Leong Horn Kee
Singapore
“My question is that, although at the point of purchase when the blocks were built, this may not be structural deficiency, as the Parliamentary Secretary said, but it is now because the demand or desire is for lift access.”
“Lastly, by centralising at MOM, I wish to urge the kind Minister to provide more funds and resources for job search programmes. Most feedback from residents is that they are not getting sufficient help and satisfaction on job search services at the CDC level.”
“At the same time, our SAF soldiers are better educated and trained to handle more sophisticated fighting system. Thus, the combination of both modern weapon systems and better trained soldiers will provide a good platform for our SAF to build a strong and capable integrated fighting force.”
“All right, "may" allow two months of disruption. But in terms of cohort, after the students have left school, they are no more in the same cohort. They actually enter enlistment at different times of the year. So this issue of relating cohort to enlistment period may not be valid. Therefore, why not just have a clarity of rule?”
“Sir, on this issue of early disruption of two months, we should actually look at it not from the two months' point of view of early disruption, but from the 10 months of waiting time. The servicemen will have to mope around waiting for 10 months for his tertiary education.”
“If the safety and personal security in Johor is not improved, no matter how excellent or scenic a bridge we build, Singaporeans will be hesitant to visit Johor and spend time and money there.”
The complete record
Every one of 876 lines we hold for Leong Horn Kee, in date order, each linked to its source. Free to read, in full, without an account. Page 10 of 18.
“We also have a wide variety of tax incentives targeted at selected industries and activities which we want to promote. This means that, effectively, our tax rate is lower than the corporate tax rate of 26%. We also have a comprehensive network of tax treaties, numbering 36 at the moment, which helps to reduce the tax burden of companies in Singapore. Nevertheless, I recognise that the economic outlook is uncertain and if developments require, we will be prepared to take further action to help companies. Mr Inderjit Singh has also asked that companies be allowed to pay their tax by instalment over the next two years to help ease cash flow. Currently, companies are already allowed to pay their income tax by instalments if they arrange for the payments to be made through GIRO. The instalment plan is interest-free. If necessary, IRAS is prepared to, on a case-by-case basis, look into further adjustments to this instalment plan to help companies which face particular cash flow problems in arranging their tax schedules. Mr Inderjit Singh has also suggested that we change the GST threshold for companies which register from $1 million to $2 million and to delay collection of GST by one quarter to help companies in their cash flow problems. We believe that the current GST annual turnover limit of $1 million is already sufficiently high to exclude most, if not, all small business. With this high turnover threshold, almost all small businesses, such as provision shops, market and coffeeshop stallholders, hawkers, HDB shopkeepers are already exempt from GST.”
“In the case of items on the revenue account, such as trade receivable from foreign customers, tax deduction is allowed for realised foreign exchange losses. Paper losses or translation losses, whether due to exchange rate differences or for other reasons, are not allowed for tax deduction as they are not realised losses and may be reversed at any time prior to disposal of the assets. Mr Chuang has also suggested that the administrative concession for banks in respect of their foreign exchange losses be extended to companies in general. Under this administrative concession, banks are allowed tax deduction for unrealised foreign exchange losses on their trading account. The concession was granted mainly to facilitate tax compliance by the banks in view of the nature of their operations and the mark to market basis commonly used by them to recognise profits or losses in their books. Under this administrative concession, unrealised losses may be allowed but unrealised profits will also be subject to tax. The operations of other companies do not require a similar administrative concession. Companies also may not want to have their unrealised profits subject to tax as in the case of the administrative concession for banks. Mr Inderjit Singh has asked for corporate tax rebate of 10% to 15% over the next two years to assist companies who are facing problems in this difficult period. I would like to point out that Singapore's tax regime currently is still very competitive and I believe, based on what I said yesterday, that a tax rebate of this size is not really necessary at this stage. Our corporate income tax was recently reduced from 27% to 26% and took effect from Year of Assessment 1997.”
“I am afraid that we are not in favour of the idea of allowing group relief for companies as it will have grave implications for our tax revenue. Under group relief, profitable companies within the group will not have to pay tax on their profits if these could be offset by the losses of other companies in the group. This means that group relief will open up opportunities for tax planning and abuse. The experience of other tax administrations which allow group relief has been that complex tax rules have to be drawn up to prevent abuse, thus creating complications for tax administration. This has been the experience of countries like the US, UK and Australia who allow group relief. Our tax regime in Singapore is such that losses incurred by a company can be carried forward indefinitely to be offset against future profits earned and we believe that this is sufficient. The majority of countries in the region do not in fact allow group relief, for example, Hong Kong does not, neither does Malaysia, nor Japan, or Canada. Outside this region, Italy and Belgium do not. Mr Inderjit Singh, Mr Ahmad Magad and Mr Chuang Shaw Peng have asked whether we could provide relief or tax deduction for losses suffered by companies arising from the regional currency turmoil. Mr Chuang has further suggested that the Government should extend tax deduction given to banks for their foreign exchange losses to companies as well. I should point out that foreign exchange losses incurred by companies could be either on the capital account or on the revenue account. For items under capital account, such as loans or equity investments in overseas operations, we do not allow tax deduction for such losses, whether realised or unrealised, as we do not tax capital gains.”
“Sir, over the past few years, the Government has been reducing the property tax rates from about 16% to 12%. These reductions have helped those who own commercial properties and residential properties which are held as investments. However, about 90% of Singaporeans own their own homes and live in them. They pay a lower owner-occupied property tax rate of 4%. This 4% concession has not been reduced for a long time. The effect then is that while people who own properties for investments have benefited from the reduction of property tax rate over the years, the majority of Singaporeans are not enjoying any property tax reduction for their owner-occupied properties. On the other hand, they are actually paying higher property taxes due to higher property tax assessments made over the years. I would like to ask the Government whether they would wish to consider reducing the owner-occupied property tax concession by, say, even �% to 1% so as to give some concession to property owners who are owner-occupied. On the other hand, I would like to ask the Finance Minister as to why the Government has, for this year's Budget, given a 15% rebate to commercial and industrial properties only. Why has he not decided to include residential properties, at least for residential properties which are held as investments, for example, apartments for lease, rented apartments or service apartments? For that matter, why is the rebate of 15% not given to residential properties which are owner-occupied? The Minister may wish to explain the rationale. Dr Richard Hu Tsu Tau: Mr Leong Horn Kee and Mr Chuang Shaw Peng have asked for group relief for companies.”
