Ow Chin Hock
Singapore
“Thirdly, I believe that Mr Simon Tay referred to links with ASEAN+3. Let me say that we do not preclude any such flexibility. Indeed, APEC is an established forum linking Australia and New Zealand with ASEAN and East Asia.”
“Sir, I am not an expert on the Constitution, but I am aware that the Supreme Court's ruling is different from Mr Estrada being impeached and convicted in the Senate. NUCLEAR WEAPONS AND UNITED STATES ARMED FORCES IN SINGAPORE (Facilities) 2. Mr J. B.”
“However, we are mindful that nowadays, Singaporeans who like to experience living and working overseas, have many other attractive career options, in both private and public sectors.”
“Sir, let me thank the Minister on behalf of the 3-room flat dwellers. My supplementary question is: in future, if any rebates are given, will the Minister consider making the amount of the rebates inversely proportional to the size of HDB flats, in other words, the smaller the flat the greater the amount of rebates?”
“Lastly, clause 8 of the Bill also proposes to amend the Banking Act to allow the Singapore branches of foreign banks to transmit information to their head offices or other overseas branches for data processing.”
“These requirements would help to ensure that such businesses are run in a proper manner, and that records are kept to provide an audit trail of transactions, in order to deter illicit transactions from being conducted via such businesses. However, these requirements impose additional costs on the licensees.”
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“Thirdly, I believe that Mr Simon Tay referred to links with ASEAN+3. Let me say that we do not preclude any such flexibility. Indeed, APEC is an established forum linking Australia and New Zealand with ASEAN and East Asia. Australia indeed was instrumental in fostering the creation of APEC and hosted the first APEC Ministerial Meeting in Canberra in 1989. APEC remains the only forum which brings together both sides of the Pacific each year, leaders from 21 economies from ASEAN, North East Asia, North America, South America, Australia and New Zealand. They meet together informally to discuss economic and other important issues.”
“00 pm In addition to the two trade agreements, or FTAs, we have the Singapore-Australia Joint Ministerial Committee. The Joint Committee is a rather unique initiative evolving from the Singapore-Australia New Partnership announced in 1996. The Joint Economic Committee which meets every two years is led by the Foreign Ministers and includes two other Ministers in charge of trade and defence from each side. Australia will host the third SAJMC meeting this year. The joint meeting, which has met twice since 1996, serves to further strengthen relations and set concrete direction to realise the new partnership between Singapore and Australia. Let me now turn to some specific suggestions by Mr Simon Tay. Firstly, strengthening ties outside governments. I agree with him. In fact, there are strong ties between universities, think-tanks and NGOs between Singapore and Australia, and New Zealand. Let me add, as far as Australia is concerned, we have a Young Business Ambassador Programme as an example. With New Zealand, we have a Work Attachment Programme. In other words, Singapore also has extensive non-government links with both Australia and New Zealand. People to people linkages are thick and there are several bilateral projects. I have just named a few examples. Secondly, assistance to new ASEAN member countries. Singapore has worked closely with Australia and New Zealand to assist new ASEAN member countries. Both Australia and New Zealand are constructive and active participants in the ARF and ASEAN Post-Ministerial Conferences. Australia and New Zealand have also indicated interest in working with Singapore on projects relating to the initiative for ASEAN integration such as on IT, so as to help breach the environmental gap between newer and older ASEAN countries.”
“We hope that Singapore's FTAs with Australia and New Zealand will act as a catalyst to the AFTA-CER-CEP, and greater economic integration between the two regions. This will best serve our overall interest and an enlarged integrated region will greatly increase business and investment opportunities in the region, and also boost investors' confidence. First, Australia-Singapore Free Trade Agreement. Prime Minister Goh and Prime Minister John Howard jointly agreed to launch negotiations for the Australia-Singapore FTA in November 2000 on the site of the Brunei APEC Economic Leaders' Meeting. Two way bilateral trade in goods and services was more than A$13 billion last year. The proposed FTA serves to further build on the strong and expanding economic partnership between the two economies. Strategically, the Australia-Singapore FTA acts as a catalyst to APEC's integration and the realisation of the Bogor goals of free and open trade and investments across the Pacific in the next decade. Second, the agreement between New Zealand and Singapore on closer economic partnership was signed by Prime Minister Goh and Prime Minister Helen Clark in Singapore on 14th November last year, after about a year of negotiations. The agreement came into effect on 1st January 2001. The ANZ SCEP is a comprehensive agreement covering trade in goods and services, investment and Government procurement, among others. The agreement provides certainty and predictability for Singapore businesses and investors. The agreement will open up considerable opportunity for our business community. Trade Ministers from both sides will meet every two years to review and expand on the commitments under the agreement. A general review of the agreement will be conducted in 2005. 4.”
“I hope the JSEPA will help engage Japan and anchor its interest in the region in the long run. This will benefit Singapore and ASEAN. At the time when Europe and Americas are increasingly moving towards closer economic integration and market liberalisation within their regions, Asia should not be left behind as a result. Asia should push for further economic integration. The JSEPA is a step in the direction. The agreement, once concluded, will further strengthen our economic linkages and promote bilateral trade and business. The inclusion of new-age elements like ICT would also open new platforms for economic activities. On the whole, the JSEPA will provide ample opportunities for our peoples at all levels to interact with and know each other better. This will contribute to the widening and deepening of our bilateral relations. Let me now turn to Mr Simon Tay's points on relations with Australia and New Zealand. As he said, Singapore has excellent relations with both Australia and New Zealand, with long standing cooperation in diplomacy, defence, trade and education and also in multi-lateral fora such as the ARF, APEC and the Commonwealth. We are members of the Five Power Defence Arrangements, and Australia and New Zealand provide training facilities for our SAF. Regular bilateral leadership exchanges have further reaffirmed our close ties. Several bilateral initiatives were launched in recent years to strengthen these ties at all levels. Among the new initiatives, the most important ones are perhaps free trade agreements. Our decision to enter into bilateral FTAs with Australia and New Zealand is taken with the interest of the region in mind.”
