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 51 of 54.
“Sir, as part of its continuing efforts to upgrade and improve the amenities and facilities in its public housing estates, HDB now provides multi-storey car parks instead of surface car parks, wherever possible. This will make available more green space for landscaping and recreational use by residents. As a long lead time is necessary to construct multi-storey car parks, HDB provides temporary surface lots in the interim so that residents will not be unduly inconvenienced by a lack of parking space. The existing surface car parks in Pasir Ris Neighbourhood 5 have been provided as a temporary measure, to meet the immediate parking needs of residents during the transitional period when three new multi-storey car parks are being constructed. The surface car parks will not be retained after the completion of the multi-storey car parks. Retaining them would result in over provision of car parking facilities. In addition, residents would also be deprived of the additional green space for landscaping and recreational use.”
“Sir, let me explain the situation in public housing which is slightly different from private housing. In private housing, the developer provides one car park lot per housing unit. In public housing, there is no reason for us to do so, because we have surveyed the car ownership patterns of HDB residents. As you know, in Singapore, the car ownership ratio is about 1:10. And since public housing caters to the lower income group, the car owning ratio, say, in the 3-room flats is one car in three families. If you were to build car park lots and charge the cost to every unit, then what you are saying is that the lower income groups who purchase flats will be subsidising those who own cars. That is not the intention of the Government. We separate the costing of the flats to reflect the true cost of providing housing to Singaporeans. We separately cost the car parks so that car owners will pay for the car parks provided to them. TRENDS AND CAUSES OF TEENAGE SUICIDES (Details) 9. Dr Kanwaljit Soin asked the Minister for Home Affairs if he will give details of the trends and causes of suicides and attempted suicides among teenagers.”
“Mr Speaker, Sir, HDB has not been able to fully recover its costs for the provision of car parks, because past increases in car park charges could not keep pace with the increases in operating and construction costs for car parks. HDB is constantly looking at ways to increase efficiency in car park operations, through automation and better use of manpower to keep down costs. However, doing this alone will not be sufficient. It is necessary to increase car park charges gradually to cost-recovery levels, so as to reflect the true cost of providing car parks in HDB estates. My Ministry is, however, mindful of the impact of increases in car park charges on HDB residents, and will carefully examine the implications of any future revisions in the charges.”
“When rental blocks are demolished, the land is then returned to the State.”
“Sir, it is unclear how Mr Chia arrived at the conclusion that the subsidy for HDB rental flats is higher than that for sold flats. The deficit figures for HDB's Sale of Flats and Rental of Flats Activities are not strictly comparable as the loss per unit of flat sold is a one-off subsidy, while the operating deficit for rental flats is incurred annually. In FY 91/92, HDB incurred a total deficit of $167 million for its Rental of Flats Activity. Of this $167 million, $110 million was due to the write-off of 148 blocks of rental flats demolished that year. HDB's operating deficit for its Rental of Flats Activity was thus $57 million. The average operating deficit HDB incurred for each unit of flat rented out in FY 91/92 was $747. Public rental rates for 1-room and 2-room flats are highly subsidised to keep housing costs within affordable range for the lower income groups. For this reason, HDB's public rental rates for the lower income groups have remained unchanged since 1979. Rental for a 1-room flat ranges from $22 to $33, while that for a 2-room flat ranges from $44 to $75. Public rental rates for 1-room and 2-room flats thus constitute less than 5% of the household incomes for the majority of existing rental tenants.”
“Sir, we are reviewing all factors before we decide to raise the charges. When the review is completed, we will make the announcement. HOUSING AND DEVELOPMENT BOARD (Higher subsidy for rental flats) 7. Mr Chia Shi Teck asked the Minister for National Development if he will explain the reason for the Housing and Development Board's higher subsidy for rental flats as against purchase flats.”
“Mr Speaker, Sir, it is necessary to increase car park charges over time, so as to reflect the true cost to HDB and URA of providing car parks. My Ministry is reviewing the charges for surface and multi-storey car parks. My Ministry will consider all factors carefully before recommending any revision to car park charges.”
“The answer is no. There was no request for alternative use so we demolished it and returned the void deck for use by the residents. MR SAMAT DUPREE (Investigation into confession of murder) 5. Assoc. Prof. Walter Woon asked the Minister for Home Affairs, in the light of the report in the Straits Times of March 18th, 1993, that a Mr Samat Dupree had been acquitted of murder when the prosecution withdrew the charge -- Mr Samat apparently confessed to the murder, but it was found that the confession was not true -- will he say whether an investigation has been made into the circumstances under which Mr Samat's confession was obtained and, if so, the result of that investigation.”
“As I mentioned, the RCs in Potong Pasir have had their premises. They do not require additional premises. They did not make a request for use of the MP's office as an additional RC's office.”
