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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“Sir, may I be allowed to raise the question of labour market situation? Last year we achieved an economic growth rate of 9.2%. The unemployment rate was reduced to 2.2%. There were only 28,100 unemployed persons, and we have over 150,000 work permit holders. So indeed we have achieved over full employment and this is indeed a happy situation. But what about the future? How serious is labour shortage as a limit to our economic growth? The declining fertility trends and the ageing of our population mean that we will have fewer and fewer new job seekers but more and more of the existing workers leaving the labour market. The number of first-time job seekers between June 1988 and June 1989 was 65,000 persons, 6,100 persons less than in June 1988. We all know that labour supply depends on population growth, its composition, and labour force participation rate. While the female labour force participation rate has been increasing from 44.3% in 1980 to 48.4% last year, the participation rate of older workers aged 55-59, fell from 43.6% in 1980 to about 40.5% in 1988. It went up again to 42.2% last year. May I ask the Minister a few questions? Firstly, could he update us on the latest projections on labour supply from various sources, including part-time workers? Secondly, with regard to older workers, how many percent of companies in the private sector have raised the retirement age? And a related question, why do a few statutory boards still stick to the retirement age of 55? A final question, apart from reducing employers' CPF contribution rates, what other measures has the Ministry adopted to encourage the employment of older workers?”
“Perhaps he has been encouraged by the car quota system and he has changed his mind. There are certain similarities between implementing a quota system for vehicles and the tender system for foreign workers. In both situations, we are talking about the use and the allocation of scarce resources. In both situations, social costs are incurred. And in both situations, price mechanism has not been effective to check the increase in demand. Let us be open minded about this alternative control mechanism. There are certain advantages in implementing a tender system. The number of foreign workers can be controlled in each sector. The allocation can be made more in line with the contribution to value added. The licence fee which should be used to replace the levy will be decided by employers and I believe they are in a better position to judge the worth, the marginal value and benefit of each additional worker than the civil servants. And the levy need not be raised from time to time. Of course, there should be certain safeguards in its implementation if this control is adopted. For example, employers have to be categorised and a minimum tender price may have to be stipulated. These are implementation details, but it is worth our while to give some thought on this additional control mechanism.”
“Hong Kong has avoided social cost problems by relying on Chinese workers staying in Chu Jiang ( ) Delta in Kwangtung Province. The Chinese workers do not travel to Hong Kong to work. Instead, the manufacturing firms in Hong Kong bring work to them. This is an arrangement which has benefited both sides. We should look at the Hong Kong model as a possible alternative. This may fit well into the economic cooperation between three areas - Johor, Batam and Singapore. Foreign worker policy is an important issue. It is part and parcel of our manpower policy and wage policy. Yet, information and data on foreign workers are limited and scattered. The Minister gave the figure of "over 150,000" work permit holders on 19th January 1989. His Ministry's statement also indicated that the number of foreign workers increased to "almost 50,000" last December. I am not sure whether the "over 150,000" figure includes or excludes the "almost 50,000" foreign maids. Could the Minister give this House some information on foreign workers, eg, growth rates of foreign workers, percentage distribution of foreign workers by approved sectors and their average wage level in each sector? Next, let me turn to the control measures or control mechanism. The Ministry's statement on 6th March 1990 said that: 'Eventually the foreign worker's levy and dependency ratio will be the main control.' The Minister in his press conference has indicated that he is willing to consider applying a quota system to foreign workers in future. Mr Heng Chiang Meng, Member for Cheng San GRC, first suggested a tender system for foreign workers in the non-priority sectors in 1988 in this House. The Minister then was not in favour of a tender system.”
“Sir, I sympathise with the Minister. Regulating the inflow of foreign workers is a difficult balancing act. The Ministry of Labour, as the regulatory agency, has to balance between conflicting interests, ie, conflicting interests among different groups or conflicting considerations. Firstly, between employers and local employees, the Ministry has to satisfy the demand for additional foreign workers by employers while, at the same time, the Ministry must ensure that wages of local employees are not depressed. Secondly, there should be a balance between long-term competitiveness of our economy and the constraint of labour shortage. A larger inflow of foreign workers may ease labour shortage but it could undermine the efforts to encourage employers to upgrade, automate and mechanise their operations. Thirdly, there is a trade-off between economic growth and social cost. An additional 1% economic growth over and above the long-term growth rate of 4-6% will require an additional 12,000 workers and most of these workers have to be imported. Additional foreign workers mean higher social costs. Social costs are not merely strains on our transport system, but also increasing demand for housing, medical and other services. It may also mean more applications for contract marriages between foreign workers and Singaporeans. Love knows no national boundaries. But I do not believe that the Minister is prepared to relax the policy on contract marriages. Here, two years ago when we were debating the foreign workers policy, I cited the example of West Germany and Japan. Both countries have adopted very different approaches to labour shortage problems. May I now cite the example of Hong Kong.”
“One other feasible way is like what I suggested just now - to retain Confucian Ethics as an optional subject. A third alternative for the Ministry of Education to consider is perhaps the teaching of the essence of oriental and western thoughts, philosophies and civilization. Such a subject will have no religious flavour in it, but it will enable our students to widen their field of vision so that they can look at things in a more balanced manner. By this, we can offer our students with a more intellectually challenging subject. I hope that the Ministry of Education will consider these suggestions. Thank you.”
