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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“And this is indeed what we have done over the last three years, a gradual increase - 2,000 to 3,000, and 3,000 to 4,000. What the Government can do is to let the market know on a fair basis all the information that we have on the private property and leave it to the market to decide and determine the price. For example, the real estate statistics are published regularly and there will be an ample supply of new private residential units coming into the market. This year, about 9,400 private residential units are expected to be completed. In 1995, this figure is projected to be 14,800. You will know that this figure has moved very dramatically compared to the historical supply of 3,300 in the last four years. So there is a big supply of 9,400 this year and 14,800 next year coming in. These are the numbers that are expected to be completed. If you look further down the line in terms of potential supply in the pipeline, our statistics show that there are a total of 69,000 private residential units in the various stages of construction and planning. So developers are responding to the increased demand. How many units will be launched for sale this year? We have no way of telling because it is a decision made by the developers. What we do know, however, is based on the licensing requirement by the Controller of Housing and we try to estimate the time taken between planning approval to construction. We estimate that the total number of new units that could be launched for sale in 1994 will range from 13,500 to 21,500. So obviously, the market has responded to this assessment that there is greater demand for private properties and you will see this in launches of new sales and in actual completion. Prof.”
“" So when we finish the plan in Changi, and if indeed we want to preserve it as a bungalow area, and when we exhibit the plan, the residents in Toh estate are not happy, then there is avenue in the planning process for them to make an objection. Then we will invite planning arbitrators who will decide whether the national interest is best served by what the planning authority has proposed or what the residents want. If we do not have this control, you will end up with every estate having a mix of bungalows, semi-detached and terrace houses. And unless we decide that that is what we want to see, and every estate remains the same in that kind of mix, then we will have a free-for-all. But we think that there should be certain estates which are preserved for bungalows, certain estates which are preserved for semi-detached houses and certain estates which we will allow free development. And the Planning Act allows this dialogue to be done between the planning authorities and the people affected. Dr Wong Kwei Cheong asked how much money has been collected under the land sales programme. I am afraid I do not have the figures off-hand. Our policy in land sales is to let the market know our intention of our sales ahead of time. So we have announced that we are selling 3,000 units of property in 1993 and this year, we intend to sell 4,000 units. Developers will bid with the knowledge that this is the Government's sales intention. What they finally build depends on their reading of the market. So our approach is to adopt a steady release of state land and we announce this ahead of time so that everybody has the same information. I agree with Dr Ong Chit Chung that there is a strong demand for private property and Government should release more land.”
“With these two principles in mind, I can appreciate Mr Teo Chong Tee's unhappiness about the situation in Toh estate where the bungalow owners wanted to sub-divide and redevelop into semi-detached houses and were told by URA that they could not do so. This is URA exercising its responsibility to minimise externalities. Let me explain. If you have an established estate of bungalows and if I were one of the owners and I develop my bungalow into semi-detached or terrace houses, I would benefit a lot because I make a lot of capital gains in my redevelopment, but I enjoy the amenity of the entire estate which is still preserved as bungalows. If you say, free-for-all, then you must accept the fact that in time to come, the whole area will end up as terrace houses. So in Singapore, we have many established housing estates and we have to decide, in exercise of this control of externality, which areas we will allow developments, so that in the end it will be eventually developed into just landed property. We will not differentiate between bungalows, semi-detached or terrace houses. In some areas we may have to say, "Look. This is an area which is an established bungalow area. Let us keep it as such and your value may in fact go up because everybody is observing the rule that it is a bungalow estate." The test whether the exercise of this judgement is right or wrong is when we exhibit the plan. In the Planning Act, you have to exhibit the plan and the intention of the planning authority. And if this intention is not in keeping with the wishes of the people, then they will write in and say, "I object to this portion of the plan.”
“We will try to sell at leases of 30 years, like many JTC leases. Mr Robert Chua asked about flexibility in building usage ratio. Let me assure him that URA, together with EDB, tries to amend the usage rules to make it more flexible and to be in keeping with current manufacturing operations. We have dialogue sessions with manufacturing associations to try and make our land use rules more acceptable and more meaningful to present-day operations. So we will definitely take up his suggestions and I will ask URA to contact the other associations to get better feedback of how our usage rules can be made more flexible. But, fundamentally, there are two reasons why we must have planning rules. The first reason is we cannot leave it entirely to the free market because there are externalities. So the Government has to come in to arbitrate between other users. For example, if there were no building rules, I will build my house to the fence and I will build it six-storey high and overlook my neighbour. So we need planning rules so that externalities are controlled and there is a decent lay-out. The second reason why we need planning rules is to make sure that the infrastructure can support the use. If we do not have planning rules, then we will end up with high-rise offices at odd corners of Singapore and it will be very inconvenient because there are no MRT station and no bus services. So we need a certain amount of planning and control to make sure that we site high-density users, like offices and shops, in areas where the transport infrastructure is there. These are the two main reasons why we need planning rules.”
