative side. In other words, except for 1996, the actual budget surplus, since the new system of accounting was published from 1990, has been larger than the estimated budget surplus. In today's context, this is not a welcome trend. The economy does not need any additional fiscal contraction from larger-than-anticipated budget surpluses. I would urge the Government to be more accurate in its budgeting this year. If the economy grows faster than anticipated in the budget planning and revenue increases, then the Government should correspondingly increase expenditure. Otherwise, actual budget surplus could well be 2.5% or even 3%, well above the estimated surplus of 1.7% simply because of budgeting inaccuracy.”
“The off-Budget measures that the Government could adopt to stimulate the economy and help businesses include: a corporate tax rebate, a further individual income tax rebate, the granting of further concessions in property tax, for example, in the form of rebates, reduction of stamp duty, or a rebate, for property purchases and share transactions. Needless to say, the magnitude of the cost-cutting off-Budget measures will depend on the severity of the downturn. The more severe the downturn, the greater the cost-cutting measure. There is yet another aspect to consider, and that is, when would these off-Budget measures occur? Would they be implemented fast enough? Or would it be a case of too little, too late? The Minister has stated that "the situation will be closely monitored." This is of utmost importance in the next few months. Mr Inderjit Singh has alluded to a perception gap between the Government's forecast on the one hand, and the views in the business community on the other. By the time the first quarter economic results come out, it could well be too late. The Department of Statistics might need to work doubly hard to churn out monthly statistics fast enough in order that the Government can keep track of the pulse of the economy. In addition to hard statistical data, extensive and frequent consultations with various sectors of the business community are in order, so that the Government is ready to act, when necessary. Let us not be caught flat-footed again, as we were in 1985. Regardless of whether off-Budget measures are implemented or not, the Government should implement an immediate freeze on public sector cost increases. Government rates and fees are one important component of business costs.”
“There are two reasons for doing so. First, I do not see the need to go through a 2.5%, or even a 2% growth this year, because it would be due largely to the contagion effect of the Asian financial crisis, and not to weaknesses in our own domestic economic fundamentals. Yes, I agree, and I quote, that "our tax rates remain competitive and no major tax changes will be made against a background of declining revenue collections and rising development expenditures." But no amount of competitiveness in tax rates and rising development expenditures can solve the immediate business problems of high interest rates and low demand, and possibly, the inability to collect trade credit from neighbouring countries; and because businesses are in trouble, employees get retrenched. Second, the Minister has further stated that it is important to have a budget surplus in order to continue building our financial reserves. I totally agree with this philosophy. But I see no harm in further reducing the surplus this year, in order to bolster the economy. To put things in perspective. The estimated revenue loss of the 5% income tax rebate is $130 million. The revenue loss from the 15% property tax rebate for commercial and industrial properties is estimated to be $145 million. Suppose these rebates were to be doubled, in other words, you have a further 5% income tax rebate and a further 15% property tax rebate. The additional revenue loss would be less than $300 million. The estimated budget surplus is $2.68 billion. In short, as the Minister has said, we have enough resources to activate further off-Budget measures.”
“The business community has expressed disappointment regarding this, particularly since the recently announced Hong Kong budget contained a wide range of tax cuts, including a reduction in the corporate income tax rate, a freezing of most government fees, a reduction in property tax and in stamp duty on share transactions. And all this when the forecast for the Hong Kong economy is 3.5%, which is exactly in the middle of the range forecasted for Singapore. I agree that there is no need for major tax cuts, but provided growth is within the upper half of the range. If, indeed, the growth rate this year is about 4% or even higher, then a reduced, small budget surplus with no major tax cuts is entirely appropriate. A 4% growth rate will mean that some companies will be forced to downsize, retrench, merge or adopt drastic consolidation measures. But that is part of commercial risk. There are upsides and there are downsides in business. Businesses experienced a very good bull run since 1987. And these two years - 1998, maybe 1999 - can be viewed as a consolidation phase after 10 years of uninterrupted solid growth. However, if the growth rate for the economy is heading towards 2.5% or lower, then I do believe that the Government should adopt more measures to stimulate the economy. In other words, the Budget can remain as it is. But where I differ with the Government is the threshold for the activation of off-Budget measures to stimulate the economy. The Minister for Finance seems to imply that major stimulus initiatives will only be contemplated if there is an actual recession, ie, a decline to negative growth. I would argue for a higher threshold. In other words, a positive but low growth rate of 2.5% or below should be sufficient to implement further off-Budget measures.”
“Mr Speaker, Sir, the official GDP forecast for this year has a very wide range, 2.5% to 4.5%. This is understandable because of the uncertainties in the regional environment. However, there is a large difference between a growth rate of 2.5%, and that of 4.5%. This difference in growth rates could be translated into significant differences in retrenchments, in bankruptcies and in economic hardship in general. There are four main features of this year's Budget. First, it is a conservative budget aimed at achieving a small surplus. Second, there are no major tax cuts. Third, there is an increase in development expenditure. And fourth, there are tax incentives to promote the development of specific industries, particularly in the finance sector. I agree that the budget surplus should be reduced during a year of projected economic slowdown. This is in part due to the increase in development expenditure from 6.3% of GDP in fiscal year 1997 to 7.5% in fiscal year 1998, which is entirely appropriate at this time, for three reasons: to continue our efforts in improving our medium to long-term economic capabilities; to take advantage of cheaper prices, for example, in land reclamation; and in light of the expected slowdown in private fixed capital formation, to boost investment expenditure by means of public sector capital formation. The current emphasis now is to further develop the financial sector, without at the same time reducing the importance of manufacturing, and the fiscal incentives offered for such activities as fund management are in line with this strategy. However, the most significant aspect of the Budget is that there are no major tax cuts to stimulate the sagging economy and to help businesses.”
“In light of public accountability, would the Government make the accounts of the holding companies public and transparent, for example, Temasek Holdings?”
“This is where I think there is actually not very much knowledge regarding Temasek Holdings and the companies that Temasek Holdings owns. But as far as I know, Temasek Holdings actually does have substantial shares in quite a number of GLCs, the extent of which I really do not know. So because of Temasek Holdings' share, many of these companies actually are seen as Government-linked. I think my question really is: is it possible to cut off the link from the Government so that these companies are no longer Government-linked companies but become truly private companies?”
“In so far as there are holding companies, which are fully owned by the Government, would also the full divestment policy of the Government also mean the relinquishment of control of some of these holding companies, so that for the GLCs, for which these holding companies have substantial shares, that these become truly private companies where the Government has no say in terms of management and control?”
“As far as I know, I think Temasek Holdings actually holds a substantial number of shares in many of the companies that you have mentioned. To that extent, Temasek Holdings actually would have a substantial say in terms of the management direction of the company.”
“Sir, I may be wrong, but it would seem to me that the shares of many of these GLCs belong to holding companies that are in turn actually owned by the Government.”