“Sir, I go on to my next cut. In Singapore, the tax authorities do not allow the group offsetting and relief of losses incurred by subsidiaries of a group of companies. I understand that the group offsetting of losses is not allowed because of concerns on tax loopholes being created. However, group offsetting is now allowed in some developed countries, such as the United Kingdom. In recent years, many companies have answered the Government's call to venture out regionally. They have invested heavily in the region. Some of them could be encountering losses because of the regional knock-down. They are facing problems of higher overheads, higher manpower costs, lower selling prices and larger bad debts. I would like to ask the Minister whether he could consider group offsetting of losses as a short-term measure to help companies tide over their difficult period. To alleviate the risk of large tax loopholes, perhaps partial offsetting of 50% of their losses could be considered.”
“I understand that most local banks are not able to qualify because they do not manage offshore funds of over $5 billion. I would like to ask the Minister to consider whether it could adopt a two-tier approach. For example, to keep the $5 billion qualifying level for foreign banks and a lower qualifying level of, say, $2.5 billion for local fund managers.”
“Sir, the Minister for Trade and Industry recently announced that the future twin engines of growth of Singapore's economy will be the manufacturing sector and the services sector. I support this strategy. A major component of the services sector is the banking industry. The Government's desire is to firmly establish Singapore as a financial hub. Therefore, the financial and business sector now contributes to about 30.9% of the total GDP, as compared to 24.3% for the manufacturing sector. The regional turmoil shows the frailty of the smaller banks in Singapore. When hit by bad or doubtful loans, the provisions made by them have a heavy impact on their profits and total assets base. The larger banks are better placed to weather the impact. Hence, I would like to ask the Minister whether the Government intends to foster the mergers of local banks. The following table shows a comparison of the sizes of local banks as compared to the major international banks. For example, our big four banks, DBS, OCBC, UOB and OUB, have a total shareholders' fund of between $3 billion and $7 billion. The big banks around the world, for example, HSBC has S$47 billion, Bank of Tokyo/Mitsubishi has S$46 billion, Group Credit Agricole has S$37 billion, Chase Manhattan has S$34 billion and Citicorp has S$33.5 billion. The above comparison shows that our largest local banks are only about one-fifth to one-seventh of the size of the world's largest foreign banks. If local banks were to merge, they will be better placed to compete internationally. On another topic, Sir, the Government has announced the reduction of the total qualifying non-resident funds under management for preferential tax treatment from $10 billion to $5 billion.”
“Sir, I beg to move, That the total sum to be allocated for Head N of the Main Estimates be reduced by $100. Sir, the Singapore dollar has encountered some volatility in recent months due to the regional currency turmoil. In the last one year, the Singapore dollar exchange rate has weakened from about 1.42 to the US dollar in mid-1997 to a low of nearly 1.8 towards the end of 1997. Now, it is hovering at about 1.62 to 1.65. The Singapore dollar has depreciated some 13% against the US dollar. Although the Singapore dollar has weakened against the US dollar, it has strengthened against the regional currencies. Compared to the Thai baht, Malaysian ringgit and Indonesian rupiah, the Singapore dollar has appreciated by between 20% and 50%. My question to the Minister is: what is the Government's short to medium term strategy for the Singapore dollar? On the one hand, a strong Singapore dollar will enable Singapore companies to purchase foreign goods at low prices. It will help to keep domestic inflation low. On the other hand, a strong Singapore dollar will cost Singapore to lose its competitiveness against the neighbouring countries. Our manufacturers will suffer a disadvantage. Their products will now be dearer than products in the neighbouring countries. During this period of great volatility, it may be difficult for the Government to stabilise the Singapore dollar. However, in view of the sudden shifts in the exchange rates of the various currencies against the Singapore dollar, the Government may need to do a review of its exchange rate policy. Could the Minister enlighten the House on how the Government intend to balance the conflicting effects of the strength of the Singapore dollar?”
“Sir, just for the record, as I mentioned earlier, the discussion was awry and the question of my daughter was put in a hypothetical manner. My daughter did not go on a Government scholarship. He challenged me, "Would you ask your daughter to resign?" At that stage, the meeting was bad. Certainly, anyone in my shoes, with three very senior civil servants challenging me, would say things that one may not respond otherwise. But I take the DPM's point that I may not have given the best answers at that meeting. I admit it. But I just want to give the context of the atmosphere I was in, and why the reply was given.”
“Sir, I am glad the Deputy Prime Minister has made this Ministerial Statement. It gives us a chance to hear the Government's position and also gives the Backbenchers a chance to pose a couple of questions. I do agree with the Deputy Prime Minister that we definitely very much frown upon those scholarship holders who break their bonds, particularly those who do not even serve a single day of their bond. But my point really is to ask whether naming of the bond-breakers would serve the purpose. Because when you send a student overseas, there is a risk that in three to five years of overseas stay, he might be affected by the overseas environment and there may be other reasons for him not wanting to serve his bond. So I want to ask the Deputy Prime Minister whether there are other ways of doing it that can help the process. For example, the pre-award procedures can help to educate them. Maybe there should be proper counselling or national education. Maybe the selection process of scholarship applicants can be a bit more rigid to make sure that you can sieve out those who are very mercenary in their approach of going for scholarships. Perhaps that may be considered. I thought it was also not quite in line with the new approach that we are going to have about the Government's lighter touch in naming the bond-breakers. MINISTERIAL STATEMENT (Exempted Business Motion) With the consent of Mr Speaker and the general assent of Members present, Question put, and agreed to. Resolved, That the proceedings on the Ministerial Statement today by the Deputy Prime Minister be continued beyond 1.30 pm. [Mr Wong Kan Seng]. Mr Chng Hee Kok: Mr Speaker, Sir, I thank the DPM for clarifying that the note was taken after he intervened in this matter.”
“The accelerated loss of confidence if this happens cannot be easily recovered as we recently learned from what happened to our neighbours. While I applaud the Government for focusing on the finance sector for our long-term good, I feel that we should not have neglected the other important sectors of our economy. I hope the Government will show more signs to substantiate its commitment in making manufacturing and services the engines of growth for our economy.”
