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 2 of 18.
“Mr Chairman, Sir, it is important for any country to maintain close and cordial relations with its neighbours, but without compromising on its sovereign rights and interests. Therefore, I would like to discuss our relations with our three closest neighbours, namely, Malaysia, Indonesia and Thailand. Senior Minister, Mr Goh Chok Tong has recently met with Malaysia's Prime Minister Abdullah Badawi. We read from the newspaper reports that they had a very good and fruitful meeting. However, no details were released on the progress of their discussions on bilateral issues. In particular, I believe Singaporeans are interested to know whether we have made progress on the water agreement discussions. Singaporeans are relieved to hear from our leaders that we have sufficient water and would not need to renew the 2011 Water Agreement with Malaysia; and by 2061, Singapore would have developed more water resources. The other issue of public interest is Malaysia's proposal to build the so-called "crooked bridge" to replace the present bridge, and now it is going to be a straight bridge but still a new bridge. All Singaporeans feel that the existing causeway is serving us perfectly, so why the need to spend about $1 billion to build either a crooked or a straight bridge? On Indonesia, the Indonesian President, Susilo Bambang Yudhoyono visited Singapore recently. He was thankful for the fast response and great help given by Singapore during the recent tsunami disaster. He has called our Prime Minister "his good friend". President Yudhoyono signed an Investment Guarantee Agreement (IGA) with Singapore and has urged Singapore businessmen to invest in Indonesia. Both sides agreed to work on an extradition treaty. I share Ms Irene Ng's queries on the purpose of this treaty.”
“I hope that today I would not get a stock "no" answer from the present Finance Minister. Sir, the greatest evil of cash based accounting is that many misdeeds and mistakes of Government can be swept under the carpet using cash accounting. The simplest trick is just to defer payments and expenses to the following year so as to show a profit for the current year. We pride ourselves as a clean and honest Government that would not fiddle with the national accounts. However, to further enhance the exemplary image of good governance, I would strongly urge the Government to consider adopting the accrual basis of national accounting. Although this may be a very massive exercise, perhaps the Minister for Finance would like to consider it for adoption, even if not now, but in the future. Casino”
“The main weakness of the cash based accounting is that it is short term. The accounts can show a net surplus for the current year and hide the huge financial losses yet to be realised in the following years. A cash based account does not adequately reflect the cost of future generations of present Government policies and commitments, such as the failure to cater for future infrastructure programmes or social needs. Many countries like the UK, USA, China and India have realised that successive past governments have allowed infrastructures, such as roads, sewers and schools to run down because the cash based method does not need to account for future obligations. In some instances, the governments do not want to convert to accrual accounting basis because it is more expedient to use asset sales to cover for budget deficits, eg, sale of land, sale of national corporations and even sale of natural resources. The accrual based budgeting system reflects better the total state of health of the national accounts because the accounts show the changing values of assets and also potential liabilities. In addition, the cash basis accounting creates a curious phenomenon that all Government agencies rush to spend monies allocated in the current financial year's budget towards the end of the financial year. This mad rush to spend the remaining money allocated may cause unnecessary expenses to be incurred or create a distortion to the yearly accounts. Sir, I note from the Hansard that as far as 12 years ago, in 1993, Assoc. Prof. Koo Tsai Kee had pleaded earnestly in this House for the Government to consider converting to the accrual accounting method. However, the then Finance Minister, Dr Richard Hu, turned down the proposal.”
“I am afraid that the Ministries are merely giving lip service to their performance indicators which are published. Most of the indicators give no information. They seem to be published just for show. In such cases, I do honestly feel that it is not worth the bother of collecting and publishing these indicators. It is waste of time, effort and money. Sir, the Prime Minister and Minister for Finance in his Budget Statement stated that he had instructed all Ministries to cut another 3% budget cap across the board. I am concerned that such a measure is actually a very blunt instrument. The repercussions are not controllable and some Ministries would simply resort to cut some minor staff positions or chop off programmes that have useful social benefits. For a more targeted approach, I would like to ask the Prime Minister and Minister for Finance whether he would pass instructions down to all Government agencies and Ministries to do a thorough review of all their respective performance indicators. Ministries' yearly performance should then be evaluated based on output using the indicators as reference. I am sure that this manner of review will lead to a far better financial accountability and more efficient use of funds, thereby creating a leaner and more efficient Government. Government Accounts My next cut is on Government Accounts. I wish to raise the issue of accrual based versus cash based accounting practice of the Singapore Government. I note that Australia and New Zealand have converted to accrual based accounting. Corporations and businesses have long adopted the accrual basis of accounting for good reasons. Accrual based accounts generally give a better and more complete picture of the state of health of an entity.”