“Secondly, it would be wrong for us to sell shops in areas where there is tremendous development potential. To do so, I think would be to do a disservice to Singapore as a whole. The whole society will have to pay a very heavy price because the land is valuable, it could be redeveloped to a higher potential. If you were to sell the shops, you are then not reaping the potential of that area. So there are three categories of shops which will not be sold: (1) the kiosks, because they are very small; (2) shops in the void deck of rental flats which are earmarked for demolition; and (3) shops in areas where there is high development potential. So single-storey shops, very old shops, in such areas will not be sold. I take his point that he wants to conserve them as history, but I think it is a heavy price to pay to remember history by. Dr Tan Cheng Bock asked about the HDB industrial properties. The same problems arise for HDB industrial properties as with the shops. Again, we will want to sell as many of these industrial properties as we can. But, unfortunately, many of these industrial properties were built 20 years ago, where the industrial demands were less stringent. So today, many of these properties are not suitable and need to be upgraded in terms of electrical upgrading, loading or traffic. We will try as far as possible to make sure that what we sell will be suitable for the users for many years to come. So we will try to sell as many as possible but in some areas where the design is very poor and cannot be upgraded, then we cannot sell. Again, in areas where there is a tremendous development potential, then we ought not to sell them so as not to compromise national interest.”
“That did not stop the prices of private property from going up by 36%. If what he described is true, then I would indeed have a very strong instrument. And will you guarantee that if I lower HDB prices by 5% tomorrow, the prices of private property will drop by 20% the next year? Obviously, you do not believe so. So although there is some small linkage in that when resale prices go up, people feel more wealthy and want to upgrade, the correlation is in fact different. For this reason, the prices of HDB new flats are fixed by the Government to make sure it is affordable to Singaporeans. The prices of private property are strictly a function of demand and supply. When we make the resale of HDB flats more and more flexible and more and more closer to private property, then you will find the resale HDB prices moving in line with the private property. We have done so by giving more mortgage loans and by freeing the rules. So the Member is right in the sense that HDB resale prices will now move more and more in tandem with private property because they are affected by the same factors - good economic growth, low interest rate, etc. But the new HDB flats are purposely kept low to make sure that Singaporeans can afford them. But in pricing the new HDB flats, we have to be sure that we are able to recover the construction cost. On the proposal by Mr Chay of conservation of old HDB shops, I am afraid that in our sale of shops, although we would like to sell as many HDB shops as possible, we cannot sell shops if they are situated below rental flats which are eventually to be demolished. If you are going to demolish the rental flats because there is very poor demand, especially the 1-room flats, then we cannot sell the shops in the void deck.”
“So we will give it a try and we hope to be able to create a new type of housing for foreign workers. But, by and large, foreign workers will still be living in our midst because we do allow flat owners to sublet one or two rooms to foreign workers. But this will not be big numbers in dormitory housing as in Teban Gardens. So we hope to see an improvement in the situation for the foreign workers. As for the second crossing of the Johore Straits, we will be signing the Inter-Government Agreement for the second link on Tuesday next week. The second link is 2.3 kilometres long. We will start work once the agreement is signed. We have already appointed consultants. I do not have the estimated cost. We will only finalise the cost when the construction of the bridge is tendered. It will be completed somewhere towards the end of 1997 and it will be opened to traffic in 1998. The benefit to Singapore is that it will provide a very quick link to the western portion of Johore and it will also provide a very fast and efficient link for our future port in Pasir Panjang to the whole new hinterland and up the North-South Expressway. With the completion of this bridge, Singaporeans will have another route to the western part of Johore and a faster road to places like Malacca. On the impact of price increases of HDB flats, Dr Wang Kai Yuen gave more credit and power to the Ministry of National Development than is actually the case. Although there is some linkage between HDB prices and private property prices in that the resale value of a HDB flat goes up, people feel that they can afford private property and they can upgrade. But I assure him the linkage ends there because in 1993, the prices of HDB new flats only went up by 4.9%.”
“Sir, let me continue with my response on the Upgrading Programme. Currently, we have about 22,000 flats undergoing different changes of the Upgrading Programme. For the demonstration phase, we have about 6,000 flats under construction. The first precinct in Kim Keat will be ready by the end of this year or early next year. The other batches are in different stages of design, voting or calling of tenders. Dr Wong Kwei Cheong asked the difference between Interim and Main Upgrading Programmes. The idea of the Interim Upgrading Programme (IUP) is to allow other precincts to do some parts of the upgrading while waiting for their turn in the Main Upgrading Programme. Dr Ong Chit Chung asked whether the $6,000 for the Interim Upgrading Programme is sufficient. In designing the IUP, we are giving priority to works in and outside the block in the precinct, but not to works within the flat. So we think the $6,000 will be sufficient. We will try it, and if there is need, we will extend the scope. Let me now turn to public housing for foreign workers. Let me thank Dr Tan Cheng Bock for carrying more than his burden of foreign workers. We agree that housing foreign workers in the midst of our housing estates does present some problems of disamenities and we are looking at other ways of housing foreign workers. I agree with Dr Ong Chit Chung that we must provide decent and proper housing for the foreign workers. To this end, we are thinking of allocating land to some of the big companies to build dormitory housing for the foreign workers. We will also tender out pieces of land which are suitable for housing foreign workers away from the housing estates, but close enough to make use of some of the facilities in the housing estates, for example, the shops and the coffeeshops.”
“The plan will be finalised some time in August, Sir. ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1994 TO 31ST MARCH, 1995 Order read for consideration in Committee of Supply [2nd Allotted Day]. [Mr Speaker in the Chair] Head O -”
“Is it related to Istana and Command House?”
