Lim Hng Kiang
Singapore
“The company has made commitments to recycle the ash, and as for renewable energy, the gasification project is not an energy project, it is not a generation company (genco). It is to produce hydrogen and carbon monoxide or, essentially, carbon. Because as feedstock to the petrochemical sector, you need more C and more H2.”
“The Government will continue to recover the IIA awarded if the company fails any conditions or breaches the legislative amendments. I would like to highlight that there are no errant cases in the last five years for IIA and the current amendments are, therefore, not reactionary in nature, but are being made for legislative clarity.”
“In addition, the IIA scheme will be extended till 31 December 2022. Clauses 10 to 13 give legislative effect to this change. The remaining legislative changes arising from our periodic review of the income tax system are either administrative or technical in nature.”
“Data on household and individual savings rates by income groups are not available. However, data on the aggregate level of household financial assets can be obtained from the Household Sector balance sheet compiled by the Department of Statistics.”
“The aggregate level of financial assets owned by Singapore’s household sector6 in each of the past five years is provided in Table 1 below. Data on the amount of financial assets owned by households and individuals in the different income percentiles is not available.”
“The Second Review of the Comprehensive Economic Cooperation Agreement (Second CECA Review) is ongoing. The review is taking some time as both countries have our respective interests to work through, such as in the area of labour mobility. Our agencies regularly engage Indian counterparts to work through issues collaboratively.”
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“We own the boats but the fishermen are foreigners. So working with these constraints, we will try to enhance the capability to facilitate our farmers to start farms overseas and have diversification in our imports. But perhaps the most important point to remember is that the bottom line is our food imports are not the same as water. For food imports there are close substitutes and we have many potential sources. So if any one particular food product is embargoed, if fresh chickens are embargoed, we have recourse to fresh chickens from other countries as well as frozen chickens or other meat. So diversification is not a major difficulty and we are working with the market forces to make sure that Singaporeans will always continue to have a wide range of food at very competitive prices. Our records have shown that food prices in Singapore have indeed remained very stable. 2.45 pm Another good example is the Punggol Fish Market. We have to close it down because we are reclaiming Punggol for Punggol 21. But instead of just closing the fish market, we have built a new one at Senoko. The 16 fish merchants at Punggol Fish Market were given replacement lots at Senoko. They were given preference to select their lots. The rental is charged at the original rate, which is very, very low. Currently they are paying $380 per month for their lots. We have tendered out the remaining 15 lots and they fetched $7,000 per month. But we were prepared to relocate them, let them continue to pay the existing rates and we would take some time to adjust their rate to the market rate. This is an example of how we try to facilitate the fish trade in the fish market and encourage foreign vessels to land their catch in Senoko.”
“You will have to get your inputs on where to put them because every time you put a barbecue pit, some people are happy and some are not. Mr Peh Chin Hua raised the issue about this case of somebody being jailed for killing a cat. Let me explain that the Animals and Birds Act provides for a penalty of a fine not exceeding $500 or to imprisonment for a term not exceeding six months, or both, for acts concerning cruelty to animals. For this particular case, it is up to the court to decide on the level of the punishment. The Act gives a range of penalties so as to give sufficient flexibility to the court to decide the appropriate penalty in regard to the circumstances of the case. I understand the person has filed a notice of appeal in May and his petition is up for hearing. So I would not want to go into the details of the case. Is it very excessive to have a penalty of $500 or a term of imprisonment not exceeding six months? Apparently, this is a fairly standard clause in many of the Government Acts. I have a list of 20 Acts where they prescribe this penalty. I will have to consult the Minster for Law whether this is an appropriate correspondence, ie, does $500 fine correspond to six months' imprisonment. Maybe times have changed and the Government should look at this correspondence. On diversification of sources of food, I agree entirely with Mr Zainul Abidin that we should be very careful where we import from. Where we can, we should increase local production. The example cited by him about our deep sea fishing is a good example of how we can combine technology with our determination to try and have greater self-sufficiency. But we must be realistic. Land is very expensive in Singapore. Singaporeans do not want to be farmers.”
“Sir, I shall be brief in my responses. I would like to thank Dr Teo Ho Pin for his many good suggestions on how to upgrade the local contractors so that they can pursue overseas contracts. I would direct the CIDB to take this up and see whether these are applicable. To Mr Leong Horn Kee's suggestion on the regional training parks, this was dealt with during the debate on MTI. I will get my Ministry to work with MTI to determine whether there is indeed a demand for such a regional training park. And if there is, we will try to identify a suitable location for the regional training park. On Dr Teo Ho Pin's and Mr Zainul's comments on parks and park connectors, I would like to thank them for their support of the park connectors. The National Parks Board is very conscious that this is very useful and would try to accelerate the completion as quickly as possible. Under the Master Plan, we have some 360 km of park connectors to be developed by the year 2010. The National Parks Board would try to do quickly but I would like Members' understanding of some of the difficulties they have because the park connectors have to be tied in with the other infrastructure construction. For example, in Cheng San, part of the park connector has to wait until the canals and the drainage reserves are constituted. Then we can put in the park connector. Similarly, for the connection to Punggol 21, we will require the reclamation and the basic infrastructure of Punggol 21 to be ready before the park connector can be placed. But bearing all these constraints in mind, we will try to do the best we can and put in the various facilities, like camping sites or barbecue pits.”
“Let me assure Members here that when we come up with the proposal to look at the ethnic ceilings, we will circulate to all Members for their comments and further suggestions. For this policy to work, we need all your assistance to sell it on the ground. So we are not going to spring this upon you. All your ideas will be incorporated, we will try them out and we hope that we can work out together a package which will serve us well for the next 10-20 years.”
