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.”
The complete record
Every one of 2,677 lines we hold for Lim Hng Kiang, in date order, each linked to its source. Free to read, in full, without an account. Page 46 of 54.
“Mr Speaker, Sir, I beg leave to withdraw the motion. Motion, by leave, withdrawn.”
“The eligibility will be assessed at the time of application.”
“On redevelopment of mature estates - I have said this previously - because of the overwhelming demand for mature estates, we are back to the same problem of excessive demand and limited supply. You can either have a queuing system, in which case there will be riots; you can either have a balloting system, in which case some Members will claim it is a tikam-tikam; or you can have a tender system, in which case we allocate based on price. We are still studying the system and we will make the announcement in due course. An hon. Member: Eligibility.”
“Even if we advertise now, or we may not physically build it, everybody will be holding on to their chips and calling in their chips only when they see a flat in Bukit Batok where they want. Other than that, they will not put in their names. And this was exactly what happened in 1986. We ended up building more because the queuing system ended up with 45,000 applicants, but we never seemed to clear the queue. We were building 10,000 units in Woodlands, but we still had 45,000 applicants in the queue. So I think we will evaluate this system of one zone and one register in which you put in your number when you find the location of your choice. But my first reaction is that it looks very much the same problem that we have had in Woodlands. Again Mr Heng Chiang Meng is a good statistician. I am afraid I am a bit more honest. Although, on average, they wait 2 1/2 years, my point is that anybody who applies on 1st October has to take into consideration the 53,000 upgraders already in the system as of today. And if all 53,000 of them return to the queuing system, and there are about 16,000 flats allocated to upgraders, it will take about four years. Sir, I am talking about a person who now wants to put in an application. An upgrader who now has to put in an application in October. Dr Tan Cheng Bock's suggestion about returning the flat to HDB at posted price so as to be given priority to buy a new flat, we will evaluate the suggestion and see how applicable that is. On Mr Umar's question about the Buy-Back Scheme, you can only put yourself on the queue for the 3-room Buy-Back Scheme or you take advantage of the $30,000 grant. You cannot have both.”
“On the question of affordability - I have said this many times - when HDB prices its new flats, it takes into consideration thecost in building the flats and at the same time the affordability of the applicants. We do that by having the income profileof the applicants and we try to make the servicing of the mortgage loans for new HDB flats not to exceed 25% of the income of the median applicants. So there is an affordability assessment based on the income of the median applicants and we try to keep the servicing of the mortgage loans within 25%. So, by and large, 80% to 90% of HDB applicants service their mortgage loans using their CPF, and we try to keep the prices within that limit. On this question about one zone and Mr Heng Chiang Meng's suggestion, in fact, that is exactly what happened in the 1980s. We had a queuing system and we allowed people to opt. It was not a calling-up by number, but we had three choices. So they never exercised their third choice. As a result, we had a lot of flats in Woodlands and we could not offer to anybody because everybody was holding on to their queue position and queue number and waiting for that flat in the city area or Tampines.”
“I thought walk-in selection has already gone. Mr Speaker, Sir, I think that more or less covers all the questions. If there are any more questions, I will answer them.”
“As for linkage to length of stay, HDB will consider all other novel suggestions. All these suggestions will be noted. Anything which is novel, we will keep it for future review. There are also several questions why we did not raise the supply to 40,000 or 45,000 units. I think Dr Ong Chit Chung raised this question. There are better productivity growth rates and better quality control. As I have explained, the issue is not just quality, productivity and cost. The other issues also the impact on the resale price. This is something which Mr Chia Shi Teck brought up. We have 30,000 to 32,000 new households every year, comprising the 25,000 newly-weds, permanent residents and expatriates, etc. We are physically building 40,000 flats. If HDB builds 45,000 flats and the private sector builds 10,000 units, that means physically we are building 55,000 units. Somebody has to take up 55,000 flats. As I said, there are only 30,000 to 32,000 new households who need new housing every year. So if you have this over production of flats, it will invariably affect the resale prices. Mr Chia Shi Teck asked: why worry if the resale prices tumble? It is our job to worry. There are several questions about the CPF Housing Grant Scheme. Let me explain. There seems to be some misunderstanding. The $30,000 CPF Housing Grant Scheme also applies to the mature estates. It is not meant only for the New Towns. So first-time applicants who are buying a flat in the mature estates so as to be close to their parents can apply for this $30,000 grant. Why then do we not apply to private housing? Let us keep the scheme within the HDB estates first. We will consider extending this scheme to private estates in subsequent reviews. Mr Kenneth Chen asks; what happens to walk-in selection?”