“I wish to commend the Government for publishing the Ministries' and their agencies' yearly performance indicators in the Government's expenditure estimates or so-called Budget Book. However, the indicators published should provide useful information. Generally, the public and taxpayers are not only interested in how much money is spent by each Government agency on a specific programme. They are also keenly interested in knowing whether they are getting value for money spent. Let me quote a few performance indicators that do not give any information whatsoever. For example, under the Ministry of Finance, IRAS publishes the number of annual income tax returns issued yearly. This data in itself has no information or performance measurements. What will be more pertinent is to measure and compare the number of annual income tax returns, for example, processed by each staff yearly, rather than just the number of returns submitted. The second example is that the Ministry of Transport publishes the operating cost of Ministry's HQ as a percentage on the Ministry's total cost. This again has no meaning in terms of performance measurement. The public will be more interested to know, for example, the cost of construction per kilometre of road built, which is a more important information for them. The third example is the Ministry of Health. In its mission statement, it is mentioned that it intends to promote health and lower infant mortality. However, the Ministry's performance indicators do not give such statistics. It only gives a performance indicator, for example, on the number of establishments inspected by the Ministry. The public actually would be more keen to know the national infant mortality rate or maybe the average time for each consultation at the A&E ward.”
“Sir, the Ministerknows thatthe Governmentactually increases rentals when rentals go up. It is a fact. I cannot give an assurance. But it is a fact that the Ministry increases rentals whenever rentals go up.”
“Sir, I would like toinform the Minister that there are two cases in my constituency. One is the Sin Ming motor workshops and the other is the Shunfu Mart which is for wet market and foodstalls. In both of these cases, we now have the experience where the new tenders are priced lower than the existing tender for the rentals. In such cases, will the Ministry concerned review and lower the rates for the existing tenants?”
“Sir, may I ask the Minister about the rental rebates? With only half the rental rebate being retained, some of the shops are actually now facing higher rentals. With the renewal of the rebates due for review in June, will it be possible for the Ministry to consider continuing with the rebates? Mr Lim Hng Kiang:Mr Speaker, Sir, we should take the issue of rental rebates separately. The rental rebates were given over the last few years inview of the difficult market conditions that we faced - the 1997-1998 Asian financial crisis, the 2001 recession and the 2003 SARS. Since then, the situation has stabilised. Last year, we have enjoyed fairly good growth and, this year, we expect the growth to continue to be stable. And that is the reason why we have gradually removed these rebates. In the meantime, the rents have been lowered to reflect the current market conditions. So HDB shopkeepers and stallholders will face current rents which are very low, compared to the last five or 10 years.”
“Following from what the Minister of State has said, would it not be simpler to have a new formulation whereby you do not impose a levy for the first purchase but give a lower subsidy or no subsidy for the second purchase, so that you avoid the whole complication of paying a levy on the first purchase which gives rise to all these issues? Just simply do not impose a levy on the first purchase.”
“Sir, I am afraid that the Minister of State has not really answered my question, because my question is whether it is equitable to charge on the basis of sale price or on profitability. As he has said, the sale of a flat to a resident is for him to enjoy subsidised housing. But if it happened that he did not manage to enjoy any benefit in the sale of the property, how can we charge him, on top of his loss, another levy charge again? When he buys a second property, he has no cash to pay HDB for the levy - he cannot even afford to have a roof over his head because he cannot afford to buy a second flat.”
“Sir, my question also links to the fact about cashflow and the availability of funds because the present formula requires the person to pay a levy at the time when he buys a second flat from HDB. Very often, some of them may not have the money to pay for the levy because they do not have the cash to pay for it. They may have sold the first flat sometime ago and could well make a profit, but since then, the money has been spent for other purposes. Many of the residents who came to see me actually cannot afford to pay for the levy because of this formulation. Could we review this formula so that residents who are faced with this problem can have an alternative way to deal with the levy problem?”
“Sir, I would like to ask the Minister of State for some clarifications. When the resale levy is imposed at the point of purchase of the second flat, it does mean that there is a levy imposed on the first flat. That is what I understand it to be. Therefore, technically, if the resale levy is based on the price of the sale of the first flat, a person could actually have incurred a loss because his selling price would be lower than his actual cost price plus the renovation that he had spent on the flat. On this basis, this formulation does make it inequitable for those who happen to sell during poor market conditions, maybe forced by financial circumstances and, therefore, incur a loss and have to pay a levy at the same time.”
“Sir, the Minister said earlier that in contrast to the unemployment rate, a better figure to look at would be the growth in the total employment figure. Could his Ministry perhaps publish these figures? If he has the figures right now, could he let us know what is the growth in the total employment figure? The Minister also mentioned that it is very difficult to solve structural unemployment. Could he also give us, in labour statistics terms, the frictional unemployment rate as well as the structural unemployment rate? And if you add the two rates together, it actually implies a medium and long-term unemployment rate for Singapore.”
