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 7 of 18.
“Sir, many of my parliamentary colleagues and I have spoken on the need to help the pensioners during the Budget debate. In my speech during the Budget debate, I mentioned that retired pensioners are a pool of past contributors who had toiled hard to help the country achieve economic growth and nation building, at salaries that were generally below market rates. I mentioned also that the $1.7 million given to pensioners as adjustment of the Singapore Allowance and gross pension ceiling is paltry compared to the budget surpluses of $3.5 billion. The Finance Minister, I am certain, could have and should have been more generous to the pensioners. Allow me to plead harder again for the plight of the pensioners. Assuming a pensioner retired 10 years ago in 1990 and had a pension of $1,000. In the last 10 years, inflation rate, as represented by the accumulative rise in the Consumer Price Index (CPI), has increased by 17%. In addition, the national average monthly income of Singaporean households has increased by 74%, from $9,670 in 1990 to $16,800 in year 2000. If we combine the two factors, that is, of rising inflation and the increase in household income, we can see that a pensioner with no other sources of income will fall behind other Singaporeans by a good 91%, that is by adding the two figures together. That actually means a $1,000 pension in 1990, would roughly diminish by about 50% in today's value, compared to the other economically active households. Sir, I am not advocating an indexation scheme to peg pensions with yearly adjustments. This is not right. What I am requesting is that, in good years, when all Singaporeans are rewarded with pay rise and NWC adjustments to salaries, we should not forget the pensioners. At present, there are about 12,000 pensioners.”
“Sir, the Government has announced the reduction of the property tax rate from 12% to 10%. However, at the same time, the 25% property tax rebate was removed. The net effect is that except for the residential sector, the commercial, office and industrial sectors do not have any gain in the property tax reduction. For a higher benefit to the businesses and property owners, it would have been more appreciated if the Finance Minister could have done both, that is, to lower the property tax rate and, at the same time, give a rebate. Sir, property tax is originally conceived as a form of wealth tax. However, the function of the property tax as a wealth tax is partially diminished since most Singaporeans own their homes, 93% to be exact; as HDB dwellers are mostly home owners as well. Hence, it may be opportune for the Government to reconsider the use of property tax as a wealth tax. Although the negative effect is mitigated by the reduction of property tax for owner occupied properties, the effect of property tax for non-residential area, that is, for commercial, office and industrial, is that it essentially becomes a cost factor. Property tax has an impact on rental charges as property owners normally on-charge the cost of property tax to the tenants. This cost factor adds to overall business costs. Sir, my question to the Minister is that if property tax is losing its purpose as a wealth tax, and tends to add towards operating cost, I would like to ask the Minister whether he would review the role of property tax and eventually reduce it to a lower level over time. In the long term, is there a need for property tax, since income tax and GST are serving the main functions of direct and indirect taxes?”
“If taxes or levies are lowered further, which the Government could afford to, more money could be left in the hands of the people and the businesses who can then have more money to spend on their needs. This will help to stimulate the economy. Similarly, if the Government's development expenditures are unintentionally curtailed because of poor budgetary planning, then there will be a contractionary effect on the economy. At least, the economy could have been stimulated further through higher capital expenditures on worthwhile Government projects. Sir, my comments above are of course predicated on the understanding that I am not advocating mindless and wasteful spending. We value frugality and prudency in our expenditures are virtues. I am also aware that excessive spending can cause the evil of inflation. Given the complexity of the issues, I would like to ask the Minister for his comments on how he would deal with the substantial surpluses, and whether measures will be taken to improve the Government's budget planning and funds allocation process.”
“As a result, we have no foreign debt which is the primary reason why we are not adversely affected by the recent Asian financial crisis. Sir, however, the substantial budget surpluses also pose concerns in some aspects. Allow me to elaborate. The areas of concern are: (1) Each year, the actual surplus achieved is typically higher than the original forecast of the annual Government budget. It may mean that the various Ministries are unable to plan accurately their annual incomes and expenditures. This tendency is not desirable, as some Ministries or departments could be deprived of funds for their projects and programmes, because other Ministries asked for more money and did not utilize the funds in the end. The affected Ministries could well be the welfare and social services group as they tend to be lower down the priority list compared with the economic agencies. So I would like to ask the Finance Minister whether the Government budget planning process can be tightened. Those Ministries and departments that over-budgeted and did not fully utilize their allocations should be queried and taken to task. (2) On the Government income side, the budget surplus could well have the adverse impact of over-drawing on the Government taxes, charges, levies and fees. On the Government expenditure side, there could be under-spending of the expenditures, especially in development projects and expenditures. Both situations are not desirable. On the one hand, over-charging and over-collection of Government income mean that the Government can be over-taxing the people and the businesses.”
“Sir, this topic of the substantial budget surplus was raised by a few Members during the Budget debate. I feel that there is a need to raise this issue for further discussion because it is an important topic with major impact on the yearly financial plans of the Government. I have examined the budget surpluses of the Government in the last five years. The figures are as follows: FY 1996, the surplus was $5.6 billion; FY 1997, $6.1 billion; FY 1998, - $0.4 billion (this was a recession year); FY 1999, $0.9 billion; and FY 2000, $3.5 billion. The forecast for FY 2001 budget surplus is $4.4 billion. Based on the above figures, it can be seen that the Government has performed exceedingly well to achieve consistently substantial budget surpluses, except for 1998 which was a recession year. If we take the total of these surpluses in the last five years, the sum is a hefty $15.7 billion, which is nearly 10% of the year 2000 GDP. With these substantial surpluses, the Government has much flexibility in terms of the actions and policies it can pursue. Therefore, it has the following key advantages: (1) Flexibility and freedom to pursue Government policies and objectives. (2) Ability to implement wealth redistribution policies that enable the Government to give help to the poor and needy. (3) Ability to build up a substantial national reserve that can be used to cushion against uncertainties and the ability to act against external interferences and exigencies. However, what is more remarkable about our substantial budget surplus is that it is attained after accounting not only for the Government's annual operating expenditure but also inclusive of total annual developmental expenditure.”
