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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“The exemption of $75,000 has been there since 1981, if I am not mistaken. If the Minister carries out a review of the exemption amount, this would be in line with the Government's intention to compensate compulsory acquisition based on the 1992 values.”
“With regard to the first question, Sir, in the Budget debate last year I raised the question of the distribution of income tax burden. The Minister in his reply informed the House that 10% of taxpayers contributed 75% of the total tax collected for the Year of Assessment 1990. On the other hand, taxpayers with chargeable income of $5,000 and below, comprising about 45% of the taxpayers, contributed only 2-3% of the tax collection. I believe even with the tax changes to be introduced in 1994, the tax burden will still fall heavily on the higher income taxpayers. The Government has used the income tax system to tax the rich and help the poor. The tax revenue collected is used to finance social services - education, basic health care and public housing. With regard to the second question, the taxpayers in the lower income tax bracket will no longer be paying income tax. Instead, they become consumption taxpayers. In this regard, the Minister also announced a package of offsets and rebates to cushion the impact of GST on lower income households. So the Government has used the tax system wisely to re-distribute wealth to benefit the poor and the lower income people. SDP Members and those who preach politics of envy must be blind to these facts. I support the Prime Minister's stand that there is no place for politics of envy in Singapore. Finally, Sir, may I turn to a specific point on tax rate on owner-occupied residential properties. If I understand the Income Tax Act (section 10(1)(a)) correctly, the amount above $75,000 or the net annual value, whichever is less, is deemed to be profit arising from the property and is taxable. The Minister may wish to consider raising the current exemption level above $75,000.”
“However, the cut in corporate tax rate is a blunt instrument. The tax cuts benefit all profit-making companies regardless of what they intend to do with the tax savings. In a dialogue session on GST organised by the Feedback Unit on 16th February this year, one participant observed that, and I quote, "some companies might not improve or expand after corporate tax has been reduced and these companies will be benefitting at the expense of all Singaporeans who pay the 3% GST". I notice that my friend, Mr Leslie Fong, of The Straits Times also made a similar point on 6th March 1993. The argument reminded me of the economic concept - "quasi-rent" concept. The question is how to encourage these existing profitable companies to expand and to reinvest, particularly in R&D, training of workers and other activities which make these companies more competitive. In the case of personal tax changes, the Minister has chosen to use a combination of tax rebate and personal relief. The Minister may consider using a similar combination method of tax rebate, tax allowances and tax deductibles for companies. The objective is to build a tax system which will make our economy competitive but, at the same time, rewarding to initiatives and risk-taking. I believe this combination approach may be better than further tax cuts across-the-board. Sir, next, let me turn to personal tax changes. Personal tax changes allowed by the Minister include the reduction of personal tax rate, increase in personal relief and a tax rebate. I would like to ask the Minister two specific questions: (a) How will these changes affect the distribution of income tax burden in 1994 as compared to the current position? (b) How many taxpayers will fall out of the income tax net?”
“Sir, I beg to move, That the total sum to be allocated for Head N of the Main Estimates be reduced by $100. Sir, it is ironical that I have to move an amendment to cut his Ministry's estimates in order to thank the Minister for his compassion for the poor and for the lower-income households. In his Budget Statement, the Minister has announced a number of tax changes and related issues: (a) For residents living in 1-room to 3-room flats who pay little or no income tax, the Government would pay on their behalf the Service and Conservancy charges in December 1993. This is equivalent to 5% of the income tax rebate; (b) The generous package of offsets to cushion the impact of GST on lower income households; and (c) The increased Edusave grant of $50 per annum per pupil regardless of whether he is rich or poor. Sir, let me first focus on the tax incentives for enterprises. The Minister has given seven tax incentives to promote the development of an external economy. He has also proposed eight incentives to attract offshore activities to Singapore. These are specific tax changes for enterprises. I support these specific tax incentives. However, I would like to raise one specific question on behalf of a GPC Resource Panel member, ie, is double taxation relief (DTR) allowed in respect of services rendered in Singapore although the income is deemed to be derived from, say, Malaysia? If not, why not? In addition, there are two other tax changes that affect companies: (a) one-off property tax rebate for commercial and industrial properties, and (b) the reduction of corporate tax rate by 3 percentage points. I believe that the property tax rebate will help to offset partly the increases in business cost which I referred to yesterday.”
“Sir, allow me to make one brief observation before I withdraw my amendment. I remember last year, SDP MPs failed to move any cut in the Committee of Supply. This year, I have checked through the Order Paper Supplement, and I observe Mr Ling How Doong has filed only one amendment, and yet he is absent. So I wonder whether he has taken his Parliamentary duties seriously. Sir, I thank the Minister and his Senior Minister of State for their replies. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“One way to contain price increases is to promote productivity growth. If productivity growth is faster than the increase in real wage, unit labour cost can be stabilised. However, in the last five years, productivity growth has lagged behind increases in real wage. Last year, the productivity growth rate was 3.1%, higher than the 1.5% in 1991. At the same time, real wage increase slowed down from 6.6% to 5.5% between 1991 and 1992. The narrower gap between productivity growth and real wage increase helped to ease the upward pressure on unit labour cost in 1992. 1.45 pm I notice, Sir, that among all the sectors, the construction sector showed the highest productivity growth rate of 10%. It is a quantum jump from 1.4% in 1990 and 2.8% in 1991. May I ask the Minister what are the factors contributing to this volatile productivity performance of the construction sector? Is it because construction demand itself is unstable and fluctuating? Or is it because the sector's capital/labour ratio has increased in the last two years? Similarly, I believe that the new investment of $3.5 billion in the manufacturing sector will raise the capital/labour ratio and also raise the sector's labour productivity. But this increase in labour productivity in the manufacturing sector has nothing to do with improvement in labour training, labour skills or work attitudes. Rather, it is because workers have more capital to work with. So this leads me to ask two questions: (1) Should the Department of Statistics also construct "total factor productivity", not just labour productivity? and (2) Have we really misused capital as observed by Prof. Alwyn Young in his study of "A Tale of Two Cities"?”
“Thank you, Sir. Let me take these two topics together. I will confine myself to the question of inflation. I will not talk about profiteering because many of my colleagues have raised this point in the last two days. Just now, I raised the question of increasing business costs. The more serious question is to what extent these cost increases will lead to increases in the general price level. The more inelastic the demand, the higher will be the price increase. The price increase may lead people into believing that inflation is induced by GST. While GST itself is not inflationary, price expectations will be inflationary. Let me now turn to a point made by Dr Wang Kai Yuen two days ago. Dr Wang observed that "if the price increases go beyond 5% per household, all the gains from the GST offsets and income tax reduction will be wiped out". I would like to point out that inflation erodes all payments in monetary terms (in dollars and cents) whether they are wages or salaries, rentals or interests, taxes or subsidies, not just GST rebates. Take the example he quoted about a the household living in a 1-room rental flat, with $500 monthly income. Even without GST and the offset package, the household's real income or purchasing power in real terms will be reduced from $6,000 to $5,714 per annum if the inflation rate is 5%. With GST and the offset package, the household's net gain is still positive, that is, $203 in real terms, after discounting 5% inflation rate. In other words, the real income of this 1-room rental flat household will be reduced to $5,917 instead of $5,714 per annum. So we should not mix the two issues - inflationary effect and the GST package. Sir, let me move on to productivity growth and wage increase.”