“Sir, I have two questions to ask the Minister. If I could refer him to the Table that he had just circulated, I would like to ask him that in the fourth quarter of 2003, first quarter of 2004, as well as the second quarter of 2004, there had been positive employment changes in each of these quarters. But I see that the unemployment rate has remained the same - 4.5% for each of the quarter. Could the Minister explain to us why there is no change, whereas in the third quarter of 2004 there was a sharp drop from 4.5% to 3.4%? My second question is to ask the Minister whether he would foresee that, with continued economic growth, there would be a continuing improvement in the unemployment rate?”
“Taking the point from the Minister, I would also like to ask him the question which I posed about the proposed merger of SPH and MediaCorp where, in fact, it did not give rise to competition but a monopolistic body will be formed.”
“This Bill will ensure that there will be a certain degree of level playing field which promotes fair competition for all. Sir, I support the Bill.”
“A weaker competitor can use this competition law to complain against the pricing tactics of a dominant player but, in actual fact, it could be that it is the weaker competitor who is not price-competitive. In such instances, how could the Competition Commission or the court decide and define what are the "losses" suffered by this minor player? In fact, on the converse, it is the consumers who will gain arising from the lower prices that they have to pay. Sir, I would like to seek clarification from the Minister on another point. Why is it that the proposed Bill proposed to form a new statutory board called the Competition Commission of Singapore? As the Minister has said earlier, the stated principle is to incur low regulatory cost, which means to be very cost-efficient. But the creation of a new statutory board means that there is a need for higher expenses in relation to new offices, a new CEO with his staffing needs and expenses relating to formation of a statutory board. Did the Ministry consider constituting the Competition Commission as a department or a section within the Ministry of Trade and Industry? The Commission can be serviced by a secretariat. This approach could be equally effective without incurring higher costs. Sir, finally, I wish to express my strong support for this Competition Bill. I am pleased to note that the Bill will guard against predatory behaviour towards competitors and the abuse of dominant position. I am sure this Bill would be helpful to our local start-ups and the small and medium enterprises (SMEs), as they seek to find a footing when competing in Singapore. I am, therefore, pleased that the Bill will be applicable to all companies operating in Singapore, including GLCs and MNCs.”
“Once the media merger is implemented, we naturally expect to see the closing of some newspapers and TV channels. Would the merger therefore be good for competition and provide more services and variety to consumers? Perhaps not. This media merger could well be the first test case for our Competition Commission. Should the Competition Commission intervene to object to the merger of SPH and MediaCorp? There is a provision in clause 87 of the Bill which enables the Competition Commission to enter into cooperation agreement and mutual consultation with the exempted regulatory bodies. However, I feel that such cooperation or mutual consultation may not be sufficient. In some instances, the regulatory bodies of the exempted sector may decide to ignore the advice or the views of the Competition Commission. I would like to suggest that the Bill should enable the Competition Commission to have an "over-arching authority" on matters concerning the promotion of competition and the avoidance of the creation of a dominant or monopolistic player. Hence, in the event that there are differing stances with regard to competition, the Competition Bill should prevail. I would like to ask the Minister whether this is possible or advisable. My second comment on this Bill is with regard to what is deemed as "abuse of dominant position" of a major player. It is hard to police and define. A major player can decide to drop prices because it is more efficient, cost-effective and innovative. This tactic is ultimately beneficial to consumers. Therefore, why should the Competition Commission rule it as an abuse of dominant position? And why should the Authority disallow it?”
“Mr Speaker, Sir, the Competition Bill is one of the key recommendations of the Economic Review Committee. This Bill gives teeth to the Government's announced policy of curbing any predatory practices of dominant industry players and encouraging more open competition, which forces companies to be innovative and responsive to market pressures and demands. As a result, consumers will benefit from lower prices, more variety and choices and better services,. The economy as a whole will gain. Sir, therefore, I wish to express my firm support for this Competition Bill. In fact, it is long in coming. Nevertheless, it is heartening that Singapore is finally going to have a competition law. Being a new initiative, there are many aspects of this Bill which are not clear and may need some fine-tuning over time. I would like to take this opportunity to raise a few queries on this Bill. The Competition Bill exempts various sectors that have their own regulatory authorities and laws. This can create uneven standards on competition policy between this Competition Bill and the regulators of the exempted sectors. Moreover, these other regulators may be motivated and governed more by their sectoral interests and controls, and not focused on ensuring competition. Let me cite an example. Recently, there was an announcement on the proposed merger of SPH and MediaCorp. I read that the governing media body has approved the merger. But is the approval accorded based on the financial benefits accruing to the two entities to be merged or based on the potential benefits to customers and the industry? I notice that when there are two existing competing media providers, the consumers get more variety of TV channels, newspapers and more innovation in terms of service level and product variety.”