“Moreover, we are now emphasizing the inculcation of oriental values. To many Chinese, Confucianism is a complete set of traditional values by itself. What the Ministry of Education is doing is to treat the six subjects on equal footing. Although, superficially, this may appear to be a fair treatment for all. But, in reality, such an act is most unfair! As such, I concur with the Senior Parliamentary Secretary, Mr Ho Kah Leong's view that the Ministry of Education should reconsider the matter and not abolish but retain Confucian Ethics. With the abolition of Religious Knowledge, what are we going to replace it with? It is not just a question of filling up the lesson time. The important point is Moral Education is part and parcel of our education programme. We all know that education must comprise the three essential components: Moral Education, Intellectual Education. Moral education is particularly important when we see so many unhealthy phenomena in our society today. We have delinquents and an increasing number of drug addicts; some commit suicide at the slightest setback; and other resort to emigration over the slightest dissatisfaction in life. As such, the school should coordinate with the family in the inculcation of the right values and the true meaning of life in our students. This is the main objective of Moral Education, irrespective of its approval or method of teaching. Of course, the teaching of core value is a feasible method. I agree with Dr Aline Wong that Confucianism can be included in the Civics subject, although I must say the scope of civics is somewhat narrow. Unless we have some interesting teaching materials, it will become sermon-like and boring.”
“In other instances, some members of the family refuse to perform some traditional rites or to observe certain festive occasions owing to their religious differences, thereby resulting in conflicts and unhappiness in the family. In the circumstances, if we persist in teaching Religious Knowledge in our secondary schools, it will not only result in our schools being used as the cradle for the preaching of religious beliefs, but also further aggravate the frictions among the various religions in our Republic, thereby polarizing our society. For these reasons, I support the Minister of Education's decision to abolish the teaching of Religious Knowledge which he announced just now. I believe this is a correct decision. However, while the teaching of Religious Knowledge is being abolished, Confucian Ethics, as an innocent by-stander, unfortunately, has to face the chopping board and be abolished as well. Few years ago, we spent a lot of time and effort, in developing the subject. We even went to the extent of going abroad to invite experts such as Tu Wei-Ming, Yu Ying-Shih, etc. to help us draw up a conceptual framework for the syllabus for Confucian Ethics. This syllabus is used for just a few years and it has to be abolished. In fact, as my colleagues have already pointed out, Confucianism is not a religion. What it emphasizes is human relationship, the relationship between man and society, and the relationship between man and the nation. It does not involve the relationship between man and God. It is not a religious belief and is not in conflict with any other religion. The circumstances here have changed. But, the various adverse effects on our society brought about by religious revival over the past few years have nothing to do with the teaching of Confucian Ethics.”
“In his conclusion, he said that the teaching of Religious Knowledge in schools was appropriate, otherwise many of our students would have no knowledge of the major religions in the world and he asked whether this was what we wanted for our future generation. His exact works (in English) were, "Is this something that we want for future generation?". Yet, just a few years later, the Ministry of Education has now decided to abolish the teaching of Religious Knowledge. Over the past few years, circumstances have changed. Religions in our Republic have undergone some revival. Our Constitution provides for freedom of religion for our people. The Government has adopted a fairly neutral stand as far as religions are concerned. However, in a multi-religious society, if any of the religions is to develop too rapidly, it would naturally result in reactions or response from the other religious groups in self-defence. Some over-zealous or even fanatical preachers may forsake the basic principle of inter-religious tolerance and neglect the importance of inter-religious peaceful co-existence. In order to further their objectives of preaching their religions, they will not hesitate to run down the other religions and beliefs, and criticize other people's traditional customs and practices. Such development will result in more friction among the religious bodies in our society. It would also aggravate the conflicts and problems among members of a family because of different religious beliefs. We have often heard that in a family, many problems arose at their wedding ceremonies or funeral rites because of different religious beliefs.”
“First, I pointed out then, we should emphasise the mutual respect and tolerance among the various religious groups, and such tolerance should be extended to cover the traditions and customs of the various communities. Among the Chinese, there are many who are polytheistic. They worship not only the deities but also their ancestors. They also believe in geomancy. At that time, I asked whether the students who studied Religious Knowledge would tolerate all these. Would the Christians say these are heretical beliefs and superstitions? Would the non-Christian Chinese feel that the Christian are devoid of feeling for their ancestors and are forsaking their roots? If we were not careful, Religious Knowledge would have some disintegrating effect on the cohesiveness in our society. Unfortunately, what I said at that time turns out to be true. Secondly, I was also concerned that some religious fanatics would make use of the teaching of Religious Knowledge to preach their religious beliefs and to attack the other religions. The Ministry of Education then announced that a monitor unit would oversee the teaching of Religious Knowledge. I was doubtful, even at that time, that the unit would be able to supervise 140 schools in the teaching of Religious Knowledge. I believe the Member for Moulmein also expressed his worry on this matter at the same sitting. At that time, the Minister of State, Dr Tay Eng Soon, replied that the Government would take very stern action against those who made use of Religion and religious issues to disintegrate our society and create conflicts therein.”