“Sir, as I have mentioned earlier, the majority of our 3-room owners have lived in their flats for more than 10 years and therefore under the revised policies, they will not be greatly affected and they can continue to apply for a bigger flat without any delay in their applications. I am reluctant to give priority according to family size because it will start a new criterion and more computers for all of you to navigate. A very small proportion of 3-room owners have less than 10 years' occupation and these are primarily those whom we have sold the flats recently to them under the Sitting Tenants Scheme or under the Buy Back Scheme. So for this small category of applicants, I think it is fair that they stay 10 years before they consider upgrading to a 4-room flat, because it is only very recent history that they bought a 3-room flat from us under very heavily subsidised rates, under the Buy Back Scheme or the Sitting Tenants Scheme. Cash grants for singles - I say that we are studying this. We do not want to create other social problems by allowing two singles to combine their grants. We do not want to encourage new forms of lifestyle. But our minds are not closed. Basically, we do recognise that our policies have favoured greatly families and that singles, particularly those below 35 years old, have not been helped in owning flats, and therefore it is in our agenda to look at this. We will study his suggestions but I would not go as far as to say that we will be very liberal and we allow singles to combine and buy flats together. 2.00 pm”
“Such criteria as age of the estate, deficiencies in the infrastructure, as well as the level of support from the community for the project. We have accepted the Committee's proposal in-principle, but we have to recognise that the private housing estates are very diverse and therefore we have to look at many of them in detail to see whether or not these general principles are applicable. Therefore, we are now studying these in greater detail and we are looking at between four and six estates as a pilot project, if we find this feasible.”
“And as part of that target, by the year 2010, for example, we have set aside enough land for 75% high density public housing and 25% private housing. But let me clarify that this is not a target that we will achieve. We will release the land and it will be up to the market to settle, find its level and if, indeed, the demand is for private housing, we may achieve 75:25 or 70:30, or even more. We have contingency plans to provide for more private housing. So the Government policy on private properties is quite clear. We set out a long-term strategy of land releases. For this year, it is 7,000 units for Government land sales for private property, and 4,000 units for the Executive Condominium scheme. Then together with the private property that can come out from the developers' land holdings, we feel it is enough to meet the demands for private housing in Singapore. Upgrading of private housing estates - both Mr Leong Horn Kee and Mr Sinnakaruppan asked for an update of our plans for this. As you know, we set up a Committee to look at improvements to private residential estates chaired by my former Senior Parliamentary Secretary, Mr Matthias Yao. He has finished the study. The Committee's recommendations are: (1) that we should only improve the common areas outside the homes in private housing estates, that means, we are not going into the blocks or not going into the compounds of the private housing estates; (2) that the improvement projects will have to be proposed by the Citizens Consultative Committees; (3) that the budget should be similar to the amounts spent on precinct works in HDB's Interim Upgrading Programme, ie, $3,000 per dwelling unit; and (4) that there should be certain criteria for prioritising the estates to be upgraded.”
“If you do not want to do IUP and you want the Lift Upgrading Programme, we can do so. We can change IUP to Lift Upgrading Programme. But you should only go to the flats two times - once either to change the lifts or to do a IUP, and the second time to do the MUP. As for the four-storey blocks, this is a special problem. It is only economical to put in lifts if there is a sensible ratio between the lift and the flats. If it is walk-up flat, a staircase serving flats on two sides, it is very, very expensive to put in a lift serving eight flats. As a rule, we think a lift should serve around 50 units to make it economically viable. So if you have 4-storey blocks which are common corridors, I think it makes a lot of sense that you can introduce your lift either at IUP or MUP. It is no problem, but work within your budget. If you only have a single staircase, like those flats in Tiong Bahru or Boon Tiong, it is just not economical to put in the lift. Let me now turn to Prof. Low Seow Chay's comments on private housing. I agree with him entirely that the Government will not interfere in the private housing market in as far as target prices are concerned. That is not our job. Our job is to ensure that there is indeed a long-term supply of private residential properties. We have no fixed target of ratio between public and private housing. As I mentioned earlier, as part of the long-term plan, we envisage that many more Singaporeans want to own private property and therefore our concept plan and development guide plans do cater for a higher ratio of private properties, because private properties entail lower housing density and therefore require more land.”
“With $6,000 per unit, let me tell you that several Town Councils, even in Batch 1, were able to incorporate lift upgrading for every floor. Of course, it means a trade-off between other nice-to-have facilities, like linkways, etc. But it is a test of how valuable you think the lift upgrading is. Again, in response to your many requests, we managed to convince the Finance Ministry to cough up an extra $1,000, so that the lift upgrading can be done within the IUP. Why is it not a good idea to have a separate programme for the lift upgrading? Because between 14 years and 23 or 25 years, you do not have that much time to put in three major programmes. I think two major programmes are about the best for us to go to the residents and do major renovations to their environment. Under either programme, it takes you about one year to go through your consultations and getting your consensus on the design. It takes you another 1(r), up to 2 years, to implement the programme. And if you go back again and say, look, you want another major programme, I think you are causing undue interruptions and inconvenience. So I think we only have time between 14 years, 17 years and 23 years to do two programmes. They do an Interim Upgrading Programme and at the next cycle, seven years later, we let them have the MUP. If they do the Interim Upgrading Programme much earlier when they are 10 years' old, again, in response to Members' request, then, of course, you have to wait two cycles. When we design the IUP, it was intended to start with those at 17 years old, so that seven years later they upgrade. But many MPs started putting in nominations of flats which are only 10 years. Between Interim and Main Upgrading, we have enough time for two major programmes.”
“Lift upgrading - as I have explained earlier, let me try and present the problem and why we think the present solution of an Interim Upgrading Programme and the Main Upgrading Programme address this issue. We recognise that not so many years ago we were much poorer. We designed our flats without the lifts stopping at every floor. Now we can afford it. Our new flats are built with lifts stopping at every floor. So how do we go back and retrofit all the old lifts? We want to do so. It is a matter of getting the funds, setting the priorities and doing it in a most efficient way. So we design the Main Upgrading Programme. Under the Main Upgrading Programme, we envisage that flats which are more than 23 or 25 years old will undertake a major upgrading. And under the Main Upgrading Programme, we encounter many of the structural problems where we could not just punch a hole and let the lifts stop at every floor. Many of the structural problems that we encounter can be solved under the MUP. Because under the MUP, we will have shifted the surfaces out of the immediate apron and we are able to put additional lift core and therefore provide new lifts which can stop at every floor. So really the main solution must be under the MUP because it is a major re-investment, major structural works and can only be done using the funds under the MUP. So all the old flats will in due course be upgraded. In responding to all the Members' persuasiveness, they all ask for an IUP. So we implemented an Interim Upgrading Programme whereby flats which are between 10 and 17 years old will also have interim upgrading, and under the interim upgrading they can also upgrade their lifts to stop at every floor.”