“Sir, with the benefit of not having Questions for Oral Answer session of one-and-a-half hours, we actually have the benefit of a full two-and-a-half hours to answer 29 cuts, which also provide time for the Members to speak fully on their questions and the Minister, as well as the Senior Minister of State, to give very comprehensive and detailed answers. On that note, I wish to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, on electricity, there have been several reports and statements made by the Government about the intention to privatise the generation of electricity and allow more players into this sector. This move is supported and welcomed by the people, because it is hoped that with more private sector players, the service delivery of electricity will improve, and electricity rates will be kept low. The recent sharp increase in electricity charges has created much concern to the common people and the business sector. This has added to living and business costs. Hence, Sir, I raise this cut so that I could ask the Minister what is the status with regard to attracting new operators into this sector. How soon or how much faster can the privatisation effort be pushed along? In addition, I wish to ask whether the Government will allow private operators to buy electricity from neighbouring countries, like Malaysia, for sale to Singapore-based users. It may be possible that there are occasions for excess electricity generated by Malaysia which they are prepared to sell to us at competitive rates. Unlike water, electricity is a less emotive and critical utility. We should favourably consider sourcing electricity from Malaysia if they have excess to sell and we can use this source to supplement and cover for the peak electricity demand periods.”
“Sir, Sentosa Island is one of the main attractions for tourists and a favourite recreational playground of Singaporeans. In land scarce Singapore, it is indeed a very valuable piece of real estate. One of the regular grouses of Sentosa is the hassle of getting there. When you get there, the difficulty is getting around due to the very inefficient monorail system. This problem will be solved when eventually there will be MRT links to the island. To maximise the potential of Sentosa, I would like to suggest to the Minister to give further thought in improving the local transportation in Sentosa. Perhaps, an efficient network of LRT and a large fleet of small buses will enhance the speed and convenience for visitors to get around in Sentosa. Secondly, money spent on future new and bold attractions, eg, theme parks, fun rides, museums and theatres, will be money worth spending as tourists will be attracted to stay longer in Singapore. Hence, I sincerely feel that if we could give bold and imaginative ideas and attractions to be developed in Sentosa, it will have a tremendous impact on the tourism income for Singapore. I would like to take this opportunity to ask about the status of the Sentosa Cove project. Bringing residents to Sentosa is a very good move. It will add life there. Sentosa Cove will provide a very pleasant resort living environment. However, it was reported that this Sentosa Cove project will be deferred. What are the reasons? What are the problems causing the deferment? Also would the MRT links be provided to Sentosa Cove to enhance its attraction as a prime residential area in future?”
“It is this ability to constantly adjust and change that enables the locality to remain so vibrant. Hence, in both the HDB and private shopping and retail areas, I would like to suggest that the Government should actually let the shopkeepers decide what is best suited for the area. Sir, could the Minister give us his views?”
“(ii) Sir, I wish to ask the two Ministers to be flexible in the applications of change of use of premises in the case of privately owned shops or retail outlets. Another example I have in my constituency is the private old shophouses along Upper Thomson Road. Business has been bad for some of these shophouses for several years. Commercial activities, like shops and restaurants, have been allowed on the first storey, but the authorities have not allowed commercial activities on the second storey but insisted on its use as residential. Repeated appeals to the authorities to allow the second storey for commercial purposes, such as restaurants and offices, like what Mr Inderjit Singh brought up, for dot.com companies have been turned down. The stated reason given was that the proposed commercial uses would "likely aggravate the traffic and illegal parking problems in the area." Sir, the stated reason given is not reasonable. The shopkeepers feel that certain alternative uses of the premises would help to bring in new businesses. Why would the authorities reject the applications on the basis of concern of traffic? Having higher traffic is a good sign. It means that the intended use is viable and will generate more economic activity. As there are other means to resolve the traffic problem, we should not curtail a sound and viable business idea just because of the fear of traffic congestions. Sir, a good example where freedom to operate and choice has worked very well is the popular Holland Village. It has a very vibrant and lively eating and shopping locality. I notice that new shops or outlets constantly sprout out in this area. When the business is not sustainable, it is quickly replaced by another.”
“Sir, the retail sector has been experiencing poor business for several years now. Although there was a 7.8% increase in the total sales volume, after excluding unusually high motor vehicle sales in the year 2000, most retailers are still finding business difficulties. This has prompted the Government to draw up the Retail 21 Plan, which was announced yesterday. Sir, I notice that the retail business in HDB estates has been poor in the last few years. This is aggravated by the fact that some years ago, under the HDB's Sale of Shops programme, many shopkeepers had bought their shops from the HDB at market prices then. Even though the prices were discounted from market rates, some are finding difficulties in servicing their bank loans. In the face of continuing poor business, I would like to ask the Minister to work with his colleague, the Minister for National Development, in devising methods for assisting the retailers, hawkers and stallholders. Both Ministers may wish to consider the following suggestions: (i) In HDB wet markets and food courts where the business is poor and the stallholders are finding difficulties to sustain their business, the relevant authority should consider reducing the rentals. Such downward adjustment of rentals should be undertaken speedily, rather than after numerous appeals. This will also ensure that the stallholders will have a chance to survive with a lower rental cost. A case in point I have is in the new Shunfu Mart, a wet market-cum-food court in my constituency. Business has been poor from day one since this new centre was opened last year, but the HDB has not yet agreed to any rental reductions despite many appeals.”
“Sir, with the collapse of the dot-com phenomenon in the US, we are seeing more and more dot-com or e-commerce companies collapsing and falling by the way-side. Singapore is equally affected by this dot-com downturn. However, from my contacts with the e-commerce or Internet community, I feel that there are some fairly good start-up companies with good management and sound product ideas which would be worthwhile to rescue. However, due to a lack of funding which dried up suddenly, these potentially sound companies can be starved of funding and could therefore finally collapse. Like my GPC colleague, Mr Inderjit Singh, I feel that the Government can establish a Start-up Lifeline Fund to assist these companies. The idea can be based on a co-funding manner where the Government can work together with some selected experienced and capable venture capital and management companies to seek out and support promising local companies to get through the current difficult market. The general concept can be that of a Lifeline Fund that can co-invest into local companies on a dollar for dollar basis with the private sector funding. This way, some promising local start-up companies can be assisted to pull through the present difficult period. The details of the scheme can be worked out with some of these industry professionals and need not be discussed here, provided that the Government can agree and support this idea through a pledge of a certain sum of money, say, to create a fund of $50 million which is to be matched by another $50 million from the private sector, making a total of $100 million. This $100 million fund can therefore be a very important lifeline for many of our smaller start-up companies. 1.15 pm”
“I would like to suggest that for some of these bonds, we should require our scholarship students to return to Singapore to work as the only requirement for bondage, rather than to be bonded to a particular company in Singapore. Does the Minister concur with this evaluation? Let us hear his comments. However, not having enough world-class companies now does not mean that we should not start to cultivate and nurture promising local companies to grow into world-class ones. The process would take time and substantial effort. For a start, we need to create a larger pool of entrepreneurs running sizeable companies. They must be prepared to take risks and venture out. They must be tolerant to failures and we must create an environment of enterprise, with ample rewards for those who succeed. Local companies should be encouraged to merge so as to create bulk and compete more effectively against foreign enterprises.”