“I did not say that the office was not centrally sited. The Civil Defence agency felt that the office was not centrally sited for its own use. So they decided not to take it.”
“The Civil Defence subsequently felt that the office, at 75 square metres, was too small and not centrally sited. They declined the use of the space. There were no other takers and so the space was returned to the residents for use.”
“Sir, the MP's office in Potong Pasir is only 75 square metres. We sought alternative uses from other Ministries and statutory boards. There was no request for alternative use and therefore we demolished it so that the void deck could be returned to the use of residents.”
“Mr Speaker, Sir, following my Ministry's decision in September 1991 that HDB would no longer provide MPs with offices at HDB void decks, all PAP MPs who had their offices at HDB void decks have given them back to HDB. Of these, some have been let out for use as Education Centres, and others for social/communal use. None has been demolished.”
“Sir, we will announce the selection of the next six precincts in due course. ALEXANDRA HOSPITAL (Subsidised beds and future development) 2. Dr S. Vasoo asked the Minister for Health whether the number of subsidised beds in Alexandra Hospital will be reduced and what will be the future developments of the hospital.”
“Mr Speaker, Sir, the package of incentives that URA announced is intended for the majority of the 118 sites. It is not intended to be targeted at the small owners of strata title properties. We realise that the small owners are not likely to get together and take advantage of these incentives. The incentive package is largely tailored to the single owner of general and hazardous industries. For this light industry, we are prepared to let them remain, as they are strata title properties in the light industrial buildings and they cause no disamenity to the surrounding areas. ELECTRONIC ROAD PRICING SYSTEM (Progress) 2. Mr Heng Chiang Meng asked the Minister for Communications if he will report on the progress of the electronic road pricing system.”
“Sir, the answer is very clear. The URA is not forcing them to demolish or convert to residential use. Being light industrial buildings, they are allowed to co-exist with residential use. We would, of course, like them to convert to residential use and we offer incentives for them to be changed to residential use. But if these owners do not wish to convert their buildings to residential use, URA has no plans to acquire or to force them to demolish. Let it be clear that these buildings are not intended to be demolished or acquired. There are incentives for them to change to residential use. If they do not want to change, they are allowed to remain as light industrial uses.”
“Somebody prompted seven years. He knows more than I do. I am afraid I do not know the details of the loan. I will send the answer to him after I find out.”
“The Government's position of giving loans to the Town Councils has been announced, I think, by Dr Lee Boon Yang two or three years ago, and that is, during this period when Town Councils have not yet built up the sinking fund and they need money to pay for the cyclical works, the Government is prepared, for cash flow purposes, to lend the money to the Town Councils to tide over the cyclical requirement during the seven years. After that, there will not be any more loan. The loan that he refers to concerns Gillman Heights (HUDC). They required a very major cyclical work, I believe, last year, and the Government does not provide grants to HUDC. So there was a cash flow problem. They were confident that over time, their S&C collections and contributions to the sinking fund would pay off the loan, and MND gave them the loan. The details of the loan requirement, I think, is 2% above CPF rate. But I have to confirm that.”
“All right. Why the minimum rate is 5%, I think I have given the answer to Mr Cheo. Let me just take the third point given by Mr Chiam. He asked how many Town Councils have asked for increase in S&C charges and whether this poses a dilemma to HDB. Let me tell him very categorically that HDB is not in a dilemma when Opposition Town Councils apply for grants. Grants are given out according to the flat type, according to age, and is given out equally to all Town Councils, whether PAP or Opposition. So the same condition that HDB applies to the PAP, it applies to the Opposition Town Councils. So HDB is in no dilemma, whatever. You want to raise your S&C charges and you want to get the grants, you are entitled to the grant, we give it to you. He said that I did not answer Mr Cheo's question about how many PAP Town Councils have asked for more grants because they are increasing their S&C charges. We have decided in MND that individual Town Councils should inform their residents the amount and the date of the increase. It would not be good for us to make a general announcement when the individual Town Councils have yet to send letters to the individual residents stating the amount of increase and the date of increase. So although all the Town Councils, both PAP as well as Opposition, have submitted their increases to MND, it is having an embargo on the details of the returns, because we prefer to let individual Town Councils communicate with their residents. Mr Low Thia Khiang asked why there is a loan to the Town Council.”
“Sir, I have three minutes. So I do not propose to go through the old ground of why the contribution rate has to be increased from 25% to 35% and 40%.”
“So all the six precincts, whether it is Marine Parade, Toa Payoh, Ang Mo Kio, Lorong Lew Lian, Clementi or Telok Blangah, pay 10%, which is up to $4,500. In the steady state, we have come out with a new ratio of payment of which the menu is decided by the residents, and they pay different amounts. If they choose the Standard Package, then they pay about $3,500, without the additional space-adding item. If they choose to have the additional space-adding item, then they pay $13,500 for the 3-room flats.”