“I think that makes the levy/premium system more equitable. If you keep it at 10%, then it favours the owners of big flats. With the 20% premium, it is fairer and there will be less of those people who have an Executive flat buying another Executive flat. An hon. Member: What about linkage to length of stay?”
“Whether it is the balloting system or the queuing system, the 93,000 applicants are also remaining in the queue and in the system, and they also have to wait four or five years before their turn. What we hope to achieve in the queuing system is a fairer and more equitable way. We know there is a big demand from the upgraders. It is how to allocate it fairly. Mr Low Thia Khiang asked how we calculate the levy and premium system. The choice is up to the applicant - whether he opts to pay the levy or the premium. If he opts to pay the premium, then he pays 20% of the price of the second flat that he is buying, ie, 20% premium. If he opts to pay the levy, then it depends what flat he is selling. If he is selling a 3-room flat, he pays 10% lvey of the sale price. If he is selling a bigger flat, the levy is according to the type of the flat - 15%, 20%, 25%. So the choice is up to the applicant. As I have explained, those who are in a 3-room flat and upgrading to bigger flats, most of them will opt for the levy. So they pay 3% of the resale price of their 3-room flatand they will get a bigger flat from HDB at the price HDB is selling. Mr Leong Horn Kee - he is not here - asked for a review of the income ceiling eligibility. HDB does this regularly. The next round of review is due in November. So when November comes, we will look at the income ceiling and the percentage of people who qualify. If it is due for an increase, we will increase accordingly. Dr Arthur Beng asked whether people who recently bought their 3-room rental flats under the Sale to Tenants scheme would have their previous years of tenancy computed in the five years. I am afraid the answer is no. Once you buy you start from that period. Dr Arthur Beng also asked why the premium has jumped from 10% to 20%.”
“We are not in favour of having a proportionate system because, with the large number of upgraders, the first-timers will find that they are not getting the priority. If you have a proportionate system based on the proportion of first-timers and upgraders, then of course you are even-handed, but the first-timers will not get the flats in time. How long will people have to wait? We will have to go through the exercise before we can finalise the numbers. Every time we change over a system, we find that there is quite a significant drop-out rate, and many people apply because it is Hougang or because it is Tampines. But once you tell them it is three zones and by the time they get their flat, it will be Kangkar or Punggol, they are no longer interested. They prefer to buy from the resale market. Once we go through the exercise, we will get the numbers. But for the first-timers, there is a better "fix" because we know that there are only so many newly-weds every year and we have so many flats. So the first-timers can expect to be asked to select their flats between 1 1/2 years and 2 years after their first application during this transition period. Once we get into a steady stream and the backlog is cleared, hopefully, the demand and supply will balance out and they will need only to wait one year. For the upgraders, I am afraid I cannot give a good number. The back-of-envelope calculation will show you that if all the 53,000 upgraders remain on the queue and we are allocating 16,000 to them, then whoever applies on 1st October or 1st November will have to wait more than four years. But do not shoot the messenger.”
“If they cross over the income ceiling, they cannot apply. Just like upgrading, if you cross over the income ceiling, you also cannot apply. The next key area which many Members raise is the ratio of 60:40%. Let me explain the thinking. As I have explained in the Statement, we have about 25,000 newly-weds every year. That is our new household formation every year. With new permanent residents, plus expatriates, etc., you get a total of about 30,000 to 32,000 new households every year who need new housing. But from Singapore citizens, there are about 25,000 newly-weds, plus or minus, every year. Out of these 25,000, about 10% would buy private property. They would not come into the HDB system. Another 10% would buy the 3-room resale flats, the Buy-Back Scheme the HDB is introducing in October. So you have about 80% of our newly-weds who will be catered for in this system, which means something like 20,000 every year. We intend to build 34,000 units. So if we allocate 60% of that, it will be about 20,000 units. Even after you minus all the priority schemes, it will be around 60:40%, because first-timers also take advantage of the Multi-Tier Family Scheme and also the Joint Selection scheme. So that is the rough number. That means we are in a fairly stable system. We allocate 60:40%. It will cater for the yearly demand of new households - the 20,000 that we expect to apply every year. We have a temporary problem because there is a surge in applications by the new households, but once we clear the backlog, this ratio of 60:40% will cater for the long term. As I agree with many speakers here, we will adjust these numbers as the demand pattern changes.”