“I do not have the specific number of staff that the President has. The main part of the refurbishment of the Istana is in the refurbishment of the old buildings. Many of our old buildings, City Hall, etc., have to be refurbished after 100 years. The buildings are in a very bad state. So it is mainly to refurbish the buildings. Part of the other reason is of course to create office space and rooms for the staff. I do not have the exact numbers but I will find it out and pass it to the Member. The second point is: why can the Elected President not stay in the Istana? As he well knows, the main building of the Istana and the Annexe are used as offices for the Elected President, the Prime Minister and the Senior Minister, as well as rooms for state functions. The previous President lived in another small building on the Istana grounds, called the Istana Lodge. During this refurbishment, the Istana Lodge will be used as a temporary office for the President and his staff. This allows us to make use of the building while we are refurbishing the main building. Otherwise, we have to find temporary offices for the Elected President. On the question of $2.6 million, I am not sure where the Member gets the figure. Maybe he could enlighten me.”
“Sir, the intention of building a school on the piece of land between Block 791 and Block 792 is to give more space to the blocks. Because for a primary school, a large part of the site is the school field. We intend to design the school in such a way that the school building will be towards the gabled-end walls of the blocks and the school field will provide the open space between the blocks. SUSPENSION OF STANDING ORDERS (Business Motion) Resolved, That, notwithstanding the Standing Orders, the proceedings on the Estimates for FY 1994/95 on 9th, 10th, 11th, 15th, 16th, 17th and 18th March 1994, be continued beyond 5.30 pm, and be exempted from the provisions of Standing Order No. 1 until 6.00 pm on each day. - [Mr Wong Kan Seng]. ANNUAL BUDGET STATEMENT Order read for Resumption of Debate on Question [23rd February, 1994], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1994 to 31st March, 1995." - [Minister for Finance]. Question again proposed”
“Mr Speaker, Sir, the plot of land between Block 791 and Block 792 at Yishun Avenue 2 is designated for a primary school. The other three plots, as mentioned in the Question, are sites reserved for future development. The specific plans for these sites have not been finalised.”
“Such work should not take too long, so we should finish it in due course. NEE SOON SOUTH CONSTITUENCY (Development plans for plots of land) 2. Dr Koh Lip Lin asked the Acting Minister for National Development what are the development plans for the following plots of land in Nee Soon South constituency: (i) the land between Blocks 791 and 792 at Yishun Ring Road; (ii) the land between Khatib MRT Station and Block 804 at Yishun Avenue 2; (iii) the land bounded by Yishun Avenue 2, Yishun Ring Road and Block 838; and (iv) the land bounded by Yishun Ring Road and Blocks 846 and 848.”
“Compared with 10-20 years ago, most of the men were the sole breadwinners, but now with widespread education, with higher education and with no unemployment problem in Singapore, nearly every household member does have a job. They can work and save the money. Why is there the necessity to withhold the money from these people? Of course, the Government very often cites the figures. In 30 years' time, we will have about 600,000 people over 65 years of age. Therefore, we need to look after them. However, we have to bear in mind one thing. These 600,000 people of tomorrow are the useful citizens of today. They are gainfully employed and they are not destitute. So, it may well be that the ratio is three young men to one old person. So what? These old people are not supported by three young men because in their lifetime they would have saved sufficient money for themselves. Let me tell Members here: let us not compare with Australia, New Zealand or Switzerland. Singapore cannot, by any stretch of the imagination, be considered a welfare state. These countries have got unemployment benefits. They have so many benefits. In Singapore, we only have the basic subsidies. So let us not compare with these countries. If you want to compare, let us compare. An hon. Member: We have no unemployment!”
“I can afford to spend away whatever money I may have. The question that we will have to consider is this. What the Government is doing now is contrary to the spirit and intent of the original CPF objective. Previously, it was actually meant as a forced saving and you will be allowed to withdraw at the age of 55 years. The first intrusion into this spirit is this. The Government has decided to retain Medisave. That is the first step. Now, the Minimum Sum. My question is: what next? Would parents of Down Syndrome children and physically and mentally handicapped children be required in future to have their account retained to maintain these poor children? I think the answer is quite obvious. The next point is this. All in all, the retirement account, together with Medisave, would come to a hefty $90,000. Of course, to everyone of you here, $90,000 is nothing. But we are talking in terms of more than half a million people in Singapore whose income is below $1,300. Is it right for this Government to retain their hard-earned money, knowing that some of them may not have a chance to "smell" it before they leave this world? I would say that the Government has got no moral right to withhold the hard-earned money of the citizens. We all know that Singaporeans are by nature very thrifty. In fact, now there is clear evidence that Singaporeans are preparing themselves for their old age. The fact is that the POSB accounts have increased and deposits have also increased to billions of dollars. The trend is that more and more Singaporeans are buying insurance policy, either for their old age or for their children's education and so on and so forth. These are good signs that Singaporeans are becoming more responsible. One more factor that one must remember is this.”