“While we have made mistakes in the past in allowing asset price inflation in Singapore and hence property prices being out of control, and while I can understand the undesirable impact on our economy if the property market bubble bursts, I hope that no new measures would be put in to prop up the market. In May 1996, we had put in measures to remove speculations in the property market. The objectives should not change now. We should never allow speculation in land scarce Singapore. These measures must therefore stay even if prices slide downwards a little more. I would like to quote Mr Chiang Pin-Kung, not in Mandarin but in English, the Chairman of the Taiwanese Council of Economic Planning and Development, who said "A lot of money borrowed in South-east Asia went not into manufacturing but into the stock and property market", when he analysed the causes of the regional turmoil. In conclusion, Sir, while we know of people being unhappy of the income tax rebate being reduced by 5%, I would like to highlight that a majority of Singaporeans got many other rebates like rental, utilities and S&C rebates. I am sure this will help many of them, as we know about 70% of Singaporeans do not in fact pay income tax. The other area that I would like to compliment the Minister is in the area of development expenditures that have gone up this year. This reflects the long-term thinking of the Government and willingness to invest in our future. We will see the results many years from now. I would like to conclude, once again, by urging the Government to be more pro-active and not reactive in determining policies, as this Budget has indicated. In this case, we cannot wait for companies to collapse before we step in.”
“With losses made worse by the regional currency crisis, many companies are facing short-term cash flow problems. In this area, I would like to urge the Finance Minister to consider providing temporary measures to help those countries that are willing to restructure and by independent assessment are companies capable of growing and competing effectively in the world markets. These are companies which are facing transient problems, not permanent problems, and they need to survive through the next two years or so. I would like to make one suggestion, and I will be talking about the details when we discuss the various Ministries, and that is, to provide an equivalent to an IMF bailout package that was offered to Indonesia, for our own businesses here. This package can be in the form of bank loans with some Government backing. Others include various types of rebates that have already been mentioned. The temporary measures need not be handouts, but one-off type assistance that will not impact the long-term measures or policies of the Government. Property Sector This is one area where I feel that the Government has done too much. As I recall, the general tone of our Government policy has always been that we should let market forces decide the property prices. However, in the last few years, I have noticed that many incidences of Government interventions where sometimes we tempered with the demand and sometimes we tempered with the supply in a seemingly uncoordinated and piecemeal manner resulting in the sector being jerked around many times. I would like to encourage the Government to go back to the principle of `letting the market forces decide' and to be involved in only setting general directions and fundamental strategies and then let go.”
“Sir, I would like to refer the Minister for Finance to an article that appeared in the Straits Times on 28th February 1998 that analysed why the Taiwan economy was able to weather the regional turmoil while strong economies like South Korea and Malaysia collapsed. In the final analysis, among other things, two of the most significant reasons are, first of all, the competitiveness of the Taiwan economy is due to the manufacturing sector and, in particular, the electronics and the semiconductor industries which have grown from a mere 2.5% in 1990 to 37.5% of the economy in 1997. Secondly, Taiwan was focused on many small and medium sized businesses rather than conglomerates or big companies, thus giving the economy flexibility compared to other countries who were focused on its large companies. While I am not suggesting that we emulate the Taiwanese economy, I do believe that there are many lessons that we can learn from them and apply to Singapore. Strong Dollar/Rising Interest Rates and Financing Problems Sir, today, while the Singapore dollar has depreciated only slightly against the OECD currencies, those of our neighbours have drastically devalued. Therefore, more than before, the strength of Singapore dollar becomes a bigger issue in attracting investments and in competing in the export of our goods. I believe that Singapore needs to re-assess the level at which our dollar should be, compared to other currencies around the world. We also need to moderate interest rate increases which have gone up about three times in the last six months. Banks are also tightening credit financing, thus making it very difficult for businesses that can still grow and be successful in the long term in getting loans.”
“Worse, we may see flights of investments out of Singapore to our neighbouring countries. The small and medium enterprises form an important pillar of our economy, employing a large percentage of our workforce. The regional crisis has a bigger impact on them because these companies get jerked around due to their smallness. These companies need special help, especially for those who have regionalised in the last few years. While there are many Government schemes to help them, the feedback that we have got from most of them is that these schemes are so complex that they just give up trying to apply. We need to be more organised in helping the small and medium enterprises more effectively. Currently, I feel that the bigger companies, especially multinational companies, are the ones that truly benefit from these schemes. In the area of regionalisation, once again, I feel that the Government has been too quickly distracted by its narrow focus on a few sectors. Our long-term directions should still be to regionalise and to further develop the second wing of our economy. I therefore expected more to be done to encourage regionalisation, especially this is a good time for bargain investments in our neighbouring countries. Therefore, the lack of new initiatives in the Budget to encourage regionalisation was a let down. Furthermore, for companies that had already regionalised in the last two years, the regional crisis has badly impacted them in terms of loss of value of assets in the neighbouring countries as well as due to inability to collect debts. I was hoping for some temporary relief measures to such companies to tide over these tough times, such as provisions for losses in computing their taxes here in Singapore on a group basis.”
“It is my contention that at worst, we over stimulate the economy a little should the situation not be as bad as predicted and at best, we could have avoided a crisis by acting very early. In either case, Singapore would have gained tremendously should the Budget have been more generous in helping businesses address competitiveness and the regional crisis issues. Although the Minister mentioned the possibility of off-Budget measures, I hope that he can clarify how fast he would be able to react and how will this be done. Businesses need to be assured that the help will come on time when they needed it most. Manufacturing Sector, SMEs and Regionalisation Drive - The Cost of Doing Business Sir, the cost of doing business in Singapore becomes an even more critical issue as the currencies of our neighbours have devalued and thus making these countries more attractive for investors because of the cheaper land and labour costs. I therefore feel that the Budget did not adequately address these issues and in particular, it did not address the needs of the manufacturing and the small and medium enterprises sectors, as I have pointed out earlier. I do not know the rationale for the lack of attention to these sectors, but I fear we may be giving the wrong signals to current businesses and potential new investors as to the importance they have to our overall economy. While the overall economy has slowed down and as competition from our neighbours increases, business costs in Singapore still remain high. As our neighbours become more competitive and increase their focus on the sectors of the economy which we are neglecting, they will be successful in attracting investments that otherwise could have been brought into Singapore.”
“The Commerce Department in the USA recently published, just a few days ago, figures that showed a drop of about 2.6% in January for electronic products shipped out of the USA. Factory inventories were also up by about 0.1%. I therefore am a little worried that we may not be aligned and hence the Budget may have been drawn based on statistics that may not be up to date, especially in this fast changing environment. The Government has projected a 2.5% to 4.5% growth for the Singapore economy. In my opinion, although this may turn out to be so for the overall economy, certain sectors of the economy may, in fact, go into recession later this year. This may happen in the manufacturing sector, especially for the electronic products area. The retail and tourism sectors are set to see one of the worst times in the last 10 years. What should the Government have done? In my opinion, the Minister for Finance could have been a little more proactive to anticipate a possible sudden downturn rather than waiting to react when it happens. In this environment of rapid changes, why should we wait for a crisis to happen? We must have learned from our neighbours that when it starts to fall, it will be too late to reverse things. As Mr Leong Horn Kee has stated, there are surveys done by the Chambers of Commerce and also the Confederation of Industries that about 50% to 60% of businesses expect to see a drastic fall in sales and profits this year. Also in the last few days, from the newspaper reports, we have seen very disappointing corporate results. So in my opinion, the Minister could have given the benefit of doubt to the businesses and the feedback that they have given about the tough times ahead.”