“So you can apply on the first day of October or the last day of October, you will be grouped together and there will be a ballot. From 1st November, it will be on a queue system, ie, on a first-come-first-served basis. This is how the transition will be carried out. HDB will explain this on Monday. When you have three zones you have better matching between the geographical preference and the offer. If you have one zone, the person will be hoarding his position and he will be choosing the flat and the zone, and he will exercise his queue position at the right time. That is not fair to all those people at the end of the queue. So I think we have a zonal system and we will allow cross-over of zones, but there will be a penalty in the queue position whenever you cross the zone. Again, HDB will explain this on Monday. As for downgrading from a 5-room to 3-room flat, unless I am wrong, HDB does not deter people from downgrading from a 5-room to 3-room flat. You can apply for your next flat and whatever type you want. The majority, of course, apply for a bigger flat. If you apply for a smaller flat, you are also allowed to do so. I will check on that. An hon. Member: What happens if they cross over the income ceiling?”
“Dr Soin asked which schemes should take priority. First of all, the ethnic ceiling is fixed for all estates, whether it is for new allocation of flats or resale flats. There is a ceiling, and HDB does not breach the ceiling. So when it allocates, it will allocate below the ceiling. Secondly, we will allocate according to the priority schemes: 5% to the Multi-Tier Family Scheme, 5% to the Third-Child Priority Scheme, and 5% to the Joint Selection Scheme. The remaining would then be allocated with 60% to first-timers and 40% to upgraders. So that will be how the system would work. Mr Chng Hee Kok asked for the speeding up of information. I said that HDB will announce the details next week. HDB will announce all the details on Monday. So it is not that we are going to keep people in suspense. Today, I announce the main parameters. HDB will give the details on Monday. Let me just reassure everybody that the priority of those who have applied previously will be kept. HDB would, over the next one month, send letters to the 93,000 applicants who have applied before and show them the application history so that they can confirm that this was indeed their application history, ie, the number of times they have applied. We will group those who have applied the highest number of times together, and we will ballot them, and this group, of course, will be given the highest queue position. Then we will group the next batch with the highest number of times of applications, and they will be balloted, and they will get the subsequent queue position, and so on and so forth. On 1st October, we will open up the application to all new applicants. We do not want a riot. It will be balloted for the whole month of October.”
“I think the balloting is very useful in making certainty about the area that you are going to. Of course, the uncertainty is when will you get it. In the queuing system, there is certainty. Everybody is in the queue. But if you have it in one register, then you will be uncertain where you will be offered one. We are now trying to strike a balance in having three zones so that people can apply for the zone they want and still be assured that they will be called up according to the queue position. I have explained the two main principles of giving preferences to those who have stayed longer and to those who are moving from small flats to big flats. The way to go about it is not easy. If you have a point system, it will be an extremely messy system. Right now, we have opted for a very simple system, which is a cut-off of five years. So only if you have stayed for five years, then you are eligible. Of course, it does not satisfy several MPs here who suggest that there should be some weightage for the number of years that they have stayed. We will look into that, but right now it is a simple cut-off of five years before they can apply as an upgrader. The second way, of course, is by the pricing mechanism. By making the premium at 20%, you are favouring the 3-room upgraders, and those who are moving laterally will find it not so attractive to apply for a bigger flat if they already have a big flat. So our approach of giving priority to the 3-room applicants is through these two mechanisms. I will be happy to listen to other suggestions on how this priority can be given and I am sure that over the next few years there will be many more debates and modifications to the system. The third area which many Members have raised is how do we process the applications.”
“Mr Speaker, Sir, I thought I was just making an announcement on the allocation system. It looks like it has invited a whole host of questions. I will try to answer all of them, but I will stay away from details. First, let me explain that this switch to a queuing system is for the non-mature estates, and not for mature estates. My comments in previous sittings about the overwhelming demand for mature estates and that a queuing system is not suitable for mature estates are still valid. This system is only for non-mature estates in the three zones that I described. In the North Zone, it will constitute new towns like Woodlands, Yishun and Sembawang. In the North East Zone, it will constitute new towns like Hougang, Serangoon, Kangkar and, in the future, Punggol. In the Western Zone, it will constitute new towns like Bukit Batok, Bukit Panjang and every town west in that area. So this new system does not cater to the mature estates in the city area or developments in other mature estates. We are looking into the system for the mature estates. We will make the announcement in due course. The second question is: why three zones? Why not a single register? Again, my earlier comments about Singaporeans being particular about the area they want to buy their flat are still valid. I think if we have a single register and the applicant is thinking of a flat in Hougang and we offer him a flat in Jurong West, he is not going to be happy. If he gets knocked out of the queue position he will be extremely unhappy. So it is better to break them up into three areas so that there is some better matching in preference of the estate they want. The balloting system, of course, is the other extreme. You actually apply for the estate and those developments that you saw in the advertisement.”