“Sir, let me now move on to the topic of business costs. There are two basic factors determining our competitiveness: (1) business costs, and, (2) productivity growth. Let me first deal with business costs. Business costs have been increasing. The unit business cost (UBC) index in the manufacturing sector reached 119.2 last year. This is higher than its peak (114.2) in 1984. The major component of business costs is labour costs. In fact, the manufacturing unit labour cost (ULC) has increased faster than UBC since 1988. The ULC index reached 127.2 last year, 6.2% higher than its peak in 1988. Apart from labour costs, rentals constitute another major cost item in some sectors, particularly, the service sector. The URA's rental indices showed that average office rentals in 1992 were 43% higher than their 1985 levels, and average retail rentals were 19% higher. The question concerning businessmen and investors is whether this trend of increasing costs will continue. As our economy is expected to perform better this year than last year, the labour market will be tighter, and further increase in labour costs is expected. How do we contain these cost increases?”
“(b) Implementation - other participants have observed that the schemes are too conservative and restrictive, for example, EDB's loan schemes require local collateral, and the assistance schemes are confined to procurement of machinery and equipment, but not services; and (c) Coordination - the observation is that there is some overlapping in the functions of EDB and TDB. One example is application for shipping loan. Another example is application for consultancy grant. May I have the Minister's comments on these problem areas? Finally, may I ask the Minister to consider two specific suggestions: (a) To establish an overseas network connecting our embassies, TDB, EDB and SIA offices. The main functions of the network are to collate and disseminate information on market conditions, investment opportunities, social practices, local personalities and other relevant information; and (b) To ask JTC, EDB, TDB, together with other statutory boards such as PSA, to jointly develop industrial estates and commercial towns overseas. These estates and towns may serve as bases for local enterprises, GLCs and other ASEAN enterprises.”
“Sir, I beg to move, That the total sum to be allocated for Head W of the Main Estimates be reduced by $100. Sir, the Economic Development Board, Trade Development Board and other statutory boards under the Ministry of Trade and Industry have various schemes to assist local enterprises. In 1992, the total amount of loans approved was $348.6 million, and the total amount of grants given was only $61.5 million. The average loan per approval was about $223,000, and the average grant per approval was $4,700. So I submit that the financial assistance given by EDB and TDB to the local enterprises was indeed very small. Sir, to venture overseas, local companies require much greater assistance from the Government, particularly in the areas of finance, information and manpower. The Government can and should help them. EDB and TDB have announced their schemes to promote the regionalisation drive of our local enterprises. For example, EDB's Local Enterprise Finance Scheme will be extended to cover low cost financing for overseas investment, and TDB's Market Development Assistance Scheme will include investment development activities. I wish to find out from the Minister how much more resources will be devoted to these extended schemes of EDB and TDB. Sir, from the discussions and dialogues with local entrepreneurs and businessmen, I sense that there are three problem areas relating to these schemes: (a) Understanding - despite the efforts of the Enterprise Promotion Centre, many local companies are still not clear about these schemes with regard to their criteria and the procedures of applications.”
“I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, with your permission, I will not move Amendment (c) on Costs of Doing Business. Instead, I will speak on Amendment (d).”
“In view of the rising health cost, will medical benefits of civil servants be adjusted?”
“Sir, the second issue I would like to raise is Manpower in the Civil Service. Last year, in the Committee of Supply, during the debate on the Ministry of Finance, the Minister observed that job-hopping was likely to persist, as long as the unemployment rate was below the national rate of unemployment, which was then estimated to be about 3%. The Minister also admitted that the job-hopping problem was serious. At that time, he was referring to the job-hopping problem of the whole economy in reply to a question by Mr Chandra Das. 1.15 pm Today, I would like to ask him about job-hopping among civil servants. How serious is the problem of job-hopping among civil servants? What is the overall turnover rate of the civil service? In his view, what is the acceptable rate of turnover? What are the characteristics of these job-hoppers among civil servants in terms of age, sex, education level and length of service? In some departments, such as Inland Revenue and Audit, where experiences command certain premium market values, are turnover rates higher than the overall rate of turnover for the civil service? Is the quality of services in these departments compromised in any way? The second question I would like to raise is about the conversion of civil servants on the pension scheme to the CPF scheme. I am raising this on behalf of the ex-MP, Mr Sia Khoon Seong. Last year, Mr Sia asked the Minister a similar question. The question was whether another exercise will be mounted to convert the civil servants on the pension scheme to the CPF scheme, and whether civil servants will be given an option. May I know whether the conversion scheme has been finalised and, if so, when will the exercise be implemented? Final question, Sir.”
“Sir, we should learn from the Japanese. It is just in time for me to withdraw my amendment. Amendment, by leave, withdrawn.”
“Here, I would like to seek clarifications from the Ministry of Trade and industry on a few points: (1) What are the criteria, for example, capital, business turnover, etc., for retailers to qualify for assistance under the various schemes in the Retail Sector Development Plan? (2) In the development plan for retail centres such as Tampines Neighbourhood Centre and Toa Payoh Town Centre, there are some good proposals in terms of physical facilities and shopping environment. But have the purchasing power and profiles, such as their age group, etc., of the residents in these neighbourhoods been taken into consideration in the planning? (3) The report on the Retail Sector Development Plan mentioned about the need to gain support of the residents on the development of these retail centres. How do we determine whether the residents support the development of these retail centres? Are we going to conduct a voting like what we do for the upgrading of HDB flats?”
“On the other hand, they are worried that even after discount, the selling price of the shops may still be higher than what they can afford. If the monthly instalment is more than double the rent they are paying now, then they will not be able to afford it. I feel that shopkeepers should regard the purchase of the shophouses as an investment in the property market. To those older shop owners or those who do not have anyone to succeed them in their businesses, maybe this is an opportunity for them to buy the shops first and then later resell them to make some money for their retirement. But I think most of these shopkeepers would like to become their own bosses to continue doing their business. I believe that many of the shopkeepers will buy the shophouses under the scheme in order to upgrade their business. So I hope that these retailers will make full use of the various assistance schemes under the Retail Sector Development Plan to upgrade and improve their way of doing business in order to enhance their competitiveness. They should not stick to conventions. These retailers may even consider going into joint ventures and cooperation with one another to obtain better benefits from the economies of scale. Of course, as the Senior Minister of State for the Ministry of Trade and Industry has said, the scheme cannot ensure that all the retailers can continue to survive. Some may be phased out under the market competition. The scheme is to provide an opportunity for most of the retailers to obtain a new lease of life. Whether they can succeed or not will depend on their own business skills and entrepreneurship.”