“May I ask the Minister that should oil prices go to such a high level of US$100 per barrel, as stated in the article, what would be the impact on our GDP growth this year and other impacts, like inflation, and on sectors that require oil as fuel, such as pump prices, electricity tariffs and even on transport costs like bus fares and MRT fares.”
“Mr Speaker, Sir, I would like to thank the Minister for his assurance that we can still keep to about 8% GDP growth. But I have just been reading this article from Business Week on "Coping with sky-high oil prices" which predicts that oil prices may go up to US$100 per barrel. Of course, we do not wish for that scenario to happen but ---”
“Mr Deputy Speaker, Sir, I would like to also thank the Deputy Prime Minister and Coordinating Minister for his very clear explanation about national security. I would like to ask whether it is timely now to heighten the level of public awareness about these various potential national threats, such as train attacks, explosions at installations, or even biochemical attacks. If we heighten the level of awareness and make it more public, there will be more public concern and, therefore, people get more worried. I think, on balance, it is better to actually start with more programmes of such kind whereby the public can be educated, as Mr Tan Soo Khoon said, on television, by publications and various means, so that we know how to prepare ourselves and how to react when such instances do happen. In particular, I would also like to ask whether we could also involve the schools, grassroots organisations and the public in general in getting involved in some of these exercises and to suggest whether we should conduct national alert emergency exercises and programmes, so that people can practise and learn how to react.”
“Mr Deputy Speaker, Sir, this is a very important topic of much public interest. I have a few questions, and I shall be brief. I heard the Minister of State say that the penalties will be increased up to $2 million. For parties that are found responsible for causing major blackouts where the fallout and the damages could be very high, should the Government not consider imposing higher penalties than $2 million, so as to serve as a deterrent? Also, should further higher penalties be imposed for repeat offenders? In the case of the ConocoPhillips, I just heard that it was the fifth time that it has caused a blackout. The second question is this. In certain instances where there is a commercial arrangement between, say, ConocoPhillips and SembGas, I was told that the Government has no power to control such commercial arrangements. Is it true, and if it is true, would the law be amended to allow the Government to have more powers to monitor and control the market, and find out the causes for the blackout? The third question is whether the Government actually has a central body or authority with the expert knowledge to constantly review various alternative sources for gas or oil, and even for other forms of energy like solar or tidal, so that we can have more sources for our supply. Finally, during a blackout, many people made phone calls and the phone line was jammed, especially the important lines like 999 and 995. Should the Government not consider setting up another line, for example, 911 - sorry for the pun, but it is a number which is very easy to remember - for the public to call on such emergencies, not fire or police matters but national emergencies like a blackout, so that people get information and know what is happening?”
“Mr Speaker Sir, I would also like to join Members to welcome this move and applaud the Minister for his bold policy decision, though it comes a little late for me - I had done full-time NS - as well as for my son who just completed his 2 1/2 years of full-time National Service. Anyway, I do welcome this move because it benefits the nation and the future batches of National Servicemen. I would like to ask the Minister whether there is any consequential impact from this change of policy, eg, will there be any change or impact on the early disruption scheme? In the past, a person going for tertiary education, who had only a few more months to serve, was allowed to get his NS disrupted, go for his tertiary education, then come back and serve National Service for one or two months. In this case of a shorter NS period, could the Ministry still allow some disruption, so that students do not need to wait for a full year and have their school's programme affected? So, please do consider whether to continue with the early disruption scheme. The second question is whether it has any impact on the period for reservist training. At the moment, there is a limit of 40 days. Usually it is shorter for yearly reservist training. In fact, I hope there is no increase in the reservist training period as a result of the shorter full-time training period. On the contrary, as the Minister has said, if modern technology could allow training to be more efficient, maybe, as a collateral, the reservist training period could be reduced further as well.”
“Sir, may I make a final appeal to the Minister that, in fact, the 30-month period is actually very, very long. I think he should seriously consider whether that can be reduced to a shorter period.”
“Sir, I would like to thank the Minister for saying that he would take a review of special cases, especially those involving financial hardship and retrenchment. In fact, I would like to ask the Minister to consider a policy review, contrary to what he is saying that this is a temporary situation. In fact, this 30-month time bar had been introduced during the heydays of a buoyant property market. But the current situation is that the property market is quite stable and, in some cases, quite depressed, and there have been a lot of changes in the HDB policy, such as the changes to the holding period from five to 10 years and the imposition of levy to cream off the benefits that the sellers can get from the sale of flat. With all these changes, perhaps it is time for the Minister to consider a policy review of this 30-month time bar to a shorter period, so that at least it will not be such a long holding period for those who are affected. Mr Mah Bow Tan: As I have explained, the time bar is really to make sure that private property owners or those who sell their flat, those who currently own a flat and therefore wish to sell, do not compete with those who are first-timers, those who, I believe, would need a new flat much more than them. This is the reason why we have a time bar. Whether it is 30 months or whether it should be less, from time to time, we do review our policies. At this point in time, I see no need to change this policy. But I dare say that if there is a substantial or fundamental change in the situation, we will relook at it again.”