“Mr Speaker, Sir, I beg to move, That Parliament do now adjourn. Question proposed. REVISED ALLOCATION SYSTEM FOR NEW HDB FLATS IN NON-MATURE ESTATES”
“Implementation by HDB Mr Speaker, Sir, the new system will come into effect from 1st October 1994. HDB will announce the details next week on how to handle the transition, especially on how to ensure fair treatment to those who have applied earlier and have participated in the balloting for the non-mature estates over the last few quarters. Mr Speaker, Sir, to sum up, the policy measures which I have outlined will strike a fairer and more equitable balance between the needs of first-time applicants and upgraders. The Registration for Flats system will ensure that the basic need for shelter of first-time applicants can be met within a reasonable and more predictable time. This solution addresses the suggestions and concerns raised by Members of Parliament and by the public. I hope Singaporeans will give the new system their strong support.”
“Low Income Group Mr Speaker, Sir, in the revision of the allocation system, my Ministry will make sure that the needs of those in the lower income group continue to be catered for. We will give a headstart in the first-timer queue to tenants of HDB rental flats, under the Priority Allocation for Tenants scheme. This is an existing scheme and we intend to preserve it when we change to the new scheme. From October 1994, HDB will offer to households with incomes of $1,000, or below, 3-room flats at subsidised prices that it has bought from the resale market. There will be a separate queue for such flats, which will be offered only to first-timers. Again, this is an existing scheme which we will preserve in the new system. Family Ties HDB will also take the opportunity to improve the existing schemes which promote the family unit. It will set aside 5% of the total flat supply for each of the Multi-Tier Family, Joint Selection and Third Child Priority schemes, or 15% in total. The Multi-Tier Family scheme gives priority to married couples who apply to stay together with their parents and grandparents in the same flat. The Joint Selection scheme allows both parents and their married children to submit separate applications for the same estate. As long as one of the applications is successful, the other will automatically succeed as well, and both parents and children will get to select flats in the same estate. The Third Child Priority scheme encourages families to have more children, if they can afford it. These schemes are HDB's contribution to the strengthening of the family unit because we acknowledge that geographical proximity is an important factor in enhancing family ties.”
“This new rule will therefore not affect the majority of upgraders, particularly the 3-room applicants, who are likely to have stayed longer than five years in their existing flats. Second, the premium imposed on the second flats bought direct from HDB will be raised from 10% to 20%. At present, lessees who sell flats bought direct from HDB, and apply to HDB for a second flat, must pay either a 10% premium on the price of the second flat, or a graded resale levy based on the flat-type of the sold flat. The levy is 10% of the resale price for 3-room flats, 15% for 4-room, 20% for 5-room and 25% for Executive flats. The graded levy is fair because upgraders from the bigger flats make a bigger capital gain from the sale of their flats and should therefore pay more. The 10% premium, however, favours those in bigger flats. As a result, upgraders from the 3-room flats choose to pay the 10% levy, whereas upgraders from the bigger flats opt to pay the 10% premium. The 10% premium makes it worthwhile for the owner of an Executive flat to sell his flat and apply for another Executive flat. To close this loophole, HDB will increase the premium from 10% to 20%, while continuing to allow upgraders to choose between levy and premium. Upgraders from 4-room and bigger flats will have to pay more. This will also discourage lessees from moving laterally between the same flat-types, and lessees who do not need the second flat from applying for one. For example, those who move from a 5-room flat to another 5-room flat will pay about $20,000 more than at present, while those who move from an Executive flat to another Executive flat will pay around $35,000 more. Upgraders from three rooms, however, will not be affected. They can continue to opt to pay the 10% levy.”