“I do feel that enough has been done by the Government in recent years in terms of creating a pro-enterprise environment, such as a low tax regime, stock option schemes, access to venture capital funds and a conducive business climate. However, what is still lacking is the insufficiency of the main ingredient, which is the people or the entrepreneurs. Having done so much by the Government, I actually wonder why we constantly lament at the dearth of entrepreneurs in Singapore. Some people rationalise that the reason could be that Singapore is a small economy. But I feel that this excuse of small size is not a good excuse to make. Let us take the example of Nokia. Nokia is from Finland which has an economy and population similar to Singapore. Yet Nokia is a world-class company that grew by seizing the opportunity of the world telecommunication boom in recent years. Sir, I would suggest that the Minister may consider seriously two other factors that may affect the growth of our entrepreneurship environment in Singapore and the number of entrepreneurs that we can nurture. First is the effect of the crowding out of the private sector by the Government-linked companies (GLCs). Second is the deprivation of a pool of the brighter and talented young people to join the private enterprises, as the Government and the GLCs and the statutory boards have been giving out large numbers of scholarships to capture our brightest young students and bond them to work in the Government service or in GLCs. If these are valid reasons, I would like to ask the Minister whether the Government should consider hastening the process of divestment of the GLCs and liberalise the concept of imposition of bonds on our students. Perhaps, it is time for us to take a more enlightened approach on bonds.”
“Hence, to be successful, I feel that the framework of the SBF has to create avenues whereby the different firms from different groupings and of different sizes can find their views and interests voiced adequately through this apex body. The Minister may wish to comment on these concerns. I move on to my next cut on entrepreneurship. Singapore has been ranked the world's most globalised country in a recent survey done by the respected US magazine called "Foreign Policy" of 50 countries around the world. This Globalisation Index was created by the Foreign Policy magazine and renowned US consulting firm, AT Kearney. The report said that "Tiny Singapore clearly stands out as the world's most global country and it far out-distances its nearest rivals, which are the Netherlands, Sweden, Switzerland and Finland which are in the second, third, fourth and fifth places respectively." I am actually very intrigued by this celebrated ranking of Singapore as the world's most globalised country by a very respectable agency. No doubt, the assessment is correct based on the criteria like cross border flows of goods and services, capital, people and communications. If we are a top globalised country, then where are our top global companies? In sharp contrast with the hugely successful and well regarded global companies like Shell, Ericsson, Swiss Bank Corporation and Nokia, which are companies and products of the lesser ranked companies, then where are the world-class companies home-grown from Singapore which can match our exalted status as a globalised economy? Save for Singapore Airlines, I cannot think of any other local companies that can truly be said to have a global business presence equal to that of Shell or Nokia.”
“Sir, on the formation of the Singapore Business Federation, early this year, it was reported that the Minister for Trade and Industry, BG George Yeo, said that he would be moving a Bill to recognise the Singapore Business Federation as the new apex business federation in Singapore. The idea was that the local business sector needed a strong apex organisation, like the Keidanren of Japan, to improve its representative prowess, both locally and overseas. The Singapore Federation of Chambers of Commerce is reorganising itself into the SBF, and a search for a suitable CEO for this new body is ongoing. I would like to ask the Minister for an update on the status of this proposed SBF. When would the Bill be ready for tabling in Parliament? Could the Minister give us a preview of the main elements of the Bill? What are the features that would ensure that the SBF would have the image, clout and means to be developed as an equivalent to the Japanese Keidanren. One way is to ensure that our top businessmen can be persuaded to serve on the board of this SBF, and another is to ensure that we can identify a very capable and well-respected person to be the CEO. 1.00 pm However, I do have a concern with the SBF, which is that if the concept is to have a law that empowers the SBF to require all companies operating in Singapore with paid-up capital of more than $0.5 million to be members, then this may create a lot of resentment by the smaller companies, especially if they have to pay subscription by law. Among the 18,800 Singapore registered companies which will be forced to join, the majority will be small and medium enterprises. They may not want to join because they may feel that the SBF will speak only for the large firms and their interests will not be represented.”
“Sir, can I make a point of clarification?”
“For example, Indonesian President, Abdurrahman Wahid, was reported to have said that he wanted Singapore to help first restore Indonesia's economy, and not search for new trade partners far afield. The Malaysian Prime Minister, Dr Mahathir, was reported to have remarked that such FTAs were a "worrisome" development affecting the ASEAN Free Trade Area (AFTA). He was bothered by the non-ASEAN countries that may use the FTAs as a "backdoor" to enter AFTA, by shipping partly completed products into Singapore and complete them here so that these products can be regarded as Singapore-made. Sir, I am rather baffled by these contrasting comments of the Business Week magazine, analysing the benefits of Singapore's FTAs with the surrounding countries in the other parts of the world, against the resentments expressed by the two closest neighbours. Perhaps, the Minister for Trade and Industry could enlighten this House.”
“Therefore, I would very much appreciate to hear from the Minister what are his views on the possible scenarios unfolding in Indonesia and Malaysia. If there were to be adverse developments, how could Singapore cushion ourselves against the negative impact? Sir, can I move on to my second cut? On Free Trade Agreements, while maintaining close ties with our neighbours, Singapore has embarked on a bold initiative to leapfrog the region by establishing closer trade and investment linkages with the stable developed economies further away. This is achieved by signing Free Trade Agreements with other countries outside ASEAN. 12.45 pm Singapore has inked an FTA with New Zealand, and is in discussion with USA, Australia, Canada, Mexico, Japan and Chile on FTAs. These FTAs will bring about substantial benefits. For example, if we can sign an FTA with the USA, it would attract more foreign investments from MNCs eyeing the US market. This benefit is clearly seen in Mexico, which has a North American Free Trade Area (NAFTA) with the USA and Canada. It was reported in the Business Week magazine, in its 5th March issue, that with the widened horizons, Singapore's FTAs could bring the following advantages: 1. Reduce the nation's reliance on its neighbours. 2. Lower tariffs and attract foreign manufacturers to Singapore. 3. Spur our neighbours to get back on the free-trade track. 4. Help boost global confidence in the rest of the region in Southeast Asia. Given these meaningful and real benefits, I was indeed surprised to read in recent press reports that top leaders from both Malaysia and Indonesia were concerned about Singapore's unilateral free trade agreements with non-ASEAN members.”