“The wide range of linkages together with trade, investment and tourism helps to promote people-to-people contact. We also work closely with Japan in regional and international fora, such as the ARF, APEC and the UN. As a major trading partner and investor in the region, Japan has a large stake in the well-being of the region. In the last few years, we have seen the efforts Japan put in to help the region recover from the Asian financial crisis. Japan was the main contributor to rescue packages to the region, through the US$30 billion Miyazawa Plan. Japan has consulted closely with regional countries as events unfolded, so as to assess developments and coordinate policies. On the specific point of freedom of navigation in the Straits of Malacca, our position is clear on this particular issue. The route through the Straits of Malacca and Singapore is the shortest sea lane between East and West. It is also the most cost efficient and preferred sea lane. Most of East Asia's oil imports from the Middle East pass through these Straits. It is therefore in the interest of not only Singapore and Japan but also the global community to ensure that freedom of passage through the Straits of Malacca and Singapore is preserved. Singapore will continue to work closely with Japan and other countries to ensure the freedom of navigation. Mr Sin referred to the free trade agreement negotiation with Japan. A major boost in our relations was when Prime Minister Goh and Prime Minister Mori agreed last October to launch the Japan-Singapore Economic Agreement for a New Age Partnership (JSEPA) in January 2001, and conclude the Agreement no later than 31 December 2001. There have been two preparatory meetings and a formal round of negotiations so far. Progress has been good.”
“Sir, I agree with Mr Sin Boon Ann that Japan is a very important country to the region. Indeed, Japan has played a crucial role in industrialising the region in the past 30-plus years. It is a major trading partner and major investor in the region, bringing with it capital, technology and employment. Although it is faced with economic difficulties in recent years, Japan is likely to recover in the longer term. Japan will continue to play a significant role in the development of regional cooperation, as it has done in the past. Last year, Japan announced a US$15 billion package to help narrow the global digital divide, focusing on Asia. At the ASEAN+3 informal summit in Singapore, the "Mori e-Action" was launched to bridge the developmental gap between the newer and older ASEAN members. Singapore is currently working closely with Japan to implement these projects. Our relations with Japan are excellent. Japan is important to us, both economically and strategically. Japan has been Singapore's third largest trading partner in the past three years. Our trade volume increased from S$40.5 billion in 1998 to S$57.9 billion last year. Singapore has put in much effort to engage Japan in the region. Bilaterally, in the past three years, several bilateral initiatives were launched with Japan to create institutional links between our two countries. These initiatives include the annual MFA-Gaimusho Dialogue; the Japan-Singapore Partnership Programme 21 for third country technical cooperation; the Diplomat Exchange Programme; the Japan-Singapore Symposium; the SIF's Raffles Programme for visits by top Japanese bureaucrats; the Japan-Singapore Business Council; the Japan-Singapore Parliamentary Friendship League; and the Japan-Singapore Action Agenda Committee.”
“Sir, I am not an expert on the Constitution, but I am aware that the Supreme Court's ruling is different from Mr Estrada being impeached and convicted in the Senate. NUCLEAR WEAPONS AND UNITED STATES ARMED FORCES IN SINGAPORE (Facilities) 2. Mr J. B. Jeyaretnam asked the Deputy Prime Minister and Minister for Defence (a) whether any nuclear weapons are stored in Singapore; (b) what facilities have been granted to the United States Armed Forces in Singapore; and (c) what are the terms of the agreement between Singapore and the United States for the use of these facilities.”
“Sir, I have explained in my reply to his main Question that the fact that Mr Estrada was not removed in a constitutional way is therefore not a plus or did not strengthen the democratic institutions of the Philippines.”
“Sir, if Mr J. B. Jeyaretnam reads carefully what Senior Minister had said in the interview, at no point did Senior Minister profess to be putting across the views of the Singapore Government.”
“Mr Speaker, Sir, I thought I have answered the question. I said, "Senior Minister expressed his personal opinion".”
“However, we are mindful that nowadays, Singaporeans who like to experience living and working overseas, have many other attractive career options, in both private and public sectors. MFA would have to continuously review and improve the terms and conditions of its scheme of service to ensure that we continue to attract good quality officers to join the Foreign Service.”
“Sir, Dr Ong Chit Chung asked about Foreign Service staff careers and training. I thank him for his concern. I agree with him that MFA must have a fair share of local talents. Indeed, for Singapore to remain successful in carving out diplomatic space for itself in spite of its small size, MFA must ensure that it has high quality and well-motivated Foreign Service officers through a comprehensive and integrated recruitment, training and career development programme and an attractive scheme of service. Our recruitment, I must say, so far so good. Dr Ong may be pleased to learn that in spite of the severe competition from the private sector and other Government agencies, MFA has so far been able to attract good quality officers to the Foreign Service. Currently, more than half of our Foreign Service officers have at least a Second (Upper) Honours degree. In addition, since 1996, 17 PSC scholars have been attracted to the Foreign Service. We also complement our pool of Foreign Service officers with talent injection of Administrative Officers and PSC scholars. At the Heads of Mission level, we have as Ambassadors people who have distinguished themselves in their respective careers, for example, Chan Heng Chee and Walter Woon. On terms and conditions, the foreign service is a challenging but tough career. The prestige and glamour of a diplomatic career is no longer an attraction or draw for our younger Singaporeans as it used to be. On the other hand, the disruption to family, in particular, to the career of their spouses and their children's education is becoming a disincentive. MFA has put in place a good training scheme and package of overseas cost of living allowances and other allowances to make MFA career more attractive.”
“Singapore can play a role only if we are invited to do so by both sides. For instance, in 1992, we facilitated the Wang-Ku Hui Tang, or Wang-Ku Talks, by providing the venue for their dialogues. 1.45 pm”
“Some observers have pointed out that the White Paper has introduced a new condition, that China will resort to force if the Taiwan authorities refuse indefinitely the peaceful settlement of cross-strait settlement or reunification through negotiation. But the Chinese leadership has countered that this has been its consistent position. However, the fundamental position of the White Paper is that China would not renounce the use of force to settle the Taiwan issue. This is not new. However, China has clearly set their OB markers against independence for Taiwan which Taipei would not breach. Given that both China and Taiwan are currently enjoying high economic growth, it is unlikely that they will want to be drawn into a conflict at this time. However, as the Minister has pointed out yesterday, the Taiwan issue is one of the most significant uncertainties in the region. An escalation of cross-strait tensions would be disastrous for the region at a time when it needs stability to sustain its economic recovery. In the interest of the region's stability and prosperity, it is our hope that the parties involved will continue to exercise restraint in their efforts to resolve differences across the Taiwan Strait. Dr Ong also asked what is Singapore's stand on the cross-strait relationship. We have always abided by the One-China policy. The release of the Chinese White Paper will not affect our policy. Nonetheless, we hope for the sake of peace, regional peace and stability, any cross-strait problem can be resolved peacefully between the two parties. Dr Ong further asked whether Singapore can play a role. Let me point out that cross-strait relations are considered by PRC as an internal matter or family affair.”