“We want to help HDB households to upgrade but the demand for HDB flats for upgrading exceeds the supply, so we need to prioritise the needs of the different groups of uggraders to make the system fair. One group which deserves priority is households living in 3-room flats, especially those who bought their flats sometime ago. Singapore was then less affluent than now. The flats that the HDB could provide then had simpler finishes, lower quality, and less resale value than the larger and better quality flats that HDB has been building in recent years. Furthermore, as the families of these 3-room households have grown over the years, the 3-room flats have become too small for them and their need for more space has become pressing. Therefore, as a general principle, households who have stayed longer in their first HDB flats should have priority in upgrading over those who have stayed only for a short period. Secondly, those who upgrade from smaller to larger flats should have priority over those who move from one large flat to another large flat. HDB will take two measures to implement these principles. First, owners who have bought flats directly from HDB may now only apply for a second direct-purchase flats after they have fulfilled the five-year minimum occupation period. At present there is no such rule. A minority of applicants have therefore taken advantage of this and applied for a new flat soon after taking possession of their first flat. In the second quarter 1994 booking exercise, 4,700 (or 8.7%) of the 53,000 upgraders applied before staying five years in their first direct-purchase flats.”
“The applicants must satisfy all the usual eligibility criteria as if they bought the flats direct from HDB, and also fulfil the same conditions. For example, they will have to occupy the flat for five years before they can apply for another flat from the HDB. They will then be considered an upgrader, and have to pay the resale levy or premium for their second flat. They will also have to wait five years before they can sell their flats in the resale market if they want to do so. The CPF Housing Grant Scheme will strengthen family ties by helping children to live near their parents, especially in the older estates where HDB is not building many new flats. This scheme will therefore widen the choice for the first-time applicants. They can opt to remain in the queue for new flats or buy a resale flat near their parents. Managing upgrader demand Mr Speaker, Sir, let me now turn to the upgraders. The Government appreciates the needs and aspirations of HDB dwellers to upgrade. It encourages HDB dwellers to make the effort to set aside enough savings to do so. It has structured the rules for selling HDB flats, so that households who have already bought one flat directly from HDB have a second chance to buy another flat directly from HDB. These upgraders pay more for their HDB flats than first-timer buyers, but still get their flats at prices well below true market values. What HDB cannot do is to guarantee an Executive flat to every Singaporean household who wants one. Nor can HDB satisfy all 53,000 upgraders at the same time. Therefore, we seek the cooperation of the upgraders to be patient as they queue for their second flats.”
“Increasing the flat supply alone, however, will not remove the element of chance that has caused so much dissatisfaction, unless at the same time we change the allocation system. Hence, my Ministry will replace the balloting system with a queuing system, to be called the Registration for Flats system. Registration for flats system Under the new system, flats available for booking will be divided into three zones, in the North, the Northeast, and the West. Applicants will apply for flats in the zone they select and join the queue for a particular flat type for that zone. Applicants will then be called up to select their flats on the basis of their queue position. The queuing system will eliminate the chance and uncertainty inherent in the current balloting system. But how will it ensure that first-timers get their flats ahead of upgraders, and within a reasonable time? Apportionment ratio Mr Speaker, Sir, this will be achieved through the apportionment of flat supply between the two groups. There will be separate queues for first-timers and upgraders. The first-timers will be allocated 60% of the flat supply under the public scheme. The remaining 40% will go to upgraders. First-timers will, therefore, be assured of priority because they form a separate queue, with the majority of flats allocated to their queue. CPF Housing Grant Scheme To help first-time flat buyers to buy resale flats in the New Town or estate where their parents live, Government will pay, as the Prime Minister has announced, a $30,000 grant into CPF accounts of such flat buyers. The $30,000 grant is to be used solely as a capital payment to reduce the principal of the mortgage loan.”
“As this House has been told, HDB has already increased its building programme from 24,000 in 1992 to 28,000 in 1993, and 30,000 in 1994. In other words, we have increased the supply by 25% in three years. We should not raise the building programme very much beyond this level. If the Government responds to the surge in applications with an equally big surge in the building programme, say, to 50,000 per year as we did in the 1980s, we will create major problems. First, this will overstretch the construction industry. There will be overheating, quality will drop and costs will go up. This was exactly what happened between 1983 and 1986, and we should not repeat that mistake. Second, when we built 53,000 flats in 1983, these were allocated mainly to people buying flats for the first time. So they could absorb the huge supply. This time it will be different. 60% of applicants are upgraders. When they take delivery of their new flats, they have to sell their existing flats. Whom can they sell to? Every year, about 30,000 to 32,000 new households, made up of newly-weds, new PRs or expatriates, need new housing in Singapore. The private sector is building 8,000 to 10,000 new units per year. HDB is building 30,000 units per year. This means 38,000 to 40,000 units per year. When the upgrader takes delivery of his new flat in two to three years, he will find it harder than he now anticipates to sell his flat. More flats will be vacant. If we increase the supply too much, resale prices will tumble. HDB will therefore increase the building programme judiciously. It will build 32,000 flats in 1994 and 34,000 flats in 1995. Even so, between now and the year 2000, HDB will be building 164,000 new flats.”