“Mr Speaker, Sir, 10 years ago I participated in the work of the Committee on Moral Education which was chaired by the then Minister for Culture, Mr Ong Teng Cheong who is now the Second Deputy Prime Minister. I remember that one of the main recommendations of the Committee was to replace the "Education for Living" then taught in the primary schools and the then Civics subject in the secondary schools by a Moral Education course. The Committee also recommended that the curriculum of the Moral Education course should entail the three following points: First, personal behaviour, such as good habits, honesty, filial piety etc.; secondly, Social Responsibility such as civic consciousness, law-abiding, cherish one's own cultural heritage and respect other people's cultural heritage etc.; and Thirdly, Loyalty to the country such as patriotism, upholding democracy and justice, etc. All the three points are still valid in today's context. At that time, the Committee on Moral Education felt that the study and learning of Religious Knowledge could reinforce the teaching of moral values and, hence, it suggested to the Ministry of Education to review its policy so as to allow the mission schools greater flexibility in the teaching of Religious Knowledge and implement their own religious instruction programmes. In principle, I support the teaching of Religious Knowledge in schools as an extension to the moral education programme. However, during the Budget Debate in March 1982, when I spoke on the teaching of Religious Knowledge in schools, I raised a few problems for the Ministry of Education to consider when it implements its policy to teach Religious Knowledge in school.”
“Sir, two supplementary questions. First, would foreign ownership be allowed and, if so, would there be a maximum on the percentage? The second question is: who will appoint the directors, and who will safeguard the accumulated reserves and assets of this proposed utilities company? BG Lee Hsien Loong: Mr Speaker, Sir, these are all issues which will have to be resolved before we proceed to privatize the company. I think that is one reason why we want to take some time.”
“Sir, I just want to raise one point. A number of incentives and assistance packages have been given to SMEs. Up to 1988 the total amount of grants and subsidized loans was $1.38 billion. The question is, whether the Government has done enough for SMEs? The second question is whether there are any indicators of performance or measures of effectiveness of these grants, loans and assistance schemes?”
“Furthermore, I agree with Mr Chng Hee Kok that there should also be a better coordination and regular review of policy measures which have claims on our scarce resources - land and labour. We must bear in mind that at any given time, the supplies of these scarce resources are fixed. Any increase in the demand for these scarce resources by the public sector would necessarily be at the expense of the private sector.”
“It is a highly technical subject and normally I spend one hour lecture to elaborate on this subject. But here because of time constraints, I will simply put it this way. Externalities refer to the external effects generated by an economic activity or policy on other economic agents but for which no price is paid. A classical example is pollution. But let me relate externality concepts to land and labour. The inflow of foreign workers has generated negative external effects, but employers of foreign workers would not have taken these social costs into account, if not for the foreign workers levy. Foreign workers levy therefore is not just a measure to regulate the inflow of foreign workers, the foreign workers levy could also be regarded as a measure to make these employers to internalize the negative externality. However, externalities could be positive or beneficial. For example, when Government develops an efficient economic infrastructure, it benefits the whole economy in general, and increases land value in particular. To the extent that beneficial externalities are not taken into account, say, in the construction of Government offices, hospitals, schools, expressways or MRT lines, there would be hidden costs and the subsidies to these projects would be understated. Failure to internalize externalities, either positive or negative externalities, could lead to distortions in our price system, and worse, misallocation of scarce resources. Hence, there should be a more realistic assessment of any policy proposal in terms of its social and economic benefits and social and economic costs.”
“Sir, last year, our economic growth rate was 11%, out of which 2.8% was attributed to foreign labour. In other words, without foreign workers, we could not have achieved such a high growth rate. However, the inflow of foreign workers has a high social cost. So two questions come to mind: (1) Are we prepared to live with a slower economic growth so as to avoid the social cost? Or are we prepared to press on with more rapid economic growth and live with a higher social cost? There is a trade-off between economic and social objectives. (2) Are there constraints to our long term economic growth? Sir, our land area is fixed and our local supply of labour could only increase slowly. These problems are different from the problems of small domestic market size. Small domestic market size imposes limits on the demand side. Scarce resources impose limits from the supply side. We have overcome the demand side limits by exporting our goods and services to the world. The world is our market. Do we have similar long term solutions to the supply-side constraints as imposed by our scarce resources? To some extent, these resource constraints could be overcome by making more intensive use and more efficient use of these resources, but there are problems in these areas also. For example, if we increase the female labour force participation rate, we will also incur social cost. Another example is if we make more intensive use of our land, it will mean higher intensity and lowering of our living standard. One solution could be to build up or promote our local MNCs, as suggested by Mr Chew Heng Ching and a few days ago, by Dr Hong Hai. Sir, another issue I would like to raise is the question of "externalities".”
“On the other hand, with rapid economic progress and ensuing import- ance of the Asia-Pacific area, the mother tongue has not only the function of transmission of traditional culture, its economic value has become increasingly important. Therefore, at our secondary school stage, we should allow more students with language talent to choose to study higher level of language, whether English or mother tongue, in order to cultivate more language talents for our country. We should start now. Otherwise, it will be too late. In the book of Zhong Yong (The Golden Mean), it is stated that "a task well prepared at head will succeed, if not will fail.... A cause prepared in advance, there will be no regret." If we want to preserve our traditional culture and values, now is the time to work hard for it, before it is too late, even to regret it once again in future.”
“Regarding teaching methods, more uses should be made up of pictures, diagrams, video tapes, cartoons, plays, and so on, to rouse students' interest and not let the teaching contents and methods be constrained by the prescribed list of characters and vocabulary. If we have to follow the list rigidly, a nursery rhyme like "Yao Yao Yao, Yao Da Wuai Poh Chia" will take primary pupils three long years to learn all the characters. It will be too regrettable. The third suggestion is the creation of traditional Chinese school atmosphere and environment, so that primary students besides acquiring knowledge at school will be able to learn how to behave properly and how to deal with others. They learn to be orderly, respectful to teachers and elders, to speak and talk gracefully and be kind and friendly. While the teachers should set examples for the students, the standard of conduct of the school children can also be guided by such daily courtesy rituals as before and after a class when the teacher comes into or leaves the classroom, the whole class will stand up, bow and sit down. Also through non-examination subjects and extra curricular activities, primary students' contact with mother tongue can be increased. Finally, I should emphasize that the functions of bilingualism need not be too polarised or bisected. We should be clear that English cannot be deemed to be neutral culturally, because EL not only introduces Science and technology and economic knowledge, it also transmits foreign thoughts and values which speed up the westernization process of our society.”