“Let me assure the House that HDB flats are built according to the planning and building plan regulations of the day. But in the past, the requirement was less stringent. Now, because we want to cater for the handicapped and the aged in society, the Ministry of National Development came out with a new building code for the handicapped and the aged, I believe two years ago. So by law, all new buildings have to abide by that code. By law, old buildings are not required to abide by the code. The code is only effective from the day it was passed. What HDB is trying to do is that, since we have this new code, we will try to bring our old flats to the requirements of the new code. We passed the code when they were built. But because there is a new code, we are trying to upgrade all our old flats to the new code. So it is not true that HDB flats are second rate flats and not built to the building code. HDB flats are built to the building code of the day, just like private flats. What we are trying to do in our Upgrading Programme is to bring our old flats to the existing code. The Town Councils under the steady state upgrading need not pay the 5% that was originally intended. This is to allow the Town Councils to have their funds for the general improvement of their estates, and not divert the funds to the specific precinct. Mr Chiam also asked why Marine Parade residents are only required to pay 10% or up to $4,500 and under the steady state the number is now changed. There is no inconsistency. We have always made it very clear that in the Demonstration Precinct, for which there are six, the residents there only pay 10% of the cost because it is a Demonstration Precinct and we are trying out new techniques and new programmes.”
“Sir, I do not wish to take the time of this House on the details of permanent structure. I think the principles are that the outdoor refreshment areas are on Temporary Occupation Licence (TOL). We discourage permanent structures because these are temporary licences. If there is a need for other uses, the operators will have to take down the structures. But if the operator is prepared to take this risk and the designs are aesthetic and they are prepared to pay the money, I will get my officers to review the requirements.”
“So we provide these facilities. I think Singaporeans have to learn to make a stand. These groups of people are part of the community. We must provide facilities for them within the community.”
“Not yet, yours is the first. Sir, let me reinforce the answer. I am not sure, as this is MCD's purview, but I believe this is the first request by SAMH, and we are catering to their request within our void decks. Let me assure the Member for Potong Pasir that there are many, many such centres in all the PAP MPs' Town Councils' void decks.”
“In other places, we have the Alzheimer's Disease Association. There are so many organisations being catered for in our void decks. And if they need a child care centre next to it, we will build the child care centre next to it. Mr Chiam See Tong: Sir, the Minister of State just refuses to answer the question, yes or no? Are there other child care centres built next to the SAMH premises in a void deck in HDB estates? It is as simple as that. Let us get an answer, yes or no?”
“The answer is that the child care centre will be built next to the SAMH, and we intend to stick to that decision.”
“I am not aware whether specifically there is any child care centre next to an SAMH. But I am aware in HDB estates, we have many, many facilities catering to different groups, for example, MINDS, old age, etc. Child care centres and kindergartens are co-located with these groups in the void deck. There is nothing wrong with it. The newspaper has been running many reports about residents living near kidney dialysis centres, MINDS centres and other centres within their premises. If we go about chasing all these centres away from our housing estates, tell me where are you going to put them? In the sea?”
“There is nothing wrong in having a child care centre next to the Centre for the SAMH, and we do not intend to relocate the child care centre because residents do not wish to have the child care centre next to the SAMH. Because if we do so, the next request from Mr Chiam would be that the residents in Block 139 do not want the SAMH in their void deck. Then we have to relocate the SAMH. So where do we end? Singapore is such a small place. We cannot be relocating all these social amenities to other places where residents got no complaints. We make the professional assessment that these two centres can co-exist side by side and we will abide by it.”
“Let me answer Mr Goh Choon Kang first. The tender for the market has been called and I think it will be completed within the next two years. We promise the residents in Braddell Heights that the market will be completed before Lim Tua Tow Market is demolished. That is the commitment we make to the MP. We will try and complete the market before we remove the other market. Mr Chiam gave the application history of the child care centre in Potong Pasir. HDB was building the centre when it received a request from MCD to meet the more urgent requirement of the Singapore Association for Mental Health. That is the reason why we allocated the space in Block 139 to SAMH. The reason is that there is already an existing child care centre in Potong Pasir located at Block 105 Avenue 1. So we thought we should cater for the needs of the SAMH urgently. But there is no decision to deny Mr Chiam of his child care centre. Once we complete the Centre for the SAMH, we will continue to build the child care centre next to the SAMH. As to Mr Chiam's request that HDB relocate the child care centre to be away from the SAMH, I am afraid we cannot accede to his request because I think the Government must make a stand that we need to provide social amenities for different segments of our population and we cannot allow different groups of residents to keep requesting for these social amenities but never in their block of flats. So I think the SAMH has a right to be in the void deck of Block 139. The Ministry of Community Development assures HDB that the SAMH are people who are completely cured. They need to be integrated back into the community and, therefore, their premises should be located within the community.”