“Sir, I will speak only on the Local Retail Sector and not on Costs of Doing Business. (In Mandarin) Sir, let me now deal with the development trend for the Small and Medium Enterprises (SMEs). In the HDB estates, there are some 12,000 small retail shops. Most of them are facing some common problems and struggling along the line of survival. The problems faced by these retailers can be generally classified as follows: Firstly, because of changes in the purchasing habits of the people, their present business turnover is very low. 47% of them have turnover of less than $10,000 per month. Secondly, they cannot afford to pay the market wages to employ local workers and have to depend on foreign workers or members of their family to operate the shops. Thirdly, the ever increasing rentals have caused the operational cost of their business to go up. Fourthly, they are only working on a small scale and their employees can have only very limited value-added. Their productivity is therefore very low. Recently, the Government announced two schemes, namely the Retail Sector Development Plan of the Ministry of Trade and Industry and the Shop Ownership Scheme of the Ministry of National Development which provides for shops in the HDB estates to be sold to the existing tenants. These are practical measures to improve the business in the retail sector. Between these two schemes, the shop ownership scheme may have a grhater impact on them. According to reports in the mass media, and my own discussion with these shop owners, most of them welcome the Government's move to sell the shops to them. But they are also swayed by considerations of gains and losses, and have mixed feelings about this. They are happy because they will be free from the pressure of ever increasing rents in future.”
“I am generally in support of the principle that the reserves should not be used as subsidies for consumption expenditures such as social welfare which do not generate long term and long-lasting benefits. The reserves, however, can be drawn upon to help develop and nurture capital assets, for example, education of children, upgrading of training and skills, and major infrastructural developments. Mr Speaker, Sir, I wish to conclude by congratulating the Minister for Finance for introducing some new innovative measures 2in providing tax rebates targeted at the low income group such as the service and conservancy rebate. It demonstrates that we have a Government which is caring and interested in the welfare of every sector of our people. We wish that, through our collective effort, we will build a more stable and prosperous Singapore. 1.33 pm”
“We would therefore like to urge the Government to study in greater depth the medium term implications of these problems. Use of our Reserves Mr Speaker, Sir, I now wish to turn to my final subject, which is on the use of our reserves. As our country progresses, we will encounter various rising financial costs, such as the cost of housing, health care, education, transportation and social services. As these costs rise, there will be increasing pressure on the Government of the day to dip into our reserves to help lessen the burden of the people. For example, the people may clamour for the Government to use the reserves for more social and health care services. Local industries may also try to persuade the Government to use the reserves to subsidise production costs. I believe it may be timely for our Government to think through carefully and state clearly how it intends to use the reserves in the long-term interest of the country. The rationale and the justification should also be thoroughly and extensively explained to the people. The Government should also explain to the people the circumstances, when the reserves will be used, and when they should not be used, and to explain to the people why certain easy options are perilous. We need to ensure that the use of reserves should not be in the short-term interest at the expense of the long-term interest. Until today, we often hear Ministers, at various times and at different places, mention the need to safeguard the use of the reserves. Perhaps, a comprehensive and coherent discourse on the matter would help to clear the air.”
“Due to the acute labour shortage in the past five to 10 years, wage costs have been going up gradually. Employers have to resort to foreign workers but there are limitations imposed by the Government on local to foreign worker ratio and the cost burden of foreign workers levy which they have to bear. Training and productivity Secondly, training and productivity. Even if employers can get the workers, they have to train these workers. Because local workers are scarce, the poor work attitude and poor work discipline of the less mature workers may cause the companies' productivity to deteriorate. Job-hopping becomes more prevalent during periods of full employment. At the same time, because workers are difficult to come by, employers may be inclined to hoard workers, even when economic prospects are looking less buoyant. Hence, our productivity rate has been falling for the past three years, down to 1.5% last year. Declining competitiveness and profitability Thirdly, declining competitiveness and profitability. As a result of the tight labour market, lower productivity and rising cost of doing business, most local industries and enterprises are looking towards relocating their labour-intensive operations overseas. This is a very logical move. But the concern is, are we rapidly losing our competitiveness? What should we do when the neighbouring countries eventually become more and more competitive than us in attracting foreign investors? If it becomes increasingly difficult to make money in Singapore, would our best local entrepreneurs and professionals be attracted to work overseas? We are aware that Malaysia, Thailand and Indonesia are becoming increasingly attractive to foreign investors. They are more and more successful in doing this.”
“If that is so, then our concern is that the net effect will be that the overall tax burden will be shifted generally from the high income earners to a larger base of consumers who are in the low income group. The reduction of income tax will benefit the high income earners, and the consumption tax, when introduced, will be borne equally by the low income earners, especially their need for basic commodities and necessities. I understand that there will be a greater burden on the low income group. We know that the Government will be preparing a White Paper on consumption tax which will allow for a more in-depth and specific debate on the subject. The Government should take into account the above concerns in preparing the White Paper. Impact on local SMEs Mr Speaker, the corporate tax has been reduced by 1% while employer's CPF contribution is increased by half a percent. Depending on a company's profits versus its manpower costs, the benefit and cost would cancel out one another. In this sense, besides those companies in the specific financial and insurance sectors which will enjoy new tax incentives, all other companies will see a nil effect of the Government Budget. They will benefit nothing from such a Budget. No wonder the companies are not enthusiastic about the Budget announcements, and the Singapore stock market did not respond positively to the Budget. However, when we look deeper, we can see that the local companies, in particular the small and medium-sized enterprise, are facing increasingly serious structural problems. It may be helpful to identify and resolve these problems early. Let me list out some of the major areas of concern. Rising labour cost Firstly, rising labour cost. Our unemployment rate of 1.9% is one of the lowest in the world.”