“Just now, what the Education Minister had announced and what his Minister of State had said about core values were encouraging. These are concrete and positive steps. Here, I would like to give my views on three points on the strengthening of mother tongue education as the basis for the inculcation and conveying of traditional values which is the pressing task for the moment, especially at primary school stage. The first is to set right the upside down pyramid. This means it is lopsided to have only four primary schools and nine secondary schools teaching Chinese as the first language. It is not logical. We should try as soon as possible to set the pyramid upright, that is, Chinese should be taught as a first language in more primary schools. At the moment, the reverted pyramid is not entirely put right. It is now more like a cylinder, as the Minister has announced just now that the number of primary schools teaching Chinese as the first language will increase from 4 to 10 and there are 9 secondary teaching CL1. This is the first step towards rectification. The second point or suggestion is that we should use more flexible and lively teaching materials and methods to teach mother tongue which should be used as a means to convey the traditional values and not treat CL just as a language to teach. Teaching materials can be culled from details of daily living and from philosophies of life and major maxims. We can have resort to the various history events, legends, biographies, folklores, poems and novels, and so on, to inculcate values, to formulate standard of behaviour and the right attitude to deal with the world.”
“Mr Chairman, I would like to talk about the bilingual policy. At the beginning of March when Prime Minister Lee was interviewed by Taiwan journalists, he said that if he had the opportunity to return to 1965 or 1970, then he would like to preserve all the Chinese primary schools and increase the English subject as second language and encourage all the parents to send their children to Chinese schools. In fact, it is not too late to amend this problem. ( ) This responsibility has now fallen on the shoulders of the second generation leaders. I remember that in 1987 when Parliament was debating on bilingual policy, I had raised similar questions asking what practical measures the Ministry of Education had taken to ensure the standard of Chinese is maintained and there would be adequate supply of Chinese teachers, journalists, editors hereafter. But the answers given were the trite talks such as "the aims and principles of bilingual examinations and so on, the usual stuff, evading the question. Outside the Parliament, in April in the same year, various Chinese newspapers as well as their readers raised various questions in the press giving many views and suggestions on Chinese mother tongue education and bilingual policy. In the end, the Ministry of Education had to issue a statement in early May saying that "the trend of language development was due to the choice of the parents. If the parents wanted Chinese mother tongue to first language and English as second language, the MOE would try to accommodate their wishes." This is the kind of tai chi play, something like a repartee out of pique. That is not a positive attitude in solving a question. I criticize but I also praise. I think I am fair.”
“May I suggest to the Minister that instead of transferring the accumulated surplus on an ad hoc and arbitrary basis, he should consider taxing the surplus of revenue-generating statutory boards on a regular basis. The company tax rate could apply to these statutory boards. The Minister said in his statement that "we should begin now to put in place a framework of indirect taxes". I believe he meant laying the water pipes now so that the tap could be turned on when this source of revenue is needed. But equally important is the need to prepare the ground for the proposed consumption tax. MPs, union leaders and community leaders could help in this aspect. However, MPs must be convinced that, on balance, such a tax proposal is desirable or at least acceptable. If many MPs remain unconvinced, how could we persuade our community leaders, workers and constituents something that we do not believe in? One difficulty the Minister may face is that many people believe that the Government has accumulated so much money that consumption tax is not necessary. I wish to urge the Minister to present consumption tax as an alternative means of raising tax revenue and not as an additional device for raising revenue. In this context, may I point out that non-tax revenue has been a major source of Government revenue. In 1987, non-tax revenue accounted for 47.2% of total Government revenue. In 1988, it went up to 50.9%. Major parts of the non-tax revenue come from investment income and interest from loans. Should we not ask ourselves one question: if the Government has not accumulated large reserves and surpluses, how could the Government generate such substantial non-tax revenue and hence reduce the need to introduce consumption tax immediately?”
“I believe the proposed consumption tax would be more acceptable if this tax proposal is accompanied by the following measures: (a) Exemption of food items from consumption tax. I single out food items because they account for a very high percentage of household expenditure of poorer families. A study by my NUS colleagues shows that for a 4-person household, food items accounted for 49.6% of total expenditure for a household with $500-$750 to spend per month. This percentage spent on food declined to 29.9% for a household with a total expenditure of between $2,500 and $3,000 per month. (b) Increase in personal income tax relief, the same point made by the Member for Tiong Bahru GRC, Mr Chng Hee Kok. If there is an increase in personal income tax relief, taxpayers in the lower income group could be exempted from income tax. In his TV discussion with journalists and a business executive telecast last week, the Minister gave very interesting figures. He said that if personal relief is raised by $1,000, the tax base would be reduced by 7% or 60,000 taxpayers. I believe most of these 60,000 taxpayers are from the lower income bracket. And their individual contributions to income tax revenue are nominal. Alternatively, the Minister could consider giving a tax rebate to these taxpayers from the lower income group so as to alleviate their tax burden. (c) The Minister should explore other avenues of tax and non-tax revenues before consumption tax is introduced. In 1988, the Government had an overall surplus of $3.85 billion. May I point out that part of this surplus was attributable to the one-time transfer of $1.5 billion from the accumulated reserves of four statutory boards.”