“Third, we are given a certain budget by the Ministry of Finance and we have to work within that budget in our programme. So within these constraints, let me assure the Member that we will try to programme it such that the older estates will get a fair chance of being upgraded.”
“Mr Goh Choon Kang wants to know details about the construction of the Serangoon Central Wet Market. The wet market will cost about $2.2 million. It will have 35 stalls when completed. The policy of allocation of these stalls is under review by the Ministry of the Environment and I am sure it will be announced when the review is completed. Existing stallholders in the Lim Tua Tow Market who are affected by resettlement will be given priority in obtaining stalls in other markets owned by the Environment Ministry or by the HDB. Alternatively, these stallholders can choose to accept cash grants if they decide to surrender their licences. Mr Chay requested the Ministry to accelerate the rate of upgrading of HDB flats. In the steady state phase of the Upgrading Programme, we will try as far as possible to upgrade the precincts according to the age of the flats. So the older estates will in fact be upgraded first. But in working out the programme, we also do try to have some geographical spread of the precincts so that the benefits of upgrading is spread to as many areas of Singapore as possible. So within the two criteria of age and geographical spread, we will try and tailor the programme to make sure that the older estates do not have to wait too long for their turn to be upgraded. I must stress, however, that the rate of the upgrading programme has to be controlled because of the limited resources within HDB, within the industry and also our financial resources. We do not want to rush the programme and end up with a result which we will regret. At the same time, if we push the construction industry too much, the cost will go up and the residents will be asked to pay more.”
“00 pm where they drink beer outside and create noise for the residents, HDB generally discourages the use of outdoor refreshment area for eating houses. But if the CCC and the advisor feel that they can keep these disamenities under control, HDB will agree upon the recommendation of the advisor to the CCC. But let me underline the principle. Operators of eating houses should tender on the basis of the seating area within their eating house. Whether we should allow permanent structures, again, that is not our intention. We prefer the operator to operate within the space in the eating house. So we again discourage permanent structures outside the eating house. Mr Eugene Yap asked the Ministry to exercise more flexibility in implementing the ethnic ceiling or the ethnic ratio. There is some flexibility already in the policy in that we do have the maximum proportions at the neighbourhood level, a few percentages of allowance above the national proportions of the ethnic group. So there is sufficient buffer to allow us to implement the policy. And flexibility is also exercised for special cases, eg, cases on medical or compassionate grounds. These cases are considered by the Allocations Committee chaired by the Senior Parliamentary Secretary of my Ministry, if there are good grounds to allow them to take over the flat. We also exercise some flexibility in some cases of mixed marriages. We also exercise flexibility for rental flats which are let out on a temporary basis, because this is not permanent and therefore we are allowed to depart from the ethnic ceiling. Let me assure Mr Eugene Yap that, wherever possible, my Ministry will exercise some flexibility in the implementation of this policy.”
“We also intend to privatise a site in the town centre next to the MRT station for commercial development. The other three neighbourhood centres will be developed in tandem with the flat developments in their neighbourhoods. Let me again assure the Member that we will try and provide the neighbourhood centres in tandem with the flats. As for Woodlands New Town, there is no lack of commercial amenities in Woodlands New Town. So the problem is well in hand. The Member also mentioned about eating houses versus fast food centres. The HDB provides the premises and tenders them out. Sometimes the fast food centres come in with a higher bid and they win the premises. We will keep watch over the situation and we try not to reach a situation where we only have fast food centres in the town. We will try to have a balance between fast food centres and eating houses within the constraints of the market system. Dr Arthur Beng asked about outdoor refreshment areas. Let me first emphasise that operators of eating houses should tender on the basis of the seating room within the shop. I think many operators tender on the basis that they will get additional seating area outside the shop and as a result, the tender prices of eating houses have escalated. This is not a very good sign. We want to tell operators of eating houses that they tender based on the seating area and the serving capacity of the shops. The space outside the eating house is not intended for serving customers. On and off, we get requests from MPs and advisors to allow the operator to use the space outside the eating house to serve his customers. We do accede to this request if the flats above are not more than four storeys. But for the reasons that Dr Arthur Beng said, killer litter, noise, especially past 10.”