“Many first-timers, who are usually just-married young couples setting up their first home, are understandably concerned that their chances of getting a flat early are being eroded by the sheer numbers of upgraders. First-timers are also frustrated by the element of chance in the balloting system. They are not quite certain when they will get their flat. They may get it on their first try, or they may have to wait till their fifth try to get their flat. What upsets the applicants most is the sense of inequity when they see somebody who applies later than them, succeed in the ballot. Many Members of this House have raised the unhappiness of applicants with the uncertainty they face under the balloting system. For example, the Member for Bukit Batok, during this year's Budget debate, told the House that one of his residents described the ballot as a state lottery system. Allow me to quote the hon. Member: "Each computer ballot is like tikam-tikam. You pray that you will get it. Sometimes you do, but most times you do not, according to some residents." Mr Speaker, Sir, the balloting system worked when there was a reasonable match between demand and supply. The priority for the first-time applicants was effective, and the element of chance was tolerable. But when the number of applications surged to 93,000, the priority for first-time applicants is overwhelmed by the large number of upgraders. When applicants have to wait much longer, they prefer a more equitable and predictable system where those who apply earlier get their flats first. A review of the allocation system is therefore necessary. Increase in flat supply How then do we cope with this surge in the number of applications? The direct solution is to increase the supply of new flats. But how far can we increase?”
“Mr Speaker, Sir, balloting was introduced in 1989 as the basis of the new booking system. In its original form, all applicants had equal chances in the ballot. In 1992, HDB revised the scheme to give first-time applicants better chances of success than upgraders who apply at the same time. Furthermore, the probability of success was also increased with each successive application. The system functioned well for some time. However, the situation has changed dramatically in the last 12 months. First, the rapid increase in HDB resale prices has made upgrading affordable and profitable to an even larger population. Many can sell their 3-room or 4-room flats on the resale market, pay the 20% downpayment for their new 5-room or Executive flats, and still make a substantial capital gain. Second, the very buoyant property market has made many worry that if they do not buy their flats now, they will be unable to afford the higher prices later on. First-time applicants have also rushed to apply for their flats, despite Government reassurances that prices for new HDB flats will remain affordable. As a result, the number of applications has increased from between 20,000 and 30,000 in each quarter of the period 1991 to mid-1993, to 93,000 in third quarter 1994. In particular, the number of upgraders has more than tripled. As recently as the first quarter of 1993, the total number of applications from upgraders was only 16,000. By the second quarter of 1994, however, this number had shot up to 53,000. Difficulties faced by first-timers. Thus, despite the priority given to first-time applicants, first-time applicants have found it increasingly difficult to get their flats.”
“Sir, we have to build according to demand. But at the same time, we build to favour the first-time applicants. So the new town has a greater mix of 4-room flats for the first-time applicants as well as for upgraders from 3-room to 4-room flats. So there is a greater proportion of 4-room flats. At the same time, we have 35% of our building programme allocated to 5-room flats and 10% of our building programme allocated to Executive flats. FEMALE "A" LEVEL STUDENTS (Job attachments before entering universities) 16. Mr Chia Shi Teck asked the Minister for Education, for female A-level students immediately after their A-level examinations and before entering universities (about six to eight months), whether he will consider organising job attachments with proper training such as (i) nursing - caring for babies, the aged and the sick; (ii) teaching - nursery and kindergarten; (iii) homemaking - cooking and sewing; and (iv) any other jobs that will help them in their later lives as mothers.”
“Mr Speaker, Sir, as I will explain later on, in the present system of balloting in the Booking System, we classify applicants under "new households" and "upgrader households". HDB classifies people who are forming new households under "new households". So the couple that he cited was classified not as a new household. But we have now revised the definition and we will classify applicants under a new group more correctly as "first-time applicants" versus "upgraders". So the problem will now be resolved.”
“Sir, such a couple would be classified as a first-time applicant to the HDB for direct allocation.”
“First-time applicants are those who have never applied for a HDB flat before. That is a first-timer. It is the first time you apply to HDB for a direct allocation of a flat. I thought it is quite straightforward.”
“Sir, 60% of the applications come from upgraders. So it is natural to see the upgraders applying for the bigger flats. There is still a demand for the 3-room and 4-room flats, both in the resale market as well as demand for 4-room flats from first-timers and also from some upgraders.”