“Our trade with Malaysia amounted to S$82.6 billion, nearly 9% higher than the total trade of S$75.9 billion with USA. Similarly, although we do not publish our trade figures with Indonesia, it is understood that our trade with Indonesia used to be very substantial. I do not know whether the trade volume with Indonesia has dropped since the political and financial turmoil in that country, but I would think that the trade volume should remain significant. In this context, we have to accept that any adverse political or economic developments in these neighbouring countries will have an impact on Singapore. In fact, DPM BG Lee Hsien Loong has recently said that this is one of the most difficult and uncertain times in this region. The sharp rise in the bilateral trade with Malaysia was due to a few factors. One was the increase in Singapore's Foreign Direct Investment (FDI) to Malaysia. The second was the upturn in the global electronics market which led to a more re-export of electronic parts and components between Singapore and Malaysia; and the third reason was the increase in oil exports. This growth of bilateral trade between Singapore and Malaysia clearly demonstrates the close intertwining of the two economies. Before the regional crisis, Singapore was pushing for the Growth Triangle and for the promotion of the location of manufacturing facilities by Singapore based companies and MNCs to the neighbouring countries and regions, like Batam and Bintan. Therefore, similarly, we also have close ties with our other neighbour, Indonesia. Hence, I am concerned about the economic and political events in Indonesia and Malaysia. The Minister for Trade and Industry recently visited Indonesia, and he also must have been in close touch with the developments in Malaysia.”
“So we could easily have asked thousands of questions within these few days of sittings. The reporter also asked why the number of speakers also went down and it seems to be a very important fact, from 25 to 13 yesterday. This again shows that she has no clear understanding of our process. MPs speak according to the time that they feel they should make clear and good points, not by the length of time they speak. On the final day, we need to give the Minister time for him to give a very detailed reply. Therefore, more time is spent and given on the first day for MPs to speak. Sir, as a final remark. In a sense, I am disappointed that somehow the recent press coverage of our parliamentary process seems to be taking a line on focusing on the MPs themselves, instead of the issues and topics for discussion. It seems to also lack, in my own words, in-depth analysis of our process. We should actually look at issues being raised and how the Minister answers them, rather than say which MP asks which particular question, how many times he has been featured in the coverage, and, in their points, counting the number of times the MP has been mentioned. These are not very fair assessments of an MP's performance because he has worked on the ground. Even if the MP spends little time, he makes quality comments in the debate. I think, on the other hand, the press should also take note of what they are doing, and not focus on MPs themselves, but on the topics we are discussing. Sir, may I go on the topic of the first cut which is the impact of regional developments. Sir, the Economic Survey of Singapore 2000 reported that Singapore's trade with Malaysia surged by 37% in Year 2000. For the first time, Malaysia overtook the USA as the top trading partner of Singapore.”
“Sir, I shall take your point that we should make our speeches short and sharp. Sir, I beg to move, That the total sum to be allocated for Head W of the Main Estimates be reduced by $100. Sir, before I go into speaking on my cut on the impact of regional developments, I am compelled to actually make some remarks on some reports made in the press today. In particular, I would like to refer you, Sir, to the commentary by a certain reporter that yesterday there was so much time but so few questions. In fact, the reporter went on to say that with the Budget debate on, there had been only two queries for oral answers each day and not by elected MPs. That did not sound very fair. She went on to say that we had extended Question Time by half an hour purposely to give more time for Q&A and why the MPs, especially elected MPs, did not use the time to ask questions. And she said that rather than elected MPs, Nominated MPs and NCMP had used the time. Sir, I must say that this is unfair because it shows she has no clear understanding of our parliamentary process. I am also disappointed that this particular reporter actually had spent many years in the Gallery, looking at us making speeches, and should know the procedures of the Government and parliamentary process here. In fact, Question Time is only used during normal Parliament sittings. During the Committee of Supply, MPs actually spend their time asking many detailed questions. The fact that we have extended the sittings to 61/4 hours every day is testimony that we actually spend a lot of time asking questions. As you have said, Sir, there are a total of 484 amendments being filed, and each amendment can be a multiplicity of many other questions in those topics.”
“As he has said in his Budget speech, this year's package of "share-outs" is the most generous to date (except to the pensioners perhaps). This sharing-out is possible because of the effective and prudent Government we have. It is especially significant in the face of the turmoils we see in the surrounding region. The Government will continue to build substantial budget surpluses. Next year's budget surplus is expected to be higher, as I said earlier, at $4.4 billion. If this is achieved, we would be pleased that some of this surplus is shared out with the people, and the balance is put into our national reserves as a cushion against future uncertainties. Mr Speaker, Sir, uncertainties and changes we are sure to face them, now and in the future. In my view, the best safeguard is not how big our reserves are, but the key is to have an effective and honest Government. That is the one and only surest safeguard.”
“However, companies can only enjoy the tax cut if they make a profit. If they are not profitable, the tax cut is not meaningful. Therefore, reducing cost of doing business is still the best and most direct to them. The only measure in the Budget that helps to reduce business costs is the reduction in property tax rate from 12% to 10%. However, except for the residential sector, this effect is negated by the withdrawal of the 25% property tax rebate. Mr Finance Minister, you gave out with one hand and took back with the other hand. Some may cry foul. To contain business costs, companies wish to request for a slowdown in the restoration of the employers' contribution rate to 20%. The rate has already been restored to 16% from January 2001. It is appreciated that workers have taken the 10% CPF cut to help lower business cost and help revive the economy. However, many companies are concerned that too rapid a restoration of the employers' CPF contribution to the full 20% will stall their business recovery. Therefore, the business community would like to urge the Government to make a determined effort to help contain business costs. They hope that with the flexibility of the larger budget surplus, the Government can do a comprehensive review of Government administered charges, such as port charges, land transportation cost, ERP, utilities, COE, levies, and other duties, so that operating costs should be kept as low as possible. Conclusion In conclusion, Mr Speaker, Sir, I would like to repeat that this year's Budget is an extremely generous Budget. We wish to thank the Minister for Finance and his colleagues for giving us so many benefits and rewards.”