“Sir, I would like to ask the Minister whether he has the data on the present stock of completed HDB units not allocated and how long will it take to fully allocate this stock, based on the current take-up rate. If this period is very long, then perhaps there is a justification for the Ministry to consider having a temporary lifting of the 30-month time bar so as to allow this stock to be taken up at a faster rate.”
“Sir, I think most, if not all, questions have been answered. But I do not know who asked the question about "Hungarian Ghosts". Anyway, I would like to thank the Minister and the two Ministers of State for their very comprehensive answers. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“One suggestion I have is to request MTI to explore and persuade MOF to consider allowing some kind of "pioneer status incentive" for consortia formed by local companies going overseas. MTI and MOF can give five to 10 years of pioneer tax-free status for profits remitted back to Singapore by these approved consortia. This is the reverse of pioneer status for MNCs investing in Singapore. In this instance, the objective is to encourage local firms to form consortia to vie for overseas projects. Another idea is to ask the Government to assist or take the lead with local companies to undertake very large projects overseas. Never mind if we are not so successful in Suzhou. Let us learn from our lessons there and start again. I think the proposed new blueprint for developing the External Wing must be comprehensive and involve both the Government, the local business sector, SMEs and the GLCs. Free Trade Agreements”
“Sir, we constantly say that Singapore has a very small domestic market. As it is getting more mature, the growth rate of our domestic economy will be limited. Our population is not growing. One means of expanding Singapore's economic pie is to expand our external economy, or quaintly called the "External Wing" by Senior Minister. Singapore should not be our only market. We should make the world our market. I think we need to have a concerted effort and an elaborate plan to grow the External Wing. We have the finances. Singapore has huge financial strengths. For people, we can employ both Singaporeans and expatriates. So this is not a limitation. For know-how and expertise, they can be acquired. The key then is just opportunities. We need to have enough tentacles and contacts out there to source, evaluate and work on business opportunities. This, I think, is the major constraint. By investing overseas, I think we can grow our External Wing to be even multiples of the total revenues and profits that Singapore companies can earn in our domestic market. I do not think this is an idle dream. It can be made a reality if we are bold enough. Currently, some locally listed companies are already earning a large proportion of their revenues and profits from overseas. By investing overseas, we are using external resources, not our own resources, to earn incomes for Singaporeans. I think we need a think-tank group to develop a bold and realisable plan. Is MTI ready to take up this challenge? Companies from Japan, Korea and Taiwan regularly form consortia or business cooperation groups when they compete for overseas contracts. They share information and leverage on each other's contacts and abilities.”
“Through the strong and concerted effort of MTI, led by Minister George Yeo, Singapore has signed many Free Trade Agreements with several countries. The most important one is the FTA with the USA. I am interested to know about the status of other FTAs under negotiation, eg, the China-ASEAN FTA or China-Singapore FTA. What about the status of India-Singapore FTA? Given the many benefits of FTAs, I would like to ask the Minister what are his future plans with regard to signing more FTAs with other countries. I am glad to hear that in the case of the Singapore-US FTA, it has enabled us to attract textile companies because of the new textile tariff preferences with the USA. Are there other such gems to be found in other FTAs signed? Can the Minister give more examples of benefits of FTAs? Has the FTA with Japan, for example, given any results so far? On the converse, I wonder whether there are costs to Singapore for these FTAs. We have to open up our banking sector, for example, and allowing chewing gum to come to Singapore because of the US-Singapore FTA. More seriously, it may be useful if the Minister could enlighten the House what are the sacrifices we have to make or trade off with more FTAs.”