“The Government should also adopt a caring attitude and take practical actions to help citizens who are not regarded as elite so that they will also understand that they have a part to play and a contribution to make. As for those poor and unfortunate people, the Government should provide assistance with warmth. Mr Speaker, Sir, the way to govern is to implement benevolent policies ( ). The tactic to govern is to win the hearts of the people ( ). As it is said, "He who wins the heart of the people, wins the universe." ( ). This is the lesson of a few thousand years. We must never never forget the teaching from history. Mr Ling How Doong (Bukit Gombak): Mr Speaker, Sir, the aging of the population is a universal phenomenon. In view of the longer life expectancy of the people, a number of countries have now raised pension withdrawal age. But in Singapore, the PAP with its usual paternalistic style has now doubled the Minimum Sum, or one may call it the retirement account, to $80,000. Out of the $80,000, $40,000 will be attached to the property and the other $40,000 will be by way of cash which the CPF holder will not be allowed to withdraw but will be paid by way of annuity from the age of 60. Quite obviously, this particular measure has been taken on the assumption that Singaporeans cannot be trusted to look after themselves during their old age. Or that if the lump sum is allowed to be withdrawn at the age of 55, they would squander away this money. The question one must ask is this: is $40,000 sufficient to maintain a Singaporean? Obviously not, if one were to go on the expectancy of life. This would then lull the Singaporeans into a false sense of security. They would have thought: The Government has retained $40,000 from us. That is enough.”
“23 billion of last year. It is just like a family with savings of less than one year's income. I agree with the Minister for Finance that in good years, we should put more surpluses into our reserves for emergency use. Reserves and surpluses belong to the State and the people, not the Government. The Government only collects and manages the funds. It collects taxes and charges on behalf of the people in order to pay for defence, social services and economic development. The money does not go into the pockets of the Ministers or the civil servants. It is only when the country enjoys prosperity and when the people are wealthy that the coffers will be enriched. It is very vicious and vilifying to say that "the Government has money but the people have none." In conclusion, in the short-term, the Government's task ahead is to deal with the impact of GST. But over the long term, the Government has to face three challenges: (1) how to focus the people's attention on our national competitiveness, to build up our external economy, and to address the issue of our aging population; (2) how to manage the rising expectations of the people. The Government cannot ignore the wishes and views of the people. But at the same time, the Government should not try to please everyone with material incentives. (3) how to strengthen the bond between the people and the Government. In this respect, we should enhance our people's national consciousness, the family concept and the moral values of the individuals. At the same time, the Government must make greater efforts to explain its policies so as to convince the people, to win their minds and their hearts.”
“I note that in terms of fees and charges last year, the Government has collected $3 billion. How much of this came from COE and the foreign workers' levy? I would ask the Minister to give us some figures on these two items. Although the Minister did not put it explicitly, it is in fact quite clear that there is Government intervention in the distribution of income and wealth through subsidies on education, health care and social services. On 11th March last year, in answer to my question, the Minister said that because of the tax rebate and the lowering of tax rates, 74% of our residents will not have to pay any direct tax. In other words, from 1st April this year, although every consumer has to pay GST, the income tax burden will be shouldered by fewer taxpayers. I hope that the Minister will be able to provide some statistics to compare the changes in the number of taxpayers and tax collected for different income groups before and after the implementation of the Goods and Services Tax. In this way, our people will be able to understand better how the Government has redistributed wealth and income in order to benefit the lower income groups. The Minister has also referred to the surpluses and reserves in his Budget Statement. This year, the estimated surplus is $2.2 billion which is much lower than the $6.97 billion for last year. Over the past two years, most of the surpluses were put into the Edusave Endowment Fund, Medifund and the CPF Share Ownership Top-Up Scheme. The Pension Fund to be set up will also be getting some of these surpluses. On the other hand, our reserves reached the level of $77.87 billion last year. However, this apparently massive amount of money can only sustain six months of imports. Furthermore, it is also lower than our GNP of $90.”
“5 billion investment commitment in the petrochemical industry. This is encouraging. The Economic Development Board has put in a great effort in this aspect, and we must compliment EDB for that. I also notice that from 1989 to 1993, in the same period, the local investment commitments have fluctuated very much. I understand that the nature of investment is volatile. But why is it that the local investment commitment has fluctuated so much more than the foreign investment commitments? Does it mean that there has been a diversion of investment to foreign countries? Mr Speaker, Sir, let me deal with the next topic, ie, the role of government. The Minister for Finance said in his statement that the Government has a role to play in economic development. Although we rely on market forces, the Government needs to intervene in several areas such as education, skill training, upgrading of economic structure and the provision of a stable environment. I agree with the Minister for Finance. The Feedback Unit has also discussed the issues relating to market forces and Government intervention with the community leaders. I noted that many people do not quite understand the operation of the market forces. More people ask for the Government to intervene in public housing, public transport, education and health care by providing subsidies. But, on the other hand, for any government intervention measure that affects their own pocket or to increase the Government's coffers, such as the foreign workers' levy and the COE, they will inevitably express strong objection and dissatisfaction. All over the streets, in coffeeshops, in restaurants, people discuss these matters. Many people want to know how much the Government has collected in these two areas.”
“They also suggested that the Government should consider setting up an overseas development bank at this critical moment, or to set up an overseas development fund with the banks to provide loans and thus spread the risk. In my personal view, the Government should do its best to assist our local entrepreneurs to venture overseas. The Prime Minister and the Senior Minister have been making many overseas trips to look for opportunities for Singaporeans to venture overseas. This is the Government's greatest assistance to our local entrepreneurs to venture overseas. This political goodwill is indeed an intangible asset for our overseas ventures. Some entrepreneurs who go overseas for development are prone to complaining that they do not enjoy protection under the local laws, the lack of transparency of regulations, and the frequent changes of government policies. As a result, they have to take very great risks and sometimes they do not even know what to do. These entrepreneurs should realize that if these countries have all the comprehensive legal framework and regulations, strict enforcement of the law and consistency in policies, then they would not need our investments for development. To put it simply, when we go to these countries where the development policies are still in the groping stage, we are trying to find an equilibrium in a disequilibrium situation. While we encourage Singaporeans to venture overseas, we cannot hollow out our domestic economy. We must not only maintain our economic competitiveness, but also continue to attract foreign investments. I notice that the investment commitment from foreign sources in the manufacturing industy has steadily increased from $1.63 billion in 1989 to $3.15 billion in 1993. Recently, a foreign consortium has committed a $3.”
