Lee Yock Suan
Singapore
“The position will be clear when the regulations have been drafted. Right now we are debating it in the absence of actual wording of the regulations. The regulations will be fair, they are meant to maintain a level playing field, and we should wait for the regulations before we pass judgement. The intention is not to go after everybody.”
“I think the Member will be aware that Internet is a very dangerous place. We can have all kinds of poison letters and they will just spread like wild fire. So we must have some means to try and minimise this and make sure that everything is orderly and fair.”
“The other Members have no problem supporting the Bill, including Mr Chiam. I think the position is about 95% clear. 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 Yock Suan].”
“Then we will have to see the actual situation. But, as I said, the intention is to go after the popular sites, the main sites of parties and non-party political sites. If it is an individual, eg, a young man posting up his own site and saying "These are my views", we are not going to go after those people.”
“The intention is to make the rules clear for the main parties involved in the contest, in other words, the party websites. These are the areas we are mainly after.”
“I thank Mr Chiam for reminding me about his question. On listening to his speech, I was under the impression that he was asking whether this ban on opinion polls applies to the mass media. The answer is yes, it applies to all media, not just the Internet but also newspapers, TV and so on. Thank you for pointing this out.”
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“Mr Deputy Speaker, Sir, I am not saying that we will not consider the various possibilities. I am saying that we will have to bear in mind the priorities and if they are satisfied, then we will look at other possibilities.”
“Mr Deputy Speaker, Sir, I think the better approach would be to try not to touch the CPF savings if there are other alternatives. My position is that we should bear in mind the priorities. Having done so, and if they are satisfied, then we can look at other possibilities.”
“Sir, my answer will apply to that situation as well,”
“It is Government's policy to encourage highly skilled workers to be recruited not only from Hongkong and Macau but also from other Asian countries and to offer such workers permanent residence if they are found suitable and can blend into our society. Unfortunately, not many Singaporeans are willing to acquire construction skills and make a career in the industry. It is therefore unavoidable that we have to rely on foreign workers to supplement our limited pool of local construction workers. Hongkong and Macau are good sources of highly-skilled workers for construction and other trades. With their wage levels higher than Singapore's, they will not depress Singapore wages as when we rely on workers from low-wage countries. We are aware that Singapore contractors are not enthusiastic over their wages. table - EVIDENCE OF LAND VALUE (Cols. 93 - 94) Annex I - PRE-PRIMARY AND PRIMARY I REGISTRATION EXERCISE 1985 (Cols. 95 - 96) Annex II - ESTIMATED NUMBERS FOR THE PROPOSED 1985 REGISTRATION SCHEME (Cols. 97 - 98)”
“Sir, may I say that the Member for Anson is completely wrong in his statement. The actual practice is - and I know of several cases which have come to my attention so far in my three months in the Ministry - that the employer's written submission is given to the employee, if need be. In fact, my conciliation officers, have called up both parties so that they can talk together with the conciliation officer, with a view to reaching a settlement. What better way than through direct discussion. So there is no question of our hiding information about why we decide one way or the other. The whole thing is done fairly and openly.”
“This will undermine efforts to upgrade our economy and increase productivity through mechanization and automation. In the construction sector, it will hamper efforts to build up a permanent core of skilled local construction workers. To keep up the pressure on upgrading and to reduce dependence on unskilled and cheap foreign workers, it is therefore necessary for the increase to proceed as soon as appropriate. Sir, there are one or two points on the CPF which I have not fully answered. The Member for Boon Lay raised this question of the interest on late CPF payments. I think this issue was raised in the House previously and an answer was given. The reason why the CPF Board has not been crediting part of this interest into member's account is that it is in the nature of a fine on the employers. It is meant to defray the expenses of the CPF Board in recovering the late payments on behalf of the members. Nevertheless, considering the appeals by the hon. Member and by the public, I have asked the CPF Board to credit interest at 61/2% per annum to the members' accounts when the late payments and penalty interest are received. This will be with effect from 1st January 1985. Sir, I hope I have answered all the questions. If I have missed out any item, will Members please bring them up now?”
“We should work within the NWC system and try to improve on it, to make it more responsive to market forces rather than phase out NWC at this stage. We should not discount the contributions made by the NWC to the peaceful industrial relations climate and the orderly wage increases which we enjoy. It should be possible to make the NWC system work to the mutual benefit of both employers and employees. The NWC recommendations are only guidelines which are wide enough to cover a broad spectrum of companies. Moreover, actual wage agreements can depart from these guidelines. Employers and unions only need to convince one another that such departure is necessary because of the peculiar circumstances affecting the firms or the industry in which they operate. The other announcement, Sir, I want to make concerns the problem of the levy on foreign workers. As you know, Sir, on the 1st October 1984, a flat levy of $200 per month was imposed on foreign workers other than domestic servants on the levy scheme in place of the then 30% ad valorem levy. The flat levy was scheduled to increase by $50 per month every six months as follows: $250 per month from 1st April 1985; $300 per month from 1st October 1985; $350 per month from 1st April 1986. In view of the current economic outlook and representation from employers, the Government has decided to defer by six months the increases in the levy sheduled to begin from 1st April 1985. The scheduled increase will be reviewed in six months' time. The purpose of the levy is to ensure that the cost of employing such foreign workers will not be less than that of employing Singaporeans and permanent residents. It is to discourage employers from resorting to indiscriminate recruitment of such foreign workers.”