“While I can understand the Government's long-term vision and plan to make Singapore the financial and logistics hub in this region, I feel the Minister missed out a few very important sectors of the economy, especially the manufacturing sector, small and medium enterprises, the tourism and the retail sectors. The biggest disappointment, in my opinion, is that the Minister did not do much for the manufacturing sector which contributes about 25% to the Singapore GDP. This and the other sectors I have mentioned, have seen continual pressures for the last two years and are expected to be badly hit this year when the full effect of the regional crisis is felt by our businesses and our companies. So, in my opinion, the Budget is narrowly focused in the areas that the Government wants to grow and I am sure the intention is not to shrink the other important sectors. I, therefore, would have expected a telescopic focus from the Minister, looking at the bigger picture rather than a microscopic focus that ignores those sectors that fall outside the scope of focus. Sir, I feel that there is a perception gap between what the businesses in Singapore are seeing and what the Government has projected for the next one year. In his speech, the Minister stated that the electronics sector in the west, particularly in the USA, is set for recovery and growth and therefore he expects that the electronics-manufacturing sector in Singapore will grow. However, many companies, including large multinationals, are seeing the exact opposite. In fact, the semiconductor industry, which is one of the largest components of the electronics sector, is starting to see book to bill ratios coming down, which means that orders are coming down. Similarly, the disk drive industry is seeing a slowdown.”
“To be able to source for investment opportunities in the region, our companies must first be able to get their shops at home in order, build cash reserves, then they can venture abroad. Conclusion Mr Speaker, Sir, may I conclude by congratulating the Finance Minister for preparing and presenting such a detailed and comprehensive Budget. Having heard the many feedback from the ground, I cannot help but to urge the Government that it is not time to be faint-hearted, it is not time to hesitate. The Government must watch the situation very closely, and have regular dialogues with industry groups and local organisations. When the need arises, off-Budget measures should be introduced before it is too late. Let us put on our spurs. The first runner off the mark will win the race. The early bird catches the worm. Mr Inderjit Singh: Mr Speaker, Sir, thank you for allowing me to join in the debate on the Budget proposed by the Minister for Finance. Sir, last year, during the Budget debate, many Members made a call to the Minister to address issues related to the cost of doing business in Singapore and in particular, to give more consideration to the manufacturing sector and to the small and medium enterprises. At that time, when the interim Budget was announced, the business community did express the difficulties they were facing, but we were all hoping that this year, when the full Budget was announced, all their concerns would have been adequately addressed by an all-rounded Budget.”
“Singapore has stood up very well to the test of the turmoil as we have an efficient, effective and honest Government with a high level of transparency of rules. The regional turmoil demonstrates that countries with less transparency of rules have suffered badly by the massive erosion of confidence and outflow of both foreign and local funds. There are threats, but the current regional turmoil also offers many opportunities. It is said that there will be abundant investment opportunities in the companies in the region around us. However, we must remember that major MNCs from Europe and America are also thinking of capitalising on the situation. They have large cash hoards, and will be scouting around for good buys in the region. In addition, there will be other healthy and strong regional companies which will also be looking for good investments. One disadvantage we are facing is that the Singapore economy and the local firms are pulled down by the famous or infamous contagion effect. We have to rapidly revive the domestic economy and restore confidence. We should pick ourselves up as quickly as possible. We must take this opportunity to move ahead - while the companies in the region are still trying to regain their balance but have not gained a foothold. I wish to quote a prominent local businessman who puts it graphically in Hokkien: "Pak lang puat lok long kow, goon nang em tang teh yi nang puat lok gi". It means, in English, "Our neighbours have fallen into the drain, we should not be careless and jump into the drain ourselves". I feel that instead of trying to walk gingerly across a plank to cross the drain, the Government should help to put out as many spring boards as possible, to enable Singaporeans and local companies to leap over the drain.”
“The answer, I feel, is that while we wish to attract foreign talents, we must not forget to develop and maximise the potential of the locals. Therefore, I support the provisions in the Budget to continue to spend substantial sums on education and training. Naming of the bond-breakers Every Singaporean is a rare resource. The Government has set up several scholarship schemes to send our best students overseas to study. Upon their return, they can better serve the country. While we frown upon scholars who broke their bonds, the statutory boards, such as the EDB, should not have publicised the names of these bond-breakers. Students break their bonds for various personal reasons. Many successful local leaders, including MPs such as myself, have broken our scholarship bonds, but we continue to work and serve in Singapore. I object to publicising the names of the bond-breakers because it is an insensitive move that could lead to the alienation of the entire body of scholarship holders, their families and friends. Worse, if these scholars chose not to return to Singapore, there will be a greater loss to the country. In addition, such a callous practice does not jell with the image of an enlightened Government and a cultivated society. Moving ahead - Striving for a speedy recovery The current meltdown of the regional economies offers many lessons. As stated by Mr Claude Smadja, managing director of the World Economic Forum, every government in this region has to learn how to deal with a new animal in front of us, which is "the Global Economy". He said that because of the new information technology age, with instantaneous flow of information and funds world-wide, the New World Order demands constant up-to-date information with transparency of rules in the operating countries.”
“Reduction in CPF contributions In the 1986 Budget, the Government made a 15% point cut in employer's CPF contribution, by suspending the 4% contribution to the Special Account and a massive 11% cut to the Ordinary Account. For this year's Budget, I feel that the Government could have considered a cut in the employer's contribution to the Special Account. I agree that it will not be wise at this juncture to cut the employer's CPF contributions to the Ordinary and Medisave Accounts. Otherwise, the reduction in the CPF contributions to these Accounts will adversely impact the employees' needs for housing and medical expenses. However, a short-term cut of the 4% contribution to the Special Account will not affect the employees' CPF receipts which are meant to meet their housing and medical expenses. The amount of savings to the employers from this 4% cut to the Special Account will be substantial and, in fact, will offer them much relief. My GPC members will have other suggestions to add to those above. Development of local talents Mr Speaker, Sir, I wish to move on to another topic that I feel is also very important. It is on the development of local talents. The Government has announced its intention to source for foreign talents to supplement the local pool. Singaporeans can understand the objective as commendable, as it will help Singaporeans to achieve a higher plane of growth. Especially during this period of turmoil in the region, there will be a large number of capable and hardworking foreign professionals, R&D personnel and technicians who wish to seek employment in Singapore. We shall benefit from their contributions if we can attract them to come and work here. However, Singaporeans are concerned about the competition from these foreign talents.”