“Mr Speaker, Sir, during the entire service period of a reservist, the amount offered is not small. A reservist, for example, will enjoy a total of $15,000 of tax relief for about 15 years of active reserve service, and another $10,000 of tax relief for 20 years of non-active service at the rate of $500 tax relief per annum. Mr Speaker, Sir, under this scheme, there is one obvious anomaly, and that is, the low income earners who pay zero tax or low tax rates will not benefit as substantially as the high income earners. And this is irrespective of their individual contributions and roles in the reserve service. Perhaps the scheme can be made more equitable if a flat amount of, say, $50 or $100 tax rebate per annum be offered to every reservist, and more be given to those who are in active service. Personal income tax and consumption tax Mr Speaker, Sir, the Minister for Finance has not reduced the personal income tax of 33%, although he has reduced the corporate tax by another 1% to 30%. Personal income tax still remains at a top 33%. There will be a 3% difference between the personal income tax and corporate tax rates. I would therefore like to ask the Minister for Finance whether this will encourage individuals in the above 30% income tax brackets to form companies so that they will enjoy the lower tax rate of 30%. Perhaps the Government should consider reducing the income tax rate to 30% at the maximum. Mr Speaker, Sir, the general belief of why the personal income tax rate was not reduced was that the Government is waiting for the introduction of consumption tax and, at the same time, cut personal income tax.”
“First is the rebate on the service and conservancy charges, and the second is the tax relief for reservists. Rebate on service and conservancy charges I am particularly heartened by the rebate on service and conservancy charges for December 1992 for rented and owner-occupied 1-, 2- and 3-room HDB householders. This rebate is a clear signal that the Government is keen to find ways and means to assist and be equitable to the low income group. As we all know, the low income group do not normally pay tax, and therefore they do not enjoy the 5% rebate for income tax, which was given over the past few years for other citizens. By the rebate on the service and conservancy charges, the lower income group which do not enjoy such 5% tax rebate are indirectly able to enjoy an equivalent tax rebate worth between $15 and $28.50. May I urge the Government that, in future, whenever the 5% rebate on income tax is given, it should endeavour to give the rebate on service and conservancy charges. We should also note that one small loophole of the rebate scheme is that there may be a small group of low income people who do not pay income tax and who do not live in rented or owned HDB flats in their own names. These people could perhaps be renting a room from a house owner or squatting with relatives and friends. These people could be given a one-time welfare contribution of $15, equivalent to the service and conservancy charges of a 1-room rental flat, if they do come forward to claim as such from, say, the Social Welfare Department of the Ministry of Community Development, because they do not enjoy this one-time payment of rebate on S&C charges. Tax relief for reservists The tax relief for reservists offers an appropriate recognition of the contribution of our reservists.”
“3% have only primary or post-primary education. Of course, the younger workers and the new entrants into the labour market have higher education. For older workers, we have to be more flexible to provide them with some training and find ways and means to upgrade their skills. In this context, the National Productivity Board should be commended for conducting some training courses in Mandarin. Older workers and some young Chinese-educated workers are more at home with Mandarin. If a worker can upgrade his skill, does it really matter whether he learns to acquire such a skill in English or in the mother tongue? Sir, productivity is not just about skills and better ways of doing things, productivity is also a mental state. It is crucial for NTUC, NPB and employer organisations to cooperate to improve work attitude, reduce job-hopping and enhance productivity consciousness among our workers. Unless we have a quality workforce to work with quality capital investments and level up to a higher level of technology, it would be very difficult for us to achieve 4-6% annual growth rate in the next stage of development. Mr Leong Horn Kee (Thomson GRC)( In Mandarin): Mr Speaker, Sir, thank you very much for allowing me to join in this debate on the proposed Government budget for the financial year 1992/93. The economy of Singapore had a reasonably strong growth in 1991 of 6.7%. The expectation of this year is that economic growth will be between 4% and 6%. I shall confine my comments on the Budget on three areas - firstly, its impact on the local residents; secondly, its impact on local small and medium-sized companies; and thirdly, the use of our reserves. Impact on locals Concerning the impact of the Budget on the locals, I wish to highlight two new and innovative tax incentives.”
“Wage increase is mainly a consequence of labour shortage; it does not necessarily reflect workers' productivity performance. Our panel members informed us that even though businesses and sales have slowed down, many employers continue to employ less productive local workers because it is difficult and costly to recruit their replacements. Another reason is that some employers need to maintain the local-foreign worker ratio. These so-called labour stockpiling practices depress productivity. Productivity growth does not necessarily reflect the quality of our workforce. The Business Environment Risk Intelligence (BERI) ranked Singapore workers as No. 1 in the world in the last few years. We are proud of such achievement, but we have to ask ourselves whether our workers are really better than the Japanese, Korean and Swiss workers. It is difficult to convince employers who face job-hopping problems to agree that our workforce is of such a high quality. BERI's Labour Force Evaluation Measure Index for 47 countries is based on four factors, namely, "legal framework", "relative productivity", "work attitude" and "availability of technical skills". Our workforce has been ranked not very high in terms of the last two factors, namely, "work attitude" and "availability of technical skills". Another BERI's index, "Quality of Workforce Index" for 10 countries is based on such criteria as "quality of equipment and physical facilities", "management quality" and "Government support for education and training". These criteria are not direct indications of the quality of our workers. One thing, however, is certain: we need to invest more on education and training. One problem we face is that 19.4% of our workforce have no qualification and another 29.”
“Last year, our GDP growth rate was 6.7%, the lowest in the last five years. It was the fourth consecutive year that our economic growth rate had declined. When our economy enters into a more mature stage and starts with a higher base of US$10,000 per capita income, it is much more difficult to achieve rapid economic growth, as in the past. Apart from this so-called law of diminishing returns, the performance of our open economy depends much on external forces. This is not by choice, but a reality we have to live with. Two-thirds of our demand come from external sources. Free flow of goods and services, free flow of capital and free transfer of technology are crucial to our open economy. The formation of the North America Free Trade Area and the Single European Market will affect Singapore adversely in terms of market access and investment diversion. While we need to strengthen and diversify our international linkages, we need to ensure that our competitiveness is not eroded by domestic factors. Productivity growth, quality of workforce, technological change and the capacity to adapt and adjust in response to internal and external changes are crucial factors in determining our medium economic growth prospects. I shall confine myself to the first two factors: productivity growth and quality of our workforce. The productivity growth rate declined continuously from 4.8% in 1989 to 1.5% in 1991, based on value-added per worker. It is lower if it is based on value-added per man-hour. It is the third consecutive year that productivity growth rate fell below the increase in real wage. Productivity growth rates of all major sectors declined in 1991 as compared to 1990.”
“3 last year as compared to 100 in the base year of 1983. Some pessimistic business people see the replay of the 1983-84 pre-recession situation. I do not share this pessimistic view. However, we need to assess the accumulative impact of rising labour costs, increases in statutory charges and a strong Singapore dollar on business confidence and our export competitiveness. While the Minister for Finance has maintained that our corporate tax is competitive with many countries, many investors and businessmen choose to compare our corporate tax with that of Hong Kong. The Hong Kong Government has just announced an increase of corporate profit tax rate from 16.5% to 17.5%. I submit, Sir, a mere comparison of tax rates does not show the true tax burden. We need to look at how dividends and interest incomes are taxed, and what tax allowances and reliefs are given. The Minister may wish to give some comparative figures of total tax burdens of corporate and personal income taxes between Singapore and Hong Kong investors, taking into consideration the various tax allowances and reliefs for companies and individuals. Further, the Minister may wish to compare the Government expenditures between the two places. The obvious difference is that our Government has to shoulder the defence budget while the Hong Kong Government has no such obligation. Even though the average tax burden of Singaporean investors is higher than that of Hong Kong investors, the tax differences can be argued as a contribution to defence, which helps to reduce the investment risk in Singapore. Finally, Sir, let me speak on the prospects of medium term economic growth. Most people are interested in tax changes, but we need to focus more on the prospects of economic growth in the next few years.”