“Also, some of these entrepreneurs are not quite happy with the attitude of the civil servants because the civil servants are used to being the "regulators". They have given people the impression that "you have to beg them, they would not beg you". On top of that, some civil servants who are in charge of GLCs are not familiar with the local situation and they lack the tact necessary for business dealings. Very often, these have resulted in some unnecessary obstacles and delay, even to the extent of spoiling the whole project. Despite that, I still believe that the Government should have some means to narrow the gap between the private entrepreneurs and the Government-linked companies. In fact, they should complement and supplement each other. At the same time, the Government should play the catalytic role through these Government-linked companies and statutory boards for our overseas ventures. The private entrepreneurs have also complained that the local banks are too conservative in their management style. They insisted that the local assets should be used as collateral for loans for overseas development. This has resulted in our entrepreneurs who are venturing overseas having to bear double risks. Some of them thought that this might be the requirement stipulated by the Monetary Authority of Singapore. I hope that the Minister for Finance will be able to clarify this point. More importantly, how are we going to allow our local entrepreneurs to use their overseas assets as collateral for loans? The entrepreneurs felt that the conservative style of our local banks is not in line with the Government's encouragement for our local people to venture overseas.”
“In the Budget debate last year, I mentioned about the mutual repellence between civil servants and the entrepreneurs. This point was raised in the two dialogue sessions held by the Feedback Unit with the entrepreneurs on venturing abroad. Coupled with my personal interaction with the entrepreneurs, I have now a better understanding of the local enterprises, particularly the small and medium enterprises, and their complaints and reservations on partnership with the Government-linked companies. The private sector feels that GLCs are slow in making decisions. They think that there are three reasons for this. Firstly, because the people in charge of these GLCs are mainly civil servants. They are more careful and prudent. For every project, they need to have a feasibility study conducted before they commence action. Secondly, it is the same group of civil servants who are managing the Government-linked companies. They have to participate in rounds and rounds of negotiations. They are very busy and they have to travel all over the places - China, Vietnam, India, or Myanmar. If they are not overseas, then they are in the meeting rooms. Therefore, they are unable to make "quick" decisions on various projects. Thirdly, the Government-linked companies are participating in too many projects. So for particular projects, they lack the sense of urgency and the motive of quick completion. Apart from being slow, the entrepreneurs also observed that despite their "golden reputation", when these Government-linked companies go overseas to negotiate for projects and investment plans, they may not necessarily secure the most favoured terms.”
“The Government will not only have to prevent businessmen from using GST as an excuse for profiteering, but also to pay attention to the fact that inflation may lead some unions and workers to demand for higher wages, thereby triggering a price-wage spiral. Most of the participants at the dialogue session also suggested that the Government departments and statutory boards should freeze their fees and charges for the next two years. Otherwise, it would undermine the Government's moral authority to persuade the businessmen not to increase prices at random. Furthermore, if the Government departments and statutory boards continue to increase their fees and charges, it may create an impression among people that "we allow only the magistrate to set fire, but disallow the people even to light their lanterns" ( ). The business community is very concerned that in order to collect GST for the Government, it has to incur additional costs. The business representatives at the dialogue session felt that the Government had underestimated the private sector's cost in this aspect. They also feel that they are merely acting as collection agents for the Government, so the Government should compensate them for their expenses incurred. Now, let me go on to the issue on external economy. Apart from the amount of our investments abroad, the size of our external economy can also be measured by factor income from abroad. In 1993, our income from abroad was $1.23 billion as compared to $1.37 billion in 1992. I wish to ask the Minister for Finance: what was the reason for this decline? At the same time, I like to know, from the $1.23 billion income from abroad, how much of it came from the public sector's investment overseas.”
“But the Government should be very prudent and careful in dealing with this matter, that is, not to allow the people's expectation to be raised too high, and to take for granted that every year, there would be some hong bao and gifts to the business community and the ordinary citizens. The Government should also let the people realise the reasons for giving all these concessions. In my view, the reasons for giving these concessions in the past few years are mainly two-fold. Firstly, to improve our competitiveness and to stimulate our economy. Secondly, to return the wealth to our people according to our economic performance so as to encourage our people to work harder and to upgrade their skills. For example, the reduction of income tax in 1993 and the GST to be implemented are measures to promote our competitiveness through tax reform. The second example, for last year and this year, the various tax incentives given to the finance and other industries and the incentives for overseas development have the primary objective of increasing our GNP. The third example is the CPF Share Ownership Top-Up Scheme. Its aims are to return the wealth to our people, to reward the people for their past contributions, and to encourage them to strive for excellence. Mr Speaker, Sir, now let me talk about the implementation of GST. With regard to GST, the biggest fear among the people is profiteering and inflation that may come with its implementation. How to contain inflation rate at below 6% is the main challenge facing the Government.”