“Relief on mortgage interests In the recent budget announced by Hong Kong's Finance Secretary, a new tax relief of HK$100,000 (approximately S$20,000) was introduced to help individuals get tax reliefs for their interest payments on mortgage loans. This tax relief was welcomed by the Hongkongers as it was targeted to help the "sandwiched" or lower-middle income earners who are faced with high interest costs for housing loan mortgages. As Singaporeans are also facing the same problem of rising interest rates on their housing loans, I would like to propose that the Finance Minister could consider a similar tax relief for interest payments on mortgage loans. This tax relief will be of great help to the younger families. Residents of HDB estates may have less need for this relief as they get loans from the HDB at low preferential rates. For young families that recently ventured to purchase private properties, they will benefit from this tax relief. Moreover, while they are paying substantial income taxes, they are not enjoying the rental and S&C rebates given to HDB dwellers. I would like to urge the Finance Minister to consider introducing this tax relief as an off-Budget measure, when necessary. As for the measures that can help the business sector, I have the following suggestions: Reduction in JTC/HDB rentals The Government has decided to freeze JTC/HDB rentals. While companies are relieved to hear this, they would have liked to see an actual reduction of, say, 10 to 15% in the rentals. Although it could be argued that the impact of the reductions would be minimal on a company's overall costs, I would say that any savings would be helpful during difficult times.”
“When people tighten their belts, the contraction effect will ripple through the economy. The slowdown will be further aggravated. What the business and ordinary people are saying is: why not recognise the problem now and introduce stimulative measures immediately. The comforting point is that the Minister for Finance has specifically said that he would introduce off-Budget measures, whenever necessary, to tackle problems that may arise or when the economy worsens. Mr Speaker, Sir, allow me to elaborate on some specific measures which I feel the Government could have considered or introduced in this year's Budget or consider them as off-Budget measures. For the individuals, the following measures could have been looked into: Higher income tax rebate Many people are puzzled why the Government has reduced the income tax rebate from 10% to only 5% this year. The resultant higher tax payable means that people will have less disposable income. They will spend less, which in turn will affect the retail and other consumer trades. Lower consumer spending means that the slowing economy will be further depressed. The retail industry has been facing poor business in the last three years, and the outlook for them for the next one to two years would not be better. In contrast, during the mid-80s recession, the Government actually gave a 25% rebate on income tax in the 1986 Budget. I presume the objective then was to offer various tax reliefs to individuals and companies to help stimulate the economy. We wonder why the Government took the reverse tack this time round. Why not retain the 10% level of rebate? Better still, if it can be increased to 15%.”
“The main message we received from our meetings with the various industry groups is that, while it is not unwise for the Government to be prudent and cautious, they would have liked to see a more stimulative Budget. They are disappointed that the Budget does not offer enough measures to help companies to cut costs. The Government has predicted the 1998 GDP growth rate to be between 2.5%-4.5%. However, many people in business felt that the economic slowdown is already here, and many individuals and companies are facing severe financial difficulties. The reaction is that the Government has chosen to adopt a wait and see attitude. The reality of the situation is that difficult times have arrived. Many companies are facing the double blow of shrinking business and credit squeeze. The Government should not adopt a reactive stance, but rather a proactive one. Most prefer the Government to take a bolder and anticipatory approach by introducing more serious measures now to help revive the economy. I share their views. To verify and substantiate their positions, the Singapore Confederation of Industries (SCI) and the Singapore Chinese Chamber of Commerce and Industry (SCCCI) have conducted surveys among their members. The results they obtained was that about 60% of SCI members and 54% of SCCCI members (in both cases more than 50%) felt that their businesses would be badly affected this year. The same reaction is more or less felt by the man-in-the-street. People are concerned that with the economic slowdown, their take-home pay will be smaller. Some are fearful of the prospects of retrenchment or prolonged unemployment. To make matters worse, some are faced with the problem of higher family expenses and other costs, such as higher interest costs for mortgage loans.”
“Mr Speaker, Sir, this year's Budget is a difficult one. One main reason is that because of the region's financial turmoil and the resultant economic slowdown, there is much public expectation of the Budget. The second reason is that while the region is indeed in turmoil, Singapore has held up quite well. We are not in a recession. At least, not yet. Hence, the Government cannot portray a picture of doom and gloom, and talk ourselves into a recession. In fact, the most striking feature of the Budget is what it is not! Unlike many other countries in the region, ours is not a crisis Budget. It does not have the word "crisis" written all over it. For the purpose of gathering views and reactions from the business community, our GPC for Finance and Trade and Industry had meetings with members of our Resource Panel, representatives of the International, Chinese, Malay and Indian Chambers of Commerce, and trade associations such as the Singapore Confederation of Industries, Singapore Association of Small and Medium Enterprises, Singapore Hoteliers Association and the Singapore Retailers Association. They have given us very valuable feedback and I wish to thank them. First of all, the various groups have suggested that there should have been pre-Budget consultations, in addition to the post-Budget meetings. This is a good suggestion. I feel that the relevant Ministries should consider this idea of having pre-Budget feedback meetings with selected industry groups. On our own, our GPC has decided that we shall conduct pre-Budget meetings for next year's Budget and convey the views received from the industry groups to the appropriate Ministries.”
“May I also ask the Minister that since the ERP programme is going to be revenue neutral over the longer term, in effect, would it not actually be loading more onto companies that have to be involved in the transport trade compared to what they are now, because they are even now loaded against in terms of usage? But after the implementation of the ERP, the loading could even be heavier.”
“Sir, may I ask the Minister whether his Ministry has done any studies or comparison for companies that are involved in the transport trade, ie, companies that are going to use a lot of vehicles for transportation? What would be the impact of the ERP on the total expenses before and after the implementation of the ERP programme?”