“Many ideas have been given by my colleague, Mr Inderjit Singh, on how SMEs can be financed. (5) An environment that does not frown upon failure. Enterprise, creativity and innovation should be honoured and praised. If more interactions and dialogues can be held with the business sector, I am sure the Minister will gather more feedback and ideas. [Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair] 4.20 pm Research and Development Expenditure”
“Sir, due to the recent poor economic climate, the Government has been extending the various rebates given to the business sector, such as rental rebates by JTC and other agencies. The question is, if these rebates have been on-going for a few years, it could mean that structurally, the costs of the fees and rents charged have intrinsically been high. If so, perhaps these rebates should be made permanent. Currently, the rebates are renewed yearly or half yearly. The rebates given by JTC and other agencies are due to terminate on 30th June this year. Mid-year termination creates uncertainty. This arrangement is not satisfactory for companies as they cannot plan their annual budgets. If the rebates are not extended in mid-year, then the companies have to re-do their annual budgets. In fact, as the domestic climate is still soft for many sectors like the retail trade, hotels, construction and local manufacturers, I would like to urge the Government to seriously consider extending the rebates, at least for the second half of this year. SMEs do not want handouts. But they do welcome some help when in need. Rebates are one form. The other forms of assistance for SMEs include, and I can name five: (1) To create a business-friendly environment. (2) Lowering of Government charges, rates and fees which are not meant to be revenue generating, but imposed purely for bureaucratic administration. Such fees should be charged at a nominal or cost recovery basis only. (3) Allow for easier accessibility of businessmen to civil servants. This way there can be better interactions and mutual appreciation of each other's difficulties. (4) Better access to funds and financial support for viable projects.”
“Rail transportation can be high speed, and can move large quantity of goods and people over long distances economically. Finally, to make Singapore a vibrant metropolis plugged into the world grid, we have to find ways and means to differentiate ourselves. We cannot be too stereotype. We have to be creative and innovative, allowing more free play of new ideas. We can be a business hub for the region. Singapore should become a place where men and women of talent and ability will blossom and flourish.”
“Sir, I beg to move, That the total sum to be allocated for Head V of the Main Estimates be reduced by $100. On the Government's intent to create a vibrant business environment in Singapore, the three main ingredients to achieving this intention is PEP - P for People, E for Easy rules, and P for Physical infrastructure. In last year's Committee of Supply debate, Minister George Yeo stated that Singapore can aim to be the "London of Asia". I thought this is a very exciting idea. However, not many people seem to be enthused by it. I wonder why. To be a vibrant and lively city, to be the London of Asia, we need people. People create life and vitality. Hence, I fully agree with Dr Wang Kai Yuen that we should grow our population as quickly as possible to eight million people, maybe not in 15 years, but at least 25 years. We should also try to attract the rich and the famous, be the playground of the rich or super-rich, encourage them to spend in Singapore. I am glad to hear DPM Lee say yesterday that Sentosa Cove can be developed like the Palm Island of Dubai, or like Monte Carlo. On rules and regulations, I am glad that DPM Lee agreed that the civil service would become more entrepreneurial. Rules that obstruct business will be lifted. There must be more flexibility in dealing with rules and regulations. A vibrant business climate needs flexible rules. On infrastructure development, we already have excellent telecommunications, IT, local transport, education, medical and air connections. I would like to add that we should also push for high speed trans-national rail connections with Malaysia, Thailand, Indo-China and China. This will add another dimension to Singapore's strategic location.”
“Sir, I note DPM and Finance Minister Lee has taken a bit of rest and left all the questions to be answered by the Second Finance Minister, Mr Lim Hng Kiang. I think DPM deserves a rest for the last few days of very hard work. I would like to thank Mr Lim for his very clear and elaborate answers. I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Foreign banks are amongst the first to pull their loans during that difficult financial period. Sir, therefore, I would like to ask the Minister for Finance what are the impact of the local banks consolidation and his Ministry's plans to ensure that both local and foreign banks here cater for the small SMEs and individuals.”
“Sir, I would like to ask the Minister for Finance for his views on the current state of the consolidation and merger of local banks. Now, we are left with three major local banks. There is a constant market rumour that one bank is waiting to be acquired by another. Finally, we could be left with only two large local banks. There is a genuine concern that the reduction to only three, and eventually maybe two, local banks does restrict the number of banks that local businessmen and individuals can approach for loans and other banking services. Imagine if you are down to two local banks, if one bank rejects your loan, you are at the mercy of the other. In the past, a company needing a business loan, or an individual needing a housing loan could approach five to six local banks and a large number of finance houses. Now, there are only three local banks and a small number of finance houses to go to. Getting a loan seems more difficult nowadays, especially for SMEs. It is often quoted that Switzerland has also only two large banks, that is, the UBS and Swiss Bank Corporation (SBC). However, we know that Switzerland has many provincial and cantonale banks as well. Yes, in Singapore, there are many foreign large banks which are given full banking licences. However, these foreign banks do not cater to small businesses and individuals. Their sights are set at the large clients. Moreover, our experience is that foreign banks tend to be fair weather friends. During rainy days, they are more likely than not to take away their umbrellas. Not the fault of their local management business, as the pressure is often exerted by the overseas headquarters. This is indeed the experience of many Singapore companies during the Asian financial crisis.”