“The first meeting had made positive progress in identifying the scope of such an FTA. The next meeting will be in Japan in late April this year. Both sides will strive to complete the study and to submit by November 2000 a joint report to their respective Prime Ministers, with the recommendation on whether both countries should proceed with formal negotiation for such a Free Trade Agreement. Now, let me turn to Singapore-China relations. Singapore-China relations are good, underscored by the frequent exchange of high level visits. There are no major bilateral issues between our two countries. Following the resolution of the Suzhou Industrial Park issue or dispute, relations have been problem-free. The strongest basis of our bilateral relation is in the area of economic cooperation. Bilateral trade between Singapore and China has been steadily increasing at an average annual rate of 14% since 1990. Singapore is also one of the top investors in China. China's impending entry into the WTO is expected to provide new opportunities for our businesses and investors. Some new areas for cooperation, such as public housing, IT and the financial sector, have already been identified during Premier Zhu Rongji's visit to Singapore last November. Singapore would continue to explore stronger economic cooperation with China in these new areas. This year also marks the 10th anniversary of the establishment of diplomatic relations. We are confident that future cooperation between Singapore and China will continue to expand and strengthen. Dr Ong also commented on the PRC's White Paper on "the One-China principle and the Taiwan Issue".”
“Sir, on Singapore-Japan relations, I agree with Dr Ong Chit Chung that the bilateral relations are warm and close, and I may add, the relations have strengthened significantly in recent years. First, during the Asian financial crisis, both countries have consulted closely to assist the regional economy in overcoming their economic difficulties. Japanese government delegations visiting the region also visited Singapore and had substantive discussions with our leaders and officials on regional development. Second, bilateral cooperation and interaction have broadened and institutionalised. Several key bilateral projects endorsed at the highest political level have been implemented. These include the Japan-Singapore Partnership Programme for the 21st Century, Japan-Singapore Symposium and Japan-Singapore Business Council. Further, Prime Minister Goh's visit to Japan in December last year was successful. The visit provided more opportunity for Singapore and Japan to explore new areas to further enhance bilateral economic cooperation in the new millennium. During the visit, Prime Minister Goh and Japanese Prime Minister Obuchi agreed to launch a joint study on the feasibility to establish a Free Trade Agreement (FTA) between Japan and Singapore. Both sides hope that the joint study will help to enhance bilateral economic integration and cooperation as well as further complement ongoing efforts of the two countries to strengthen the multi-trading system. Dr Ong asked for the progress on FTA. The first meeting or inaugural meeting of the joint study has just been concluded. It was held on 7th and 8th. Both countries were represented in the joint study by senior officials from various Ministries and members of the private sector and academia.”
“The House cannot tolerate dishonesty, and it must zealously guard against any act of contempt which might cause the authority of Parliament to be undermined. Parliament is the supreme law-making body in this land. Any Member of this House, present or future, and regardless of his party affiliation, must uphold the moral authority and dignity of our Parliament. Finally, Sir, although Mr Ling How Doong and Mr Cheo Chai Chen are not here, may I ask them a few questions. First, were Mr Ling How Doong, Chairman of SDP, and Mr Cheo Chai Chen, an Exco member of SDP, involved in any way in the preparation of the written submission to the Select Committee? Were they aware of the contents and had they approved it before the submission? Second, do Mr Ling and Mr Cheo, having read the Report of the Committee of Privileges, agree or disagree with the Committee's views and findings? If they agree, would they apologise to Parliament on behalf of SDP for the contempt of Parliament committed by their four SDP comrades? If they do not, would they clearly state why they disagree or object to any particular or specific views and findings? Third, why did they choose to be absent from today's debate? Singaporeans and their constituents have the right to know their answers and their stand on the Committee's Report.”
“He has earlier accused the Department of Statistics, MTI, of massaging statistical data in calculating the Consumer Price Index (CPI) in the SDP-PKMS' Cost of Living report. Chee and his team who appeared in the hearing of the 1996 Cost Review Committee (CRC) were uncooperative and evasive in answering the questions posed by the CRC members. The two and a half hour session turned out to be fruitless. The CRC has since shown in its report that the 76% increase in household expenditure between 1988 and 1993 was mainly due to the changes of lifestyle and family structure and other factors, and only 14 percentage points of the increase in expenditure could be attributed to price increase. But the SDP-PKMS team continued to maintain their stand that the 76% increase in household expenditure was caused solely by price rise. This is another evidence showing the length Chee would go to manipulate the truth for his own political mileage, rather than discussing "an important national issue" and "get to the bottom of the figure". Singaporeans have the right to know what kind of character Chee is, especially he is the Secretary-General of the largest opposition party, SDP, and that he has proclaimed to have "an alternative vision for Singapore". The Committee has recommended to Parliament to impose fines on Chee and the other three SDP representors of varying amounts. In my view, the recommended fines are fair. The recommended penalties are not meant to deter any Singapore citizen from presenting his point of view to any Parliament's Select Committee. As pointed out by the Leader of the House just now, every Singaporean has the right to do so; but the right carries with it a corresponding responsibility to be truthful and honest in presenting his views and opinions.”
“He also deliberately mixed apples with pineapples by using both the constant price (1985) time series data on private consumption expenditure together with the current price time series data on Government health expenditure to calculate the 25%. When queried, he claimed that he wanted to extrapolate the figures from Ramesh's figures based on the same methodology, which was obviously wrong. It is amazing that Chee could have used two different figures on the Government's share of national health expenditure in his two books: 5% for the 1990s in his first book, but 0.9% for 1990 in his second book! He has no compunction in misguiding the readers of his books. It is equally amazing that he even misled his own SDP comrades in the hearings on two issues, the typographical error of 5% (paragraph 56 of the Report) and on the verification of the contents of the SDP's written submission (paragraph 59). Dr Chee would have continued to carry on with his dissemination of misinformation, misinterpretation and manipulation of data, if he had not decided to submit the written submission and to give evidence to the Select Committee. When confronted with facts and figures, his self-defence was "he cannot remember", "misunderstanding of figures" and "someone else had made a typo error". During the hearings at the Select Committee and the Committee of Privileges, Chee had shown his true colour: he committed perjury, prevaricated, wilfully gave false answers and misconducted himself. While Chee has massaged statistical data to mislead, he has projected his own way of doing things onto others, and believes that others would do the same as he does.”