“Sir, may I ask the Deputy Prime Minister, with the lowering of the currency rates in our neighbouring countries, like in Indonesia and Malaysia, and therefore they have become more competitive and enjoy low manufacturing cost, would the promotion of the Growth Triangle concept be more useful? BG Lee Hsien Loong: Mr Speaker, Sir, yes, indeed, the Growth Triangle concept is useful and the lower cost in the neighbouring provinces of Malaysia, Indonesia, Johor and Riau, should enable our businesses and companies which have operations there also to benefit from this lower cost. But, as I explained earlier, it is the real exchange rate which determines our competitiveness, not the nominal one. Let me explain the difference. If we trade with Indonesia and the rupiah goes down from 2,500 rupiah to 10,000 rupiah, other things being equal, Indonesian costs have gone down four times and therefore they are four times more competitive than us. But other things do not remain equal. When the rupiah goes down, imports cost more, people are unable to pay, they agitate for higher wages, and wages go up, inflation goes up. And if, for the sake of argument, the rupiah has gone down four times but prices have gone up four times in Indonesia, then although there has been a nominal depreciation of their currency, there is no real effect on our competitiveness or their competitiveness. It will not completely work out like that. It takes some time, and at the end of it, I think our neighbouring countries will end up somewhat more competitive than we are, but not to the extent as shown just by looking at the exchange rates now.”
“May I ask the Deputy Prime Minister to confirm whether there has actually been a draw down as yet on the US$5 billion. If not, what is the schedule that he expects it to happen? Also, would there be pressure on the Government, in case this US$5 billion is fully drawn down, that they need to consider further financing for the Indonesians? BG Lee Hsien Loong: The US$5 billion has not been drawn down at all. The arrangement is that when Indonesia needs to call on the loan, they will give us notice and draw down in reasonable tranches, but they have not yet done so. So the second question on what happens if it runs out is hypothetical.”
“At these levels of indebtedness, a 1-2% point increase in interest rates will not significantly impair corporate profitability nor increase household debt burden. Higher interest rates will tend to depress asset values, such as share and property prices. Households which have over-extended themselves, particularly those who have borrowed excessively to finance share purchases or buy properties, will face difficulties. But the larger impact on our share and property market, and the main challenge now facing our economy, is the continuing economic crisis in the region.”
“BG Lee Hsien Loong: Mr Speaker, Sir, that is really a separate question which Mr Shriniwas Rai has asked about banking mergers, and I have given him an answer. I think the answer to the question will be there. If we want to be regional players and if we want to weather possible upsets like this, then size is important. Size means you can do bigger deals; size means you can weather bigger upsets in your individual investments; size means you can have more critical mass to justify and build up expertise, analysis expertise, expertise to develop services for your customers and to be able to hold your own against other players. There is no obvious final optimum size. Even the biggest banks in the world are merging. Bank of Tokyo has merged with Mitsubishi Bank. SBC is merging with UBS in Switzerland. Our banks are many times smaller than those, and I do not think I am giving away a secret if I say that the Government has always encouraged Singapore banks to become bigger and to merge with one another in order to achieve this. RISING INTEREST RATES (Impact) 3. Mr Chng Hee Kok asked the Deputy Prime Minister what is the impact of rising interest rates on the economy. BG Lee Hsien Loong: Mr Speaker, Sir, MAS does not expect the recent rise in interest rates to hurt the Singapore economy significantly. Our corporate and household debts are both quite low. An MAS study has found that the debt-to-equity ratio of 181 companies listed on the Stock Exchange was 40% in 1996, compared with 220% for the top 20 listed Korean companies. Household debt repayment burden, ie, the proportion of personal disposable income used to service debt payments, including both interest and principal, was 25% in 1996.”
“I have two questions. Firstly, I fully support the Deputy Prime Minister's point earlier that there should be more transparency in the reporting by the banks in Singapore. I want to ask whether there are measures that MAS or the Government is considering to encourage the banks to be more transparent in their announcements and more regular announcements on the state of their financial affairs. The second question is, looking at the exposure, it seems that the biggest exposure of $28 billion is actually in Malaysia. Could more information be given on this figure? BG Lee Hsien Loong: On the first question, as I told the House and which we have published, we already have a committee, chaired by Mrs Elizabeth Sam of OCBC, working on improving disclosure standards and raising them to developed country levels, which means like those in UK and Europe. So I expect them to complete their work within this year and I would expect that even before they complete their work, the banks will do their own internal reviews and soul-searching and identify ways in which they can put out more information to the shareholders and to the investing public. On the second question, the $28 billion in Malaysia, as I explained, many of the Singapore banks have had a long-standing presence and strong business relationships there. Of this $28 billion, $4.9 billion is extended to their branches and subsidiaries in Malaysia. The rest are commercial loans and investments. Mr Chng Hee Kok: Mr Speaker, Sir, the exposure or vulnerability of the banking system is dependent on the size of banks. Will the Deputy Prime Minister say that current size of our banks is large enough to weather this storm or should there be further consolidation?”
“Sir, since the statement by President Jiang Zemin about the central government's support for the project, has this instruction been filtered down now to the municipal government in the sense that in your later contacts with them, have there been meetings or exchanges where it shows that they are now toeing the central government's line? BG Lee Hsien Loong: We are in contact with them. We have not negotiated the issues in further detail. We are now studying the problem in order to have a considered, mature response which we would convey to the Chinese side as our view of how to deal with this problem, and we expect the Chinese side will study that and give us their response in due course.”
“Mr Speaker, Sir, I would also like to ask a few questions for elaboration. First, I would like to ask the Minister whether he could elaborate on the economic ties between Singapore and Indonesia. As he mentioned, there are very close economic links between the two countries, eg, the trade ties between Indonesia and Singapore and what are the figures. Secondly, could he elaborate on the reserve that will be drawn upon and where will the money come from? Does it need us to sell off some of our foreign assets or draw down on some of our own particular reserves held in various currencies and what sort of impact will it have on the funds that we have? Thirdly, could the Minister elaborate on some of the details of the loan, eg, the interest rate if there is a drawdown, the repayment schedule and the terms of repayment?”
“I beg leave to withdraw the amendment. Amendment, by leave, withdraw. The sum of $404,800,300 for Head U ordered to stand part of the Main Estimates. The sum of $16,760,370,000 for Head U ordered to stand part of the Development Estimates. Head I -”
“The Town Council has been empowered to issue TOL for installation of public pay phone and call zone bases. Recently, HDB has informed the Town Council that it will take over the issuing of TOL for public pay phone and call zone bases and charge the operator a fee, and the Town Council cannot collect fees from the operators. Why is there a sudden change of mind in disallowing the Town Council to issue such TOL? If HDB can collect the fees from the operators, why can it not allow our Town Council to do so? The public pay phones and call zone bases were installed at common property which the Town Council has to maintain. Is it fair that whilst the Town Council incurs cost to maintain the common property, it cannot collect TOL fees and yet the HDB collects such fees by just issuing the TOL?”