“Sir, I will take the questions in turn. Prof. Low asked about the facilities in Chua Chu Kang Town. As far as possible, HDB tries to provide neighbourhood centres and other amenities in tandem with the new flat development. In general, the gap between the completion of a neighbourhood centre and nearby flats should not be more than six months. Building a neighbourhood centre too early will mean inadequate catchment and the shops will not be viable. Therefore, where flat developments can be served by nearby existing commercial facilities, HDB will time the provision of a neighbourhood centre to coincide with the completion of between 2,000 and 3,000 flats. For all new estates, HDB ensures that precinct shops are available. Precinct shops comprising eating houses and shoplets are completed together with the first residential development so as to meet the immediate needs of the residents, even if the neighbourhood centre is not yet ready. In the case of Chua Chu Kang New Town, let me apologise to the Member on behalf of HDB that there was a one to one and a half years' delay because we were reviewing the planning norms for neighbourhood centres and Chua Chu Kang New Town was caught during this delay. But we assure the Member that we will try and make good the lost time. A total of six neighbourhood centres and one town centre will be provided for Chua Chu Kang New Town. To-date, part of the town centre and one neighbourhood centre have already been completed. Another neighbourhood centre will be completed by the end of 1993. The neighbourhood centre which the Member was upset about, Neighbourhood 5, will be completed only in April 1995. That was the delay that I was referring to. We will try to make sure there is no further delay from that committed date of April 1995.”
“I think Mr Cheo is digressing. The Government's land acquisition and resettlement policy is separate from the HDB home ownership scheme. We are talking about two different categories. The SDP claimed that HDB flat owners do not own their flats. I am just asking the SDP, please come forward and put the basis of that claim with tangible numbers. Secondly, Mr Cheo asked how many Town Councils have asked for increase in S&C charges without this new ruling. I have answered that many times. Without the enhanced contribution to the sinking fund, all the Town Councils were under the false illusion that they were making big surpluses, even though many Town Councils have done their cash flow analysis and know that they will run into a shortage of funds in later years when they do not have enough money to pay for overhauling and repairing of lifts. But because the contribution rate was very low, everybody was declaring big surpluses and everybody felt that there was no need to increase S&C charges. What the Ministry of National Development has done is to put the cost and the revenue in its proper perspective - set aside a correct amount for future requirements - and it becomes very obvious to everybody that you cannot have cost increasing by 20% and your S&C charges not going up.”
“The offer is made in a very serious fashion because the SDP claims that Singaporeans who buy their flats from HDB do not own their flats as they are on a 99-year lease. So we asked the SDP to reinforce its claim, that is, to prove that the claim is right, show us that the residents in the three constituencies of Potong Pasir, Bukit Gombak and Nee Soon Central believe that they are not owning their flats, in which case, he should be mounting a campaign to ask them to return the flats to us, to prove his claim that they are not true owners of HDB flats. And if they return the flats to us, we will pay them back the original purchase price and we will rent the flats to them. Since they do not own them, we will pay them back what they have paid for. This is a very good offer. You buy something, you enjoy it, and you get back the same price. Where else do you get such an offer? If you buy a shirt, you wear it for 10 years, you go back, and you can claim back the original price.”
“Sir, I have explained just now the reason why Town Councils are in this happy situation of claiming to be in a surplus position. It is because they are not setting aside enough money for future requirements in the cyclical funds. If you were to set aside the 40% that we calculate to be necessary for your cyclical works in future, then you are faced with a very realistic situation of cost going up and you have not been raising your S&C charges to meet your cost. Basically, the problem is the S&C charges they collect today are intended for both operating expenditure as well as for future requirements. It is not possible just to say that you collect enough to meet your operating requirements. You have the responsibility to all your residents to cater for their cyclical works in future, and these are life-and-death decisions - changing of lifts, repairing of the hoisting ropes. As the Ministry responsible for Town Councils, we cannot allow Town Councils to neglect setting aside money for the future requirements and endanger the success of high-rise, high-density living in Singapore. Mr Chiam See Tong: Sir, I am much obliged to you for allowing me to get back to the offer made by the Minister last Friday. Last Friday, he offered residents at Potong Pasir to sell their flats back to the HDB. And then the HDB, after having purchased back the flats, could rent out to them. This is a serious offer. And before I could go back to my constituents, I would like the Minister to give me fuller details: What is the purchase price, in particular, and what are the rental rates? If he could give me in writing, I would certainly refer them to the residents there.”
“Just now Mr Lim mentioned that the costs had been going up all the time. However, when I asked him some questions, he did not answer me, that is, before the new measures were introduced, how many town councils had applied to increase their conservancy charges? Which were the town councils that had applied to increase their conservancy charges? Could the Minister of State please enlighten the House?”
“So, essentially, we are encouraging most upgrading precincts to accept the Standard Package and for certain blocks, if they want to pay for the additional item, then they go for the Standard-plus Package. So again I assure the House that the design for the upgrading precinct will he harmonious and there should not be any problems. Let me also assure all the Members here, who are responsible for Town Councils, that it is not the intention of MND to foist deficit operations onto them. So we are not likely to take up Mr Chia Shi Teck's suggestion to pass the car park operations on to the Town Councils. Mr Cheo Chai Chen (Nee Soo Central)( In Mandarin): Sir, any town council whose income is not enough to cover its expenditure can consider applying to the Ministry of National Development for an increase in their conservancy charges or for more subsidy. I think this is very normal. If a town council has not enough money in its sinking fund, then it can increase its conservancy charges and transfer the additional revenue from the increased conservancy charges to its sinking fund. There is no need to increase the sinking fund from 25% to 35 or 40%. I think the most important fund of a town council is its operational fund. If the operational fund of a town council is not enough to cover its day-to-day expenses, then it will be difficult for the town council to maintain itself. So I think this is one point which the Ministry of National Development has not taken into consideration. Of course, we have no objection to increase the conservancy charges when our operational fund is not enough to cover our expenses. However, we feel that so long as we can avoid increasing the conservancy charges, we must avoid doing so in order not to increase the burden of our residents.”