“The market is now in favour of families going to the town centre where they have the full range of shopping facilities. I remember over the last one week I have been answering a lot of questions from Members lamenting the poor take-up rate of both shops and eating places at the neighbourhood level. So to go in with more cafes and coffeeshops at the precinct level will not solve the problem. We have to change with the shopping and eating habits of Singaporeans. 1.45 pm Before I turn to the many arguments for lift upgrading, let me just address the point made by Mr Chng Hee Kok, now that he has entered the Chamber. Mr Chng said on Friday that he needed a computer to navigate the many HDB rules. I completely sympathise with him. I do not use a computer. I just send a letter to HDB and let them tell me what is the policy. But I wish there were more Mr Chng Hee Koks in the House, because let me tell you, every sub-section of HDB rules, I can pinpoint to a particular Member in the House who has asked for exceptions to be made for that sub-category of Singaporeans. If we embark on an HDB policy which is simple, straightforward, I can assure Members that HDB rules will have been very simple. But because of the persuasiveness and the hardworking nature of all Members - you all lobby very hard for some exceptions to be made, and for every exception that I was foolish enough to accede - there is a sub-section in the HDB regulations. So I would wish Mr Chng work harder on the rest of you and I shall try my best to be harder to accede. So this is now the starting point of all the negative answers.”
“Several MPs stood up to ask about the facilities in the town to encourage community interaction. HDB tries its best to design the community facilities in such a way as to enhance cohesion. At the block level, we kept the void decks open so that we can introduce activities at the void decks. This is a major design requirement, that the void decks be kept open and as the social needs of the community change or increase, we are able to put in community facilities at the void decks. At the precinct level, we have precinct facilities, whether it is the RC centre, kindergartens, etc. At the neighbourhood level which consists of 6,000 to 8,000 flats, we have a neighbourhood park and other facilities at the neighbourhood level, for example, a neighbourhood centre, coffeeshops, etc. So we are constantly reviewing the community facilities to try and see how we can improve. For example, in Punggol 21, we are breaking up the neighbourhood into smaller communities or estates so that between two and three precincts we can introduce some facilities to allow inter-precinct interaction. Mr Ong Kian Min suggests that we should have family activity centres. I think that comes entirely under the purview of advisors to the grassroots organisations. All of us have a certain quota of facilities that we can introduce. If you want to introduce and try out family activity centres, by all means put up your suggestion within the quota of community facilities that is allocated to you. Mr Ong Kian Min also lamented that there is a lack of coffeeshops and cafes now at the precinct or block level. HDB also has to adapt to the market. Now with the MRT and entertainment centres at the town centres, you will find it very difficult to also have coffeeshops at the precinct level or at the block level.”
“Because if you do so, very soon the entire Bishan and Thomson areas would be entirely Chinese." So we say, "No, you must sell to another Indian." We have to look at such cases and see how we can achieve this good mix without causing too much hardship. Mr Sinnakaruppan suggested that in such areas, perhaps the ceiling should be combined - the Indians with others or the Indians with the Chinese. This is the same problem that we have with the enrolment of our Malay students in schools where the Malay PAP MPs, to their credit, proposed to Government some years ago that if we did not set some limit there will be some schools where over time will be closely identified as Malay schools. So it is better that we have a limit so that every school reflects the multi-racial character. For that, we need also to restrict the other races. Similarly, for Bishan and Thomson. If, as Mr Sinnakaruppan suggested, we only set the cap for Little India and Sembawang and merge the ceilings for other areas, then very soon Bishan, Pasir Ris and Hougang will all be entirely Chinese areas. Where do the Indians go to when they cannot go to Little India and Sembawang? They will have to pay Chinese prices to go to the next Chinese town. By having the ceilings, you are in fact lowering the price for Indian families going into Bishan. So you are favouring the new entrants into Bishan but, of course, the Indian family who is selling the flat feels aggrieved because he could have sold his flat to a Chinese family at a much higher price. We have got to look at the problem not only from the point of the seller but also from the buyer, the community and within the nation. I am not saying that the subject is closed. It is eight years since we announced this policy. We will take another look at it.”
“Since 1989, we have set certain limits on the number of families of a particular race that can live in a block or in a precinct. We have reviewed these limits regularly every three to four years, and we have found that these have not caused undue hardships on the various races. Let me take up both Mr Zainul's and Mr Sinnakaruppan's suggestion. My Ministry and HDB will review this one more time to study the extent and to see whether there are any more ways we can achieve the objective while causing minimal constraints and difficulties, especially on the minority races. Of the two suggestions that Mr Sinnakaruppan suggested, I do not want to go through the pros and cons in detail here, but just to give Members a flavour of the difficulties and complexities involved. As Members know, the ethnic ceiling problem affects the Indian and other races community more than the Malays, and it affects the Chinese even less. As Mr Sinnakaruppan suggested, there are a few areas where the ceiling for the Indians has been reached, like in the Little India area, Serangoon area or in the Sembawang area. So they can only be allowed to sell to another Indian. That is not a problem because it is a very popular area. The Indians want to buy into the area. They are prepared to pay the market rate for the flat. The problem arises in the Chinese areas. For example, in Bishan, Thomson and Hougang where the Chinese want to buy into these areas, but because of this ethnic ceiling, we restrict them. We insist that the Indians who are already living in these areas must sell their flat to another Indian. So here you have a Chinese who is willing to pay Bishan prices to go into Bishan but the Government is saying, "No.”