“Mr Low Thia Khiang (Hougang)( In Mandarin): Sir, in February 1995, the Hougang Town Council submitted to install 16 illuminated block number directional signboards at car park entrances for approval. Only two were approved. The others, because it involved the use of land belonging to PWD, were not approved. In October 1995, Hougang Town Council amended the plan to use land belonging to the HDB and again applied to the HDB for approval to install the remaining signboards. In February 1996, HDB replied to say that the Hougang CCC has also applied to put up these illuminated signs, and there was thus a duplication of applications. Because of that, HDB did not approve the installation of the illuminated signs by the Town Council. The HDB also instructed Hougang Town Council to liaise with Hougang CCC to submit a single application. Hougang Town Council also wrote to the CCC of Hougang asking them to indicate their stand, but so far, the CCC has not replied. Regarding the installation of illuminated signs at our car park, from February 1995, we applied and until now, almost two-and-a-half years have passed, and because of the Hougang CCC's interference, our residents cannot enjoy the benefit of illuminated signboards at the car park entrance for the convenience of their friends and relatives who visit them. I have a few questions to ask. Firstly, in approving such applications for projects, what are the principles involved? Does it mean that if any organisation applies, HDB will approve, irrespective of whether it has got the Town Council's agreement? Secondly, does it mean that once HDB receives double applications for the same project regardless of who is the applicant and who puts up the application first, it will not approve? Sir, I will move on to the next topic.”
“Yes, Sir, I shall try to be brief. Sir, I beg to move, That the sum to be allocated for Head U of the Main Estimates be reduced by $10 in respect of Code UJ 2600. Sir, I understand that once the HUDC privatisation programme is announced, the Community Improvement Projects Committee (CIPC) will immediately stop the CIPC funding for the estate named. Sir, I feel this ruling is rather unfair. Allow me to explain why. When the announcement was made to privatise the HUDC estates, actual planning and preparation work will take about one to two years. Then there is a need to go for a voting process where at least 75% of the residents have to agree to the privatisation exercise. Therefore, it takes one to two years before the actual privatisation is implemented. Meanwhile, the estate is still under the management of HDB and therefore run like an HDB estate. On this basis, I feel that it will be more equitable for the Government to actually include or retain the HUDC estate as part of the estate eligible for CIPC funding. I feel that the Government should only review the CIPC funding such that the rule will only apply when the number of votes gathered is above 75%; whereby it is sure that the privatisation exercise will go ahead. I have an example on hand in the proposed privatisation of the Shunfu HUDC estate. After the announcement of this estate's privatisation exercise, the CIPC has refused to fund a proposed linkway from a block of flats to the bus stop. In fact, this proposal was conceived before the privatisation exercise was announced. I would like the Minister to reconsider the above ruling.”
“Sir, I am pleased to hear that the Minister is finally saying yes to the upgrading of the private estates. Three points of clarification, Sir. First, I did not suggest specifically that the Government should go for a "one-bite" HDB policy. What I did suggest was that the Government should review its "two-bite" policy. The first bite, which is if the Government can provide a 3-bedroom unit, it has basically fulfilled its obligation. The second bite, which comes as an investment gain for the applicant, is only if there are extras, as a bonus to them. I want to seek a clarification from the Minister about these 3-room flats. He is saying the present policy allows them to upgrade earlier. But I am asking whether if there are applicants staying currently in 3-room units who are in need of upgrading to 4- or 5-room flats because of family size being too big or the children have grown up to become adults. Could they actually be given an earlier allocation, if there is a demand for space? I am also pleased to hear that the Minister is going to consider the proposal of a CPF cash grant to singles and the old poor singles. As an extension of the policy, could the Minister also consider whether two old single applicants for a 3-room resale flat can actually be allocated this grant? That means if two of them apply together, they may not necessarily be married, but just two old females or two old males who are going to live together as friends, and to make it more affordable for them, they can both get a grant each of, say, $20,000, (combined $40,000). This can help them to buy a flat.”
“I recall that the Government has previously formed a Committee under Mr Matthias Yao, the former Senior Parliamentary Secretary to the Minister for National Development, to study this matter. May I ask the Minister what is the status of the study. I believe MPs will continue to raise this proposal until we get a satisfactory answer.”
“Sir, I am speaking on the upgrading of private estates, not on the private residential market. This request for the Government's assistance to help upgrade private estates is a regular item raised by MPs during the yearly Committee of Supply debate, particularly by MPs with large private residential populations, such as Mr Sinnakaruppan, Mr Lew Syn Pau and myself. Compared to the HDB residents, some private estates, especially the old ones, are becoming like their poor cousins. In HDB estates, the residents enjoy upgrading programmes like IUP and MUP. For the fortunate some, they even get cash grants under the SERS programme. Private estates so far get nothing. There have been constant calls to look into upgrading of private estates. I am not suggesting that the upgrading of private estates be similar to the MUP in HDB estates where the blocks and their interiors are upgraded. For private estates, the upgrading need only be similar to the IUP concept. The estate can be provided with a grant amounting to a certain dollar value per household. If we use a figure of just $5,000 per household (less than the HDB's IUP provision of $7,000 per household), then an estate with 100 units may receive about $500,000 to upgrade the common areas in their estate. This sum is quite meaningful. The grant can be used for improvement of common areas and provision of recreational facilities, such as playgrounds, linkways, clubhouse upgrading, barbeque pits and landscaping. I would like to suggest that the selection criteria for eligible private estates for this grant can also be based on some criteria similar to the HDB estates, like age of the estate, whether they have community spirit and whether they have active and responsible area committees.”
“Sir, the Interim Upgrading Programme (IUP) is a very well-received exercise for residents in HDB estates. The Government has recently increased the allocation to $7,000 per household. One popular item in the IUP is to provide for new lifts to land on every floor. This provision of lifts to stop at every floor is needed by the old folks, the handicapped and young children. The problem is that new lifts are quite expensive, and different precincts have different requirements for lifts. In most IUPs, lift upgrading is usually given the top priority. The remaining funds are then assigned for other improvement works in the precincts. In some old estates with tall blocks, a situation may arise where most of the funds are used to provide for lift upgrading. Little money is left for other improvement works which are also necessary, such as linkways, lobby area upgrading and landscaping. I would like to suggest that the Ministry of National Development consider splitting the IUP in two portions. One portion is for funding of lift upgrading and another portion for funding of other requirements. The first portion for lift upgrading should be funded entirely by MND, while the second portion may be based on a dollar value per household. This two-portion formula will be more equitable as all precincts will receive the same allocation per household for upgrading of the common areas, other than lifts. As upgrading of lifts under the IUP is a very popular and critical item, I hope the Minister will consider this proposal favourably.”