“9% of taxpayers who had chargeable income of more than $100,000 per year paid 37.7% of the total tax collected in that year. On the average, the tax burden of the higher income group was $55,569 per capita. Taxpayers with chargeable income between $10,000 -100,000 constituted about 22.6% in terms of the number of taxpayers that year. They contributed a total of 53.2% of tax revenue. On the average, the middle income group, ie, those who have $10,000 - $100,000 chargeable income, paid $3,326 per capita in that year. The figures I have quoted are for the Assessment Year 1982. These figures are outdated. May I request the Minister to update these figures to show that the tax burden is basically shouldered by a relatively few number of taxpayers in the upper and middle income brackets. The reduction of corporate income tax from 31% to 30% is welcomed by the business sector. However, businessmen are not particularly excited about this reduction, partly because the reduction is expected but mainly because businessmen and investors are worried about the rising cost of doing business. Because of the tight labour market, nominal wages continued to increase by more than 9% in the last three consecutive years - 9.8% in 1989, 9.3% in 1990 and 9.2% in 1991. I must clarify that the nominal wage here measured by payroll per worker includes bonuses but excludes employer's CPF contributions. The nominal wage of the manufacturing sector increased by 11.2% between 1990 and 1991 though that sector experienced the slowest growth of 5.3% among the major sectors. As a result, the unit labour cost index in manufacturing increased to 117.4 as compared to 100 in the base year of 1983. Business unit cost index in manufacturing also increased to 108.”
“6 billion in 1991, would help Government to finance defence, development expenditures and the provision of social services without raising tax. Another issue is tax changes and tax burdens. I agree with the Minister that the GDP pie should be made bigger before we talk about distribution of the pie. Income redistribution should come after and not before economic growth. However, if income distribution is perceived by many as unfair, then social and political stability could be undermined. In recent years, we sense some resentment among some Singaporeans in the lower income group. These Singaporeans perhaps perceive that Government has not looked after their interest and that the middle and upper income groups have gained more from Government policies. Against this background the rebate on service and conservancy charges (S&CC) is important as Singaporeans living in one-room, two-room and three-room HDB flats who pay little or no income tax could also enjoy some form of tax benefit. The S&CC rebate shows Government's compassion for the lower income group and, at the same time, it does not set an unhealthy precedent for tax credit or negative tax. Ministers have shown in this House how much Singaporeans, including those in the lower income group, have benefitted from the economic growth in the last 30-odd years in the form of increasing savings and also in the form of increasing value of assets and household appliances they have. It may be equally important to show the other side of the coin, ie, the relative tax burdens of different income groups. In the Year of Assessment 1982, 54.8% of taxpayers with chargeable income of less than $5,000 paid a total of 3.9% of tax revenue. The average tax burden of this income group was $101 per capita. At the other extreme, 0.”
“(c) to what extent should a service be subsidized when its demand increases and becomes more diversified and personalized? and (d) could the Government resist demands and pressures for new subsidies? Some Singaporeans believe that the Government should use the reserves to subsidize social services and to lower the cost of living. The Minister for Foreign Affairs has made public the results of two straw polls on Singaporeans' opinions towards the use of the reserves. According to the Annual Economic Survey, our official foreign reserves have reached $55.8 billion at the end of 1991. This figure appears large. However, this is equivalent to only 5.9 months' worth of merchandise imports. Even if we confine it to retained imports, the ratio would be around 10 months. In other words, our foreign reserves cannot buy even one year of retained imports for Singaporeans. Another way of looking at it is that the accumulated reserves of $55.8 billion are less than one year's GDP which was $61.9 billion last year. Using the analogy of a family, the accumulated saving is less than one year of annual income. So I hope my fellow Singaporeans do not think of using the reserves for subsidies too readily. It is in the interest of our citizens and of our future generations that we guard and preserve the reserves jealously. This is our only resource that Singapore could rely on if Singapore faces a severe recession or other hardships in future. In fact, we should aim to live within our means, and in good years, we should save as much as possible to build up our reserves. Another benefit is that the larger our reserves, the greater will be the Government's investment income from this source. The investment income, which amounted to about $5.”
“With regard to the first point, I believe most economists, including those from MIT like Paul Samuelson and Robert Solow, would advocate that government should adopt macro economic policies so as to stabilize the economy and to reduce the magnitude of fluctuations of business cycles. No elected government can afford not to intervene when the economy is suffering from a prolonged recession or inflation. The question is what macro economic tools should be used, their timing, their dosage and their side-effects. With regard to the second point, it is common for governments to implement progressive income tax and to provide social services for the redistribution of income. Market forces allocate scarce resources efficiently, but market forces do not guarantee equitable income distribution. An efficient economic solution is not necessarily socially desirable. Hence, government needs to intervene. In the context of Singapore, given the scarcity of land, if the Government did not intervene by subsidizing land costs and even part of the construction costs, most Singaporeans would not be able to afford HDB flats. The Government also intervenes in education and health care through subsidies so as to ensure that education and basic health care are affordable to the lower income group. 1.00 pm Subsidy need not be a dirty word, but Singaporeans must be aware of the dangers of using subsidy: subsidy hides true costs, subsidy distorts prices, subsidy generates excessive demand, and subsidy perpetuates itself. There are four basic questions about subsidy and they are: (a) what is the purpose of subsidy - for production or consumption? (b) to what extent should a service be subsidized when its costs escalate?”
“Mr Speaker, Sir, I rise to support the motion standing in the name of the Minister for Finance. My GPC Members have discussed the Budget Statement. We also met the resource panel and the panel members have raised some pertinent points. In the budget debate today and tomorrow and in the Committee of Supply, my GPC Members and I will raise a number of economic issues. Let me start by giving an overall view and comment on some specific issues. First, allow me to participate in the debate on market forces and Government intervention. The Minister for Finance stated in his statement that the "free market is the best system known for allocation of resources efficiently." I agree with him. I support the free market system and I also believe in market forces. However, there are good reasons for Government to intervene in the event of market failures caused by public goods and externalities. Let me illustrate. Defence is a public good. It cannot be produced by the private sector and sold in the market at a price like any ordinary good or service. Hence, defence has to be provided by Government collectively and financed by tax. Pollution is a good example of externalities. Government needs to intervene by regulation or by imposing tax to force polluters to cut down their activities or to internalize the externalities. Government may also have to correct market imperfections due to monopolistic elements and incomplete information. Again, Government has to invest in physical infrastructure and provide social services where the rates of social returns are high or the initial capital outlays are large. There are two areas that Government intervention is crucial: (1) macro economic management; and (2) income redistribution.”