“I think the family should get together and try and help resolve the mistake that the girl has made. The next area which I would like to turn to is how to achieve community bonding in HDB flats. There are several components to this objective of community bonding. First is how to integrate Singaporeans from different income levels within the HDB estates. Dr Teo Ho Pin suggests that we should build flats which integrate 1-room, 2-room, 3-room, 4-room, 5-room flats flexibly. That is possible, but I am not sure whether it will work. Many years ago, we tried building blocks which incorporate 3-room flats and 5-room flats. Even at that, we did not find it working. There was a very poor take-up of the 5-room flats. So we have to recognise that although we can change and not call 1-room "1-room flats" or call them "studio apartments", and not call 2-room flats "2-room flats", but call them "luxurious studious apartments", it would not change the reality on the ground. That is not to say that HDB is not prepared to adapt to the market. When we go to Punggol 21, we will indeed adopt a new nomenclature of mixing the flats and also naming them as "3-bedroom flats" or "2-bedroom flats", and not distinguish them as "1-room", "2-room", "3-room", "4-room", "5-room", "Executive flats". We have done so already in our design-and-build flats. We call them Apartment "A", "B", "C" but let us not fool ourselves. On the ground, the stratifications still occur. But we take great pains to try and facilitate the integration. The second aspect of integration is racial integration. This is a core objective. We realise that to ensure the multi-racial character of Singapore, every estate, every constituency, every precinct, down to every block, should reflect the multi-racial character of Singapore.”
“HDB has liberalised its policies of subletting. Today, we have around 6,000 flats which are approved for subletting as an entire flat. HDB has liberalised the rules for subletting of rooms within a flat. We no longer monitor the number of such flats which are let out. In other words, anybody can let out a room as long as he continues to occupy the flat. So a single unmarried mother can easily rent a room or the whole flat in the open market. I think the problem is on the category which cannot afford it. If they can afford it, there are enough avenues for them to rent a room or rent a flat. So there is no reason for HDB to come in and rent a room or a flat to them at market prices. If they can afford market prices, they can go to the market and do so. The problem is when they cannot afford it. Does that mean that you want to extend subsidised flats, either rental or sale, to single unmarried mothers? That would send a wrong signal that we are now allowing single unmarried mothers to have access to subsidised HDB flats. Even if you give them the rental flat, I do not think that solves the problem, from a social angle. Because if they cannot afford market rentals, these young single unmarried mothers would not be able to afford a flat and at the same time go out and find work. Who then looks after the child in the HDB rental flat? I think the solution is really for these single unmarried mothers to go back to their families so that the family can look after the child and the mother can go out to work. Mr Shanmugam says such single unmarried mothers have made a mistake and why should the HDB penalise them? HDB is not penalising them. HDB treats them as any other singles. It is a mistake.”
“As Members know, the HDB's policies are biased in favour of families. This is because it is the Government's policy to uphold the family as the basic social unit and to uphold core family values. So the present rules allow singles who are above 35 years old to buy a 3-room or smaller resale flat. Also, we allow joint singles above 35 years old to rent or buy a flat from the HDB. Some may argue that the criterion of 35 years old is perhaps too stringent. Mr Leong has suggested perhaps a smaller CPF grant to cater for the singles. Again, this is something that we are studying and I like to thank Members for the various suggestions put forward. I would like to address Mr Shanmugam's point about our policies towards single unmarried mothers. Let me, first, say that the Government's policy is to discourage single unmarried mothers. And we have treated single unmarried mothers in the same way as singles. We have not discriminated against them. It is just that we do not recognise the child that is born out of wedlock. As far as single unmarried mothers are concerned, they enjoy the same policies as the singles. Having a child outside wedlock does not give them higher demand on HDB resources. 1.30 pm Mr Shanmugam suggests that this is too harsh and that perhaps HDB should rent them flats at market prices. I think the solution is not so simple. If you look at the problem of single unmarried mothers, and if they are above 35 years old, I think they have all the avenues to buy a resale flat or to have joint-singles to apply to purchase or rent a flat from HDB. The problem comes when they are below 35 years old. If they are below 35 years old and they cannot have recourse to HDB, they have to either rent a flat or a room in the open market.”
“We do so by giving the CPF housing grant scheme to encourage young couples to buy resale flats in the mature estates to stay near their parents. We recognise that there may not be enough new flats or resale flats for the young couples to stay in the mature estates and, therefore, we also have the joint selection scheme whereby the young couple together with their parents can apply for two flats in the new towns. So if they are prepared to uproot and go to a new town, they get two flats. They live close to one another, providing mutual support. But this means that the elderly couple must buy a 4-room flat or a 5-room flat. This, again, may not fit the requirements. So some years ago we developed granny flats - 2-room flats in Pasir Ris - so that the young couple can apply for a 4-room or 5-room flat and the elderly couple can apply for a 2-room flat. Unfortunately, that did not work out. The demand was very low. For the poor single elderly staying in a 1-room flat, we have a programme where we upgrade the flats to make the living conditions better. Right now, we have 18 blocks being upgraded, primarily in the mature estates. Several Members have suggested that the HDB consider studio apartments, so as to put in smaller studio apartments in the new towns for the elderly couples to apply. HDB is considering this, as we indicated in the Addendum to the President's Address under MND's programme. This is an issue which HDB together with the other Ministries are studying very closely. We have the Inter-Ministry Committee on the Elderly and part of the issues we are looking at is the housing options for the elderly. I thank Members for the various suggestions and we will see how we can approach the housing needs of the elderly. Let me now turn to housing for singles.”
“Unlike what Mr Leong Horn Kee said, we not only have to worry about shelter and asset, many of the heartaches that MPs feel are towards housing policies set up to achieve social objectives. Let me first turn to housing for the elderly. This has been one of the objectives of our public housing programme to make sure that the elderly have their flats and to make sure that the young and the old live together. If we look at the life cycle of a family, I think it is ideal if we can encourage extended families staying together. That is not always the case. So we have to live with the reality that some elderly couples may want to stay on their own. This should not present a problem if the couple remains together and they stay in their flat, whether it is a 5-room flat or a 3-room flat. I think the difficulties arise when one of the spouses passes away and the surviving spouse has to live alone in the flat. So we have a single elderly problem. We also have a sub-category of poor single elderly households, not very many. Our last survey shows that there are about 6,000 of such households, single elderly people living on their own with very poor means of income support, either because there are very few relatives or immediate families supporting them or they were the early immigrants who came here on their own and did not get married. How has HDB tried to tackle this problem? As I said, our most preferred outcome is for children and their parents to stay together as an extended family, and that is why HDB gives priority to the multi-tier family scheme. But we have to recognise that this may not work out all the time and, therefore, some elderly couples want to stay on their own. If they do so, then our next step is to encourage their children to stay near to them.”