“I would like to suggest that the HDB consider renaming their flats similar to those in the private sector. For example, a 1-room flat can be called a studio; a 2-room flat can be called a 1-bedroom studio; a 3-room flat actually is a 2-bedroom flat, the 3-, 4- or 5-room and executive flats can be just called 3-bedroom flats. This is a clearer nomenclature. I think it will avoid some class differences.”
“Sir, it is envisaged that the demand for public housing from singles and senior citizens will continue to increase. Often, singles remain single not by their own choice. Similarly, senior citizens who are old and childless, or who cannot live with their children for whatever reasons, will need flats which are affordable. Therefore, just as for young couples who purchase 3-room resale flats are given $40,000 grant (or $50,000 if the flat is near to their parents' home), I feel that some form of financial assistance should be given to singles and senior citizens if they purchase 3-room resale flats. We can take a numerical basis for computing this grant. If a young couple is given $40,000, then a single person or a single senior citizen who purchases a 3-room resale flat on his own should therefore be given half or a $20,000 grant to assist him to purchase the resale flat. Similarly, if the flat is near to his parents, the grant for a single person can be increased to $25,000. For a senior citizen, if the flat is near to his children, then this grant can be $25,000 as well. Sir, the above grant should of course be given only to those who have not previously applied to the HDB to purchase flats. This grant could be deemed as their "first bite". This proposal of cash grant to singles and senior citizens is to make it equitable for them compared to those of other HDB purchases. Thereafter, the Government would have fulfilled their "housing obligation" to them. At present, the nomenclature used for public housing, Sir, is 1-, 2-, 3-, 4- and 5-room flats which sets a class structure for the occupiers. Hence, families, singles or senior citizens who stay in 1-, 2- or 3-room flats appear to be living in a poorer class of flats. This should not be the case.”
“The second bite, if given, is to fulfill the second objective of an investment or capital gain. This is a less critical objective. Finally, Sir, I would like to raise a point that some consideration should be given to 3-room flat owners to upgrade. A 3-room flat is actually only a 2-bedroom flat. For a growing family with two children or more, it will be quite inadequate. It is worse if they have to live with their parents or other relatives. Hence, I would like to urge the Minister to consider allowing such cases to upgrade earlier than 10 years, if they genuinely need more living space due to an enlarging and growing family, or if they have 3-tier families with their parents living with them.”
“If 5% of these home owners wish to convert to public housing, that is, to take their rightful first bite to an HDB flat, there will be a potential demand for 7,500 units a year. Sir, if we add up the above three figures, the potential demand for public housing will balloon to about 100,000 units a year. This is potentially a very large number. It is a little like the "millennium time-bomb" described by Dr Ho Tat Kin in the debate of the Ministry of Trade and Industry. Likewise, this problem will hit us only after the turn of the 21st century when the demand can escalate. Going back to the two basic objectives of housing, I wish to repeat my view that the primary duty of the Government on public housing is to provide an adequate shelter. Therefore, I feel that if the Government has provided a 3-bedroom flat to a family, it has basically fulfilled its obligation, which is to provide adequate housing of 3-bedroom flats. A 3-bedroom flat actually means either a 4-room, 5-room or Executive flat in the HDB nomenclature. If these households wish to apply for a second flat (that is, to take a second bite) it can only be looked upon as a bonus, some extra to be shared if something is left behind. As I have said in another speech in this House previously, our HDB residents of 4- and 5-room flats, with about 1,100 sq ft of living space, are actually living in quite spacious environment, compared to their counterparts who live in public housing in other major cities in this region. From the above perspectives, the Government may wish to do a review of the present "2 bites" public housing policy. Government's basic duty of the social objective is fulfilled if a family is given the first bite of a 3-bedroom flat, which is a 4-room flat and above.”
“These measures are welcome by all, and they have been effective in eliminating the undesirable speculative activities. Market analysts have reported that prices have dropped by 10-15% and the speculative froth is gone. The current task of the Government is to keep a close watch over the property market trends, particularly on the supply and demand situation. I believe everyone would be pleased to see the market remain in a stable and steady state. There will be great concerns and widespread repercussions if the property market falls into a downward spiral. For the public housing sector, one of the Government's current tasks is to watch over the long waiting list, which is 150,000 applicants. Of this total, about half, or 75,000, are first-timers, and the remaining 75,000 are upgraders. The recent decision by the Ministry of National Development to step up the building programme to cut the waiting time for first-timers from 4 1/2 years to three years is very well received. Conversely, the lengthening of the waiting period for upgraders from five years to 10 years has caused some concern, particularly for upgraders who are living in small flats. I can envisage that the demand for public housing will continue to escalate in future. Let us examine the potential demand as follows: First, the potential demand from new household formation is about 30,000 units a year or thereabouts. Second, the current stock of owned public housing units is about 600,000 units. Based on a 10-year waiting period, 10% of these 600,000, which is about 60,000 units, are eligible for upgrading each year. Third, the current stock of private residential units is about 150,000 households.”
“Sir, I beg to move, That the total sum to be allocated for Head U of the Main Estimates be reduced by $100. Sir, the Government's housing policy is quite simple, that is, to provide a home for every citizen. In this regard, the Government has done exceedingly well. Ninety percent of the people own their homes. We can view Government's housing policy as the need to achieve two basic purposes. The first purpose in housing is to serve as a social need, which is to provide shelter for our people. The second purpose is to serve as an investment need, where the value of the people's homes, usually their main assets, is preserved and protected. Viewed from these two perspectives, we can then better appreciate the duty of the Government in formulating its housing policy. Fundamentally, the duty of the Government in public housing is therefore to fulfill the first objective, that is, to ensure that every citizen has a shelter. If this shelter turns out to be a good investment as an appreciating asset, then it is a fortuitous development for the owners. For those in the private housing sector, who can afford private homes, then the Government is relieved of the duty to provide them with the physical shelter. In this instance, the second purpose, which is for the private properties to be looked upon as investments, will come into play. It is then expected that the Government's duty is to ensure an orderly and steady property market. Sir, allow me to touch on what I see as the present tasks of the Government in both the private and public housing estates. For the private housing market, the Government has introduced last May measures to curb the excessive speculative property market.”
“Sir, I want to ask the Minister a second question. There is a very popular request that this resale levy be modified to base on a reducing time scale method. For example, if an applicant has stayed in the flat for five years, the resale levy can be 20%, but if he has stayed for 10 years, maybe it can be reduced to 10%, and if he has stayed for 15 years, it may be zero percent. Can that suggestion be considered?”