“So whether it is dismissals which are provided in the law, or whether it is terminations, if there is reason to believe that the employee has not been properly treated by the employer, such that the employer has used some excuse to terminate him, the employee can write in to the Ministry, and I can assure everyone that my Ministry will look into the case thoroughly and make sure that the interests of workers are well protected. Sir, we are a small country. Our laws must be such that the framework for investment remains attractive. We can write the most iron-clad provisions into our labour laws to protect the workers. But if, in the end, we scare away the investors, then these laws are just empty pieces of paper. So we must get our priorities right. Sir, as time is running short, l would just like to respond to two other points. One concerns the National Wages Council. This was raised by the Member for Boon Lay during the Budget debate and no reply has been given. I share the view of the Member that the NWC continues to have a useful role to play. The Council was set up 13 years ago to facilitate the transition from a labour-surplus to a labour-scarce economy. It has performed its function well and has contributed to industrial harmony and orderly wage increases over the years. The NWC has been discussing a proposal from the employer groups to expedite the move towards direct wage bargaining at the enterprise level. This arose because employers believe that there are certain shortcomings with the NWC system. They are apprehensive that the NWC system may have contributed to higher wage costs. While we understand the concern of the employers, I would like to urge all parties involved to examine carefully any proposal to phase out the NWC.”
“Our labour laws are fair. They provide the minimum conditions for employers and employees to enter into a contract of employment. I do not think, Sir, we want to over-provide in our laws. We must leave room for employers and employees to come to agreement themselves, to leave room for employers to show concern and care for the welfare of their employees. Now, this Section 14 has been mentioned which provides for appeals to be made in cases where employees feel they have been dismissed without proper reason or excuse. The appeal is made to the Ministry of Labour. My officers will look into it thoroughly. We will request the employer to explain their background, their reasons, justification, whether they have conducted due inquiry and so forth. 3.45 pm [Mr Deputy Speaker in the Chair] This particular case that he mentioned, Sir, is something which my Ministry is looking into carefully. It takes time. He mentioned two months. It shows how carefully we are studying the case. If there is a just cause for the employee's appeal, the Government will then order the employer to compensate the employee or to reinstate him. But we will have to look into the facts fully. The Member's usual line is that we must refer this matter to a tribunal. There must always be contention, and so on. But in these cases, my officers do their jobs to the best of their ability. It is a question of administrative policy. It is not a question of legal matters, commissions, and so on. It is a question of whether the employer has treated the employee fairly.”
“Mr Speaker, Sir, I think Members by now are very familiar with the story and the line that come out from the Member for Anson. Sir, there are always bad apples in any basket. I do not know why the Member is always associating himself with the bad apples and thereby generalizing that, "Oh, our laws are terrible, we are not looking after the workers' interest" and so forth, and making a big song and dance out of it. An hon. Member: He is a bad apple.”
“Sir, I have a write-up here on maritime law which I could show the Member afterwards if he wishes. But the way I read it, it is not applicable because with ships there are a number of other considerations. The owner is not on board the ship. The cargo might not be paid and so on. Under maritime law, I understand, wages rank first for very special reasons. But that might not apply to, say, a situation in Singapore, a landed situation.”
“The third category is workmen's compensation for injuries and so on. The fourth category is pay for leave that has not been taken. The fifth category is CPF contributions. The Attorney-General has advised that where an employer has deducted CPF from his employee's pay and failed to pay into CPF, that money still ranks as wages. So it is really No. 2 on that priority list. On the other hand, the employer's CPF ranks No. 5. The question is whether we want to move this No. 5 up to No. 2. Personally, I feel there is no strong reason because all the other categories, except the first one, are really dues to employees, whether it is wages or workmen's compensation and so on. There is really no advantage in moving this up. The Member for Jalan Kayu mentioned this possibility of applying the maritime law. I am not familiar with that law but I do not think it is quite applicable to a landed situation, because with a ship you have special considerations.”
“Sir, the Member will have every chance to make his point afterwards. Could I request that I be allowed to continue in peace without interruption? In view of the problems and the concern, the CPF Board is trying to see how it could improve on the collection. For example, the Board is arranging with the Attorney-General for his approval of the request for prosecution, which will be forthcoming within a week. Previously, it took longer than that, except for urgent cases. Now we are trying to expedite the legal process. The CPF Board is also asking the Subordinate Courts to arrange for earlier hearings. One of the problems we must realize is that the CPF Board must weigh the pros and cons of taking action. If you take premature action, you will be just pushing the employer over the brink. If it goes bankrupt, then everybody loses. One further problem is that many of these employers have taken loans from banks and other financial sources which are secured against their machinery, factories and so forth. These creditors have first charge on those assets. This is normal banking practice. I believe this is the situation all over the world but I have to verify this - that when a banker lends money against security of an asset, he is effectively the owner of that asset. He has first claim. We cannot have a situation where his claim is subordinate to some other claim, be it wages or CPF or whatever. This is the problem. So if you push that company over the brink and there is not enough money to pay all the creditors, then the CPF holder gets nothing. But within the legal framework and within the present system, under the Companies Act, in the category of unsecured creditors, the first priority goes to winding-up expenses. The second category is salaries and wages.”
“Whatever it is, the employee himself is alerted. He can make his own choice, and it is a very immediate reaction from the employee. The CPF is doing its best within the legal process, which takes time. If it were a good employer, the employee affected might decide, in that instance, to allow the employer to pay later. That is part of this concept we are promoting - company welfarism, loyalty and so on. But if the employee feels that he cannot accept this underpayment of salary, then it is up to him to decide what action he wants to take.”
“I am just putting it simply to Members that the CPF money is the members' pay. If a worker were suddenly to find that his employer is not paying him, what does he do?”