“Their monthly CPF contributions should also be sufficient to service the monthly loan instalments. As we have indicated many times, more than 85% of HDB flat owners are able to service their mortgage loans entirely through their CPF contributions. The third indicator that we use to monitor affordability is the application patterns. We notice that more and more applicants are now opting for the bigger flats. In the past six months, 61% of all new applications are for 5-room flats. Obviously, they must think that they can afford the 5-room flats. Otherwise, they would not have applied for them. I remember we had some debate here over how to make flats affordable to the low-income families, and we have a programme of assisting low-income families to buy their flats. Two years ago, Dr Vasoo lobbied very hard for households with less than $1,500 per month to be considered as low-income families, so that they can also buy 3-room flats under the HDB Buy-Back Scheme. We have been tracking these so-called low-income families. In the period January to June this year, 15% of households with income less than $1,500 per month applied for 3-room flats. So by increasing the income ceiling, 15% of these applicants now can apply for 3-room flats. But 55% applied for 4-room flats, and 30% applied for 3-room flats. So they are by no means low-income families. Last Friday, Dr Tan Cheng Bock asked whether a family with a monthly income of $4,000 per month can afford a 4-room flat. I immediately answered yes without having to check any notes, because a family with a household income of $1,800 per month can easily afford a 4-room flat, let alone a family with $4,000 per month. Let me now turn to the other aspects of housing policies.”
“Perhaps not as many as the 100,000 per year that Mr Leong Hong Kee forecasted, but it really depends on how big is the "second bite of the cherry". We therefore have to monitor the situation. With the recent policy changes, however, we have placed the housing programme on a firmer and more sustainable basis Let me now turn to the issue of affordability raised by Dr Tan Cheng Bock. This is a very important issue and I am grateful to Dr Tan for giving me the opportunity to reiterate the Government's position on affordability. As he said many times before, the Government's pricing policy for HDB new flats is to set the selling prices of new HDB flats such that 90% of new Singaporean households can afford at least a 3-room flat, and at least 70% of new Singaporean households can afford 4-room flats. Those with higher incomes can continue to buy the bigger HDB flats. Other than setting this pricing according to the policy announced by the Government two years ago, MND and HDB have also some affordability indicators to make sure that we are on track, and Singaporeans are able to afford their flats. The first indicator is that we try to make sure that the flat prices, as a multiple of the household income, should range from about 5-6. This will make sure that the flats continue to be affordable. The second indicator is the proportion of income and the CPF savings utilised to pay for both the downpayment and the mortgage instalments. This should be around 25-30% of gross household incomes, so that most families can comfortably pay for their mortgage instalments using CPF contributions. In general, applicants who have worked for four or five years should be able to pay the 20% downpayment using their CPF savings.”
“The final impact is that within this grace period, another 7,700 applicants have transferred their applications to flats of a smaller size without any penalty in their applications. These applicants have decided not to over commit themselves and buy bigger flats which are beyond their means. Sir, the measures have achieved what they set out to do. Now, HDB is reviewing the building programme, increasing and distributing flats according to the new patterns in the waiting list. By doing so, we are able to reduce the average waiting time for first-timers, from 4.5 years in April 1997 to 3 years in July 1997, as we set out to achieve. Also, upgraders from 3-room flats will also get their flats earlier than before. I would say that the overall impact of the revised policies on the waiting time for new HDB flats has been positive. As I said earlier, our approach may not be as simple or as elegant as that proposed by Mr Leong Horn Kee or Mr Chng Hee Kok, but we managed to achieve similar results. Young couples get their "first bite of the cherry" to start their family. Upgraders from 3-room and smaller flats can still upgrade comfortably. Most 3-room applicants have stayed more than 10 years in their flats, and they are not affected by the 10-year time bar rule. The revised resale levy has also not undermined the ability of the small flat owners to upgrade to 4-room or 5-room flats. Through the graded levy system, the second housing subsidy for 4-room flat owners is now smaller. And the second housing subsidy for the 5-room and Executive flat owners is smaller still. I am not saying that the whole housing issue is now resolved, far from it. We still have more than 140,000 applicants on our waiting list. Many more will apply if the market subsidy increases.”
“As we expected, the 5,700 upgraders who cancelled their applications were mainly upgraders from the bigger flats who now have to pay a substantially larger resale levy when they apply for flats of the same size or smaller flats. The market subsidy for their second flat is correspondingly reduced and they find it not worthwhile to pursue their applications. The 2,900 applicants under the Fiance/Fiancee Scheme who cancelled their applications constitute about 16% of the total number of applicants under this scheme. This confirmed our assessment that a substantial number of those who applied under the Fiance/Fiancee Scheme do so ahead of serious plans to get married. 1.15 pm Let me now turn to the fourth impact of the measures. The fourth impact resulted from the 10-year time bar. As a result of this 10-year time bar, 24,000 upgraders in the waiting list who have lived less than 10 years in their existing flats had their applications deferred. By deferring these people, it will benefit the 3-roomers, the majority of whom have lived in their flats for more than 10 years. And because we now defer those who have lived only 5-10 years, those in the 3-room who have lived more than 10 years will now get their flats faster. This is what has been advocated by Mr Leong Horn Kee. The fifth impact is that by having a separate queue for the Punggol 21 town, we managed to attract 27,500 applicants to switch over to Punggol 21. The majority of these applicants who switched over were from the north east zone. It shows that they are prepared to wait longer for flats in Punggol 21 town. As a result of their switching over, this reduces the waiting time for first-timer applicants waiting for flats in the north east zone.”
“Restricting every Singaporean family to two housing loan subsidies was fair. Giving housing priority to young couples to start their first home was also fair. Restricting upgraders in getting their "second bite of the cherry" was fair. This was achieved by setting the 10-year bar and the graded levy system. In other words, the "second bite of the cherry" should be smaller than the "first bite of the cherry". Let me now deal with the result of these policy changes. First, as a result of these changes, we have prevented the bubble in the HDB resale market from growing bigger and risking a major collapse in the HDB resale prices. By imposing strict credit assessment criteria, we have introduced some financial discipline and prudence in the resale market. The HDB resale market is now consolidating instead of continuing on an upward spiral. Second, the number of new applicants was 3,100 in May 1997 and 2,100 in June 1997. The demand for new HDB flats is now at a more realistic level. If it continues at this level, it will average 30,000 to 35,000 per year. This was a typical level that we had before the massive surge in demand since 1994. The third impact is that during the two-month adjustment period from May to 12th July, only 9,400 applicants cancelled their applications for new HDB flats. So it shows that the measures were not draconian. It was focused, maybe it was sharp. But only 9,400 found it necessary to cancel their applications. If you look at these applications, they comprise 5,700 upgraders and 2,900 applicants under the Fiance/Fiancee Scheme with another 800 other applicants.”