“But for proper maintenance of HDB estates, my Ministry's recommendation to the Town Councils is, face the facts, costs have gone up, S&C charges need to go up. The Government will help you in this increase by also increasing the grant for the lower income households. 1.15 pm Dr Tan Cheng Bock asked the Ministry of National Development to re-consider a higher subsidy for the 3-roomers in regard to the space-adding item. We have evaluated that, and that is, we put the contribution rate for the 3-roomers at 40%, as compared to 60% for the 4-roomers. So, in fact, we are tailoring the percentages very much in favour of the 3-room flat owners. Let me again say that, in the end, individual flat owners must decide whether there is value for money in putting the space-adding item. If I were a 3-room flat owner in Toa Payoh, for example, and I have to contribute $13,000 to have another space-adding item, which is almost half a bedroom, and a 4-room flat in Toa Payoh goes for $120,000, I think that is very good value for money. A 3-room flat owner contributes $13,000 and he upgrades his 3-room flat to something like a 3(r)-room flat. So he upgrades his resale value from $80,000 to somewhere between $80,000 and $120,000. I think that is good investment, but, in the end, he has to decide for himself. Dr Tan Cheng Bock is very concerned that we end up with different designs in a precinct. Let me assure him again that in the dialogue between the Advisor, HDB and the residents before they take a vote, we will work out one design for the entire precinct so that everybody votes on one design. We would like to encourage every precinct to gravitate towards the Standard Package.”
“Let me respond to Mr Low. In FY 1992, we budgeted, I believe, $150-odd million for the cyclical grant. In FY 1993, this was reduced to $121 million. He wanted to know why I said that the grant to the residents in HDB estates has not been reduced. The grant to the Town Councils is reduced by this amount because, if the Member remembers, last year we took away the responsibility of the CATV from the Town Councils. So previously we catered for the sinking fund requirements of the CATV in the FY 1992 budget. Now that the HDB is undertaking the replacement of CATV, that money has been transferred to HDB. Mr Low also asked on what basis were the grants calculated? We set up the Town Councils in 1988/89 and we used the then prices to calculate the grants. I understand Members are concerned that since 1988 until now prices have gone up and the grants that were calculated on those basis may not be sufficient for their cyclical maintenance. That is precisely my point, and that is why I am asking Members to put more into their sinking funds so that they can fund their cyclical works. Mr Low also asked why is the Government forcing the Town Councils to increase their S&C charges through this method? Let me again stress that there is no compulsion. We know costs have gone up by 20%. S&C charges have gone up by 9%. Town Councils ought to raise S&C charges to meet their requirements. If the Town Councils feel that they can meet their requirements through greater efficiency or, more probably, through a lower level of service, that is a decision to be taken by the Town Councils and they have to meet the response of their residents.”
“The additional S&C grants will enable Town Councils to keep the increases in S&C charges to the 1- and 2-room flats to a minimum and reduce the increases necessary for the 3-room flats. Mr Cheo asked why there is a stipulation that the increase must be at least 5% to enjoy the higher grants. The reason is very simple. The grants are intended to help the lower income families. It is a very generous grant, ranging from 32% to 135% of the old grant. If the Town Councils do not raise the S&C charges of the bigger flats by at least 5%, then what will in fact happen is that the increase in grants intended for the lower income households will be used to cross-subsidise the cost of the bigger flats. This is not the objective of the increase in the grants. That is why we require Town Councils to increase by at least 5% for the bigger flats to enjoy the very generous grants intended for the smaller flats. Mr Cheo also asked why the deadline of 10th March 1993. The answer is again very simple. There is nothing sinister in this at all. We want to make the generous grant retrospective for FY 1992. In order to disburse the funds before the closing of this fiscal year, we need the response from the Town Councils before 10th March 1993. If Mr Cheo does not want the grant for FY 1992, he can well ignore the deadline. I hope my explanation is sufficiently clear. I repeat, there is no reduction in the Government grant to the Town Councils. In fact, there is a generous increase in the operating grant. I also repeat, there is also no compulsion to increase the S&C charges. If Town Councils can live within their existing S&C collection, good for them. However, if I were a resident in his Town Council, I will then make sure that the level of service does not deteriorate.”