“If the company does not pay up, the CPF Board will then have to take legal action to get a court order to enforce payment. If, despite this court ruling, the company still does not pay, then the CPF Board may have no choice but to seize the employer's assets for sale to recover the arrears of CPF payment. If need be, the CPF Board can even go after the company's debtors -what are known as garnishee proceedings, in legal jargon; in other words, to go after the debtors of the company to get them to pay to the CPF. Unfortunately, all this process takes time. The courts are busy and they take time to hear the cases and so forth. What the CPF Board has done is to inform members within a reasonable period that their employers have not been paying their CPF. Once that is done, the CPF member should be alerted that his employer has been underpaying him. So it is up to him to decide what course of action he wants to take. It is as if the employer has not been paying him wages or underpaying his wages. He might go and bang at the door of the personnel manager, or whatever other action. In the extreme case, he might even decide to leave the company because the employee is in a sense offering his services to the company. If the company is a good employer, has good welfare benefits -”
“The Member for Kebun Baru was concerned that if the Government were to allow CPF for purchase of more than one property, then we might cause overheating of the property market. In actual fact, the amount of money that could be released from CPF into the property market is limited by the amount of savings that people have. As of now, they can invest all their money in one property, one big house or whatever; or they could invest the same sum of money in several properties. Instead of buying a big house, this member may decide to buy a small terrace house because he has a small family. He does not need a luxurious house. He might then buy another house to rent out. In fact, it is an improvement of the scheme and does not necessarily lead to further heating of the property market. Of course, members will have to use their judgment as to when is the best time to buy -whether it is now or later. But, as in any investment, there must be some risks although in the Singapore context, with our land shortage, we expect that investment in properties will be a good hedge against inflation and will be a good investment in the long run. Sir, the Member for Jalan Kayu and the Member for Boon Lay touched on the problem that we have been experiencing with some employers who have been late in their payment of CPF on behalf of their members. If Members recall, the CPF Board has issued a very comprehensive statement on this problem. Let me just explain the mechanism. Sir, the CPF already has a very comprehensive enforcement system. All the accounts are computerized. As soon as any company is late in payment, the CPF computer will detect this late payment and a letter of demand will be sent to the company to pay up.”
“15 pm There was also a suggestion that we use CPF for renovation. The problem here, apart from this basic factor of preserving the quantum of the savings for old age security, is that it will be very difficult for CPF to administer the scheme because, what constitutes renovation? Is it furnishing? Is it changing of a window? What is it? But that is not the basic objection. The basic objection is that we should first look towards providing financial security in old age and home ownership before we think of other possibilities. How much time do I have, Sir?”
“So before Members start jumping up and suggesting all kinds of new ways to use the money, just look at the quantum of the savings. The Member for Toa Payoh has already mentioned that the CPF savings are needed to pay for HDB flats. So we should have our priorities right. First and foremost, the objective of the CPF scheme is for old age financial security. This is the most important basis of the CPF scheme and we should not forget that. Secondly, we want him to own a home; priority No. 2. So we must make sure these two are assured first before we even consider other possibilities. Various Members have spoken eloquently on why we should release CPF money for education, that it is a form of investment, it is good for filial piety, and so on. Members have also given the reasons which were explained before in this House. So I will not repeat them. But before we look at that possibility, we should take up the proposal of the Minister for Finance the other day - that one way is for the Government to offer interest-free loans to students going for tertiary education in our Universities. I think that is an excellent idea and something we should look into. Because it means the students, the young men and young ladies, will be able to finance their own tertiary education without taxing their poor parents who need the CPF savings for their old age. As of now, already there are many scholar-ship schemes and bursaries which have not been fully used. Perhaps the PSC should be more liberal. It could be that there are not many takers. But if it is because the PSC has been too strict, then I would suggest that they should really liberalize and provide more bursaries, more scholarships, more loans (interest-free loans), before we touch the CPF money. 3.”
“First and foremost, Sir, I think he should get his sums straight about CPF. He was so confused with the numbers that I do not know whether Members could understand him - about gross salary $1,000 and deduct $250, and therefore the take-home pay is $500. Perhaps he should go back and do the sums first. But the basic point is that CPF is workers' pay. If you cut it, if you reduce the CPF rate, you are going to reduce the workers' pay. It is as simple as that. It is no use talking about equilibrium, this, that and the other. If you give the employers half a chance, I think they will try and reduce costs. Sir, I would like now to turn to some of the other issues raised by hon. Members. Members seem to have sensed that the Government no,w has a more liberal mood towards CPF and are trying to introduce or suggest all kinds of new uses for CPF funds. Before we proceed further, maybe I should remind Members that they should really take a look at the breakdown of CPF savings of different members at this point of time. What is the real situation as far as the quantum of savings in members' accounts is concerned? As at 31st December, 1984, out of about 900,000 active members on the CPF list, 33% had less than $10,000 in their accounts. This includes the amounts withdrawn for HDB, for SBS, and so forth. 55% had less than $20,000; 69% had less than $30,000, 78% had less than $40,000. If you compare this to what I have mentioned just now, about the sum you need for old age financial security, you will see that we are still quite far away from that financial assurance upon retirement for existing members. If you exclude amounts withdrawn for HDB, the proportion is even more striking -88% had less than $40,000 in their accounts.”
“Another point I want to make is that, contrary to the unfounded allegation that the Government is trying to hold back the money, in actual fact the Government is thinking of how to liberalize on the use and management of these funds, As the First Deputy Prime Minister has mentioned, we are thinking of allowing the use of CPF to purchase more than one residential property, perhaps even commercial property, perhaps shares, and other assets. But even, as of now, with the various schemes that we have, the CPF money is, in fact, not locked up. Vast sums have been withdrawn by members to buy HDB flats. Do not forget this point. This is the reason why many members are able to furnish their flats lavishly; they are able to buy cars; they are able to go on travel. Because they have been using the CPF money to finance the homes that they own. So they have money to spare, which they are using for various other purpose& So the money is actually not locked up. If I may now turn, Sir, to one other point which the Member for Potong Pasir made this morning. It was his idea that we should reduce the CPF rate from 50% to 40%. He himself has confirmed that this reduction of 10% will come from the employer's portion as well as the employee's portion. This means that he is advocating a reduction in the wage packet of the ordinary worker. I do not think our Singaporean worker will thank him for it. As the Member for Toa Payoh has explained this morning, our Singaporean workers need this CPF money in order to pay for their HDB flats, and even at 50% rate they can barely make it to own a 3-room flat at Woodlands. If it were a 3-room flat in a more central location, already there will be a problem. And here, this Member for Potong Pasir is advocating that we should cut down the CPF rate.”