“We cannot have HDB resale prices spiralling up at 35% per year. The situation was also not equitable. Those upgraders who applied early, particularly those living in bigger flats, enjoy two large housing subsidies. Whereas young couples who apply later have to wait for many years before they get their first flat. So two sets of measures were necessary. One set of measures is aimed at tightening the mortgage loan conditions, especially for upgraders and purchasers of bigger flats. Every Singaporean family was limited to two housing loan subsidies. This was announced on 12th April 1997. The second set of measures is to prioritise the demand of those on the waiting list, to favour applicants who are in more genuine need of the flats, in particular first-timers who are waiting for HDB flats to set up their homes, and upgraders from 3-room flats who need bigger flats for a growing family. This set of measures was announced on 18th May 1997. Both sets of measures were necessary to put the housing policies on a more rational and more sustainable basis. Mr Chng Hee Kok asked whether these measures were coordinated. Yes, they were. He also asked whether they could have been announced together. Well, they could have. It was really a judgment call. Announcing them together would have a bigger psychological impact on the HDB housing market. Taking them separately allows us to gauge the market response to the first set of measures before proceeding to the next step. We decided to go for separate announcements. The more important questions we should ask in fact should be: were these the right policies and were they effective? Like Mr Leong Horn Kee and Mr Chng Hee Kok, most Singaporeans agree that there must be some limit to the number of HDB housing loan subsidies.”
“1 billion in 1995, and $9.5 billion in 1996. This is a major injection of credit. (3) The number of new applications increased from a monthly average of 2,500 in 1992 to 5,600 in 1996. In other words, in 1996, we had a staggering 66,800 new applicants joining our HDB queue. The surge in demand for new HDB flats resulted in an increase in the HDB waiting list from about 80,000 in October 1994 to 146,000 in April 1997. The number of new applications did not correspond to our present demographic patterns. The high demand for public housing is also not consistent with the fact that there is no housing shortage at all in Singapore. There are several causes for these sharp increases in HDB resale prices and also the artificially high demand for new HDB flats. Let me give some of these reasons. The first reason is that the mortgage financing rules for HDB flats were too liberal. Second, many flat lessees were applying for another HDB flat even though their flats currently meet their needs. They apply for flats of the same size or even smaller flats so as to enjoy the large market subsidy for new HDB flats and the highly subsidised HDB mortgage loans. Third, some first-timers were applying for flats under the Fiance/Fiancee Scheme ahead of their housing needs even before they were certain that they were going to get married. Fourth, some HDB flat lessees immediately apply for their second flat after they have stayed in their first flat for five years. Fifth, some applicants who were in fact interested in Punggol New Town were applying in advance for flats in the North-east zone although the first tender for Punggol 21 will only be called next year. Sir, as we approached the beginning of this year, it was clear that the situation was untenable.”
“Let me take the questions raised up to this point. First of all, Mr Leong Horn Kee and Mr Chng Hee Kok raised a very fundamental issue of housing subsidies. Both of them commented that HDB housing subsidies would lead to excessive demand. Mr Leong Horn Kee proposed the "one bite of the cherry" for all those who buy 3-bedroom flats. Owners of smaller flats will be given the opportunity to upgrade to bigger flats. Mr Chng Kee Kok asked that the market mechanism be used. In other words, he has always advocated that HDB should set prices at market levels and give a discount to the first-timers. This is also equivalent to the "one bite of the cherry". If we were indeed starting the public housing programme from scratch, I would be inclined to adopt their approach. It would be simple to understand and easy to implement. Although not so elegant, let me explain that the recent changes to the HDB mortgage financing policy and the HDB allocation policy were intended to achieve similar objectives. Let me first recapitulate the reasons for these major revisions and also take this opportunity to give the House a preliminary assessment of what has been achieved with these changes. As you know, HDB gave a grace period of up to 12th July 1997 for applicants to adjust to these changes. It is therefore timely for us to give a preliminary assessment of the impact of these changes. Before we made these changes, let me again recapitulate the public housing situation. (1) The resale prices of HDB flats have gone up very sharply in the last three years: 12% in 1994, 35% in 1995, and another 35% in 1996. (2) The amount of HDB housing loans has ballooned correspondingly with these sharp resale prices. In 1994, HDB provided $5.8 billion in housing loans. This was increased to $7.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates for the financial year 1997/1998, and ask leave to sit again on Monday, 28th July 1997.”
“Mr Speaker, Sir, the URA is constructing another 10 heavy vehicle parks throughout the island. The first of these vehicle parks will be completed by early next year while the rest will be completed progressively by the end of 1998. These heavy vehicle parks will provide a total of about 2,500 lots. A heavy vehicle park will be constructed in the Bukit Gombak Constituency at Bukit Batok East Avenue 2. This heavy vehicle park, which will be completed in July 1998, will have 220 lots. BILL INTRODUCED CONSTITUTION OF THE REPUBLIC OF SINGAPORE (AMENDMENT) BILL "to amend the Constitution of the Republic of Singapore (1992 Revised Edition)", presented by the Minister for Home Affairs (Mr Wong Kan Seng); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. ANNUAL BUDGET STATEMENT Order read for Resumption of Debate on Question [11th July, 1997], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1997 to 31st March, 1998." - [Minister for Finance]. Question again proposed. 1.00 pm”
“Mr Speaker, Sir, Neighbourhood Centre 7, consisting of 40 shops, one supermarket and four eating establishments, was completed and taken over for management by the HDB in February this year. HDB had invited tenders for the commercial premises in this Neighbourhood Centre in April this year. The successful tenderers have signed the tenancy agreement, and the majority of them are now renovating their premises. As the renovation works would take approximately two months for most shops, this Neighbourhood Centre will be operational by late August. BUKIT GOMBAK CONSTITUENCY (Provision of permanent parking place for heavy vehicles) 7. Mr Ang Mong Seng asked the Minister for National Development whether his Ministry has any plans to provide more heavy vehicle parking places island-wide and when such a permanent parking place will be built in Bukit Gombak Constituency.”