“For FY2001, this surplus is expected to increase further to $4.4 billion. That means the Government is collecting more revenue than it needs for its yearly total expenditures. Surely there is no need to raise Government charges and fees. On the contrary, more reduction in taxes, rates and fees may be considered. As I said earlier, the low income group are the people falling behind the wage gap between the rich and the poor. The Government must continue to find ways to help them. Otherwise, they may feel left behind and become disgruntled or disillusioned that they are not enjoying a share of the country's economic wealth. Their only hope is to see that their children do well in their studies, and they look forward to the days when their children can secure good jobs, attain good stead in their careers. Therefore, education and retraining is the great opportunity equalisation factor. We must ensure that everyone has good access to education and retraining. As for the business community, they are concerned and disappointed that this year's Budget did not address or even mention how to contain the threat of rising business costs. Although the overall economy has grown by 9.9% in 2000, many local businesses have not fully recovered from the 1998 recession. Good examples are the retailers and the construction sector. They are still facing insufficient business demand, high business costs, high labour, utilities, rental and other costs. A survey recently conducted by the Singapore Confederation of Industries (SCI) has confirmed that most local businesses are still concerned about poor business prospects and rising business costs. Even MNCs based in Singapore are becoming concerned about these business cost increases. The reduction of corporate tax by 1% is welcome, no doubt.”
“He has increased the Singapore Allowance by $10 to $150 per month and increased the gross pension ceiling from $950 to $1,050 per month. This revision will cost the Government an additional $1.7 million. I wish to lament that this sum of $1.7 million is rather paltry. Compared to the budget surplus expected for financial year 2000 of $3.5 billion, this is only 0.0005%, or less than half of a 1,000th of a percent. Sir, may I quietly plead to the Finance Minister, on the pensioners' behalf, to ask that some form of a more substantial adjustment be considered so that the pensioners are also amply rewarded. I am not asking for a formula for inflation indexation scheme to constantly adjust pensions for inflation. But an ad hoc review may be a kind and thoughtful gesture. Sadly, this year's Budget cannot be said to be the most generous to the pensioners. I sincerely hope the Finance Minister will sympathise with this appeal. Raising Living Costs and Business Costs Sir, with your indulgence, I like to speak on two remaining areas that I wish to raise in this Budget debate. It is a constant refrain from both the common people and the business community, that is the call to help contain rising costs of living and costs of doing business. We have to accept that with rising affluence, living costs and business costs are bound to increase. What the people and the business sector are asking is for the Government to refrain from imposing more charges, rates and fees on them. For example, the low income group is facing difficulty with the recent increase in utility charges due to oil price increases. Their income is falling behind the increase in cost of living. For FY2000, the expected budget surplus is a hefty $3.5 billion.”
“It is time that due recognition should be given to them by allocating them sufficient basic funds so that they can be more effective in their efforts. The money is affordable. To ensure that the money is spent meaningfully, we can allow the advisers of the grassroots organisations to manage and decide how the funds can be used. Reward for Pensioners The second area where I feel strongly that the Government can do more is the recognition and rewards for pensioners. The retired Government pensioners are a group that has toiled quietly and faithfully to help build up Singapore. Many of them spent their entire career in the civil service. During the old days when Singapore was less well-off, civil servants on pension scheme generally drew lower salaries compared to their contemporaries in the private sector. It was just an honour to serve. Salary was not the key consideration. Things have changed since the pension scheme has been modified where most Government servants are switched to full CPF payments, and civil servants' salaries are matched to the private sector. However, for the pool of retired civil service pensioners, many are trying to survive and make ends meet on their lowly meagre pensions. They see the fruits of the economic pie which they have helped to build being shared out in the recent years, but they get nothing or very little. Moreover, the pensions are eroded in value through inflation and increase in the cost of living. Not many of them are complaining. You do not see many letters to the press. But I think during the good times like now, it is important that this lot of past contributors is not forgotten. In this year's Budget, the Finance Minister has made an attempt to provide something for the pensioners.”
“However, I do have a few suggestions. Grassroots Fund for Community Groups First, I would like to suggest that we establish a Grassroots Support Fund which grassroots organisations can tap on to do more activities for their task to support the Government's plan towards nation-building and building stronger community ties. I would say that even if we allocate a lowly sum of $100,000 per constituency, the Government needs only to put aside $8.3 million yearly for all the 83 constituencies, as a fund for grassroots leaders to help finance their projects. Currently, I do say that the lack of ready availability of money does put a constraint on the scale and the quantity of projects and activities that grassroots bodies like the Residents' Committees and the Community Clubs can organise. It is a fact that important community groups like the Residents' Committees in HDB estates are formed with no direct funding support from the Government. Often, while they devote much time to organise activities to draw in residents, they also have to raise their own funds for activities and projects. When they have to source for donations from local residents or shopkeepers, or undertake major fund raising project exercises, these efforts can be laborious, energy sapping and time consuming. I feel that this is unfair to our dedicated and hardworking grassroots leaders. Lack of funds should not be a constraint for grassroots groups to do more. They should be freed from time spent on fund raising, so that they can channel more energy towards organising activities and promoting neighbourliness. The grassroots bodies are important elements in the nation-building process.”
“The key to what the Government can do is to provide everyone a sound education so that every Singaporean, whatever are his abilities, can run a good race and earn enough rewards to have a decent and useful life. For the ones with potential, we provide scholarships and bursaries, at all levels, to lift them to higher heights. Another task of the Government is to lessen the burdens that the people have to carry in the race, and at the same time provide supplements and assistance programmes along the way. In this regard, I can say that Singapore has scored top grade "A" in its mission of nation building. We have provided one of the best educational systems in the world, an envy of many others. Our students scored high grades in international mathematics and science tests. They have done well in top universities around the world. They achieved top honours in international oratorical debates. We have a low, but simple and effective tax regime. Huge foreign investments continue to flow in. We have substantial foreign reserves. And we have consistently achieved high economic growth and healthy budget surpluses. What I particularly welcome are the various funds to help the poor and under-privileged. We have the Medical Endowment Fund and ElderCare Fund. Another worthwhile programme is the Lifelong Learning Endowment Fund. These funds are very meaningful. They help the poor and elderly to pay for their medical and hospitalisation bills if they cannot afford it. The other fund helps the older workers to be trained and retrained so that they can adapt to the changing technological environment in the work place. Then what more can be done? Actually, not much more, since there are so many plans already thought out and put in place by the Government.”