“Sir, I would like to emphasize that all these points that have been discussed so far are just ideas at this stage. My Ministry is still studying the problem. It is a very complex problem and we will try and come up with a proposal by next year. The proposal will be thoroughly discussed before a decision is reached. Some Members in this House, when this matter was being debated, also brought up this idea of old money and new money. In other words, should you distinguish between CPF money put in at a certain date from that put in at a later date? That is something we will have to look into. There is also the question that there are many people who are not yet in the labour market, who have no CPF savings yet. These are the younger workers. The Government will also have to look at them. In other words, the Government has to see all the factors, not just those I enumerated, before we come up with a proposal. I would like to mention also, Sir, that my Ministry is considering introducing a dependant's protection insurance scheme. Some Members mentioned this morning that they would be in favour of some insurance scheme to protect the CPF members. My Ministry is examining the merits and details of such a scheme. The idea is to provide a minimum level of life insurance for members to protect their dependants against the risk of the member's premature death. The premiums payable will come out of the Special Account of the members. We are still looking at the details. So I hope this answers the pleas made by some Members that we should improve on the CPF scheme and make use of CPF for various purposes. This is one such scheme we are studying, Sir.”
“There is no record of this because the Government does not collect these records. But the fact is, it does happen. There are some people who need to be assisted, a minority group, maybe a very small group, to look after their savings. They may have the illusion that this CPF saving which they will get is a very big sum, but in actual fact that sum has to last them for the rest of their lives. I am not saying that the Government should try and protect him completely, to make sure that he is provided completely for the rest of his life; maybe only partially. But we should at least try and look into the problem to see how we can provide for this group of people, without penalizing the majority who are prudent and who know how to manage their own funds. The Prime Minister has also mentioned in this press conference, which was alluded to earlier, that there will be many people who are. reaching their retirement age. These are people who are aged 50 and above, aged 45 and above. These are people who were earning relatively low salaries in the earlier years when pay levels were low. In those years the CPF rate was also low. So their CPF savings as of now are, in fact, quite small. For this group of people we will have to give special consideration because the sum of $25,000 is just too big to be retained. And this group of people, in total numbers, is small in comparison with the whole population. This is what the Prime Minister meant. He said that if this idea of a minimum sum retained was accepted, then it should be implemented in stages. Maybe those above 50 should not have any sum held back, those who are younger maybe smaller sums, and so on, in gradual stages. This is really what he meant. So please do not misunderstand him and misquote him.”
“He must still manage his savings carefully in order that this sum can last him through his twilight years. I know what Members are thinking. Most of us can look after our own savings. I agree. But I think many of us have come across instances of retired persons who have withdrawn their meagre CPF savings and spent it straightaway on television, on videos, on trips to China, maybe speculated on the stock market, and then eventually ended up dependent on their relatives and families. Many of us have heard of or experienced such instances.”
“If we assume that the CPF rate just equals inflation - in fact, it is greater than inflation, but for simplicity, we assume that the CPF rate is equal to inflation - and if there is no wage increase, which is most unlikely, then this figure of $90,000 will be his real savings in CPF at age 55. 1 am not saying this will be the actual figure. The actual figure will probably be bigger because the CPF rate is higher than inflation and there will also be actual wage increases. I am just using this figure, Sir, for easy comprehension. If a Member can follow my calculations mentally, he will be more convinced of what I am trying to tell him. Looking at these figures alone, in real terms, this young man earning $500 per month today would have by the age 55 a sum of the order of $90,000. So this young man will be well provided for. He will be able to own a 3-room flat costing about $40,000. He will be able to put aside $10,000 for Medisave. He will still have savings of $40,000 to live on. So this CPF scheme is a wonderful scheme. He has saved over the years. He has got this much money. 3.00 pm The question then is, looking at this figure of $40,000 that he has got left, does he realize that, at age 55, he may still live for another 20 years? Some may not. Some may live even longer. But on the average, maybe up to age 75. If that is the case, in order to live for 20 years, even at $200 per month to live on, a very modest sum, you need $2,400 per year. You multiply that by 20 years, you will need, in fact, $48,000 to last him from age 55 to age 75. So the point I am making is that the Singaporean worker starting out today will be well provided for, but not so well that he can afford to squander away his money.”
“But recently the Prime Minister has said that he is not optimistic that we will be able to achieve 100% home ownership. There may be a small minority, maybe 10-15%, who may not be able to achieve this objective. This is a small group of people whom we have to take care of to help them manage their savings, to make sure that they will have enough savings after retirement for their financial security. Whilst we want to do this, Sir, the intention is not to penalize the majority. We know that the majority are fully capable of looking after their money. As my colleague has mentioned, Singaporeans are avid savers. So when they withdraw their CPF money, they will probably put it into a bank. But there will be a group, maybe a small group, who may not be able to manage their own savings. So this small group may require assistance, without penalizing the rest. If there is not enough provision made for this group, they may end up as a burden on their relatives and maybe eventually on the State. Sir, let me just give you some numbers to view this sum of $25,000 because, if we just look at the figure "$25,000", it looks like a big number. Let us consider a young man who starts work today. For example, he is 25 years old today. By the time he is 55, he would have worked for 30 years. If we assume that today his salary is $500 per month, which is a very normal pay, his CPF per month would be $250, 50% of $500. For one year, therefore, he would have $3,000 CPF savings. If we multiply this figure of $3,000 by 30 years, the time that he would be working till 55, we would get a figure of $90,000, a very big figure. Let me explain. This is looking at it in a very simplistic view.”