“Moreover, tax revenue from this source is more stable because private consumption expenditure fluctuates much less than GDP or national income. Thirdly, a general consumption tax is a means of broadening the tax base. Our income tax base remains narrow. It was estimated that in 1983 only 47% of the resident labour force paid personal income tax. It is costly and difficult to tax many self-employed persons. A general consumption tax will bring these people into the tax net. The tax burden will be shared by more taxpayers. Also, part of the capital gains which are used for consumption would also be taxed. However, as many Members have pointed out, consumption tax has its shortcomings. One major shortcoming is its regressiveness, a point which I raised sometime ago. Whether you earn $500 per month or $21,000 per month, you pay the same tax rate. The tax burden in relation to income is much heavier for the lower income group. So there should be exemptions for essential consumer goods. Another shortcoming is that consumption tax itself is inflationary. It raises the general price level and the cost of living. To the extent that these increases lead to higher cost of production and higher cost of operation, our export competitiveness would also be eroded. Thirdly, certain sectors such as the retail trade and tourism will be adversely affected. More Singaporeans may choose to do shopping and make more purchases in Johor Baru, further affecting our retail trade. Finally, the Government has to install an administrative machinery to collect consumption tax. Manpower and other costs of the machinery cannot be ignored.”
“Mr Speaker, Sir, I rise to support the motion standing in the name of the Minister for Finance. I wish to focus only on one aspect of the Budget Statement, ie, consumption tax. I hope I can present a more balanced view on this issue. In 1986, the Economic Committee recommended that the "Government should shift from direct to indirect taxes as its main source of revenue". The Minister for Finance has accepted the recommendation, but he has been cautious about its implementation. I agree with this approach. At the outset, I should point out that we already have selective sales tax on goods and services. These include customs and excise duties, motor vehicle taxes, stamp duties, entertainment and betting duties, and taxes on PUB and telephone bills. So what we are talking about is whether the Government should introduce a comprehensive consumption tax, perhaps in the form of retail sales tax or in the form of value added tax (VAT). Further, we are not talking about a complete shift from direct to indirect taxes, but a better balance between these two sources of tax revenues. As a taxation principle, there are sound arguments for introducing a comprehensive indirect tax on consumption. Firstly, consumption tax does not undermine incentive to work, incentive to invest or stifle business initiative, as in the case of direct taxes. Secondly, consumption tax is a high yield tax. Consumption tax is able to generate substantial tax revenues with relatively low tax rates. For example, in 1988, private consumption expenditure was $23.14 billion. Without any exemptions, a 3% general sales tax would yield around $694 million tax revenue, which is higher than the total tax revenue actually collected from both direct and indirect taxes in 1988.”
“Repeat your point about silence. I did not say anything about silence.”
“Few points of clarification, Sir. The Minister should fight for the collection from levy to be channelled to SDF. Otherwise, the Minister for Finance will swallow up the whole thing. The second point is on factor intensity, I do not have the figures but I have got the impression that the approval rate tends to discriminate against the more labour-intensive industry, even they are export-oriented, for example, garment and textile industry. That is the point I am making. So could we use the factor intensity criterion in addition to export-orientation criterion? The third point is that I have asked the question, whether the bureaucracy is able to assess the changing demand condition quite accurately or in that regard, should we consult unions and private sector on this matter? The Chairman: Order. Moment of Interruption. Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.”
“On the other hand, quota can restrict the number of foreign workers directly and meet the long-term objective more effectively. But quota may distort wage structure. The Government has opted to do both, namely, implementing an import duty plus quota system. This has frustrated many employers who have complained that not only have they got to pay a higher levy but also they cannot get enough foreign workers when these workers are most needed. I suggest to the Minister that we should rationalize our work permit policy to meet both the short-term and long-term objectives, and to balance the interests of labour and employers. For example, we should ask ourselves several questions, such as, (1) should the levy be in percentage terms rather than in fixed sum; (2) should we have a tender system and leave the amount of levy to be determined by market forces, as suggested by the Member for Jalan Kayu; and (3) should we siphon off the collection from the foreign workers levy to SDF for training of our workers? Another question is: should the Ministry take into account the factor intensity of industries and activities in the allocation of workers in addition to the degree of export orientation? And the final question is whether the bureaucracy is able to assess the changing economic conditions in the labour market accurately and make the necessary adjustments to the amount of foreign workers levy and the rate of approval of the applications for work permit holders. Should the private sector and labour unions be consulted on these matters?”
“Thirdly, as most foreign workers are earning less than $600 a month, they tend to depress wages for our unskilled workers. As a small-sized economy with 1.15 million employed persons, we need to regulate the inflow of foreign workers. Otherwise, we could be easily swamped. The Government has interfered with the supply of work permit holders in three ways: (1) by regulating its price mechanism through a levy, it is similar to an import duty; (2) by controlling the overall quantity, it is similar to a quota; and (3) by interfering with its allocation, only certain sectors such as manufacturing, construction, hotel and domestic service, can apply for work permit holders. Sir, I agree that in the long run we should reduce our dependence on foreign workers. This should be our long-term objective. We should try to increase our domestic supply of workers and improve our labour productivity. I also agree with the Minister that "we should be selective in what we eat" but economic restructuring takes time. So in the short run we still have to rely on foreign workers. I support the need to control the supply of foreign workers, as I have just mentioned. The question is which control mechanism is more effective in meeting our long-term objective and which control mechanism is more responsive to market forces and changing economic conditions? The levy can be adjusted more easily to smooth out fluctuations in demand for labour and allow the employer to decide for himself whether to employ an additional foreign worker based on the marginal cost (inclusive of levy) and marginal revenue of this particular worker. The levy also helps to internalize the external diseconomies, namely, employers who rely on foreign workers would have to pay for the social costs.”