“Promotion of Nation Building Besides the main task of the Budget to plan and allocate resources for the economic development of the country, another major objective of the yearly Budgets is to apportion Government spending and resources to match the broader objective of nation building. The recently completed year 2000 survey of household income showed that over the last 10-year period from 1990 to 2000, the household income gap of Singaporeans has widened further. The national average monthly income of the lowest 10% wage earners dropped from $370 in 1990 to only $61 in 2000. In contrast, the national average monthly income of the top 10% wage earners increased from $9,670 in 1990 to $16,800 in 2000. Obviously, there has been a widening in the income gap between the rich and the poor. As I recall, the Senior Minister, Mr Lee Kuan Yew, commented before that this is like a marathon race by all Singaporeans, starting back when we first gained our independence. As we progress and prosper, the gap between the forerunners and the stragglers behind gets longer and longer. This is inevitable. We cannot stop the race and start all over again. We also cannot tell the forerunners to run slower to wait for those behind to catch up. I support the Prime Minister, Mr Goh Chok Tong's call over the weekend to the people not to fret over this income gap. Firstly, everybody's income has increased, from an average of $3,080 per month in 1990 to $4,940 per month in 2000. The Prime Minister has explained that wealth is not confined to a privileged minority at the expense of the majority. There are opportunities for all. Wealth is redistributed through measures introduced during the Budget, and Government has programmes to reach out and help the poor and needy.”
“Since we are living in a difficult neighbourhood and we cannot just uproot ourselves and move elsewhere, it is necessary therefore for us to find ways to help our neighbours to get out of the rut, so to speak. Besides the direct bilateral assistance that we are doing, there may well be other methods for us to help each other, for our mutual benefit. One way is to use the ASEAN framework to do joint trade and investment promotions to the Western economies. Collectively, the economic and trade Ministers of ASEAN countries can work together to persuade the MNCs in the developed countries that this region (ie, Indonesia, Malaysia, Thailand and others) are still good investment areas in view of the low overheads and abundant labour supply. Singapore can help to facilitate this process, if we can undertake joint trade and investment promotions. If foreign investors return to this region, the economic recovery will be hastened. Leap-frogging the Region While we work hand in glove with our neighbours to attract foreign investors, it is also beneficial that Singapore makes direct approach to countries beyond ASEAN to encourage them to invest here. In this instance, our move to establish bilateral Free Trade Agreements (FTAs) is a step in the right direction. The FTAs will encourage the strong and successful companies in the foreign countries to seriously explore trade and investment opportunities with Singapore. In the process, they can be encouraged to cast their eyes wider, and look at other investment opportunities in our neighbouring countries. At least, we can hope that through their attention being attracted to Singapore and by casting their eyes in our direction, the region will also enter their "radar screen" of these foreign investors as areas of investments.”
“We are fortunate that through sound management of the economy, we have escaped the recent crisis in a sharp "V" shape recovery. The people and the business community are indeed very concerned about a recurrence of the recession, meaning a "W" shape downturn. I suppose the Finance Minister will respond that when the time comes, he will deal with it, and propose off-budget measures. This is not a very comfortable approach. The Singapore Government is known for its practice of looking far ahead, anticipating problems and planning in advance. As the Chinese saying goes: wei yu chou mou ( ), which means to close the windows and the doors before the rain comes. It seems that this time round, the Budget did not mention these preparations. Are we getting too comfortable and too smug? I do not think so. One explanation I can offer is that talking about a potential downturn may not fit in the tone of the Finance Minister's Budget speech for this year; that things are good, let us come and share the goodies, and let us worry about the rain later. Whatever are his reasons, I do feel that it would indeed give the people more comfort that even in good times, we are reminded that our Government is prepared for any unforeseen eventualities ahead. Similarly, it would bolster the confidence of foreign investors that the Singapore Government is very alert and mindful of external eventualities, and is constantly thinking and planning ahead. We definitely are. This is the trademark of the PAP Government. Collaboration with the Countries in the Region It is evident that the region is going through a difficult transitional period. I say "transitional" because I am confident that the leaders in the regional countries will eventually overcome their problems.”
“These are very gratifying benefits indeed. These and other benefits announced brought great cheers to the people. What is worth noting is that the benefits are biased in favour of the lower income group and the smaller firms. However, in spite of the excellent benefits, I do feel that there are areas in which the Government can perhaps do more, or be more proactive to anticipate potential problem areas, and detail the possible remedial actions. Uncertainty of External Economic Developments Sir, the Finance Minister did make general broad brush reviews of the regional and international economic situation. However, I feel what is lacking are some clear statements stressing the likely problem areas in the short and medium term. We are concerned about the worsening US economy. We watch with dismay the geo-political developments in our neighbouring countries, like Indonesia, the Philippines, Thailand, Japan, Malaysia and elsewhere. The Deputy Prime Minister, BG Lee Hsien Loong, has warned about the tough external environment as mentioned in last Friday's newspaper reports. The Deputy Prime Minister said that given the current political and economic uncertainties in South-east Asia, the external environment Singapore now faces is the most difficult since the 1960s. He warned that any regional political turmoil would have direct impact on Singapore. These are strong statements and a very realistic and sober assessment of the current economic situation. Then, why is it that the Budget Statement for this year did not dwell on this matter in depth? Why are no comments made on how to deal with a potential crisis if another regional crisis or turmoil were to precipitate?”
“Mr Speaker, Sir, it must have been a very pleasant task for Dr Richard Hu, the Minister for Finance, to deliver this year's Budget. The reason is obvious. Unlike the Budget and off-Budget statements in 1998 and 1999, when painful and belt-tightening measures had to be introduced to combat the recession and the adverse impact of the regional financial crisis, in sharp contrast, this year's Budget is a happy one. The only problem, I think, Dr Richard Hu and his Ministerial colleagues had was how to share out and apportion the goodies that a healthy Government budget can enable them to dole out to the different segments of the population. For FY2000, the budget surplus is expected to increase from the original estimate of $2.4 billion to $3.5 billion. This year's Budget is indeed an extremely generous one. The Finance Minister has given out benefits to practically everyone in Singapore. Allow me to quickly recount some of the very generous benefits doled out. There are the significant 2-5% cuts in personal income tax. Then there is the unexpected 1% cut in corporate tax, following a 1/2% cut already given out last year. Small businesses are given partial tax-exempt benefit for chargeable incomes of up to $100,000. To top off, the Government is giving a 10% rebate on personal income tax. This is more generous compared to the 5% rebate given last year. The other benefits that touch deeper into the hearts of the lower income group is the Service and Conservancy (S&C) charges, rentals and utilities rebates to various households living in HDB estates. Then there is the additional $500 million contribution into the Lifelong Learning Endowment Fund, an additional $250 million to the ElderCare Fund, and $100 million to the Medical Endowment Fund.”