“Much of what I am going to say is not new. It has been reported. It has been discussed in this Parliament. But I want to take this opportunity to spend a few minutes on explaining what the issue is all about. As I have said, the whole thing started with the problem of the aged which is coming within the next 20-30 years. All these are contained in the Howe Yoon Chong Report. This Report was meant only for discussion, both inside this House and outside, to get public response. One of the proposals in the Report was to defer the withdrawal age from 55 to 60. As people work longer and so on, the idea is to postpone this withdrawal age. But because of the very strong negative reactions from both the public and from Members of the House, the former Minister for Labour has given some ideas about what could be a possible solution. These are ideas at this stage. The idea that he indicated was that perhaps a minimum sum could be held back, say, $25,000. This figure has not been fixed, Anything above that amount can be withdrawn completely. During the elections, the Prime Minister further clarified that this minimum sum includes the value of the property that you buy. So if you own an HDB flat and has already paid up to the sum of $25,000, then there is no need to hold back any more CPF savings. The whole sum in excess of this $25,000 or the value of the HDB flat can be withdrawn at age 55. In the heat of the elections, many people have missed this point because it is a very significant point. As you know, Sir, the Government is aiming for 100% home ownership. If, in fact, we do achieve that, then where is the sum held back? Because everybody would have invested some CPF savings in their properties to the extent of this amount.”
“In the Howe Yoon Chong Report, it has been projected that (if we consider the different age groups, those who are economically active, ie, people between the ages of 15-64 as one group, and then we have those who are the aged, aged 65 and above, who are the ones most likely to have left employment) as of the year 1980, there were 15 economically active persons to one person aged 65 and above. As our birth rate declines and the population grows older, this ratio is going to change from 15:1 to 10:1 in the year 2000 and to 3:1 in the year 2030. This is the problem that the Prime Minister was alluding to. He was concerned that with so many aged people in our midst, there will be a problem of financial security in old age. This is the basic concern. It is not because the Government is trying to postpone the withdrawal age, not because the Government is concerned about CPF withdrawals causing inflation, but because being a farsighted and responsible politician and Prime Minister, he has forewarned the people of this problem. What it means is that, as the population ages, there will be fewer and fewer working Singaporeans to support every member who is aged. Furthermore, people are living a longer life. The life expectancy will probably go up to about 70-75 years, maybe longer. And this prolonging of life may come about through medical advances, through modern medical techniques, such that people are kept alive at high medical costs. This is the problem, a very serious and genuine problem, which we will have to face up to in the years to come. This is what the Prime Minister was referring to. Since so much confusion has been created over this issue, I would now like to take a few minutes just to explain the various aspects of this CPF withdrawal age problem.”
“This is one of the claims made by him. I would like to remind him that he still has to decide on the offer by the Minister for National Development to build the four blocks of flats. The real increase in HDB prices came after the severe problems faced by the industry in the years 1979-81 when the construction cost shot up because there was overheating of the industry. And this affected not only HDB flats but also all kinds of properties. I just mentioned this by way of illustration. I do not want to digress into HDB which is not my problem. I just wanted to quote one example to show the kind of ideas he has been led into. His second point is his original claim - today he has shifted his position - but his original claim as reflected in the article is that the Government will not be able to pay the CPF withdrawals because the sums will be very big. I am glad to note that today he has finally accepted our explanation and agreed that the money will be there, and there will be no problem of repayment. But because he thought the Government was afraid it might not be able to pay, he has suggested that the Government was, in fact, raising the CPF rate year by year in order to get more money to pay back the depositors and thereby postponing the issue. There again, it shows how he has not understood the problem. The third point which has already been well answered by my colleague concerns inflation. He claims that because there is going to be inflation, therefore, the Government is trying to delay payment of the CPF and that is why the Government has been discussing this postponement of the withdrawal age. I am afraid, Sir, the Member has misunderstood or misquoted the Prime Minister who was commenting on the problem that will come in the future as our population gets older.”
“I will, don't worry. I am coming to it. But it is obvious from the fact that he was not able even to explain what M1 is. He has not a clue of what he is talking about. And yet, despite this ignorance, or despite wrong advice by people who have been advising him, he has been publishing all these in the Demokrat. I have a copy here, Sir, of the Demokrat dated October/November 1984 which was the issue before the Elections. I think those who have read this, and who do not understand the full facts, would be confused and would be alarmed unnecessarily. I consider this to be a higher irresponsible action on the part of one who claims to be constructive opposition. 2.45 pm Again, this morning he has misquoted what the Prime Minister said during the press conference. I do not know whether he is genuinely not able to understand what the Prime Minister said or his whole frame of mind is such that he is not able to understand the issues. Acting on wrong advice or on ignorance, he has come up with this notion that because the sums to be withdrawn from the CPF many years from now will be very big, that, he has been told, is going to cause inflation. Therefore, he has been going around telling everybody that the Government is trying to delay payment of CPF in order to postpone this day of reckoning. This is the basic premise of his statements today and also of this article in The Demokrat. He has come out with all kinds of preposterous ideas. One point he made here, or the writer made, is the claim that HDB prices have been increased in order to soak up the CPF savings. How preposterous can he be? We all know that from 1979 to 1981, the construction industry was overheated and as a result -”
“Mr Speaker, Sir, first, I would like to thank the Minister for Trade and Industry, who is the real expert here on financial matters, for explaining so clearly what the Member for Potong Pasir is completely ignorant about. I am sorry to have to say so.”