“Because they only contribute 25% to the sinking fund, much lower than what was needed, all of them were able to declare a big surplus. This gives a completely wrong picture. Since 1989, costs of maintenance have increased by 20%, but Town Councils have increased their S&C charges by only 9% and yet the Town Councils are declaring big surpluses. How long can this illusion last? Mr Cheo proposes that we let the 25% contribution rate remain, even though we know that this is not sufficient. Then when the cyclical works fall due and the sinking fund is not sufficient, the residents will be asked to pay up a lump sum to cover the shortfall. This may be okay in the case of condominiums. But in the HDB estates, most of our residents are from the lower income groups. So it is better to raise the contribution rate and build up the sinking fund gradually. That is why the Government decided to raise the contribution rate with effect from 1st April, 1993. Let me now turn to the additional S&C grants. I mentioned earlier that the Government gives an annual operating grant to the Town Councils. In FY 1993, the Government will increase this grant from $56 million to $80 million, an increase of 43%. The reasons for increasing this S&C grant were explained in a press release last month. Let me recapitulate. Costs have gone up. Town Councils have informed the Government that while they will raise S&C charges, they also requested the Government to help meet the increased cost through higher annual S&C grants. The Government has agreed. The increase in the grant from $56 million to $80 million is primarily to help the lower income households living in 1-, 2- and 3-room flats. It will be given only to those Town Councils which need to raise S&C charges to meet the higher maintenance costs.”
“Sir, let me continue with my answer. Both Mr Cheo and Mr Low asked why there is a need to revise the contribution rate to the sinking fund for the Town Councils. Let me explain. When the Town Councils were formed, the Government wanted the Town Councils to start off on a sound footing. To assist the Town Councils, the Government provided two types of grants. First, cyclical works grant. Because the Town Councils need time to build up the sinking fund, the Government will give each Town Council a cyclical works grant that will cover the cyclical works due in the first seven years of their operation. This grant will be paid in two instalments. The first instalment was paid at the inception of the Town Council. The second instalment will be paid this year and that is why they have budgeted $121 million for it. Second, operating grant. Although the Town Councils are to fund their current and future expenditures from their S&C collections, this may pose a burden on the lower income households. So the Government gives an annual operating grant to the Town Councils. In FY 1992, this grant amounted to $56 million. The Town Councils are required to set aside at least 25% of their S&C collections, including the Government operating grants, into the sinking fund for future cyclical maintenance. This rate was based on the cost of maintenance at 1986 prices. The sinking fund contribution of 25% is no longer sufficient to pay for cyclical works when they fall due. Town Councils who do a cash flow analysis know this to be true. But none of the Town Councils has raised the sinking fund contribution rate on its own. There was no pressure on them to do so because the cyclical works in the first seven years were funded by the Government.”
“Mr Peh asked whether we will investigate misuse of funds by Town Councils for political purposes. Let me assure him that we will. And if we catch any Town Council violating financial regulations and misusing funds, we will take action. Mr Cheo and Mr Low Thia Khiang complained that the high percentage of contributions to the sinking funds has resulted in lower operating revenue for the Town Councils. Let me explain. We have found, through our experience, that Town Councils are not putting aside enough money to fund their future cyclical funds. The previous 25% is grossly inadequate because of the rising cost of cyclical maintenance. We have hoped to leave it to the Town Councils to use their judgement and increase the contributions on their own. Unfortunately, that does not happen. So now we require all Town Councils, PAP or Opposition, to increase their contributions to the sinking fund. Mr Cheo said, why put it in now? He will raise it later on when the need arises. I am sorry, Mr Cheo, we may not be around when the need arises. So it is better for us to put the money in the sinking fund and all Singaporeans are assured the money is there for future cyclical works. Mr Cheo said that we are forcing all Town Councils to increase it by 5%. That is not true. We give Town Councils the option and a free hand. If they want to raise, they notify us and we will give them the additional grant. If they do not want to raise, we will let it be. The rationale is this. The Government has pledged to give more grants to Town Councils which are running tight. If you are running tight and you need to raise your S&C charges to fund your operations, the Government will step in and help you and give you more grant.”