“4% for 1985. This is not just extraordinary, but it is absurd. Anyone with some arithmetic knowledge would know that the interpolated figure, even if Chee did do it, could not have been 40%, but the interpolated figure should be somewhere between 37.4% and 39%. In quoting from source materials, Chee conflated the two separate points from Mukul Asher's article, "Planning for the Future: Welfare System in the New Plan Development". Chee Soon Juan dishonestly truncated and compressed Asher's two separate points into one false statement that "the total health expenditure has been reduced from 40.1% in 1970 to just 0.9% in the 1990." This statement is in page 145 of his second book. The 0.9% referred to by Asher related to "government health expenditure as a proportion of GDP between 1980 and 1989" but Chee Soon Juan misrepresented it to be government health expenditure as a percentage of total national health expenditure in the year 1990, and then compared the 0.9% with 40.1% which was the government's share of total national health expenditure in the year 1970. Chee's whole purpose of doing so is to create a false impression that the Government is shifting its burden of medical expenses to the private individuals in Singapore. On the use or abuse of statistical methods, Dr Chee purposely chose to compare apples with oranges, putting Singapore Government's spending on health care as a percentage of GDP alongside with the national or total health expenditure as a percentage of GDP for Japan, the US and the average for the OECD countries. His attempt to compare the incomparable was intended "to make Singapore look worse".”
“In the 1993 Cost Review Committee, I remember that Mr Low voiced his objections and aired his views whenever he disagreed, and he finally even decided to publish his own version of the CRC report in 1993. If Mr Low did not agree with the Committee that the four SDP representors had committed contempt of Parliament, he would have voiced his views and raised strong objections. But this appears not to be so from the Minutes of Evidence (pages C 1 to C 176 of the Report). It is sad and disturbing that Chee Soon Juan, who has a PhD in Psychology and published two books and several articles and has claimed to take his research work very seriously, has gone against the basic objective of research, and has violated the fundamental rules of research in calculating data, using statistical methods, and quoting from source materials. The objective of his so-called research on health care in both his books and the written submission to the Select Committee is not to establish the truth but, on the contrary, to deceive and mislead the public and Parliament. He has resorted to fabrication of data, misrepresentation of researchers' findings, abusing statistical methods and deliberately confusing different concepts. Let me just quote a few examples here: On the misuse of data, Dr Chee invented the now infamous 5% which he claimed to be the Singapore Government's share of total health care expenditure for the year 1990. The 5% was not even carried over from his first book Dare to Change, as he claimed. There is no such figure for the year 1990 in his book. The 5% turned out to be produced out of "a typographical error". Another figure used by Chee Soon Juan was the 40% for the year 1970, which he claimed was based on interpolation from Ramesh's figures of 39% for 1960 and 37.”
“On the first key statement 1 and chart 1 in the SDP's written submission, the Committee's findings have established beyond any doubt that the figure of 25%, supposedly the Singapore Government's share of total national health expenditure, could not have become 5%, simply because of a typographical error, as claimed by Dr Chee. Similarly, on the second key statement 2 and chart 3, the Committee's findings have also clearly shown that the comparison of Singapore Government's spending on health care as a percentage of GDP with the percentage of national health care expenditure as a proportion of GDP of other countries, ie, Japan, the United States and the OECD countries, by Dr Chee cannot be due to "a misunderstanding of the figures", as claimed by Dr Chee. In both the statements and the relevant charts, Dr Chee had deliberately fabricated or misused the data to deceive the Select Committee. It is significant that the Committee's views and findings are supported and endorsed by all Committee Members, including Mr Low Thia Khiang of the Workers' Party. Mr Low had moved some minor amendments, one of which he subsequently withdrew. His two amendments to paragraphs 28 and 101 were not substantive in nature. These are in page D 5 of the Report. The only major amendment by Mr Low was that he proposed to reduce the recommended quantum of fines imposed on each of the representors. Whether the SDP appreciates Mr Low's attempt is not relevant here. What is important is that by attempting to do so, Mr Low confirms that he agrees with the Committee: that the four SDP representors had committed one or more of the following contempts: perjury, wilfully giving false answers, prevaricating and misconducting themselves.”
“Sir, this is perhaps my last speech as MP for Leng Kee. Allow me to participate in this debate as a Member of this House and as an ex-academic. I support the motion. In my opinion, the Committee of Privileges has conducted a full and thorough investigation of the complaint for contempt of Parliament against the four SDP representors. The views of the Committee are objective and fair and its findings, convincing. On objectivity, the Committee has made a distinction between Chee Soon Juan who prepared the written submission to the Select Committee on Health Care Subsidy, and the other three, namely, S Kunalen, Wong Hong Toy and Kwan Yue Keng, who were not involved in the preparation. On a specific complaint, the Committee has given Chee Soon Juan the benefit of the doubt on whether he had a copy of Ramesh's article with him during the hearing of the Select Committee on 15th July 1996 (paragraphs 79 to 82 of the Report). The Committee has also decided that the complaint against Kunalen that he prevaricated when he said that Chee had told him that "somebody had made a typographical error" has not been made out (paragraph 113). The Committee has been fair to Kwan Yue Keng. It has concluded that "Kwan appeared to have had the smallest role in the whole affair" (paragraph 136), and observed that he was forthright and candid in giving answers to the Select Committee and the Committee of Privileges (paragraph 138). On the other hand, the Committee has found that Wong Hong Toy committed perjury to cover up for Chee, apart from having prevaricated and misconducted himself in giving evidence (paragraph 78). The Committee's findings are convincing.”
“With the rise in recurrent expenditure, even if the subsidy rate remains unchanged, the amount of subsidy per capita must gradually go up year after year. However, we must look at this issue from another angle. University education is an investment on our human resources. The next phase of economic growth will require more university graduates. Therefore, investing in university education will not only benefit the individuals, but will also yield a high rate of social returns. Subsidy for university education is, at least, more meaningful and acceptable than subsidy for purchase of Executive Condominium. Thirdly, the reverse mortgage scheme would enable our senior citizens to enjoy the benefit of appreciation of value of their properties, and also help them to meet the needs of their post-retirement years. This concept of reverse mortgage is relatively new, and it may meet with some cultural resistance. Like the case of life insurance, old people may not accept it in the past, but now life assurance has become very popular. With our aging population, there are many old people who will have to depend on their children after their retirement. As such, they must provide for a rainy day. The Government should introduce some incentive schemes to encourage the financial institutions to launch the reverse mortgage scheme. 2.10 pm”
“(2) The other factor that causes apprehension among our people about the rising cost of living is that some opposition parties are deliberately distorting the concepts, playing with figures and generalising isolated cases to mislead the people and stirring up their emotions. The SDP and PKMS have made some baseless allegations on this issue. For example, they say that (1) the rise in cost of living was "no less than phenomenal"; (2) that the increase in prices is the main factor contributing to the 76% increase in average household expenditures and (3) that the CPI is a result of the statistical massage of numbers. Having read the CRC Report, do the SDP members, particularly Chairman Ling How Doong, still insist that these allegations are true and correct? If so, he should present facts and figures to support these allegations. Otherwise, has he the courage to admit the mistakes and apologise to the people on behalf of the SDP for trying to mislead our people? I hope that the Government would accept the recommendations of the Cost Review Committee. I personally feel that the more important recommendations are in three areas: Firstly, the Government and its agencies should give more publicity to the three medical protection safety nets. This should alleviate the people's fear of not being able to afford medical expenses, particularly on the introduction of an opt-out system to provide MediShield cover for dependants of Medisave members. We should also encourage more old people to participate in the MediShield scheme. Secondly, the subsidy on university tuition fees should be maintained at 79%. At present, the subsidy per student per year is between $14,200 and $18,200.”