“Mr Speaker, Sir, may I seek a clarification on the definition of "incomes"? Are incomes net of tax or net of tax and CPF contributions? BG Lee Hsien Loong: Mr Speaker, Sir, I think these are gross incomes as declared by the households. They are not based on any documents but we conduct household expenditure surveys and the households declare them as what they have earned. ARMS FOR IRAQ (Transferred at Singapore) 4. Dr Lee Siew-Choh asked the Minister for Trade and Industry whether arms sold or supplied by other countries to Iraq had been transferred at Singapore. BG Lee Hsien Loong: Mr Speaker, Sir, for the past five years, we have no records of arms sold or supplied by other countries to Iraq being transferred at Singapore.”
“In our multi-racial, multi-cultural society, it goes without saying that the members of the Council should be as representative as possible. For the Arts Council to effectively carry out its duty, apart from good leadership, it must also have good financial and manpower support. I believe the staff of the National Theatre Trust and also some of the staff from the Arts Division in the Ministry of Information and the Arts would form the basic staff of the Arts Council. The question is how many staff will the Council have. And whether they are adequate. Another point that I wish to speak on concerns the financial resources of the Arts Council. The setting up of an endowment fund would ensure that the Arts Council has enough funds to carry out its activities. However, I believe that if we want to raise sufficient money for this endowment fund, it would take some time. So I hope that the Government will take the lead by giving an initial grant to this Arts Council so that it could have a good start. I believe the private sector would also respond positively. Recently, a company donated $1 million to the Substation. From this, we can see that we would have good support from the private sector in the development of arts in Singapore. Mr Speaker, I support the Bill.”
“So I believe it will be in a better position to reflect the desire and hopes of our people in the development of arts in Singapore. But I believe that the Arts Council will also have another basic mission, that is not only to satisfy the desire of the people but also to preserve and promote the various Asian traditional arts and to facilitate the development of a unique Singaporean culture. Only by so doing that we would be able to maintain our traditions and our national spirit, which is needed to face up to the world in the face of very strong influence from the West. Mr Speaker, Sir, the development of the arts is within the realm of spiritual development, which in turn is a very important thing for us to do. This cannot be left to the market forces alone to decide. Take, for example, we want to prevent our society from going fully Westernised and preserve and promote our traditional arts. That certainly requires very strong determination and effort. Those who are involved in this effort should be given not only moral support but also strong financial support. The Chairman-designate of the Arts Council, as we know, is our Ambassador-at-large, Prof. Tommy Koh. I believe we all have full confidence in Prof. Koh and it is hoped that under his leadership the National Arts Council will be able to effectively carry out its duties and to maximise its potential so that arts could be fully developed in Singapore. At the same time, I am sure those who are concerned in the development of the arts in Singapore would also like to know how the Arts Council is going to appoint its Chief Executive Officer and the 10 to 25 Council members as provided for under the Bill.”
“I think this suggestion is worth considering even from the financial viewpoint. Finally, clause 9 of the Bill gives the Minister the power to direct the Council. Itseems rather unnecessary in the light of paragraph 5 of the First Schedule that the Minister has absolute power to revoke the appointment of any Council Member. And this is also not consistent with the oft-repeated comment that arts development should be left to the people within some framework. However, I am not advocating the removal of this clause but I feel that a clarification of how this power is to be used would be helpful to dispel misgivings. Sir, I would be grateful if the Acting Minister could comment on these issues. Mr Goh Choon Kang (Braddell Heights)( In Mandarin): Mr Speaker, Sir, I support the Bill. The establishment of the proposed National Arts Council will be a very important milestone in our Next Lap towards spiritual development. It also signals the uplifting of the status of the arts. I feel that we should be proud of the fact that we are able, in a matter of about 20 years of nation building to move a step forward from materialistic development, to spiritual development. One of our long-term development objectives is to build Singapore into a more gracious and cultured society. The National Arts Council will play a very important role in this aspect. Under this Bill, the National Arts Council will have to shoulder very heavy responsibilities, just as the old Chinese saying goes: "The burden is heavy and the road is long." The Arts Council will be an autonomous organization. It will take the form of a statutory board. In other words, it will enjoy more flexibility than a Government department in carrying out its activities. And the input that it will receive will be nation wide.”
“I also hope that the Government will not view this Bill as privatisation of the arts and thereafter leave it to the private sector and the general public to support the arts. I agree that the private sector should and must support the arts but to expect it to carry the greater part of the financial burden is asking for too much, especially when the public and the private sectors are also called upon to contribute to education, the poor, the underprivileged, the physically handicapped and all other kinds of charity. Yet arts expenditure can be a bottomless pit. Therefore, I believe that this financial burden should be a shared partnership between the Government and the public. In this respect, I would like to forward this suggestion, and that is, to give double tax exemption to individuals donating to the Arts Council. I stress only individuals and not companies for a good reason. Firstly, such double tax exemption would encourage contributions by individuals at the community level, that means by individuals themselves and not through their organisation, and this should be the case since arts is really for everyone. Secondly, the loss of tax revenue from the Government's viewpoint will also not be too great since individual tax rates are progressive, going up to a maximum rate of 32%. Hence, as an example, for those at the marginal 15% tax rate who are given a double tax exemption, it will only benefit them up to 30% which means that, in actual fact, for every dollar they contribute, they have to contribute 70 cents of their own money while the Inland Revenue Department contributes 30 cents. Even this, forexample, is lesser than the 31% that is being enjoyed by companies which contribute to institutions of a public character.”
“By all means, provide the infrastructure, facilities, the policy framework, financial and other forms of assistance, but the Arts Council should not compete with the arts organisations by the organisation of artistic activities. It should encourage and promote, but not organise them. I have my doubts about the effectiveness of this policy. Further, would the Council not organise activities as dictated by what the Government of the day wants? In other words, such activities could very often be termed as propaganda and, in the end, this could be counter-productive. Here, I would like to propose that a hands-off approach might be the best. There is also another reason for the Arts Council to stick to its main function of being the umbrella body. From an overview, its main concern with the policy to encourage and promote the organisation of activities, the Arts Council could provide seed money and other forms of financial assistance to the many deserving arts organisations, especially in their early years. We have already seen some good results of this policy. Examples which come readily to mind are the Substation and some of the more well-known performing arts groups. More of this type of assistance will be helpful. Sir, on the financial side, arts expenditure, unfortunately, is very often deemed as expenditure without financial returns. Perhaps, there may be good returns eventually but, from a purely financial perspective, it would be too risky an investment. Therefore, I could see that, in later years, budgetary allocationfrom the Government will always be a thorny issue. Hence, I would like to express the hope that the Arts Council be given adequate funds to fulfil its main responsibility.”