“Sir, DPM Lee has announced that about 80 GLCs have been identified to be divested in his Budget round-up speech. I am glad to hear that. My GPC colleague, Mr Inderjit Singh and I have said many times in this House that GLCs, TLCs and NLCs - I am referring to NTUC-linked companies - do occupy part of the business space in Singapore. Singapore is already a very small market. The competition from GLCs has a severe impact on the operational and business opportunities left for local SMEs. If we wish to see private enterprise as the engine of growth in the future, then more business space should be given to the private sector. Hence, I would like to hear more details on the Government's plan to divest the non-strategic business of the GLCs. During the divestment process, I would particularly like to see opportunities given to Management Buy-Outs (MBOs) or Management Buy-Ins (MBIs) which is to participate with external investors. In this way we can encourage GLC management to start businesses on their own through participation in the divested GLCs. It will also create a larger pool of local entrepreneurs in future. GLCs are larger and stronger and well-placed to compete overseas. They help to develop the external wing. This is a very important charter of the GLCs. There have been many suggestions in the past that GLCs can lead and work with local SMEs in jointly working together to vie for overseas businesses and contracts. Sir, I feel this way the GLCs can also play a useful role in cooperation with SMEs.”
“The Minister did not answer my question, which is on the new tax relief for individuals who top up the non-working spouses who are 55 years and above. I would like to ask whether it can be earlier so that they can have an earlier top-up and more cash accumulation. 2.00 pm”
“Even a menial odd-job labourer earns about $600 per month nowadays.”
“Sir, at present, a married woman could claim tax relief of twice the amount of foreign maid levy paid, up to a total of $8,280 a year against her earned income. However, this relief cannot be claimed by the working husband. I think this rule is unfair for both the working husband and the family as a unit. Normally, both husband and wife bring up and support the family together. If it so happens that the husband is working and the wife is not, then this relief cannot be enjoyed by the family. In the interest of promoting more families and more babies, I would like to sincerely ask the DPM to reconsider this foreign maid levy relief. I suggest that either the working husband or wife can claim this relief. Currently, only the wife can. This is one instance where the woman has more rights than the man. Sir, on another relief. In his Budget speech, DPM Lee announced that he will extend tax relief to individuals making cash top-ups for non-working spouses who are 55 years old and above, and who earn not more than $2,000 in the preceding year. Though I wish to commend him for introducing this tax relief, I would like to urge him to be not so tight-fisted, and maybe to be a bit more generous. As the money is put into the non-working spouse's CPF retirement account, and it is entirely voluntary, I propose that the Government allow this tax relief to start earlier, for example, when the non-working spouse is younger, say, 40 years old. Starting earlier will enable the voluntary contributions to accumulate gradually over a longer time, rather than start so late in life when the spouse is already 55 years old. Moreover, the income limit of $2,000 for the non-working spouse is too low. It amounts to only about $166 per month.”
“Yes. This would be a very welcome move by local businesses, as they will be able to deploy the moneys earned overseas in expansion projects locally. This will also be beneficial to wealth and employment creation in Singapore. Corporate Taxes”
“Have studies been done to compare the entire tax structure of direct and indirect taxes and the non-tax revenues? How do we evaluate and conclude that Singapore has achieved an efficient and the most desirable tax regime? Have we considered whether it is desirable to adopt a flat tax structure of 16%, like in Hong Kong? Sir, on a tax related matter, I would like to commend DPM Lee on his decision to waive tax on remittances of foreign income of individuals. This waiver is well received. It will encourage a substantial influx of funds into Singapore. It will help create a healthy market for wealth management. I would like to ask DPM Lee whether the Government would also consider extending this waiver to remittances of foreign income back to Singapore by companies.”
“Sir, I beg to move, That the total sum to be allocated for Head M of the Main Estimates be reduced by $100. Sir, I wish to ask DPM and Finance Minister what is the ideal long-term overall tax structure for Singapore. He has covered some aspects of Singapore's tax structure in his Budget round-up speech yesterday. The total tax revenue was $21.59 billion in FY03, and estimated to be $22.05 billion in FY04. However, there are no details of the breakdown between direct and indirect taxes in the Budget document. The Government has stated its intention to achieve a balanced budget by FY05, whilst actual deficits were incurrred in FY01 and FY03. A budget defict is expected for this FY04. What is the current share of direct and indirect taxes? Corporate tax will be lowered by 2% and the intention is to reduce personal income tax by 2% some time in the future. I am concerned that the shift of direct to indirect taxes will be greater with these cuts in direct taxes. There is the spectre or fear that this could lead to further increases in indirect taxes, such as GST. If not, how is the Government going to achieve a balanced budged in future, not just by 2005, which is actually next year? If we impose more on indirect taxes, it implies a heavier tax burden on the lower income group. The lower income group normally pays no or low personal income tax. I would like to ask whether our current tax structure with 20% corporate tax and 5% indirect GST tax is a competitive tax regime. How do we compare with Hong Kong and other countries that we compete with, eg, Malaysia, Thailand, Indonesia, China and Taiwan? 1.00 pm We cannot just compare the main taxes, but have to evaluate the entire tax regime, inclusive of tax and non-tax revenues.”