“Is their living standard better or worse than what it was five years ago? (3) Are they aware of the Government's substantial subsidy on health care and education? Are they fully aware of the three safety nets for medical protection - Medisave, MediShield and Medifund and the various educational bursaries and assistance schemes for the poor? Apart from a lack of full understanding of the functions of the market economy, Singaporeans are worried about the rise in the cost of living because of the two following factors: (1) The perception gap - most people look at it from a micro view and personal experience. For example, when a housewife goes to the market, she feels that the basket of food costs more than last year's. When a hawker goes to the hawker centre, he finds that he has to pay more for a bowl of noodle or a plate of rice. When one chooses to buy a flat in a certain neighbourhood, he laments that he could have saved so much money had he bought it a few years ago. On the other hand, the Government uses the macro view, an average statistical data to analyse the issue. The Consumer Price Index (CPI) has risen by just 4.9% in the past three years. The non-cooked food items rose by an average of 4.7% and cooked food items increased by 7.2%. The prices of 5-room HDB flats across the country increased by an average of 10% per year. The Cost Review Committee Report can only enhance the people's understanding of the cost of living and narrow the perception gap. It is just the beginning. Members of Parliament, grassroots leaders, union leaders and the media have a lot to do to educate our people and to help them better understand the issue of cost of living.”
“For the five-year period between 1988 and 1993, the average monthly household expenditure increased by 76%. But only 14 percentage points were due to price increase in consumer goods while another 62 percentage points were due to more comfortable lifestyle and changes in family structures. The Cost Review Committee has also found that between 1993 and 1995: (1) Medical expenses increased by 4.4% annually; (2) Selling price of a 4-room flat rose by an average of 5.4% annually, 5-room flat by 10% and executive flat by 11.2%; (3) University tuition fees increased by 3.7% annually while junior college and secondary and primary school fees and miscellaneous fees remained unchanged; (4) Bus fares increased by 0.5% annually, MRT fares by 1.4% and taxi fares by 2.1%. Cost of living has indeed increased. But it is certainly not "no less than phenomenal" as alleged by the SDP and PKMS. More importantly, our people can still afford to purchase HDB flats and to meet their medical, educational and public transportation expenses. The Government has promised that nobody will be denied medical treatment simply because of poverty, and no children from the lower income families will be deprived of the opportunity to be educated. At the same time, the Government has guaranteed that the selling prices of 3-room and 4-room flats will be pegged to the incomes of the people. At least 70% to 90% of our people can afford to purchase a 3-room or 4-room HDB flat. Singaporeans should examine their conscience and ask themselves these questions: (1) What are the main factors causing the rise in the cost of living? Is there a choice in their consumption pattern? Must they constantly "keep up with the Joneses"? (2) Has their family income increased over the years?”
“In his speech just now, Mr Low Thia Khiang said the increase in household expenditure was due to the people's choice to opt for a more comfortable and expensive life, implying that the people have themselves to blame. In my view, this is not a fair comment. As I said, wanting to have a better life is a natural aspiration of the people, and it is a motivating force. Of course, the changes in the number of family members and their ages would also increase the household expenditure. The middle-aged head of household has to maintain his parents as well as support his children. Household expenses, particularly in education and medical expenses, must surely go up. Changes in the stages of life cycle and the family structure are inevitable. However, in the entire working life of a person, income during his middle age should relatively be the highest. They should be selective in their expenditure and make the necessary adjustments. For example, when he wants to send his children overseas for study, he would have to sacrifice or delay his plan to upgrade to a bigger flat or to a private property. On the supply side, our human resources and the size of our land are limited. Under such constraints, economic growth and higher demands will push wages and land prices higher, resulting in increasing operating cost for labour-intensive services such as health care, education services, and land-intensive activities such as property and transportation . Such increases in cost are inevitable. However, improvements in productivity, management efficiency and technological advances may, to some extent, offset part of the increase in unit cost. The combined effect of the demand and supply factors is the increase in household expenditure.”
“Mr Speaker, Sir, the main objective of economic development is to raise the standard of living of the people. On the one hand, it is to increase the earnings of the people and enhance the values of their assets. On the other hand, it is to check the increase in prices or inflation rate. The Singapore Government has been successful in both aspects. Last year, our per capita GNP had reached $30,770, while earnings of the people had risen by an average of 0.7% annually over the past five years. Almost 90% of the families own their own homes. In the past five years, the Consumer Price Index (CPI) rose by an average of just 2.2% annually. The strong Singapore dollar makes imported goods cheaper and overseas holidays less expensive than before. Then, why is it that many Singaporeans are still worried about the increase in cost of living? Why are people so concerned that they are unable to afford the purchase of HDB flats or that they may not be able to pay for their medical expenses when they fall ill? There is a fundamental principle of economics known as "unsatisfiable want, limited resources". On the demand side, when the income is increasing, purchasing power is also increased. Naturally, there will be higher demands for better and more consumer goods; for example, superior grade fragrant rice, quality seafood, vegetables, better electrical appliances, more branded clothes, etc. Furthermore, with changes in lifestyle, more families dine out in restaurants more frequently; more families are employing domestic servants; and more people are going for holidays overseas. This is the consequence of their choice. Wanting to have a more comfortable standard of living is a natural aspiration. It is actually a motivating force to make people work harder.”
“My final question is: why are there so many amendments for these two Bills? Are the draftsmen of these two Bills in a great hurry?”
“The "Xs" define the tax rates of the respective time periods. May I ask a few specific questions about this formula: (1) Why are the tax rates defined in terms of Xs as coefficients of the differences between Ms and Cs (in other words, Ms minus Cs) rather than the specific numerical percentages, namely, 100%, 66.6% and 33.3% respectively? Does it mean that the tax rates will be varied in future? (2) Is it correct to say that only one of the three Xs is applicable at any one time? For example, if X3 is applied or operational, then X1 and X2 should be zero? (3) Does the cost of real property acquired in this formula include stamp duty, legal cost, interest cost, insurance cost, renovation cost, etc.? My third question is related to the definition of "company". The parameter `A' is the percentage of the shareholding in a relevant company disposed of on the date of disposal. A "relevant company" or a "relevant investment company" is defined in the Bill as any private company which has at least 75% of the market value of its total tangible assets in the form of property. May I ask why is the benchmark set at 75%? Is this based on empirical evidence? Sir, clause 3 of the Bill inserts a new section 45D to provide for the withholding of tax for a non-resident who disposes of his property within the 3-year period at the rate of 15%, 10% and 5% respectively. My question is: for a property which is co-owned by a non-resident and a Singapore resident, how will the tax on the gain from the short-term property transaction be determined, particularly if the share between the two owners is not stipulated? Sir, I see in the Order Paper Supplement that there will be some amendments to this Bill and, earlier, the Minister has also moved amendments to the Stamp Duties (Amendment) Bill.”