“And what we are working towards is letting the market settle the price structure. In other words, if you are a company which is very dependent on energy and you want stable electricity prices, you negotiate for that. You go into a long-term contract. If you are comfortable with month-by-month volatility, then that is what you get. We will be able to do this once the electricity market in Singapore is deregulated which we intend to do for big consumers later this year and for everybody in one or two years' time. SINGAPORE GENERAL HOSPITAL (Hike in consultation fees for specialist-outpatient clinics) 5. Dr Lily Neo asked the Minister for Health how does his Ministry (i) justify the big hike of 70% in the consultation fees for specialist-outpatient clinics (SOCs) at the Singapore General Hospital; and (ii) ensure the affordability of specialist care to the lower-income Singaporeans. 6. Mr Tay Beng Chuan asked the Minister for Health (a) what is the justification for the Singapore General Hospital (SGH) to increase with effect from 1st December 2000 its consultation charges at specialist-outpatient clinics by as high as up to 70%; and (b) what productivity and control measures are put in place by his Ministry to prevent, in the future, spiral increases in operation costs and charges by SGH and other Government-linked hospitals with no regard to the affordability of the average Singaporean.”
“Mr Speaker, Sir, I wish to thank the Minister for the very detailed answer but I have a few queries. Firstly, will the present formula of having a quarterly review be reviewed because it seems like a long stretch to wait for three months to do an adjustment and, especially in the environment now where we are seeing a falling of oil prices, there should be a more frequent review? Sir, secondly, this formula that the Minister explained seems to be causing a lot of lumpiness in the calculation and computation of trying to recover the past losses. I want to ask whether this formula can also be reviewed and whether the Government actually imputes into it a profit element for the power companies because, if that is so, it means the Government is actually protecting these companies. My last question is, in view of this situation, will the Government introduce more competition in the industry, as he mentioned earlier, to allow for private electricity producers? BG George Yong-Boon Yeo: Mr Speaker, Sir, Mr Leong has raised a very fundamental question of how we overcome the problem of price volatility. The stock market goes up and down, day by day, and we do not want the day-by-day volatility to be passed on directly to consumers. So we try to even them out. In the case of petrol pumps, the evening out is over such a long period that when prices do not respond immediately to price drop in crude prices, members of the public are upset. But we also recognise that if we pass all the volatility, you also create great disturbance in the market. If you look at the public transport companies, they have fuel equalisation funds. In theory, Power Supply can go into the futures market. But they can also guess wrong. There is no simple solution to this.”
“Hence, there is a need to review and relax on the advertising rules so that small firms can advertise and let their prospective clients know more about the services that they can offer. Sir, I also wish to point out that the Government should consider similar relaxation of rules on advertising for other professional firms such as the lawyers, architects, engineers and others, and also allowing them to corporatise their services.”
“Sir, I wish to speak in support of the Accountants (Amendment) Bill. Sir, I am in total agreement with the proposal that accounting firms should be allowed to form Public Accounting Corporations (PACs). Essentially, this means that local accounting firms will be allowed to corporatise. The benefit is that after corporatisation, local firms can look towards mergers to form bigger companies or to form strategic alliances with overseas firms. Corporatisation will also enable local firms to adopt more professional practices which will facilitate recruiting and retaining of good staff. It also removes the onerous responsibility of unlimited and collective responsibility as in the case of partnerships. Sir, I wish to take this opportunity to raise a point not covered in this Bill and that is on advertising by professional firms. I note that current rules which govern the conduct of professional firms such as accounting firms are that they are not allowed to openly advertise their services. I would like to suggest that this restriction be reviewed. Professional firms should be allowed to do some limited form of responsible advertising. I feel that permitting advertisement will be beneficial, especially for the smaller local firms. Large accounting firms, especially the foreign ones, are already very well-known and do not require advertising to publicise their services and expertise. Moreover, large foreign firms get ample press coverage of their activities or coverage of events which they can afford to sponsor. On the contrary, small firms have no means of publicising their expertise and services.”
“I feel that there is one proposal which deserves serious consideration and in fact quick implementation, that is, to introduce quarterly reporting of financial statements or financial results for listed companies. Quarterly reporting has already been in place in the USA for several years. Malaysia has also implemented this policy from this year and it was implemented smoothly. I would like to suggest that Singapore should also adopt this requirement of quarterly reporting so as to ensure that the local companies will disclose their financial performance on a more regular basis. Although this policy would mean more onerous accounting and reporting by companies, I believe it will ensure more transparency of the companies' performance. Sir, I support the Bill.”
“Mr Speaker, Sir, I wish to speak in support of this Bill. As the Second Minister for Finance has said, this Bill is introduced with the purpose of improving the disclosure requirements of public listed companies and thereby elevating the standards of corporate governance. Sir, the importance of good corporate governance is well accepted. Deputy Prime Minister BG Lee Hsien Loong has said previously, and as the Minister has just mentioned, that world class standards of corporate governance are vital pre-requisites for Singapore to become an international financial sector. For Singapore to grow as a financial centre and to attract more foreign institutional investors, Singapore will need to have a high standard of corporate governance. However, I wish to remark that in Singapore's context, there are still occasions when rumour-mongering has affected the share prices of some counters in the SGX which led to a fair amount of speculative trading. Recent examples are counters in the electronic sector where for many weeks, there have been rumours of takeover by foreign companies which were denied by the companies themselves. Sir, such undesirable practices are detrimental to the good image of the SGX. I would like to suggest that SGX should endeavour to curb such speculative rumour-mongering and also to remind companies to exercise due care in preserving price-sensitive information, ensure early disclosure of any price-sensitive information or discussions, and avoid possible insider trading. Sir, I am in support of all the amendments that the Minister has explained earlier. It is known that the MAS has set up a few committees as part of the Government's plan to review the corporate framework for good corporate governance in Singapore.”
“Sir, I read in a recent press report that some lecturers in the Econometrics Department of the National University of Singapore have actually assessed that, with increasing oil prices and the positive impact on our neighbouring countries like Malaysia and Indonesia which are oil-producing countries, it may in fact have a beneficial effect on Singapore. What does the Minister think about that assessment? BG George Yong-Boon Yeo: Mr Speaker, Sir, that would be a consolation prize.”
“Mr Speaker, Sir, I rise to support this Bill. In fact, the amendments have been debated previously and quite thoroughly during the Government's 2000 Budget session. Similarly, the proposed Entrepreneurial Employee Stock Option Scheme was also debated previously in this House when Dr Richard Hu announced the scheme. However, I wish to take this opportunity to raise a query on the Entrepreneurial Employee Stock Option Scheme. In clause 13J (4) of the Bill, it is specified that to qualify for the tax benefit, both the company and the holding company have to be incorporated in Singapore. I wish to point out that this rule of both the company and the holding company having to be incorporated in Singapore will mean that several Singaporeans or residents who are working in companies whose holding companies are not incorporated in Singapore will be excluded from this scheme and therefore unable to enjoy this benefit. There are also several high tech companies which could have their parent companies incorporated overseas, eg, foreign US companies setting up a base here. And because they may be offered stock options of their parent companies' stocks which could eventually be listed on the NASDAQ, therefore they are unable to enjoy this benefit when the company gets listed. However, these foreign companies setting up operations in Singapore actually will create employment and other benefits to us. They will also add to the overall high tech innovative and creative environment that the Government wants to create. Hence, I would like to ask the Minister whether we should consider how to incorporate amendments to the scheme, whereby persons working in foreign holding companies of local companies can also enjoy this benefit.”