“Sir, as the National Arts Council (NAC) will be the national vehicle through which the food for the spirit will be provided, I fully support this Bill. However, from another perspective, this Bill is only a shell to contain the appropriate policies for the advancement of the arts in Singapore. Eventually, how effective it will be depends on the substance and quality of its policies and its efforts, and not its form. It is in this context that I would like to raise several issues. One, the Arts Council appears to be a successor to the National Theatre Trust (NTT). I hope that it will not be a mere continuation of the National Theatre Trust. Since its establishment, the NTT has not been very effective in promoting and advancing the arts on a broad basis. It has organised many cultural functions and, in the process, has become another arts organisation - no different from the rest, albeit bigger, better organised and perhaps with more financial muscles. Therefore, I hope that one of the Arts Council's early tasks will be to review the policies, regulations, practices and procedures affecting us and the promotion of artsin Singapore today. Many of the policies were formulated years ago and may no longer be relevant in our present context. In this respect, perhaps it could update the views and recommendations expressed in the Report of the Advisory Council on Culture and the Arts, done in 1989, and proceed from there. Sir, another point is that I hope the National Arts Council should not be involved in organising any artistic activities as provided for in clause 5 of the Bill. The Arts Council should be the umbrella body for all arts organisations in Singapore.”
“For the Arts Council to be the "national vehicle for the arts programme", a much higher financial grant is required from the Government. While I understand that the Council will seek financial grants from the private sector in the form of donations and sponsorships, the Government needs to set an example. Here, may I make a suggestion. One possible source of finance is from the Bukit Turf Club and the Singapore Totalisator Board. Could the Minister obtain a firm commitment from these twoorganisations for their financial contributions to the Arts Council? If our objective is to ensure adequate financial resources for the promotion of the arts in Singapore, it does not matter whether the money is from the oil companies or from gambling activities. Secondly, appointment of Council Members. I read in the newspaper that the Acting Minister has announced the appointment of the Chairman. We have no quarrel with the appointment of Prof. Tommy Koh as the Chairman. I personally think that he is the right choice. The Bill also provides for the post of the Vice-Chairman and 10 to 25 other Council Members. I hope the Minister will consult our GPC on the nomination of the Council Members. The GPC will, in turn, consult its Resource Panel. In this way, the Ministry and the GPC can work together for the promotion of the arts in Singapore. Mr Heng Chiang Meng : Sir, I must say that eventually and finally arts is about to take its rightful place in our society. I do not suppose there is any need for me to go into the reasons why food for the spirit is now necessary, now that Singaporeans have been provided with food for the body. I must assume that this is supported and accepted by all.”
“The third concerns foreign competition. Every effort must be made to train localartists so as to raise the standard of their works. Nevertheless, this should not lead us into protectionism and the creation of a closed-door mentality against foreign competition. Foreign competition will help broaden the vision of the local artists and bring about more diverse and more dynamic local artistic activities. Foreign competition will also inspire local artists to set their sights beyond the national boundary and venture into the international arts scene. Sir, next, let me make two specific comments on the Bill. Firstly, financial grants from the Government. I understand from the Bill that the assets and funds from the National Theatre Trust, the Singapore Cultural Foundation and the Arts Division under the Ministry will be transferred to the Council to set up the Singapore Arts Endowment Fund. I take it that the Government will also provide operating grants annually to the Council. Could the Minister inform the House what is the annual grant to be provided to the Council? I have checked the 1991/92 Budget and the recurrent expenditure allocated under the Arts Programme for FY 1990 was $4.16 million, and the recurrent expenditure estimated for FY 1991 was $7.19 million. The sums are really very small. In fact, these sums are much smaller than the recurrent expenditure allocated under the Parks Programme. The recurrent expenditure allocated for the Parks Programme for FY 1990 was $31.63 million and for FY 1991, it was $34.69 million. In other words, the recurrent expenditure allocated for the Arts Programme accounted for less than 22% of the expenditure allocated for the Parks Programme.”
“Mr Speaker, Sir, the GPC on Information and the Arts supports the establishment of the National Arts Council. As a statutory board, the Arts Council will enjoy flexibility in its operation and autonomy in its finance and administration. On the other hand, the Arts Council is accountable to Parliament through the Acting Minister. Sir, let me offer some general observations about the promotion of the arts in Singapore. I hope these observations are useful to the National Arts Council and perhaps even to the Ministry. In the development of the arts, we need to strike a certain balance between conflicting interests. The first is about the role of the Government. The Government should give maximum assistance to arts organisations and artists. The assistance can be in the form of provision of arts facilities, training of artistic talent, financial and administrative support. However, such Government assistance does not confer on Government officials the right to interfere in the artistic creation. Interference will only stifle creativity. The arts produced under the bureaucratic system are normally rigid, unnatural or even lifeless. The second balance concerns the role of the private enterprises and corporations. Incentives must be given to encourage more private enterprises and corporations to participate in the promotion of the arts. On the other hand, we must make sure there is no over-commercialisation of the arts. In a free market economy, purchases of art works by private enterprises and corporations at higher prices constitute a form of material incentive to the artists. The artists, however, must continue to be motivated by the desire to achieve artistic excellence and should not allow themselves to be dictated by monetary consideration.”
“This is because, as the Minister has stated, the Government is determined to support and maintain racial harmony. The various policies of the Government, including the policy of putting various ethnic groups in the same housing estate to ensure that all racial ethnic groups will have the awareness of maintaining racial harmony, are very important. This is the most important reason of our having racial harmony. Thank you, Sir.”
“Because if we want students to build a strong foundation for a language and to cultivate their interest in the language, we cannot wait until they reach the secondary school. We should start right from the primary school, right from a young age of the students. In my opinion, the SAP schools should not only be continued but they should also be improved and strengthened. And because of this, the Government has decided to set up what they call the "seed" schools. This is a very wise move. I hope that this move will not cause any concern or worry to certain people over the so-called segregation of SAP school students from students of other races. Mr Speaker, the Minister has already explained why there is no problem to the maintenance of religious harmony in Singapore. I entirely agree with what he has said. As a matter of fact, what is more important is the correct attitude among the various ethnic groups towards one another. Correct attitude must be cultivated right from childhood, right from young. We must teach our students not to have any discrimination or suspicion of other ethnic groups. We must cultivate the idea of universal brotherhood among our students. This I think we have already done. Because if you look carefully at the contents of the Civics lesson in our primary schools, you will see that there are many lessons inculcating the concepts of multi-racialism and multi-racial harmony. In the past, under our old education system, we have the so-called Chinese schools and the English schools. There are many Singaporeans who have hailed from the Chinese schools. Why is it that since the 1970s we were able all the time to work and live and make progress together in racial harmony?”