“Sir, I support the Income Tax (Amendment) Bill. The main objective of this Bill is to empower IRAS to tax as income any gains derived from short-term transactions in real properties. Speculation in the property market would be discouraged or deterred if part or whole of its gains is siphoned off by tax. I would like to seek a few clarifications from the Minister with regard to the amendment Bill. First, clause 2 inserts new section 10F. The proposed subsection (1) states that "the relevant amount of any gain arising from the disposal of property shall be deemed to be income of the person chargeable to tax under section 10(1)(g)". In other words, the tax on the gain will be determined according to the property owner's chargeable income tax bracket. My question is: would this not create a tax loophole for a person who may purchase a property under the name of his family member or a relative who is in the lower income tax bracket, and hence pay lower tax on the gain of the property when he disposes of it within three years from the date of its purchase? This will reduce the effectiveness of the anti-speculation measure. [Mr Deputy Speaker in the Chair] 3.20 pm Second, clause 2 also inserts new section 10G which sets out how such gain is to be taxed and the relevant definitions relating to the tax. In particular, the proposed section 10G, subsection 7(b) (in page 9 of the Bill), spells out the formula which determines the relevant amount of the gain to be taxed. The formula includes four variables and coefficients, namely, Ms, Cs, Xs and an A. The "Ms" define the market values at the date of disposal of the property within the first, second and third year of purchase. The "Cs" define the costs of such a property acquired within the first, second and third year.”
“This is because under the new rule on stamp duty, speculators will be hit twice -- first, when they buy and, subsequently, when they dispose of their properties within three years. However, some participants expressed concern that the genuine buyer may also be hurt because the stamp duty is payable upfront when he signs the sale and purchase agreement, instead of when the property is completed. Also, under the new rule, stamp duty is payable on the full value of the property on every sale and sub-sale, regardless of whether the property is completed or uncompleted. The new stamp duty would therefore add to the cash flow problem faced by young couples. Sir, there were some suggestions by the participants in the dialogue: (i) Since speculative activities focused on new projects and not older projects, should stamp duty be levied only on new projects? (ii) Should the first-time property buyer be exempted from paying the stamp duty upfront? In other words, the old rule should apply. (iii) Should the first-time property buyer be allowed to use his CPF to pay for the stamp duty? (iv) Should there be a greater flexibility in the refund of stamp duty? For instance, should the refund be extended to include a situation where any one party cannot proceed with the transaction, especially because of circumstances beyond his control? Could the Minister consider these suggestions since the main objective of the amendment Bill is to curb speculative activities in the property market, and not to impose financial difficulties on the genuine buyers and first-time home buyers? Sir, I support the Bill.”
“Mr Speaker, Sir, the Stamp Duties (Amendment) Bill seeks to provide for stamp duty to be payable by the purchaser in respect of every sale and sub-sale of properties, and also to impose an additional stamp duty payable by the vendor and transferor of residential property where the property is disposed of within three years of its purchase. These are contained in clause 6 of the Bill which repeals the existing section 22 and introduces two new sections 22 and 22A. Clauses 18 and 19 specify the rates of the additional stamp duty payable under the new section 22A. This is part of a package of measures to curb speculation in the property market with effect from 15th May 1996. In this context, speculation is defined as sale of property within three years of its purchase by any individual or a company. The Feedback Unit held a dialogue session on the property market on 17th June 1996. I have sent the notes of the dialogue to the Minister. Most participants supported the package of measures to curb speculation in property. Also, out of 150 inputs received so far by the Feedback Unit, 130 inputs or 86.6% supported the measures to cool the property market, although there were some reservations on stamp duties, and the timing of the package. This amendment is an effective measure to curb speculation in the property market by making speculation more costly. Indeed, a number of participants in the dialogue session on17th June 1996 considered the new rule on stamp duty as a more effective measure than income tax on gains derived from real property transactions in curbing speculation in the property market.”
“Sir, let me thank the Minister on behalf of the 3-room flat dwellers. My supplementary question is: in future, if any rebates are given, will the Minister consider making the amount of the rebates inversely proportional to the size of HDB flats, in other words, the smaller the flat the greater the amount of rebates?”
“Lastly, clause 8 of the Bill also proposes to amend the Banking Act to allow the Singapore branches of foreign banks to transmit information to their head offices or other overseas branches for data processing. I support this proposal as it would help to reduce the operating costs of foreign banks in Singapore, thereby making Singapore more attractive as a location for foreign banks to set up or expand their operations here. Sir, apart from these queries, I fully support the Banking (Amendment) Bill.”
“1 billion fraud in Daiwa Bank's New York Branch, have highlighted the importance for supervisory authorities to undertake closer supervision over their banks' overseas operations. I note that a number of financial centres already allow foreign supervisory authorities to conduct inspections on the branches of foreign banks operating in their jurisdictions. I therefore support this provision under clause 5. Sir, given the large number of foreign banks with branches in Singapore, this provision will enhance the level of supervision over the Singapore banking sector and help to reduce the risk to our depositors and investors. However, we cannot depend solely on the foreign supervisory authorities to supervise the operation of their banks here. The foreign supervisory authorities may not fully appreciate our local operating environment, and the focus of their inspections may also differ from that of the Monetary Authority of Singapore. MAS, therefore, cannot afford to be less vigilant in supervising the foreign banks in Singapore. But may I ask the Minister: in the event of differences or even conflict between MAS and a foreign supervisory body, which agency will prevail or take precedence? In this context, Clause 7 of the Bill inserts a new section 46A to safeguard the confidentiality of reports produced by MAS or a foreign supervisory authority upon supervision or investigation. May I ask the Minister to further elaborate on these safeguards to maintain the confidentiality so as to ensure that depositors' and investors' confidence in our banking system is not compromised.”