“Mr Speaker, Sir, my GPC for Finance and Trade and Industry would definitely welcome this new Entrepreneurial ESOP scheme, because we think it is very generous and would be very effective in promoting the use of ESOP in companies in Singapore. I would like to ask the Minister three questions. First, on the rule that qualifying companies must be, first of all, incorporated in Singapore. Should we not consider the case of other companies which are not incorporated in Singapore but have significant businesses in Singapore, and their employees therefore should be allowed to enjoy this benefit? My other members of GPC will probably elaborate on this point. The second question is on qualifying employees: Why should there be a limiting percentage of 75% of the time spent in the company? There may well be individuals who do not spend their time in one company but in several other companies. Perhaps a lower qualifying percentage of 51% might be more reasonable for such cases. The last point to ask the Minister is: Why is it not eligible for non-executive directors? These non-executive directors may also contribute to a company and therefore they should be able to enjoy this scheme.”
“Sir, I would like to ask the Minister whether he would consider having clear-cut laws on this matter and also ask the HDB to make it a clear-cut issue, ie, anybody having flower pots and objects outside the flat as well as putting flower pots on ledges are committing an offence.”
“Sir, I would like to urge the Minister to seriously consider having clear-cut laws. At the moment, the way I see it, there is a gap between the present Penal Code and the Housing and Development Act. If it is like the case that Dr Wang has just mentioned, it turned out to be an accident rather than an intentional act to cause harm, then which law would be applicable? The Penal Code may not be applicable and the Housing and Development Act may not have a strong enough deterrent. I would like to ask the Minister whether the HDB could consider having clear-cut rules on how a tenant is allowed to hang their flower pots, so as not to cause a danger to the people around. At the moment, there are no clear-cut rules, except to say that if a flatdweller puts something in a dangerous manner, then he can be punished or asked to remove the object. Maybe it is worthwhile for the HDB and town councils to come out with clear-cut rules on this matter. Mr Speaker: Is the Member making a speech?”
“This form of undesirable trading practices is no different from pyramid selling schemes as ultimately the end-users are taken advantage of. Can the Minister kindly enlighten the House on the above issues? I support the Bill.”
“Mr Deputy Speaker, Sir, I would like to speak in support of this Bill. As the Minister of State has explained, the Bill is meant to enable the Government to prohibit pyramid selling schemes under a wider form of definition. This is to protect unsuspecting persons from being recruited or made use of by undesirable pyramid selling promoters. I also agree with the change of the maximum fines from $30,000 to $200,000 as the value of the benefit from such schemes has escalated over the years. Therefore, a higher limit of fine is needed to act as a more effective deterrent. While I support this Bill, I would like to take this opportunity to pose a few issues to the Minister. My first query is to ask the Minister what form of protection or control can his Ministry exercise if the pyramid selling scheme is perpetuated through the Internet. If a syndicate operates from another country and uses the Net to sell pyramid selling schemes in Singapore, how are we going to take such overseas operators to task? With more and more Singaporeans being wired up through the Internet, goods and services can now be easily transacted through the Net, without the promoters themselves of such pyramid selling schemes being physically present in Singapore. Sir, the second issue I would like to pose to the Minister is whether his Ministry has plans to look into some form of competition law or anti-trust law. In some countries, there are laws that prohibit monopolistic practices, or unfair competition or unfair competitive practices. For example, if a certain group manages to monopolise or corner a specific product or service, then they can manipulate the market or charge unfair prices. Under such circumstances, the consumers will suffer.”
“Dormant accounts. BG Lee Hsien Loong: To have the Government close the dormant accounts, I think that would have been very difficult. Banks have to keep records. You look at the Swiss bank accounts from the Second World War of the Jews. Fifty years later, the grandchildren are coming to claim them. And you want me to close them? What will I do with the money? If it goes to the Government, there will be big trouble. So, I think that is not really a practical solution.”
“And if you are having an account, there are certain basic expenses which the bank would have to undertake or incur: first, to open the account, second, to maintain the records, third, to compute your interest, and fourth, maybe, just to do one or two transactions a month. So it is really for DBS to decide how they want to charge. If it makes better sense to charge by transactions rather than to charge an account fee, then there will be other banks which will offer such a charging basis and Singaporeans will be able to choose. Secondly, whether we can have a lower cost bank, a basic no-frills bank, it is possible if you want to do it. My sense of the industry is that the bigger the bank is, the lower its overheads. And the more you try and cut this out and present it as a no-frills business, the more your costs are going to be. Because you have to have a large customer base in order to have the ATMs, in order to justify the computer system, in order to provide the services and the call answering services, and to be able to make the transactions with the other banks. If you do your own and you try and carve it out, I think your unit costs are going to go up. Again, this is a market matter. If it were true that it is attractive, somebody would do it. What is your third question?”
“Sir, may I ask DPM whether DBS or POSB has considered the alternative of charging by transactions before imposing this $2 per month charge? Because for the small depositors, they merely have one or two transactions per month. Therefore, they are actually using much less bank services, compared to the bigger depositors who have several transactions per month. That may be a fairer method for the low income depositors. The second question is whether the bank has considered other means to provide low cost or no-frills services to these low income depositors. For example, could POSBank consider setting up a no-frills or low-cost division to service these depositors who could therefore be charged a lower rate? Finally, I have just heard from DPM that there are 5.2 million savings accounts. Many of these accounts seem to be dormant accounts. Could there be a rule to enforce the closure of dormant accounts so that there could be a lower cost base for POSBank? BG Lee Hsien Loong: Mr Speaker, Sir, these are propositions which are best addressed at the DBS' Annual General Meeting of shareholders. It is fair to impose transaction charges and I think DBS would have to impose transaction charges. But the question is: what is the base? If I open an account, then the understanding must be that the account will be used for at least one transaction. Otherwise, why do I have an account? If I buy a car, I assume it comes with tyres and a steering wheel. The radio may be optional, the sun roof may be optional. But, at least, it comes with the tyres and steering wheel.”