“Dr Ow Chin Hock (Leng Kee)( In Mandarin): Mr Speaker, Sir, I support the motion standing in the name of the Minister for Finance. I would also like to thank the Minister for his generosity. First of all, I would like to report the mixed reactions of the public to the Budget Statement. The Feedback Unit conducted a dialogue session on the Budget Statement on 28th February. Most of the participants felt that this Budget should be welcomed by the people because there are many goodies given to the people, for example, personal income tax rebate, HDB service and conservancy charges and rental rebates, and also the $300 for the CPF share ownership top-up scheme. I think our people will welcome these goodies. However, some representatives from the business community expressed their disappointment over this Budget because the corporate tax has not been further reduced. On the other hand, they were worried that the increase of 1.5 percentage points for the employer's CPF contribution would further increase labour cost. Most of the participants of this dialogue session have reached a consensus, that is, they are concerned with the impact of the forthcoming GST. The union and community leaders, academics and professionals are more worried about the profiteering and inflation that may come with GST. But the businessmen and employers are worried about the GST compliance cost. From these different reactions and the press reports, we can come to one conclusion, that is, "The more you give, the higher would be the expectation. What was given last year does not count. If you give less this year, there will be a lot of hue and cry." No doubt, asking for more is a natural reaction.”
“For budgeting purposes, we have indicated the project will start this year. When the project is finalised, we will let the Member know. I assure the Member that he will be the first to know. RESIDENTS IN WELFARE HOMES FOR DESTITUTE AND AGED PERSONS 6. Mr Ling How Doong asked the Minister for Community Development, of the 1,380 residents in welfare homes for destitute and aged persons in 1993, how many of them were in homes run by voluntary and religious organisations; and whether their stay was free of charge. The Acting Minister for Community Development (Mr Abdullah Tarmugi): Mr Speaker, Sir, the Member for Bukit Gombak may have obtained the figure of 1,380 destitute and aged persons from the FY 1994-95 Budget Book. This is only an estimate of the number of destitute persons likely to reside in the three welfare homes administered by my Ministry in FY 93/94. As at 28th February this year, there were actually 1,341 destitute persons living in the three Government homes, ie, Woodlands Home for the Aged, Woody Lodge and the Pelangi Home, and all of them stay in these homes for free. BILL INTRODUCED SUPPLEMENTARY SUPPLY BILL "to provide for making supplementary provision to meet additional expenditure for the financial year 1st April, 1993 to 31st March 1994", recommendation of President signified; presented by the Minister for Finance (Dr Richard Hu Tsu Tau); 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 [23rd February, 1994), "That Parliament approves the financial policy of the Government for the financial year 1st April, 1994 to 31st March, 1995." - [Minister for Finance]. Question again proposed.”
“Sir, as you can well appreciate, in such a project, the Public Works Department makes every attempt to minimise the impact on the surrounding area. So they have to draw up their plans carefully and make sure that they do not take more land than is necessary for the road widening project. When that is finalised, we will inform the MP of the area and we will coordinate with the Member and let the people affected know. Mr Goh Choon Kang: I notice there is already provision for the development of the interchange in this year's budget. I suppose the project will start very soon. How soon can I know the answer?”
“The details on the number of residential units or shop units affected have not been finalised. When it is finalised we will make it known to the people affected. Under such a road widening project, the land will be acquired under the Land Acquisition Act and the compensation and procedures will follow accordingly.”
“SUPPLY BILL "to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April 1994 to 31st March 1995", recommendation of President signified; presented by Dr Richard Hu Tsu Tau; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. FIRST SUPPLEMENTARY ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1993 TO 31ST MARCH, 1994 (Paper Cmd. 1 of 1994) Order read for consideration in Committee of Supply [Allotted Day]. [Mr Speaker in the Chair]”
“Mr Speaker, Sir, the PWD is aware of the growing traffic volumes along Sixth Avenue due to growth in the area. Traffic flow along Sixth Avenue is, however, satisfactory for most part of the day. Some congestion is observed during the peak periods at Sixth Avenue's junctions with Holland Road and with Bukit Timah/Dunearn Road which are both signalised junctions. The congestion is localised and is over a short period. There are no immediate plans to widen Sixth Avenue to a dual two carriageway road. However, the PWD is studying the above two junctions to see how their capacities can be increased, such as by providing additional traffic lanes along the approaches to the junctions and adjusting the traffic lights. 2.49 pm BILLS 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 Finance (Dr Richard Hu Tsu Tau); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. PATENTS BILL "to establish a new law of patents, to enable Singapore to give effect to certain international conventions on patents and to repeal the Patents (Compulsory Licensing) Act (Chapter 221 of the 1985 Revised Edition) and the Registration of United Kingdom Patents Act (Chapter 271 of the 1985 Revised Edition), and for matters connected therewith", presented by the Minister for Law (Prof. S. Jayakumar); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.”
“Under the scheme that we are examining, we are considering a scheme which will allow a discount from the market prices of the flats. We are also studying the feasibility of including some of the two-room flats into this scheme. NATIONAL NEWS AGENCY (Setting up) The following question stood in the name of Dr Kanwaljit Soin - 14. To ask the Minister for Information and the Arts whether Singapore will benefit by setting up a National News Agency.”
“Mr Speaker, Sir, as announced by the President in his Address to this House, MND is currently examining a scheme to sell rental flats to sitting tenants. We hope to complete the study in two to three months' time. Details of the scheme will be released when it is finalised.”