“Sir, we have relied on borrowed capital heavily. We have also depended on foreign labour substantially. In 1980, 7.4% of the employed persons were foreign workers. The percentage has increased to 9.2% in 1985. These foreign workers meet our increasing demand for labour during our economic booms so as to ease the constraints of labour shortage. On the other hand, foreign workers could be repatriated during recessions so as to reduce unemployment rate among Singaporean workers and this has happened in the 1974-75 recession and the recent 1985-86 recession. Hence, these foreign workers serve as a safety valve of our labour market. The supply of foreign workers has given us the advantage of flexibility on the quantity side and, to some extent, reduce the necessity for wages to adjust. Moreover, Singaporeans are reluctant to take up certain unpleasant jobs, such as construction work and domestic service. Without foreign workers, employers will have to offer much higher wages to attract Singaporeans to do these jobs. However, the presence of a large number of foreign workers has created a number of problems. Firstly, social costs. It is worthy for us to take note that West Germany today is still confronted with problems associated with a large community of foreign workers and their family members. Japan, on the other hand, has used machines, computers, robots to solve their labour shortage problem. Perhaps we should learn from Japan in this regard. If I have my way, Sir, I prefer to import robots rather than foreign workers. At least, robots do not fall in love with Singapore workers. Secondly, if employers can freely employ foreign workers, they will not have the incentive to mechanize, to computerize, to upgrade, and to restructure their operations.”
“Sir, since I have the covered the points on Friday, I am not going to move the amendment. The sum of $102,085,900 for Head V ordered to stand part of the Main Esimates. The sum of $565,779,000 for Head V ordered to stand part of the Development Estimates. Head R -”
“Whatever you want to term it. So I am urging the Ministry to take up with the Ministry of Health to look into this matter. Mr Eugene Yap Giau Cheng: I must admit that this is the first time that I have heard of this particular proposal. We will certainly look into it and then come up with some kind of idea and proposal.”
“Sir, a resort hospital is not really a hospital. When people go to a resort hospital, they are more like tourists, and they have medical check ups and so on. So it is under the purview of both the Ministry of Trade and Industry as well as the Ministry of Health.”
“There are two other points which the Senior Parliamentary Secretary has not answered. One is about our cooperation or promotion of tourism with our Asean countries and the other point is about whether we are prepared to develop resort hospitals.”
“Are we prepared to build, say, resort hospitals? Finally, Sir, may I raise two problems which probably are very close to your heart. Since you are sitting there, you cannot speak. One is counterfeiting which I raised last year. Second is touting which the Member for Cairnhill raised on 13th March 1988. Selling of counterfeit goods such as fake watches, leather goods, perfumes, etc, to tourists have given us a bad name. Other countries, eg, Taiwan, Thailand, Hong Kong, have taken stern action against these culprits. But Singapore seems to have done very little about this and the penalties are rather weak. I believe the penalty is about $2,000 which is very little as compared to the profits that they can get from counterfeiting. With the wisdom of hindsight, probably we should have done something on counterfeiting rather than amending our copyright laws! The Member for Cairnhill on 13th March in a Question for oral answer complained about touting in tourism. This has also given us a bad name. These people create problems, not only they harass the tourists but also create problems to hotel guests and management of hotels. The Minister for Home Affairs has given a very lengthy reply on this and let me quote his last sentence: 'We have to review the totality of the measure before we conclude. The solution lies in further deterrent fines and other penalties.' It looks like we have two joint projects between the two Ministries, the Ministries of Trade and Industry and Home Affairs. Could the Minister comment on this?”
“Sir, the third issue I would like to raise is tourism. Our tourism sector performed well last year. The number of tourist arrivals grew by 15% to about 3.7 million. This is the first time, I believe, that we have a double-digit growth since 1981. This success was partly due to exogenous factors, eg, the international tourism grew by about 4% last year and partly due to the appreciation of the Japanese Yen, major European currencies and Taiwanese Sin Tai Bi. Partly, I would like to pay tribute to the STPB for their promotional efforts. Here, I want to raise a less controversial issue. I simply would like to ask the Minister for an update on the progress made on the $1 billion Tourism Product Development Plan, including the Sentosa Development Project which he promised to tell us before the lunch break. And also the upgrading of Raffles Hotel which I raised last year. My second question concerns the cooperation with other ASEAN countries in tourism. The Minister has elaborated at great length about our cooperation with Johor. Singapore has served as a gateway or an entry point for visitors to the ASEAN region. However, as our neighbouring countries start to develop their own tourist infrastructure and attractions, I wonder how fast our competitive advantages in terms of accommodation, communications, shopping, etc, have become eroded and what should be our response to this. Another point, Sir, we have a competitive advantage as a convention and exhibition centre as well as in medical, dental and other professional services. We should make use of this competitive advantage in promoting Singapore as a convention and exhibition centre and also as a medical and professional services centre, so as to attract high yield tourists. How successful are we in this area?”