“As the evidence shows, there are enough eating outlets in the Serangoon Road area. Serangoon Road is not an isolated HDB town. It is built close to existing food outlets. There are also food outlets within the Town Centre. So obviously there are enough food outlets and the needs of the residents are met. PASIR RIS NEIGHBOURHOOD 7 SHOPPING CENTRE (Reasons for delay in operation) 6. Mr Charles Chong asked the Minister for National Development when will the Pasir Ris Neighbourhood 7 shopping centre be operational and what are the reasons for the delay.”
“The current Government practice on tender goes something like this. On the date and time of the closing of the tender, the Chief Valuer or the Valuation Officer of HDB will submit a bid considering the market evidence of what would be the going market price. So the Government agency evaluating the tender and the person making the evaluation are two separate bodies. In a Government tender, whoever is the agency, HDB or URA, will close the tender on a particular date and time. At that date and time, the Chief Valuer participates in the tender just like any other private sector agency. The Chief Valuer will put in a tender bid stating what he determines to be the reserve price, evaluating the market evidence. Similarly for HDB tenders, the same practice is done. The Commercial Property Section runs the tender, but the Valuation Officer in HDB is a separate agency that will put in a reserve bid.”
“As I replied earlier, the space will not be left vacant. If this latest tender does not show a good result, we will let it out for other uses.”
“Mr Speaker, Sir, as is the present practice, all tenders put out have a minimum reserve price. For the six tender exercises which were completed, there were either no tender bids at all or one or two tender bids which came below HDB's reserve tender price. For example, the latest tender, the sixth tender, managed to attract only one bid. This is obviously not a competitive tender and therefore it was not awarded.”
“Mr Speaker, Sir, besides the Serangoon Central Wet Market, the three storey building also included four retail units, one of which is designated as a food court. HDB has so far let out three of the four retail units for use as a fast food restaurant, a departmental store and a family amusement centre. For the remaining food court unit, HDB has completed many rounds of tender exercises but has found very few demand for the unit. No tenant has been found so far. This shows that the eight other eating establishments currently operating in Serangoon Town Centre and the private sector eating outlets in Serangoon are sufficient to meet the needs of the residents. The latest tender exercise for this unit is currently in progress and will close at the end of the month. If this latest tender exercise is unsuccessful, the HDB will let out the unit for other uses.”
“In view of the increasing number of cancellations under the Fianc,/Fianc,e Scheme, the registration deposit has been imposed to deter frivolous applications. Applicants who cancel their applications will have their registration deposit forfeited. The CPF Housing Grant is provided by the Government for first-time HDB applicants who decide to buy a resale flat or an Executive Condominium instead of a new HDB flat. It offers an alternative for young couples who are in need of a home to set up their families. When these applicants opt to use the CPF Housing Grant, their application to purchase a new flat will be cancelled. This will benefit other applicants on the queue as their waiting time for a new flat will be shortened. Therefore, for first-time HDB applicants under the Fianc,/Fianc,e Scheme, HDB will not forfeit their registration deposit if they subsequently cancel their application to buy a new HDB flat and opt to take up the CPF Housing Grant. MINISTERIAL TRAVELS 2. Mr J. B. Jeyaretnam asked the Minister for Finance how much was expended for Ministerial travels (Cabinet Ministers and Ministers of State) for the whole of 1996 with a breakdown Minister by Minister.”
“Sir, the Government is committed to making its offices accessible to the general public. New Government offices are thus sited near MRT stations, eg, the IRAS at Novena, the Immigration Office at Lavender Street and the proposed HDB HQ at Toa Payoh. Where possible, counters which serve the public are located on the ground floor of Government buildings. Where this is not possible due to site or floor area constraints, ramps for wheelchairs and lifts are provided to facilitate movement to offices located on the higher floors. This is part of the overall policy to make public services more accessible and convenient to the general public. NON-RESPONSE TO NCMP'S LETTERS 14. Mr J. B. Jeyaretnam asked the Prime Minister whether any directive was issued to Ministries and statutory boards not to respond to any letter sent by me as NCMP.”
“Mr Speaker, Sir, today, we are already involving almost 15,000 flats every year under the Main Upgrading Programme and a further 25,000 flats under the Interim Upgrading Programme. So every year, we are involving 40,000 flats in upgrading, of which lift upgrading is an item high on the priority of most residents. That constitutes to me a general programme for lift upgrading, 40,000 flats out of HDB's stock of 600,000-700,000 flats. The cost of upgrading the lifts every year is close to $170 million. Unless you can persuade the Minister for Finance to cough up more money for a general lift upgrading programme, I do not see how we can do it any faster. NEW GOVERNMENT OFFICES SERVING THE PUBLIC (Location on ground or first floor) 13. Dr Teo Ho Pin asked the Minister for National Development whether his Ministry will consider adopting a planning policy whereby all new Government offices which serve the general public will be located on the ground or first floor to facilitate access to the people.”
“Mr Speaker, Sir, as I said earlier, under the Main Upgrading Programme, there is sufficient budget for lift upgrading. For the Interim Upgrading Programme, we have raised the budget and we expect the Town Councils to also contribute part of the cost through its sinking fund so as to be able to do the lift upgrading. This is the ordering of priorities within the Town Councils.”
“Mr Speaker, Sir, full lift upgrading to provide lift landings at every floor of an HDB block is already an approved item under the scope of works for the existing upgrading programmes. For the Main Upgrading Programme (MUP), there is sufficient budget for the full lift upgrading. For the Interim Upgrading Programme (IUP), the grant was increased on 22nd March this year from $6,000 to $7,000 per dwelling unit to allow Town Councils to carry out full lift upgrading works. With prudent financial planning and management, lift landings at every floor can be provided for precincts which are identified for upgrading, wherever feasible. There is therefore no need for HDB to implement a separate upgrading programme for lifts to stop at every floor in the older HDB estates.”