“Sir, in setting the prices for sale, HDB valuers will look at the most recent tender prices near the area or in the surrounding area for comparison purposes. As a safeguard, HDB also appoints private valuers to value the shops for sale to the tenants. So there is a check to make sure that the price is a fair one. HOUSING AND DEVELOPMENT BOARD FLATS (Breakdown of demand on flat types) 15. Mr Chng Hee Kok asked the Acting Minister for National Development if he will give a breakdown of the demand for Housing and Development Board flats based on flat types. Mr Lim Hng Kiang: Mr Speaker, Sir, in the third quarter 1994 Booking Exercise, out of a total of 93,367 applications, 27,863 (or 30%) were for 4-room, 43,413 (or 46%) were for 5-room, and 22,091 (or 24%) were for Executive flats.”
“Mr Speaker, Sir, HDB started to sell its tenanted shops under the Sale of Tenanted Shops Scheme in June 1992. So far, HDB has successfully completed nine quarterly sales. The tenants' response towards the sales scheme has been overwhelming. Out of about 4,000 shops offered, 3,879 or 98% have been sold. HDB will continue to schedule the remaining 8,000 shops for sale over the next four years.”
“Mr Speaker, Sir, HDB completed nine blocks of HUDC flats at Hougang Avenue 7 in 1985. However, as the demand then was very poor, only five blocks were sold. As for the sixth block, only 16 out of 88 units were taken up by May 1989. Since the blocks were vacant for about four years, HDB decided to refurbish the remaining three blocks before offering the flats for sale. When the seventh block, Block 349, was refurbished and offered for sale in 1989, the take-up rate was also slow. 56 units were sold in 1990. By 1991, there were still four units left unsold. For the remaining two blocks, Blocks 342 and 343, HDB is in the process of studying how best to sell off these units. SALE OF HOUSING AND DEVELOPMENT BOARD SHOPS 14. Mr Chng Hee Kok asked the Acting Minister for National Development if he will give an updated report on the sale of Housing and Development Board shops.”
“Mr Speaker, Sir, there will be no further public housing development within Pasir Ris Neighbourhood 3. All land designated for public housing in the area has been developed. The rest of the land would be catered for private housing. VACANT AND UNSOLD HUDC BLOCKS 342 AND 343 IN HOUGANG AVENUE 7 13. Dr Toh Keng Kiat asked the Acting Minister for National Development why HUDC Blocks 342 and 343 in Hougang Avenue 7 were left vacant and unsold for nearly nine years.”
“Sir, during the October 1993 Booking Exercise, a final one-time ballot was conducted for all the remaining available flats in Tampines Estate. Successful applicants were progressively invited to select their flats. The selection exercise is still in progress. As at 25th August 1994, there are 488 flats in Tampines Estate which have yet to be selected. These unselected flats will be offered to applicants who were not successful in the main ballot, but are kept on the Reserve List. A similar one-time ballot was conducted in the second quarter 1992 Booking Exercise for all available flats in Pasir Ris Estate. Successful applicants in that Booking Exercise were invited to select their flats from the second quarter 1992 to first quarter 1993. As at 25th August 1994, 500 units in Pasir Ris Estate remain unselected. Some of these units will be set aside to be offered to applicants in the Reserve List. The other units will be reserved for sale to tenants affected by relocation exercises, and for rental under HDB's rental schemes. PASIR RIS NEIGHBOURHOOD 3 (Development plans) 12. Mr Charles Chong asked the Acting Minister for National Development what are the development plans of the Housing and Development Board for Pasir Ris Neighbourhood 3 and when will the HDB units be available for public balloting.”
“HDB treats its properties, both rental flats and shops and industrial premises, as a cost centre overall. I am sure all individual businessmen do not allocate cost to individual units. GOVERNMENT/RESTRUCTURED HOSPITALS (Occupancy rate of Class C beds) 5. Mr Low Thia Khiang asked the Minister for Health what is the occupancy rate of class C beds at government/restructured hospitals for the years 1985 to 1993.”
“That is correct. If the tenants obtain their shops in the first instance through tender they would have paid market rates for them. As willing buyer and willing seller, they sign for one-, two- or three-year tenancy at the rate that they want.”
“HDB's shops and industrial premises are let out on a term tenancy depending on the tenants. Some choose one-year tenancy while others choose two-or three-year tenancy. At the end of the tenancy, there will be a rental revision by 10%, 20% or 30% depending on the term of tenancy. Many of these premises are let out at very, very low rates because many of them were resettlement cases. So even if we adjust by 10-30% at the end of the term tenancy, the final rates are still very far below the market rates.”