“I would like to stress that while we will be flexible, employers should continue to make efforts to reduce their reliance on unskilled foreign workers. If not, they will only find it even more painful to adjust later on.”
“Thus:- - By this and other statements in the past, employers who require unskilled foreign workers have been given notice of our firm intention to reduce dependence on foreign workers. They have been constantly reminded to upgrade and adjust their operations to prepare for the day when they will not have access to foreign workers. - My Ministry will continue to restrict the number of new foreign workers to be admitted. New recruitments will be allowed only selectively to meet the needs for critical skills or to accommodate temporary shortages, particularly in manufacturing, hotels, shipyards and construction and for domestic help. - Workers with skills valuable to the economy can form part of our permanent workforce and will be allowed to stay longer or given permanent residence if they are suitable. - As for other employers, such as those in the retail and service sector referred to by the Member, my Ministry will, for the time being, be flexible in allowing them to renew the permits of their existing foreign workers particularly those who have skills useful to the economy. No new recruitment of unskilled foreign workers by this sector will however be allowed. This sector basically serves the domestic market and is not subject to international competition. The employers should try harder to recruit local workers and pay appropriate wages to attract them. The Ministry is aware that we will continue to face a tight labour market if economic growth remains strong and productivity improvement is not fast enough. However, with the more flexible repatriation programme, employers who do not have access to the use of foreign workers should have less difficulty in recruiting local workers than if we were to operate the tight repatriation programme as previously scheduled.”
“I would like to take this opportunity to elaborate on the policy, as stated in the recent Budget Statement, that the Government will be more flexible in administering the repatriation of foreign workers. Businessmen and employers should not misconstrue this policy to mean that the Government is reopening the tap to allow more unskilled foreign workers to come in. It is in the repatriation programme for foreign workers that we will be more flexible. The Government recognises that the large number of foreign workers who have been admitted into the country in recent years cannot be phased out abruptly without affecting our economic growth. Hence, the repatriation programme will be more flexibly administered in order not to compound our labour shortage. While recognising the need to be flexible, we should not overlook the adverse social and political consequences of having a large number of such workers in Singapore. Our long-term policy is still to reduce our dependence on unskilled foreign workers. Thus, my Ministry is continuing with the programme of phasing out unskilled, non-traditional-source or NTS workers from the manufacturing sector. The bulk of NTS workers in manufacturing have already left by the end of last year. The remaining ones, who were granted extension until 1986, will be leaving over the next two years - as and when their work permits expire. Except for those who are employed as domestic help and in the construction industry and shipyards, all NTS workers in other sectors have already been repatriated(2). My Ministry will however try to strike a reasonable balance between the long-term goal of reducing dependence on unskilled foreign workers and the need to ensure that repatriation will not affect economic growth.”
“I intend to put this into effect within two to three months. HDB NEW ACCOUNTING SYSTEM (Statement by the Minister for National Development) 11.24am”
“My feeling, based on the feedback that I had from taxi drivers, as I am Chairman of the NTUC Comfort Board of Directors, is that the impact would be large. Hence my suggestions to the Ministry of Communications to review these measures if it fails to achieve the intended objective. I hope I have made my position clear. I also hope my feeling would be proved wrong, instead of the assessment of the Ministry of Communications. Meanwhile, when the measures are put into operations soon, I believe it is the 1st April, I hope that all the taxi drivers and all of us who use taxis will give the scheme a try. Cooperate with the Government and try it out, and let us hope that the intended objective will be achieved. If not, we will urge the Ministry of Communications to review it. That is my stand. Thank you.”
“There is no need for us to borrow externally, and these sources of funds are non-inflationary. The CPF scheme is, in fact, a wonderful scheme. Many countries, Taiwan, Malaysia and others, are trying to copy us. And yet because of the falsehoods and the confusion spread by the Opposition, the CPF has now become a whipping horse of the Government. Mr Speaker, Sir, these are the points I want to make. The Second Deputy Prime Minister (Mr Ong Teng Cheong): Mr Speaker, Sir, the Member for Potong Pasir was not here yesterday when I explained my stand, in as far as the taxi fares and the diesel tax and measures taken by the Ministry of Communications are concerned. So I thought it is necessary that I should explain the point. The Member for Potong Pasir had twisted my words, in the same way as the Member for Anson has done yesterday. But I know the Member for Potong Pasir is new in this House, and he is young, so we will forgive him. Sir, the Member for Potong Pasir repeated the claim that there is a contradiction or differences of view between myself and the Cabinet. We know that that is not true and is incorrect. It is true that the subject has been thoroughly discussed in Cabinet and I agreed wholeheartedly with the decision of the Cabinet that (1) measures will have to be taken to solve the taxi shortage problem, and (2) to increase taxi fares in order to increase the income of taxi drivers, as has been ciamoured by the taxi drivers themselves for some years. The measures finally adopted by the Government will obviously have an impact on taxi drivers. The Ministry of Communications' assessment is that the impact on taxi drivers would be small.”