“First, the HDB intends to build smaller 4-room flats with simpler design and finishes towards the end of 1993. These flats will cost about 10% to 20% less than the normal 4-room flats. The selling prices will, therefore, be correspondingly lower. Second, at this juncture, I would like to announce that my Ministry has also reviewed the HDB's Mortgage Loan Financing Scheme for the purchase of resale flats, the subject taken up by both Dr Vasoo and Dr Tan Cheng Bock. We agree that the current financing of pegging the loans to the posted prices is a bit out of date and we are revising it. The mortgage loan finance will now be increased on 1st April 1993 to 80% of the market value, or 80% of the transacted sale price, whichever is lower. For families with income not exceeding $1,000 per month, the loan is revised to 95% of the market value, or 95% of the transacted sale price, whichever is lower. So this will allow lower-income families to afford 3-room flats in the resale market without recourse to cash. Dr Koh Lip Lin said that the increase in demand for rental flats is because of increase in prices. That is not the case. The increase in demand for rental flats is because, over the last two years, HDB has relaxed the requirements for applicants for rental flats, in particular, we have relaxed the age requirement for applicants for rental flats. And this has resulted in a big increase in the demand for rental flats. Similarly, the increase in demand for HDB flats is not because of higher prices. I have assured Singaporeans that the construction prices for HDB flats are likely to be stable this year because the construction sector is stabilising and we do not expect to see big increases in HDB prices this year. Let me now turn to the subject of Town Councils.”
“Today, we have about 40,000 odd applying each quarter and this comprises 20,000 new households, because new families are created every year, and 20,000 from upgraders. Let me now turn to affordability of HDB flats. As I mentioned just now, we do track the percentage of household income being taken up by housing and we do make sure that it remains at around 25% to 30%. In the case of 3-room flats, the monthly mortgage payment for 3-room flats, as a proportion of the average monthly income, has, in fact, fallen from 15% in 1985 to 9% in 1992. For 4-room flats, although the prices have gone up, the mortgage payment for a 4-room flat, as a proportion of average income, has remained constant at about 22% to 23%. HDB prices have to go up because HDB flats are primarily cost-driven. Increases in the HDB flats over the past two years are due primarily to the significant increases in construction and land costs. Government is, therefore, forced to raise the prices of HDB flats but we try to do so by a smaller amount than the rise in the construction cost. As a result, the subsidy has gone up. The average subsidy per flat sold was $23,000 in FY 91/92 and is now estimated to be $32,000 for FY 92/93. Our approach to pricing of HDB flats is that, as a general policy, HDB flats are priced to ensure that 3-room and 4-room flats are affordable to the lower and average income groups. The higher income groups who can afford to buy bigger flats, like the 5-room and Executive flats, will pay for the costs of the bigger areas, better design and better finishes. But my Ministry will make sure that housing will remain affordable for the lower-income groups. We are looking at several measures to make sure that the lower-income groups will continue to be able to buy flats in the future.”
“So Tampines is now facing the same situation as Ang Mo Kio, if not worse, because we publicised the Design and Build Programme and the World Habitat Award for Tampines. So there was a huge surge in the demand and now it is 25:1. Again, there is no way we can have a queuing system because there is only land available in Tampines for 5,600 flats and already there are 18,000 unsuccessful applicants for Tampines New Town. The final category of estates are those which are under development. These are Jurong West, Chua Chu Kang, Woodlands and in future towns, like Sembawang and Kangkar. In these areas, HDB has a steady stream of land to build more flats when the demand requires. And in these areas, we do have a modified queuing system in place. Applicants who tender for the flats consistently in these areas build up the weightage in the probability in which they get their flats and new household applicants will get their flats in these new towns within one year from the date of first application. So if people choose these new towns where we can have a continuous stream of development, they are assured that within one year of their application they can book their flat. So there is plenty of certainty in these new towns. But people choose to go to the mature estates and to the nearing mature estates and they claim that they do not have certainty. What can we do? So there is no necessity to reintroduce a waiting list system for these new towns. There is a modified queuing system. New household applicants will select their flats within one year and upgraders will select their flats within two years, if they stick to these new towns. The demand has not increased since the implementation of the booking system.”
“The kind of problems that we are facing today can be divided into three categories because the demand and supply pattern for these three categories are different. The first category is mature estates. In the mature estates, the demand exceeds supply by about 10 to 1. We just simply do not have land in mature estates, like Toa Payoh or Ang Mo Kio, to build flats. There is just simply no land. For example, in Toa Payoh recently, we put up 270 flats for booking and we have 4,300 applicants, or a ratio of 1:16. So for every person who gets a flat, 15 are disappointed. Dr Ho Tat Kin suggested that we have a queuing system. If we have a queuing system, we will have a riot. And there is no way to satisfy the remaining 4,000 applicants because there is just simply no land left. In Ang Mo Kio, we estimate that we have only enough land to build just 800 more flats and I am sure there are more than 4,000 applicants waiting in the wings to apply for flats in Ang Mo Kio. So the queuing system does not work in the mature estates. The supply is just not there. In scarce resources, there are only three ways to allocate: queuing, balloting or tendering. If you do not like balloting because it is a lottery, will you accept tendering? The second category is new towns on transition to becoming a mature town. These are towns which are nearing completion and land is running out for flat development. Like mature estates, such new towns in transition are very popular because the facilities are all built up and there is a lot of publicity. Two good examples are Pasir Ris and Tampines. In Tampines, at the last quarter exercise, there were 25 applicants to every flat.”