“The intention of the property tax reduction is, as I stated earlier, to help property owners, in this case, HDB, to improve and upgrade their properties and also to help them absorb some of the operating costs. In the case of HDB rental flats, the rent is kept very low. We do not see the need to reduce it by 1%. Similarly, for rental shops and industrial premises, the rents are all below market price. If any tenant feels that he is not getting a fair deal from HDB, he can give up his premises and tender for new premises.”
“Mr Speaker, Sir, the property tax reduction of 1% each year from 1994 to 1997 is meant to assist property owners to improve and upgrade their properties, and also to help absorb some of their operating costs. In the case of sold shops and flats, the lessees will enjoy this reduction. HDB's rental flats are let out at subsidised rates. The rents have not been raised since 1979. HDB has absorbed the higher operating costs over the years and has not passed on these costs to the tenants. The majority of HDB's rental shops and industrial properties are also let out at rents below the prevailing market rates. As such, HDB does not intend to lower its current rental rate for residential, commercial and industrial properties as a result of the 1% property tax reduction.”
“If no other charitable organisation, with these criteria, applies, how can I go and chase after them to apply? The only one that has applied is PCF and it is recommended by the Advisor to the CCC. So HDB allocates the premises. HDB RESIDENTIAL/COMMERCIAL/INDUSTRIAL PROPERTY (Lowering of rental rate) 4. Mr Low Thia Khiang asked the Acting Minister for National Development whether the Housing and Development Board will pass the savings from property tax reduction effective from 1st July 1994 to its tenants by lowering its current rental rate of residential, commercial and industrial property and, if not, why not.”
“The rules are rational and there is a basis for them. As I have explained, first, education centres are meant for education purposes. So HDB does this not at market rates. Unlike the Member, we do not believe in making profit out of education. Second, since it is not to be let out at market rates, we must find some way to allocate it. Since it is subsidised, it should be given to foundations which do this as part of their mission. Therefore, it must be an approved foundation. We want to have some certainty that the approved foundation can do the job well. It cannot be any fly-by-night foundation. So we stipulate a minimum paid-up capital of $5 million. At the same time, we want the Advisor to the CCC to understand all the facilities available in his constituency so that he can organise the facilities for his residents and constituents. So we also ask the Advisor to have a say in recommending the foundation for allocation of these premises.”
“As far as I can recollect, none has applied.”
“Mr Speaker, Sir, I am very glad that Mr Low Thia Khiang now talks in the same language of tendering out at market rates. But HDB believes that education centres, being for education purposes, ought to be at a subsidised rate. Therefore, we would like to let them out to approved foundations.”
“Not necessarily, Mr Speaker. We have to find out how many education centres there are to provide enough places for the children. We do not just convert all the void decks into education centres for every applicant that comes around and qualifies. We must also have some planning norms on the number of education centres compared to the number of children in the area.”
“As I have explained, there are several conditions: (1) it must be a charitable foundation; (2) it must be registered under section 29 of the Companies Act; (3) it must have a minimum paid-up capital; and (4) it must be recommended by the Advisor to the CCC.”
“If PCF gives up the premises and it is deemed that the premises ought to be used as an education centre, then it will be open to those approved foundations under the conditions which I have stipulated just now.”
“Mr Speaker, Sir, HDB lets out Education Centres only to approved Foundations which are registered under section 29 of the Companies Act with a minimum paid-up capital of $5 million and are recommended by the Advisor to the Citizens' Consultative Committee. Town Councils do not have the mandate to run education centres. It would be possible for a church or charitable group to operate the education centres if it registers itself as a Foundation with the minimum paid-up capital.”
“Sir, the Government encourages Singaporeans to upgrade because this is part of the asset enhancement programme. PAP COMMUNITY FOUNDATION KINDERGARTENS AT POTONG PASIR CONSTITUENCY The following Question stood in the name of Mr Chiam See Tong - 3. To ask the Acting Minister for National Development whether the Housing and Development Board premises at Block 143, Potong Pasir Avenue 2 and at Blocks 211 and 213, Lorong 8, Toa Payoh, which are now occupied by the PAP Community Foundation kindergartens, can be taken over either by the Potong Pasir Town Council or by a church/charitable group to operate similar kindergartens there, if the PAP Community Foundation carries out its announced intention not to run the kindergartens in 1995.”
“Mr Speaker, Sir, that is not the current Government policy. Government does provide housing for first-time applicants as well as provide the facility for upgraders to upgrade to a new and better flat.”