“I had already asked then why the requirement was set at that level, and not higher, as nearly all the local banks at that time had exceeded the S$800 million requirement. I have great pleasure to tell the Minister that I told him so three years ago. Further, as the Singapore banks continue to expand their operations overseas, it is important that they have adequate capital resources to support such expansion, and to withstand any potential adverse developments which could result in losses to their operations. I therefore have no difficulty in supporting this further increase of the minimum capital funds requirement to S$1,500 million. I note that the Minister has said that only two local banks have some difficulty in meeting the new requirement. May I ask the Minister whether the banks would be able to meet the new requirement within five years? I would also like to ask the Minister whether he would consider providing any incentive to encourage the smaller Singapore banks to merge among themselves or with the larger banks to achieve economies of scale, and thereby improve efficiency. I would also like to ask: with this increase in capital funds, what will be our capital adequacy ratio, and how does this ratio compare with other financial markets? Clause 5 of the Bill inserts a new section 45A to allow foreign supervisory authorities to conduct on-site inspections on Singapore branches of banks incorporated under their jurisdictions. This will enable them to undertake more effective consolidated supervision over their banks' overall operations. The recent occurrences of fraud and mismanagement by the overseas offices of some foreign banks, eg, the US$1.”
“Mr Speaker, Sir, the Banking Act was amended in 1993. Since then, there have been a number of incidents which have rocked the world's financial markets, such as the collapse of Barings, the Daiwa Bank scandal in the United States and the Mexican peso crisis. Even though the Barings collapse was triggered off by losses incurred by its futures subsidiary in Singapore, Singapore's financial sector was virtually unscathed, largely because of our sound financial system and the high prudential standards we have imposed on financial institutions operating here. Over the years, financial markets have become increasingly interdependent and more competitive. More innovative and sophisticated financial derivatives are being traded in increasing volumes. While these developments have raised the relative importance of the financial sector in the economy and improve the efficiency of the financial markets, they have also generated greater volatility and risks for banks and other market participants. Singapore's financial sector has also grown in sophistication and our financial institutions will also be subject to greater risks as they venture further abroad. While we should continue to develop Singapore as an international financial centre, we should not compromise our prudential standards to ensure the integrity of our financial markets. There must be a proper balance. Liberalisation of our financial markets should only be undertaken hand-in-hand with adequate regulations. Sir, now let me turn to the specific provisions of the Bill. Clause 3 seeks to raise the minimum capital funds requirement of Singapore incorporated banks to S$1,500 million. In the 1993 amendment to the Banking Act, the minimum capital funds requirement was raised to S$800 million.”
“These requirements would help to ensure that such businesses are run in a proper manner, and that records are kept to provide an audit trail of transactions, in order to deter illicit transactions from being conducted via such businesses. However, these requirements impose additional costs on the licensees. May I ask the Minister whether a standard form for such required information will be provided, and standard auditing procedures will be stipulated so as to ensure consistency and perhaps lower the additional costs involved? With the implementation of the proposed amendments, I believe that the standard and quality of money-changing and remittance businesses will improve significantly, and the interest of the public who make use of such services would be better protected. Sir, apart from the queries and clarifications, I fully support the amendment Bill.”
“Clause 3 requires the licensing of persons who wish to engage in money-changing or remittance business. I support this requirement as it is necessary to ensure the integrity of these two businesses and to prevent the man-in-the-street from being cheated. Clause 5 requires a person who is granted a remittance licence to furnish a sum of $100,000 as security deposit with MAS. With the increase in remittance business, may I ask the Minister, would it be adequate for the security deposit to be set at this level, namely, $100,000? Another question is: why is there no minimum capital fund requirement imposed on remitters, and for that matter, on money-changers, to ensure that they would have sufficient funds to protect the interest of their customers? Clause 11 introduces new section 17A which requires remitters to segregate funds received from customers for remittance from their own funds, and to deposit these customers' funds in a trust account with a bank. The segregation of customers' funds from the remitter's own funds is a good business practice for customer protection, and in preventing dishonest remitters from using the customers' funds for other purposes. The proposed penalty for contravening or failing to comply with the provisions of this clause is a fine of up to $50,000 or a jail term of up to two years, or both. May I find out from the Minister whether the penalty is appropriate in relation to the amount of remittance handled? Clause 8 requires the licensees to keep proper records of their transactions; in addition, clause 11 also introduces a new section 17B which requires the licensees to appoint external auditors to audit their businesses annually.”
“Remitters no longer just service older Singaporeans who remit money to their relatives in China, India and elsewhere in Southeast Asia, but remitters also cater for foreign workers who remit their earnings to their families overseas. The business of money-changing and remittance must have expanded correspondingly in response to the increase in demand. So may I find out first from the Minister the current number of both licensed money-changers and remitters as compared to that of 17 years ago. I note that the Minister mentioned that the number of licensed money-changers has increased to 452 in 1995. May I clarify with the Minister whether this figure applies only to the money-changers or to both money-changers and remitters? What is the estimated value of the money-changing transactions and what is the amount of remittance handled per day? As the money-changing and remittance businesses deal mainly with the man-in-the-street, it is therefore important to ensure that the Act remains effective in protecting the interests of the small customers and that these businesses are operated in a prudent and proper manner. In this context, I note that the Minister mentioned that there has been a rise in the number of complaints against money-changers and remitters from members of the public and tourists in recent years. May I ask the Minister to provide some specific data on the rise in such complaints? The Minister also reported a case where customers suffered a loss. May I also ask the Minister to report to this House whether there have been other cases where customers have suffered such losses as a result of default by the licensed remitters and, if so, what is the total amount of such losses? I now turn to a few specific provisions of the Bill.”
“Mr Speaker, Sir, we should view the proposed Money-changing and Remittance Businesses (Amendment) Bill 1996 in a wider perspective. The Bill is part of a series of amendments to the legislation on the supervision of the financial system by the Monetary Authority of Singapore. Sir, you may recall that over the last few years, the Banking Act, the Finance Companies Act, and the Futures Trading Act have been amended to ensure that these Acts remain effective in the supervision of the growing and ever changing financial markets. I note that the Minister has just introduced another Bill to amend the Banking Act even before this current Bill is passed. Sir, the amendment Acts are critical in maintaining the soundness of our financial system and in protecting the interests of customers of the financial services. I therefore support the Money-changing and Remittance Businesses (Amendment) Bill. Further, in view of growing international concerns about money laundering activities, I agree with the Minister that the Act should also be tightened to prevent and deter money laundering activities from being carried out via these two financial businesses. As the Minister mentioned, the Money-changing and Remittance Businesses Act was introduced in 1979. It has been in force for nearly 17 years without amendment. We have reason to believe that the demand for money-changing service has increased rapidly over the last 17 years. Firstly, there has been a sharp increase in the number of tourists visiting Singapore. Secondly, more Singaporeans are travelling overseas on leisure or on business, and more frequently. During the last 17 years, demand for remittance service must have also increased significantly, with the increase in the number of foreign workers in Singapore.”