“But so long as each dollar of CPF money is fully invested and backed by hard reserves which appreciate over time, there is no problem of paying back the CPF money. Our CPF savings are invested carefully in bonds, properties and other assets which are a good hedge against inflation. When the time comes for the CPF to pay back the depositors, these assets will be simply sold to obtain the necessary cash. Where then is the problem of repayment? I hope this has helped to clarify the issue and to show how, in fact, without hard facts and figures, the Member has been misleading the public. The Member for Potong Pasir has further raised the point this morning that CPF contributions should be reduced from 50% to 40%. This is something which is very popular on the surface. But you must realize that CPF is workers' pay. Lower CPF means lower pay for the workers. Is that what the Member wants? I think the Member for Whampoa has already explained very clearly why we need to have high savings, why the CPF rate should not be reduced at this time of great economic uncertainty. We may well need the CPF savings to tide us over a severe world depression, which may be triggered by the world debt crisis. He has further made the point that the lower income group especially are the ones who will require high CPF savings to enable them to purchase HDB flats, for Medisave and for old age security. It is really a paradox that this CPF scheme that we have, which many countries are trying to emulate, has become a whipping horse of the Government. We should realize the full benefits of the CPF scheme. Through CPF we have been able to have yearly surpluses, to have a high savings rate which has enabled us to build and to pump prime the economy even in times of recession.”
“It may be true that with the aging of the population at some point in time, the CPF contributions to the CPF may be less than the amount withdrawn.”
“We request the Member to produce those figures in time so that we can consider them in this House. For the moment, let me just explain the figures that I have to show how he has been misleading the public. The total deposits of members with the CPF as at 31st December 1984 amount to $22.7 billion. The foreign reserves of Singapore as at the same date, 31st December 1984, is about $23 billion. In addition, we have loans to HDB and JTC which amount to $10.8 billion, not counting the others like the loans to PUB, loans to companies and so on. So we do have these foreign reserves of $22.7 billion. We also have local reserves amounting to $10.8 billion, the figures I have just quoted. If you add these two figures alone, it comes to $33.5 billion, which is about 50% more than the sum owing by the CPF to all its members, Therefore, it shows very clearly that Government reserves are much greater than the CPF savings of all its members. Even if today all the CPF depositors were to be allowed to withdraw their entire CPF savings - I am saying "if"; I am not saying that we are going to allow this but if we allow it -there is definitely more than enough money to pay off all the depositors. So do not worry about this. As can be seen from this budget and from previous budgets, the Government has been extremely prudent in its budgetary and reserve management policies. There is absolutely no danger that the Government will be unable to pay back the CPF depositors. So long as we continue to have yearly surpluses as noted by the Member for Rochore and so long as we invest our surpluses in good, strong assets which appreciate over time, there is no question that we will be able to pay back the CPF depositors.”
“Sir, since the Member has made an important allegation, he should have the facts and figures at his fingertips to substantiate the point. He wants the electorate to believe him and these are the points on which he has gone to the elections. So surely the facts and figures must be right there with him for him to produce now rather than trying to delay and avoid the issue. As for HDB pricing, it is not for me to debate with him. I think the Minister for National Development will take him on on his point - within the three - month period during which he has to accept or reject the proposal or offer from the Minister. If Members recall, in fact the Minister has amply explained during the elections why he figures produced by the Member were faulty. But, as I said, my concern here is with the CPF and before I proceed, I just want to know whether he has facts and figures ready to substantiate the point that he made this morning.”
“Sir, although the Member for Potong Pasir claims to be a responsible Opposition Member, he has made unfounded statements both during the elections and in this House, which confuse and mislead the public. One begins to doubt his sincerity. One statement that he has made concerns the pricing of HDB flats. The Member must be still wondering how he can build four blocks of HDB flats at a profit. More likely, he must be considering how he is to get out of the fix he has got himself into. My sympathies with him. The other issue that he has raised this morning concerns the CPF, ie, the Government will be unable to pay back the depositors. Before I proceed, may I ask the Member whether he has ,any facts or figures to substantiate his claim? Would the Member like to reply?”
“Employers and employees are free to agree on terms that are more favourable than those provided in the legislation. Obviously workers who are unionized may be able to negotiate for better terms from their employers than individual workers. Since our labour legislation is adequate to protect workers and is not discriminatory against non-unionized workers in the event of retrenchment, dismissals or labour dispute, there is no necessity to amend the legislation. Appendix I - LIST OF FOREIGN CONTRACTORS AWARDED PUBLIC SECTOR CONSTRUCTION CONTRACTS IN THE LAST 3 YEARS (1982-1984) (Cols. 343 - 344) Appendix II - LIST OF GOVERNMENT-OWNED COMPANIES (Cols. 345 - 348) Appendix III - LIST OF GOVERNMENT-OWNED COMPANIES (Cols. 349 - 354) Appendix IV - 1984 REGISTRATION STATISTICS BY PHASES (Cols. 355 - 356)”
“Maj Fong Sip Chee asked the Acting Minister for Labour (1) the total number of workers who pay their union dues under the 'check-off' scheme; (2) the total amount collected under the scheme for the years 1982, 1983 and 1984; (3) in view of the apparent decline in union membership and the recent remarks by a certain union leader on non-union members, if he will categorically state that non-unionized workers will not be compelled by law to join a trade union; and (4) that in view of the recent statement made by the Second Deputy Prime Minister that non-unionized workers would lose out in the event of retrenchment, if he is satisfied that the existing labour legislation is adequate to protect, and is not discriminatory against non-unionized workers in the event of retrenchment, dismissals or labour disputes; and (5) if he will amend the relevant legislation to ensure adequate protection for non-unionized workers in such eventualities. Mr Lee Yock Suan: As at 31 Jan 85, the number of workers who pay their union dues under the 'check-off' scheme totals 164,995. The amounts collected under the scheme for 1982, 1983 and 1984 are as follows: 1982 - $11,385,602 1983 - $12,015,069 1984 - $10,865,568 Trade unions are organisations formed voluntarily by workers based on the principle of freedom of association. In line with this principle, workers should be given a choice to join or to remain outside a trade union. Non-unionised workers will therefore not be compelled by law to join a trade union. I am satisfied that the existing labour legislation is adequate to protect workers and is not discriminatory against non-unionized workers in the event of retrenchment, dismissals or labour disputes. Labour legislation can only provide for minimum standards.”