“We should encourage. BG Lee Hsien Loong: We can encourage. Is it easy for them to merge? I am not sure. Because many of them are private, small, family businesses, and each family has one head. No two heads can easily get together and set up one management team. That is the difficulty. But the economics of this is, unless you become big, unless you do have critical mass, you will not survive as a small retail shopkeeper in Singapore. It is just not economically possible to do what people used to do. Buy a mixed array of all kinds of things, stack them all over your shop, without quite knowing which thing is where, spilling onto the five-foot way. And when your customer comes and buys and asks you for something, you put your finger in your mouth and calculate what you think is the right price and then give him a 30% discount. That approach towards doing business can no longer satisfy even the needs of a family 30 years ago, much less their needs today. Because consumers no longer are attracted to such shops. They want to go to places where they have fresh stocks, competitive prices, big selection, quick run-through, check out, and out with their brown paper bags, everything they need. Unless our shops can transform themselves like that, they will have increasing difficulty. I do not think the Member will disagree with that. How do we get them to transform themselves? Some can. The younger ones can. The older ones, I think with greater difficulty. But if they want to survive, they will have to try.”
“Get together, get a critical mass, so you can have one management team who can advise you, who can purchase for you, who can run your inventories for you, who can lower your overhead costs. Can we force people to merge? It is very hard. Do you want me to force people to merge? The Member does not.”
“What I am saying, in fact, is that in our master plan on SMEs whether we could include a very objective cost - benefit analysis of foreign competition in the retail trade. I am quite balanced on this. I do not take sides. The third point is that the Minister has asked Members in this House to urge the small retailers to help themselves. I believe the Minister himself has done so. The Finance Minister has done so and I have also done so. I have spoken at the Econ-Minimart's function. When I spoke at that function, I wondered how many people would benefit. I believe there are only about 110 stores under Econ-Mini Mart. What about the other over 3,000 retailers? What are we going to do about them? Finally, I did not suggest that we should have a negative tax scheme. I simply raised a point which I believe was raised in the Economic Committee's Report, whether the losses of a subsidiary can be written off in the tax returns of the parent company. BG Lee Hsien Loong: I take the Member's points. I think I only need to respond to two of them. First, how do you get a loan? What are the criteria? Well, if you go to a bank and the bank thinks it is bankable, then we will support it. It is up to the bank to decide, which means that it must be a credit-worthy risk. It must be for a good purpose, either investment in machinery, fixed capital, or even for operating funds. If the bank thinks it is a good risk, then we will disburse the funds. Similarly, on merger. I would agree that we have asked companies to merge in the name of efficiency, including bus companies. And I would even ask retail shops and provision shops to merge in the name of efficiency.”
“Sir, before I move on to the other issues, let me clarify a few points. Firstly, I did not say that nothing has happened between last year and this year. In fact, the various schemes mentioned by the Minister are all in the Economic Survey 1987, pages 26-30. I raised this because I wanted to give the Minister an opportunity to elaborate on the various schemes. Because I know many people do not read the Economic Survey in detail. For example, I asked him what were the criteria for loans under the Small Industries Finance Scheme. Secondly, on the retail trade sector, my GPC Chairman has got into a debate with the Minister regarding the benefit of an open door policy. I do believe in market forces. I do believe in the benefit of competition. But what I dislike is that our Government always uses double standards. When we want to merge companies and we always emphasize the benefits of economies of scale. When we do not want to support them, we talk about the benefits of competition. For example, we have merged bus companies. We have merged newspaper companies on the ground that it will create economies of scale. On competition, I agree that there are some benefits. But to some extent, I think we have to pay attention to the costs which are created in terms of what I mentioned just now and whether our small guy will survive this competition. Our Government has interfered in a big way with the factor markets. For example, in the labour market, we have tried to protect our local Singaporean workers by putting a levy and quantitative restrictions on foreign workers. I am asking whether we can, to some extent in the capital market, channel capital to a certain sector, say, more to manufacturing or service sector and leave the retail trade more to our small guys?”
“The best way to change our tax system to encourage enterprise is to bring down the corporate and individual tax rates as low as possible so that what a person earns he keeps. Then there will be an incentive to earn. We moved our rate to 33% two years ago. It was a big jump downwards. Since then, many other countries have moved their rates down. The Americans have come down to 33% too. The British have just brought theirs down to 40%. Let us look at the situation in a few years' time. Provided the Exchequer can afford it and the need is there, we may move it again. But I would prefer a generalized flat tax regime rather than individual special gimmicks to encourage particular enterprises. Secondly, the Member for Cairnhill asked what we are doing about the shortage of workers and I think this is properly a question which should be directed to the Minister for Labour. From MTI's point of view, hiring foreign workers is not really the solution to the small enterprises' problems. The reason they need to hire foreign workers is that they are paying less and, therefore, Singaporeans do not want to work in Singapore-owned companies. They prefer to work with the multi-nationals who pay better. And the reason the multi-nationals pay better is that they are more productive, they earn more, they can afford to pay more. Our solution, therefore, for local companies is to upgrade their productivity, improve their performance, be able to pay more, and there will be far fewer difficulties getting workers. Sir, I think I have dealt with most of the points raised.”