“Mr Speaker, Sir, maybe the Member for Potong Pasir was too deeply involved with other matters. This was announced in the press. The Interim Upgrading Programme, as I explained, covers a budget of about $6,000 per unit and is intended to allow the Town Council to undertake works primarily in the precinct and outside the flat within the block, things like addition of linkways, reconstruction of recreational facilities, repainting of the block, lift landings on every floor, if it is possible and if it is within budget, ie, items under the Main Upgrading Programme which can be done earlier and which will not be duplicated later. EXPIRED CERTIFICATES OF ENTITLEMENT (Recycling) 8. Mr Chng Hee Kok asked the Minister for Communications if he will "recycle" Certificates of Entitlement which have expired.”
“Mr Speaker, Sir, there are two vacant sites at Telok Blangah Crescent. HDB is looking into the possibility of building new HDB flats at these vacant sites. Details will be announced in the quarterly balloting system. ANG MO KIO POLYCLINIC (Expansion of medical services) 11. Mr Yeo Toon Chia asked the Minister for Health, in view of the heavy demand for medical services in Ang Mo Kio Polyclinic, whether his Ministry has any plans to expand the medical services.”
“Sir, those blocks which were demolished in the earlier years, and which we continue to demolish today, were the 1- and 2-room rental flats. Singaporeans, in case Mr Chiam does not know, have grown richer. They are not staying in 1- and 2-room rental flats any more. Many of our 1- and 2-room blocks of flats have very high vacancy rates. We do not demolish rental flats haphazardly. We have a rule which says that rental flats in an area will be demolished if the vacancy reaches above a certain percentage. So we are just adjusting to the demand pattern of Singaporeans. As they grow richer, they want to buy bigger flats. The rental flats fall vacant. So we relocate them and we knock down the old rental flats. When we knock down the old rental flats, we create some land available. So we rebuild so that Singaporeans can enjoy some new flats in the older estates. But that is not to say that we can start a programme and guarantee every Singaporean that he can exchange his old flat for a new flat in the estate that he is staying. That is just physically and fiscally not possible. HEALTH SCHEMES IN SCHOOLS (Measures to test soundness) 9. Dr Kanwaljit Soin asked the Minister for Education (a) what measures are being taken to test the soundness of health schemes, eg, walking on stones, that are introduced in our schools; and (b) who bears the cost of such unproven ``health'' equipment or measures.”
“Mr Speaker, Sir, I have already explained that in the bulk of the older estates, first, there is very little land for us to carry out a major rebuilding programme in such a way that we can guarantee everybody a one for one exchange. Because when we rebuild the older precincts, we will end up with less units. Second, as we have explained, in the Main Upgrading Programme, we really do not encourage Singaporeans to opt for a utility room. We explained in the press conference that it is not cost effective for us to add a utility room to an old flat. The objective of our Main Upgrading Programme is to upgrade the environment, improve the facilities and improve the environment of the flat. It is not to add space. If a resident really wants space, I think the best alternative for him is to apply for a new flat in the new towns. At the same time, we provide the option of a Standard-plus package in case there are people who feel very strongly that they want a utility room. In that situation, they must pay a higher share of the cost because it is not cost effective to put a utility room. In short, the answer to Mr Low is that where it is possible for us to rebuild, instead of upgrade, the Government will consider to do so. But in the main, for the reasons I have explained earlier, the upgrading programme is still the better way to proceed.”
“Mr Speaker, Sir, the Member is not comparing like with like. That means when we rebuild, we are giving them 99 years and they are extending the land use. If we want to compare whether it is cost effective to renovate or rebuild, then we should use the same land lease terms.”
“I said that that is possible purely on the construction basis if (1) we can convince the other 50% of the residents who do not want a bigger flat that they are also buying into the programme; (2) we will not be able to generate so many big units to replace one for one in exchange for all the small units.”
“Mr Speaker, Sir, I agree with Dr Tan Cheng Bock that rebuilding, instead of renovating, is also an upgrading process for the residents. But we must always look at the cost benefit of each exercise. Where it is cost effective for the Government, the state and the residents, indeed we will consider his suggestion. But in the mainstream of the upgrading programme, as I have explained, it is not cost effective and we will continue to pursue the Main Upgrading Programme.”
“If the Government were to again subsidise $54,000, a resident, who does not really want a bigger flat still ends up with a 3-room flat, will have to pay $26,000 as compared to less than $4,000 under the Main Upgrading Scheme. We have considered both alternatives of upgrading and rebuilding and it is the Government's contention that upgrading is still a better solution for our older estates for these three reasons: (1) Many of the older folks do not want a bigger flat and cannot afford a bigger flat. (2) We may generate less units if we build bigger flats. (3) Even if we build bigger flats, it is not cost effective to do so.”