“Neither the Central Provident Fund (CPF) Board nor the Singapore Bus Service (SBS) maintain statistics in the format required by the Member. However, we do have statistics which show that as at 31 Jan 85, 49,998 CPF depositors are still holding SBS shares. The amount involved is $50.7 million. Since the inception of the SBS Share Incentive Scheme, 142,909 lots (500 shares per lot) have been purchased by CPF depositors with $71.4m of CPF funds. 41,210 lots have been sold and $20.7 million refunded to the CPFB. The decision to allow depositors to use their CPF savings to acquire shares in SBS is not inconsistent with the objective of the CPF. There is therefore no necessity to rescind the decision. SBS shares- are sound and marketable investments that provide a dividend of 7% per annum and enable their holders to purchase concessionary bus passes. Moreover, CPF depositors who have purchased SBS shares are required to refund their monies to the CPF if and when they sell their shares unless they have attained the withdrawal age. It is therefore as good as keeping their savings in the CPF. PROTECTION FOR NON-UNIONIZED WORKERS 15.”
“Up to 31 Jan 85, 20,166 Central Provident Fund depositors have used their savings to acquire private residential properties. A total of $1,321 million has been withdrawn for this purpose. Residential properties like other investments are subject to varying levels of risk. Their prices and values are determined by market conditions of demand and supply and by the political environment. CPF depositors should be conscious of this when they decide to invest in the property market which is expected to be a good hedge against inflation in the long term. As long as the economy is properly managed and there is political stability, prices of residential properties in Singapore are likely to increase in the long run because of our limited land area, although short-term price fluctuations are unavoidable. ACQUISITION OF SBS SHARES WITH CPF SAVINGS 14. Maj Fong Sip Chee asked the Acting Minister for Labour (1) how many Central Provident Fund (CPF) depositors have used their savings to acquire Singapore Bus Service (1978) Ltd (SBS) shares and the amount involved; (2) how many of them have since sold their shares and accordingly re-credited their CPF accounts and the amount so re-credited; and (3) that in view of the government's repeated reiteration of late that CPF savings are meant for the safeguard of the depositors in their old age, if he will agree that the decision in allowing depositors to use their savings to acquire shares in the SBS was inconsistent with the objective of the CPF in the first instance and if so, will he not take the necessary action to rescind that decision.”
“I am afraid I am not in a position to say yes to that question.”
“I do not know whether the hon. Member is serious in expecting an answer from me right now on an issue like that. I think he is really extending this way beyond the scope of the question. The point is this. It is granted that nobody wants to go to hospital; neither you nor I. But if you do have to go to hospital, there is a preference surely for more privacy, better room and so on. People go out of their way to apply for better wards. I am sure many of these people, if they have a choice between Class B2 at a slightly higher fee and Class C, would prefer Class B2, especially when they are paying only 20% of the public rate. This is the point I am trying to make. 7.15 pm If it were a private hospital and the officer goes there and if a Class C bed is not available, he has a choice. He either waits, which may not be possible in terms of health, or he goes to a higher class ward. And the Government, being a caring employer, says, "Look. You go to a higher class ward and we, as employer, will pay the bill, 4:1. We pay 80% and you pay 20%." That surely is very reasonable. But to twist the question - to look a gift-horse in the mouth, so to speak - and say, "You must now give it to every Class C civil servant" is, I think, surely extending this way beyond the scope of this topic.”
“Wherever necessary and appropriate, the Government will continue to retain employees past their statutory retirement age bearing in mind the needs of the organization. The last point raised by the hon. Member concerns the powers which have been delegated tb statutory boards to deal with their own personnel management policies. Since 29th October 1981, statutory authorities have been given autonomy in personnel matters. They can develop their own management styles and use terms and conditions more effectively to boost productivity, morale and team spirit. They can also design and update their own schemes of service. However, certain overall checks are necessary. Each Ministry has to ensure that any change in salaries or terms and conditions of service proposed by the statutory board within its purview does not upset essential relativities in the public service. Secondly, the Finance Ministry has to be kept informed of any new or revised salaries or terms and conditions of service. Finally, the Auditor-General should be free to identify and comment on any apparent extravagance on the part of the statutory authorities. All these checks are necessary to ensure that statutory boards which are self-sufficient do not go overboard and those which are dependent on Government grants do not over-commit Government financially. It is also important to ensure that there is some overall fairness and uniformity in salaries and terms and conditions of service, both among statutory authorities and between the authorities and Government Ministries.”
“It is on the understanding that both the employer and the employee can terminate the extension at any time by giving three months' notice. Pensionable officers under extended service are given the option to choose either to continue on the pension scheme or have their pension benefits preserved and be superannuated under the CPF scheme for the duration of their extended service. They will otherwise continue to enjoy the same terms and conditions of service. Officers who retire at 55 and similarly those who retire at 60 may seek re-employment. The authority for re-employing retirees is vested with the Public Service Commission. Re-employment is very selective and each case is considered on its own merits. Ministries may re-employ Divisions 11, Ill and IV officers on a temporary month-to-month basis for up to a year. Fresh approval from the PSC is required annually if the Ministry wishes to continue re-employing the officer. A re-employed officer is superannuated under the CPF Scheme. A re-employed pensioner is paid a full salary in addition to any pensions due to him. In considering the retention of officers after their normal retirement age, the following guidelines will apply. First, the experience and expertise of the officer. Secondly, the staffing position in the Ministry or Department and difficulties in recruitment or retention of officers in that grade of appointment. Thirdly, the officer's work and conduct. Lastly, the officer's health. Extension of service or re-employment is subject to medical fitness. The hon. Member may be assured that the Government as an employer realizes that life expectancy in general is now longer.”