“After a defeat, he spent 10 years reliving the problem, building up himself, going through the difficulties and hardship. I also read about Yue Fei, a hero of the Sung Dynasty, for his patriotism. This kind of story has left a very deep impression in my mind, and each time I come across any setback, I derive encouragement and inspiration from such stories. So I can appreciate the Prime Minister's narration of his experience of having been slapped by a Japanese, and from there he made the determination to build his own nation. This gives me a very good lesson. The Government has set up the SAP schools to provide the opportunity for students with the interest, inclination and capability to learn their mother tongue as the first language so that we will have a group of students with such linguistic ability to transmit our cultural heritage and to promote literary appreciation in their mother tongue. This cannot be done by Singaporeans generally because they have to cope with the need of learning and using English. So we need such people to take the lead to ensure the continuation of our cultural heritage and the transmittal of such values. In fact, successful implementation of the SAP scheme is not an easy task. Since its implementation in 1979, whether we have achieved the objective or not, it is still too early to say. According to my knowledge, although 10% of the PSLE students are eligible to go into the SAP schools, only 5% of them select to go into SAP schools. I believe one of the reasons is that the SAP school lacks a certain very important link and, as a result, we do not achieve the desired effect.”
“They are effectively bilingual, and in that sense they are able to combine the East with the West and it is more likely they will develop a balanced view. And secondly, if they really learn the core values of Chinese teaching derived from Confucianist ethics and Buddhism, to some extent, then they will be more tolerant and more respectful of other cultures and religions. Dr John Chen Seow Phun (Hong Kah GRC)( In Mandarin): Mr Speaker, Sir, I support the statement of the Minister for Education. It is my view that bilingual education, especially the SAP scheme, is a correct and very important policy. We must not only proceed with this scheme but we must also go one step further to improve and strengthen it. Economic development and racial harmony are two requirements that Singapore must have. And because of this, Singaporeans have to use English as a first language. But if the Government does not stress and make efforts to implement the bilingual policy, then eventually Singaporeans will pay more and more attention to English and slowly forget about their own mother tongue and eventually we will lose our cultural heritage and traditional values. In this kind of society, it is not sound and healthy, because the people in such a society will be culturally rootless. Although we may be able to continue to enjoy the present prosperity, when we face a grave crisis, we will become directionless. We will not know what to do, we will lose our ballast, and we will lose our cohesion and strength to face the difficulties and problems. Let me give you one example. When I was young, I read the stories about the Spring and Autumn Warring States. There was this King of the State of Yue.”
“He should realise that in a multi-racial and multi-religious society, if he started to query the use of taxpayers' money for SAP schools, then he cannot prevent others from asking whether or not taxpayers' money has been used to fund or support any institution or activity for the exclusive use or benefit of one particular community. And what purpose does it serve? Where will this line of argument and counter-argument lead us to? Will this type of argument undermine the basic principle of racial harmony that we are trying to preserve or maintain? On the question of equal access of SAP schools, let us not forget the objectives of SAP schools, and the Minister has mentioned them. Let me reiterate them: (a) to teach EL1 and CL1; and (b) to preserve the tradition and ethos of Chinese schools. I have said in this House the last time that if non-Chinese parents are prepared to send their children to SAP schools, I believe SAP schools will welcome that. Of course, these non-Chinese students must be of equal merit and meet the requirements. Every institution has its own requirements. NUS has its requirements in terms of "A" level results, subject combination and language requirement. You cannot say, "I want to join your church, but you change your bible." Moreover, the Minister has repeated his offer. If there is a demand for Malay and Indian students to learn ML1 or TL1, the Ministry of Education will make the necessary arrangements to make this possible. This is an equal treatment and fair to all communities. Whether or not it is necessary to have a Malay SAP school or Tamil SAP school is another question. Finally, Sir, may I just make a point about the SAP students.”
“The question simply highlights one particular important point, that is, living or residential environment is an equally important factor, in addition to school environment. So we must look at this question of inter-racial mixing in a wider perspective. In an open, urbanised and highly competitive society like ours, it is not possible for any group to isolate itself from the others and neither is it desirable to do so. Even the Japanese in Singapore cannot do so. I understand the point made by Dr Tan Cheng Bock and Mr Chandra Das. I never question their motives. But when Dr Hussin Mutalib chose to echo Mr Chandra Das' point in the Straits Times, the debate on SAP schools has taken on a different dimension, ie, a broader dimension. Dr Hussin made two main points. One point is that the SAP system operates in such a way that it prevents inter-racial mixing amongst students. I am not sure whether his point is identical with or similar to Mr Chandra Das' point. But he made another point, and that is, may I quote: '... non-Chinese parents in general are made to feel deprived in not being able to send their bright children to such schools. Utilising taxpayers' money, the SAP schools offer infrastructural facilities on a scale not enjoyed by ordinary schools ... ' He went on to say: 'Given the requirement that students who wish to apply for these elite schools must also offer ...(CL1), non-Chinese students of equal merit are denied access to study in SAP schools if they do not take CL1.' This is from the Straits Times of 23rd June. Dr Hussin's letter has drawn sharp reactions and strong rebuttals from readers in both Chinese and English newspapers.”
“Mr Speaker, Sir, I give full support to the Minister. On this issue, I am behind him. At the last sitting, I pointed out that SAP students do have opportunities to mix through school sports day, uniformed group activities and ECA; secondly, these students also have opportunities to mix in housing estates; and thirdly, when they go to junior colleges, university and in National Service. On the issue of inter-racial mixing, there are two basic questions. First, do SAP students have an opportunity to mix? Can they mix? And do they mix? The answers are all yes and in the affirmative. The Minister just now gave us the assessment of the principals from the nine SAP schools and also of the JCs. This confirms my point that the SAP students do mix, can mix, and they do have opportunities to mix. May I add another point: In the university and polytechnics, students of different racial groups do mix, and you cannot tell among the Chinese students who were from the SAP schools and who were from the non-SAP schools. So we must judge the system by its products. Another point is a comparative question. In comparison with students of other schools, do SAP students have fewer opportunities to mix with students of other racial groups? The Minister thinks so, as there are very few non-Chinese students in SAP schools. This is an obvious point. But may I counter this point by asking a simple multiple-choice question. Which of the following has a greater opportunity to mix? (a) An ACS boy living in a private housing estate; or (b) A River Valley High School boy living in an HDB flat? The answer is not straightforward. It depends on many factors.”