“If we upgrade with a utility room, which is not very cost effective, it will cost us about $67,000, of which the resident will have to pay $13,400 and the Government will have to give him a subsidy of $54,000. But if we were to build a brand new flat, a 4-room flat will cost about $90,000. If the Government were to give the same subsidy of $54,000, then the resident has to pay $36,000. So the comparison to the resident is whether he pays $13,000 for upgrading with a utility room or $36,000 if he wants a 4-room flat in the same area. But that means when we rebuild, we are not charging the resident for the land cost, because we are just talking about construction cost. So he has to pay $36,000 extra cost. The second reason why it is not cost effective is that if we were to build bigger units, we will end up with less units than the present number of units on site. Because the more bigger units we try to pack into the same area, the less units we will get. So it will not be possible to guarantee everybody that he will get a bigger unit in the same area because we will not be able to generate the same number of units when we build bigger flats. The third reason why it is not such a great idea is that even in our Main Upgrading Programme, more than 50% of the residents did not subscribe to the utility room. For many of these older residents in the old estates, they are quite happy with the standard upgrading where they pay less than $4,000 and they get a very nice environment and an upgraded flat. They are not interested in paying $13,400 for a utility room. If we were to knock down the flats and ask them to buy a brand new 3-room flat in the same vicinity, it will cost the Government $80,000 to build a 3-room flat.”
“Mr Speaker, Sir, I think the Member is probably referring to Dr Tan Cheng Bock's suggestion, as reported in the press, that the Government should consider building new flats instead of upgrading. According to the newspaper report, Dr Tan Cheng Bock said that upgrading a flat costs as much as building a new one. I think the report stated that it costs the Government about $67,000 to upgrade a flat whereas it is now possible to buy a new budget 4-room flat, the cheapest of which is $70,000. So the cost seems to be the same. Whether we upgrade or build depends on the cost effectiveness of both solutions. In this case, I think Dr Tan Cheng Bock is partly right and partly wrong in making his suggestion, although I would say he is more wrong than right. He is right because the Government did explain that upgrading is very costly, especially if you want to add a utility room. When we announced the new cost sharing package of the upgrading programme, we explained that adding a utility room is very costly, because you have to divert services, lay new foundations and it costs three to four times more per square metre than if we were to build new flats. Dr Tan is right in that sense. It is not cost effective to add new utility rooms to old flats. At the same time, he should not compare construction cost of upgrading with the selling price of budget 4-room flats, because the selling price of budget 4-room flats is very heavily subsidised to allow the poorer segments of Singaporeans to own a 4-room flat. If we were to take a precinct on its own and we have to decide whether we want to upgrade or build, these are the cost considerations.”
“Sir, the Main Upgrading Programme will eventually cover most of the existing stock of old flats. With the successful launch of the demonstration phase and the first batch of the main phase, the programme has been geared up to upgrade 10 precincts next year. If there is sufficient capacity in the construction industry, HDB plans to increase this to 20 precincts each year. The Main Upgrading Programme is expected to last 10 to 15 years. The older flats will be upgraded first, but we will also ensure a geographical spread of the precincts to be upgraded. All things being equal, priority will also be given where there is strong support for this programme. The Interim Upgrading Programme (IUP) is intended to complement the Main Upgrading Programme. Without the IUP, some precincts may have to wait for more than eight years before they can be upgraded. With the IUP, improvement works at the precinct and block level can be implemented first, so that more residents can enjoy the benefits of the Upgrading Programme earlier. The first batch of 26 precincts in the IUP was announced recently. HDB plans to upgrade some 20,000 flats each year under the IUP together with the Town Councils. In this way, the benefits of upgrading will spread to as many Singaporeans as possible.”
“He can do it. HOUSING AND DEVELOPMENT BOARD (Upgrading programme) 8. Mrs Yu-Foo Yee Shoon asked the Minister for National Development (a) what is the extent of the upgrading programme undertaken by the Housing and Development Board; (b) how many blocks of flats will be entitled to (i) major upgrading and (ii) interim upgrading; and (c) when will the upgrading programme be completed.”
“The answer is yes. For the first and third categories, the answer is yes.”
“Under the third child policy, you are only allowed to sell your first flat provided you have applied under the third child policy and under that policy, you are allowed to sell your first flat with a waiver of the occupation period. The second flat you get you have to stay in it for five years. So again, under the category of the third child policy, it is not possible for a person to keep on buying and selling the flat and claim the benefits.”
“Under these three categories, if a person is buying a 1- or 2-room flat, he can buy and sell. We do not restrict him because we consider the 1- and 2-room flat as transitionary housing. Most Singaporeans will only buy the 1- or 2-room flat as the first step before buying a 3-room or bigger flat. So it is not likely that there are persons who want to buy and sell 1- and 2-room flats. He will not buy and sell and make a profit. There is very little profit in buying and selling 1- and 2-room flats. So the reason why we have waived the occupation period for the 1- and 2-room flats is that we want to give the poorer segment of Singaporeans a chance to upgrade quickly. So they buy a 1- or 2-room flat and after one or two years, they find that their wages have gone up, they can afford a 3-room flat, they can sell their 1- or 2-room flat in the open market and move on to a 3-room flat without waiting for the five-year requisite occupation period. So that policy is intended to help the lower segment of the population. And I doubt if there are many Singaporeans who will continue to buy and sell 1- and 2-room flats. Similarly for HUDC flats. They can buy and sell HUDC flats because, essentially, HUDC flats are very close to the private sector. There is no control on the occupation period of private sector flats. So an HUDC flat is a transition between a HDB flat and a private sector flat and the rules of occupation period have been liberalised so that they are more or less like private sector flats. For the third child category, he cannot buy and sell freely.”
“It depends on the second flat that he buys. If the second flat falls in this category, he can sell the second flat, as allowed under these three categories.”
“The levy on the sale price is a policy by HDB, ie, 10% for a 3-room flat, 15% for a 4-room flat, and 20% for a 5-room flat.”