“Thank you. I am just about to conclude. In the other occasion, during the debate on a motion that I moved on the GLCs, I had quite a few things to get off my chest, here I did the same. Thank you for bearing with me. I thank you for your indulgence, Sir.”
“It means to describe a fertile place where precious assets and talented minds can flourish. We hope that Singapore can be such a place, a land of opportunity, a fertile place of men of talents. Mr Speaker, Sir, this is another occasion in Parliament that I have made a rather long speech. You know that I do not make lengthy speeches.”
“But, in modern Singapore, where we have mass instant communication with the outside world, I firmly believe that flexibility and diversity are the right choice. I strongly feel that to create a strong society, we should encourage people to open up and speak up more freely. Any stone is worth turning over now and then for a re-look. There can be gems underneath. At the most, if it is not time yet, we can place the stone back gently. Hence, we must allow the establishment of a more open society. There is a saying that great men think alike. In the new world, great men do not have to think alike. No one and no country has the monopoly to great ideas. In many instances, it is quite valid that "the unreasonable man maketh the world". I am heartened that we are indeed moving towards this direction. Over the weekend, it was reported in the newspapers that the Acting Education Minister, Mr Tharman Shanmugaratnam, wishes the Ministry of Education to focus on how to nurture original thinkers. He said: "We will not succeed if we produce young Singaporeans who are too regular, or too much of the same mould ... We need Singaporeans with different talents and different ways of thinking ... willing to test new ideas and approaches with each other and with people from the world ... We have to nurture more Singaporeans who want to do something exceptional and stand out from the crowd." I fully agree with Mr Tharman Shanmugaratnam. Blessed would be the day when he could achieve his aim. Let us not summarily dismiss ideas. Let us have more open debates. Let us find what we can learn from others, or strike out on our own. Mr Speaker, Sir, allow me to conclude by quoting a Chinese saying by a famous Tang dynasty poet called Wang Le: "wu hua tian bao, ren jue ti ling".”
“Those which can make profits in the first few years are in the minority. So, why offer an incentive that most local companies cannot enjoy? It is like dangling a plum in front of them to merely tease them. I would like to suggest that the Government consider varying the scheme to allow for companies to enjoy the first $100,000 profit offset as from the point of the first year of profit of a new start-up, ie, first year of profit, not in the first three years alone. If we can be so generously giving 15 years of tax-free status to MNCs, why not a small gesture for these small new start-ups? Help the individuals Another complaint, Sir, is: why is the Government more generous to companies as against the individuals? The Government is favouring corporations versus individuals in the 2% income tax cut. The Government has said that it cannot fulfill its promised 2% cut to 20% target for both corporate and individuals at the same time due to budget constraints. If so, why not share the misery between corporations and individuals? Why not allow for a 1% cut each in both the corporate and personal income taxes, rather than give all the 2% cut to corporations and then ask the individuals to wait for a few more years? Towards a more open society Sir, to achieve the end of creating Singapore as a land of opportunity, it is very valid that we must have effective government and strong society. Effective government is easier to achieve, but strong society is much harder. The two routes to creating a strong society are either to create steadfastness and homogeneity, or flexibility and diversity. In the old world, I think steadfastness and homogeneity could work.”
“This is a matter that perhaps MCDS may wish to review. Pro-competition - help the small businesses In the Budget Speech, DPM Lee said that the primary stance of the Government in its economic policy is pro-competition. I would like to voice a view that this policy cannot be taken to the extreme. Singapore is a small country. Our market is very small to carry this policy of pro-competition in every arena. I would advocate a degree of flexibility. It is a fact that we have openly and unabashedly given long years of protection to the local banks. The constant crying for help by SMEs cannot be crying wolf all the time. At times, they are really in need of help, for example, in getting some preferential treatment in certain types of non-strategic and non-critical Government procurement contracts. It is practised in many countries, even in the USA. It is also time to recognise that GLCs do occupy some of the business space in Singapore and they compete against SMEs. The GLCs tend to leverage on their size and connections. We know that this is a pro-business Government, which is done for national benefit. Nobody denies that. There has been some disappointment that this year's Budget is again too pro-MNCs and pro-large local companies. For example, the pioneer status for foreign investors is increased from 10 years to 15 years. When the Government does give something to small local companies like start-ups, it only gives parsimoniously and grudgingly. Let me demonstrate why. The Budget announced that local start-up companies are given a new tax relief of $100,000 of profits over the first three years of operation. This incentive is not of much help. Most new companies struggle to make money in the first few years.”