“This is far below the market rent for 1-room flat if you rent it in the open market. So obviously this situation cannot continue. HDB will have to revise the rents for the Transitional Rental Housing Scheme. WITHDRAWAL OF TENDERS AFTER ANNOUNCEMENT OF RESULTS (Penalties for contractors) 6. Dr Teo Ho Pin asked the Minister for Finance whether his Ministry will consider giving contractors the option to pay a penalty or be debarred from tendering all lines of business for one year when they withdraw their tenders after the announcement of the tender results.”
“It is very hard to give an estimate of the waiting time because it depends on the applicants for that quarter. Whenever HDB receives the applications, HDB would then queue them based on their queue positions. So if your queue number is low, you will be called up to select a flat. This is a sensible approach because it means that those who have queued longest in the queue system for the purchased flats will get a chance to get the transitional flats first. So the queue is based on the queue number of the Registration for Flat System. As to the mis-match in the demand and supply, HDB has been studying this problem and HDB will try to increase the supply by the following measures. HDB will buy back more 3-room flats from the open market for the Transitional Rental Housing Scheme. HDB will also buy back 2-room flats to add to the stock. HDB will also offer 1-room flats to the Transitional Rental Housing Scheme applicants. We hope that such applicants will not be choosy and would be prepared to accept the 1-room flats. HDB will also develop a scheme to allow two Transitional Rental Housing Scheme applicants to share a 3-room flat. That means it will be no different than they renting a room in the open market. So, in this case, we will get two applicants or two families to share one flat. HDB will not allow upgraders to join the queue for the Transitional Rental Housing Scheme on the argument that the upgraders already have a flat and they should not join the queue to compete with the first-timers. Through all these measures, HDB hopes to increase the supply. But I think the fundamental reason why there is a mis-match in the demand and supply is because the rent for the Transitional Rental Housing Scheme is very low. Today, HDB charges around $200 for a 2-room flat.”
“Mr Speaker Sir, the Transitional Rental Housing Scheme exercises are conducted on a quarterly basis. Applicants are shortlisted according to the registration numbers assigned under the Registration for Flat System to determine their queue positions. Upgraders are given a lower priority and are queued after the first-timers. For the unsuccessful applicants, HDB will place them on the reserve list and invite them to select the remaining flats not taken up by the shortlisted applicants. HDB offers 500 flats per quarter for selection. In the April 1997 exercise, HDB received 2,850 applicants for the 500 flats offered.”
“On Mr Heng Chiang Meng's first non-question, he can refer to the Minister for Finance who is in charge of the Big Sweep. On his second question, the valuation is done by private sector valuers and if the owner is not happy with the valuation, he can request for a second valuation. HDB TRANSITIONAL HOUSING RENTAL SCHEME (Statistics on demand and supply) 5. Mr Chng Hee Kok asked the Minister for National Development if the Housing and Development Board will provide the latest available statistics on the demand and supply of rental flats in the Transitional Rental Housing Scheme.”
“One could argue that those living in the upper floors paid a lower price than those living in the lower floors and therefore, by Mr Chiam's argument, he is suggesting to HDB that when the people in the upper floors buy their second flat they should pay a higher levy.”
“Many housing agents explained to me that the difference is because of Mr Chiam. So Mr Chiam compensates! Mr Chiam See Tong: I think it is in bad taste. In fact, the prices of flats at Potong Pasir can match almost any other housing estates. They still fetch a premium. My point is that the purchasers from the same block pay the same price for their flats, whether they are at the lower or upper levels. When these people sell their flats, those at the lower levels will get less than the earlier purchasers of flats at the upper levels. In the early days, the HDB did not take into consideration all the factors mentioned by the Minister. Would the Minister not think that it is only right that these people who were willing to take the lower floors be compensated in some way?”
“Mr Speaker, Sir, the Government is not responsible for changes in the market or for any other trends which may affect the price of the flats. For example, in 1984, somebody who bought a 3-room flat in Potong Pasir would pay $41,500. He could have bought a flat in Bishan for the same price. Today, when that same person in Potong Pasir sells his flat, he would be able to sell it for $187,000. In Bishan, that same flat could be sold for $217,000, a difference of $30,000. An hon. Member: Why?”
“This appreciation in the value of HDB flats is a result of good Government, strong economic growth, the Government's investment in major infrastructure and the Estates Renewal Programmes.”
“Mr Speaker, Sir, the valuation of HDB flats is carried out according to market practice. The valuation takes into consideration various factors. These include the condition of the flat, good view, orientation, storey height and location like proximity to MRT/LRT stations, etc. All factors being equal, higher floor flats generally command higher value. The valuation of a flat reflects the prevailing market price and represents what potential buyers are willing to pay. The premium for flats in the higher floors reflects the market preference today that buyers are willing to pay more for flats in the upper floors of an HDB block. This was not always the case. In the past, owners preferred lower floors. But preferences change over the years. As the lifts become more reliable and owners prefer the view and privacy of higher storey flats, so such flats command a premium. The fixed pricing mechanism in HDB was discontinued in 1987. In the early days, HDB flats were built to fairly standard designs and it was simpler to price flats in a standard manner. Residents were allocated flats by balloting and could not choose their units. Over the years, HDB has a wider range of flat designs and refined its pricing system accordingly. From 1988, HDB has progressively used premium and discount factors in the pricing of new flats for sale under the "Differential Pricing Policy" to account for the individual attributes of each flat, including the storey height. It is incorrect to say that purchasers in the early years who were allocated flats by ballots on lower floors have lost out. All owners of HDB flats who purchased them in the early years have not only enjoyed proper housing, but have also benefited greatly from the substantial capital appreciation of their flats.”
“HDB has clarified the operational details of the policies and indeed those who have selected their flat but are waiting for the keys to their flat up to this quarter will be allowed to come under the old scheme. This is made known in the press release and HDB will take out a full page advertisement in the Straits Times to explain to Singaporeans that this policy would not affect those who are already waiting for their flat or those who are selecting their flat for the second quarter of this year. So they will not come under the new policies. These new policies will not affect them. PRESIDENT'S ADDRESS Debate on the Address (Third Allotted Day) Order read for Resumption of Debate on Question [2nd June, 1997], `That the following Address in reply to the Speech of the President be agreed to:- "We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the First Session of this Parliament.".' - [Dr Wang Kai Yuen]. Question again proposed. 12.44 pm”