“Sir, I thank the Minister for his very satisfactory reply, particularly his announcement that he will review the benefits given to the 3-roomers. Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $554,235,670 for Head N ordered to stand part of the Main Estimates. The sum of $659,511,500 for Head N ordered to stand part of the Development Estimates. Head R -”
“(4) One feature of the reform is that Permanent Secretaries or officers-in-charge of AAs will be allowed to increase their head counts or manpower to cope with the increases in workload or initiate new activities within the agreed budget. The question is, if several AAs wish to do so at the same time, will the total manpower requirement be increased, and if so, will this be consistent with the Government policy of not expanding the size of the Government? If the Government puts a cap on the growth of the total manpower for the civil service, does it mean that the expansion of some AAs will be at the expense of the other AAs' manpower requirements, as in the case of constant sum game? Finally, as part of the improvement of the civil service, the Singapore Government Management Accounting System (SIGMA) was introduced earlier. SIGMA aims to provide accurate costing information and to enable good decision making by civil service managers. Could the Minister update the House on SIGMA, and explain how is SIGMA, an accounting system, related to the BFR, a budgeting system in the civil service?”
“Sir, the next subject I want to raise is related to the one raised by Mr Leong Horn Kee, ie, reform of Civil Service's Management and Control System. The Minister for Finance announced the Budgeting for Results (BFR) System in his 1994 Budget statement. He updated the House on this system in this year's statement. As I said on Monday, 11th March, I support the reform. It will make the civil service more autonomous in exchange for greater accountability, and allow the civil service to exercise greater initiative, and be more customer-oriented. I agree with the Minister that fundamental to the BFR process is the identification of the outputs and performance targets. However, there are difficulties in implementing the BFR. Let me mention a few. (1) Although outputs of some departments or Autonomous Agencies (AAs) can be measured, for example, number of patients served, number of applications processed, and the number of ICs issued, all these outputs are time-related. Their output growth should not be achieved at the expense of the quality of services. The Minister has given assurance on this on Tuesday, 12th March. (2) Some members of the public are concerned that some departments may be over-zealous in their enforcement actions, for example, the Traffic Police and the Hawkers Department may issue more summonses to justify their output growth. I share the sentiment of Mr Leong Horn Kee. (3) For AAs whose output and services are very difficult, if not impossible, to quantify, the Minister for Finance said that it is reasonable to use the GDP growth rate as a proxy for their output growth. But is there a contradiction by using this approach to the normal practice of estimating output of the public sector by its total expenditure in the national income accounting?”
“On the expenditure side, figures on both operating expenditure and development expenditure reported in this "big white" document (The Budget for the Financial Year 1996/97, Paper Cmd 4 of 1996) are different from the corresponding figures in this "slim red book" (The Economic Survey, 1995). Apart from the difference between fiscal year (as used in the Budget document) and calendar year (used in the Economic Survey), are there any other reasons why the two sets of figures on expenditures are so different, particularly on development expenditure in 1995? Sir, the Budget book for FY 1996 shows a sudden increase of development expenditure of $3.97 billion in FY94 to $6.35 billion in FY95. This is in Annex A, page 23 of the Budget Book. The estimated development expenditure reported in the Economic Survey shows a more moderate increase (from $4.42 billion in 1994 to $4.67 billion in 1995). This is in Table A 4.3, page 125. The estimated development expenditure for FY96 is $6.09 billion. Government expenditure is an important component of domestic demand; and its development expenditure affects capital formation and may be used for pump-priming the economy. Should the estimate of development expenditure not be made more accurate?”
“0 percentage points for various income tax brackets, and the increase in tax reliefs announced by the Minister on Monday, 11th March 1996, will lighten the tax burden of many income taxpayers. But some existing taxpayers may fall out of the income tax net. May I ask the Minister how the proposed tax changes will affect the distribution of income tax burdens among individual taxpayers at different chargeable income levels? Another question is: what is the total amount of tax and non-tax revenue collected from motor vehicles? This source of revenue is scattered among various items, namely, "taxes on motor vehicles", "fees and charges", "customs and excise duties", and so on. Let me raise another subject here, Sir. In response to my suggestion, the Minister distributed a Table (Annex 1) (Cols. 1049 - 1050), showing the total benefits from tax savings and utilities, SC&CC and rental rebates for residents living in different types of HDB flats on 12th March 1996. The 3-room flat dwellers have the lowest benefit - $195 for the whole of 1996, as compared to $220.50 for 1-room flat dwellers and $874 for 5-room flat dwellers. Would the Minister consider increasing the benefit given to the 3-roomers, particularly those living in 3-room sold flats, in view of the proposed electricity tariff increases, and they enjoy very little or no tax savings, and those living in purchase flats have no rental rebates. Sir, there are a large number of 3-room flat dwellers in older housing estates, including Tanjong Pagar, Bukit Merah, Leng Kee, Queenstown and, if my memory is correct, Kreta Ayer as well. I hope the Minister will be more sympathetic to the 3-roomers.”
“Sir, I beg to move, That the total sum to be allocated for Head N of the Main Estimates be reduced by $100. The first issue I would like to raise under this amendment is the financing of Government expenditure. The Government expenditure is financed by several major sources of revenue. In FY 1995, the total operating revenue was $24.5 billion (or 20.3% of our GDP), as compared to $23.7 billion in FY 1994 (or 21.9% of our GDP). The operating revenue for FY 1996 is projected to increase by 6% to reach $26 billion, but its GDP share will further decline to 19.7%. In 1995, 79% of the total revenue came from tax revenue, of which income tax revenue, including statutory boards' contributions, constituted 35.3%; asset taxes, 7.4%; taxes on motor vehicles, 7.3%, whereas GST only accounted for 6.7%, slightly higher than 6.5% from customs and excise duties. Stamp duty, betting tax and other taxes accounted for the balance. The non-tax revenue came from various fees and charges (14.8%); and other receipts (6.2%) in 1995. The Minister for Finance stated on 8th March 1994 that the aim of introducing GST was to "achieve a better balance between income tax, which is a tax on the factors of production, and GST, which is a tax on consumption." [Hansard, Vol. No. 62, Col. 638]. Between 1994 and 1995, the percentage of total revenue from income tax declined by 1.7% percentage points (from 37% to 35.3%) whereas GST contribution to total revenue increased by 1.9 percentage points (from 4.8% to 6.7%). GST is supposed to broaden our tax base. However, after deducting its offset package, GST continues to be revenue negative. On the other hand, the simplification of income tax schedule, the cut in personal income tax rates by 0.5 to 5.”
“I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”