“They formed seven working groups which comprised both civil servants as well as private sector people to examine all the areas - finance, technology, business development, productivity, human resource management. I think this was the master plan which the Member for Cairnhill was referring to. It is still being worked on. The working groups will present their conclusions at the SME development plan workshop in May this year. At the workshop we plan to collect feedback from private sector organizations, local chambers of commerce and industry, industrial and trade associations, multi-nationals, consultancy firms and so on. We need their full support and commitment because the Government cannot do it alone. If we could, we would not need private entrepreneurs. But we need private sector organizations also to put in their part and help enterprise to grow. I am confident that at the workshop we will receive valuable feedback. It will be incorporated into a development plan, and that development will take us even further on the road to promoting entrepreneurship. Now if I may take just a couple of the points raised by the Members. The Member for Leng Kee mentioned the tax structure being asymmetrical and being a disincentive to enterprise. In a way it is asymmetrical. If you make money, you pay tax; if you don't make money, you don't pay tax. But I do not know whether the Member was suggesting that if you do not make money, the Government should pay you some money back. I trust he does not. Some countries do that. But then there are a lot of companies which lose money and remain happily unprofitable for years on end because they found the way to tap it. Where there are distortions in the tax system, we will iron them away.”
“I agree that it is something worthwhile in the long run. The question is: what more do we need? There are some ideas in the article. One, shrink the size of the public sector, including the Government-owned companies. Privatize them, let the private individuals, management teams take over, make them grow. We are doing that. It will take some years. I think the Minister for Finance has explained our policy and reaffirmed it. But our problem there is not how quickly we are willing to privatize. It is how quickly the individuals in the private sector, the entrepreneurs, can come forth and be ready to take it over. If we had enough entrepreneurs in the private sector, we could privatize all our Government-linked companies almost overnight. But who is going to take them over and run them, who will provide the guiding genius to make them grow even bigger, to re-invest and move into new areas of business? There is nobody today. But we will privatize and that commitment on our part should be inducement enough for teams to emerge in the private sector. Dr Koh and Dr Lee, have also suggested that the Government should solicit ideas from the private sector on how to assist local entrepreneurs. I think that is a good point. We are doing that. Last year in February, the Small Enterprise Bureau launched a multi-agency effort to formulate the development plan for the small and medium enterprises. It is meant not as a Government effort but as a combined public and private sector effort to identify the roles for SMEs in the Singapore economy, the needs and areas of development, the strategies which need to be adopted.”
“First of all, we would lose a lot of votes because many people are consumers in Singapore. Secondly, tourists will no longer come to shop here. Overall, the economy will be poorer off. We have got to balance the interests. We have to help the retailers, which we are doing, and will do more of. At the same time, we must make sure that the consumer's interests are not hurt. One way to help the retailers is to develop entrepreneurship. The Member for Leng Kee mentioned an article by two academics - Dr Koh Ai Tee and Dr Lee (Tsao) Yuan printed in the Straits Times on 9th March. I think all MPs interested in this subject should read it. The two academics have done MTI's job for us. They have explained the problem very clearly. We have relatively fewer entrepreneurs than Taiwan or Korea or Hong Kong because, first, our talent pool is small. There are just fewer Singaporeans from whom to generate people who have that spark to be entrepreneurs. Secondly, what they call the risk reward trade-off. It is not attractive enough. To become an entrepreneur. In other words, it is too risky and not rewarding enough. It is too safe in Singapore so that being an entrepreneur does not yield any significant advantage. Better be a salaried employee in an MNC or be a Government servant in the public sector or join an established local company. So they conclude to promote entrepreneurship, either increase the expected reward or lower the risks, or do both. Best of all, no risk, great reward. But if you go to that extreme, you do not need an entrepreneur - because the whole essence of entrepreneurship is that you take risks and earn the reward! But they want something done and I sympathize with them and with the MPs who want something done.”
“The SME Division has clients who are local retailers, members of NTUC Fairprice, members of the Singapore Provision Shops Friendly Association, Econ minimart, other retail groupings. They have quite a number of schemes going. They receive financing from SIFS. Some are computerizing their operations. They managed to get a technical assistance loan with help from EDB and NCB. Some are attending training courses funded by the SDF. Others have gone on a study trip overseas, funded by bysiness development schemes to look at the experience of Japan and Taiwan, and having come back they have set up their own bulk purchasing and common advertising network. They have moved, and those who have moved have done well, to the best of our knowledge, which means there is hope. Competition - I have always thought competition is a good thing because competition is the way to spur innovation and progress. If there is no competition, the pressure, the goad to move is not there. Change slows down and stagnation sets in. The Government is not really in a position to decide how many local retailers we should have in Singapore or, for that matter, what proportion of the retail trade should be local and what proportion should be foreign. That is for the market to decide. For us to determine the number independent of the market is really to protect the retail sector. We can do that but we would have to pay a price. Singaporeans would have to pay a price, not the Government, but Singaporeans, consumers. The price is higher consumer prices, probably poorer service, as is the case in Japan and Taiwan where the retail sector is protected, and retail prices are several times higher than they are in Singapore. It would do us no good.”
“I did. BG Lee Hsien Loong: --- which was entitled "Small retailers pessimistic about future". This was a study by the NUS School of Management which concluded that small retailers are cautious, conservative and pessimistic. They are slow to change even though they recognize the need for new business methods. They are labour-intensive, low on productivity but still when it comes to training people they are only willing to train their staff in customer services and salesmanship, and give low priority to the core skills - training in merchandizing, display, purchasing,stock controls and store management. In other words, they have gone for PR training instead of management and operations training. It is not for lack of courses because SRMA (Singapore Retail Merchants Association) has a training centre running 10 different courses. But the participants are from the big companies. The small ones do not come. It all sounds so discouraging, does it not? So what do we do? More to the point, what does the Government do? The Government can help those who help themselves. If some retailers see the problem but are not willing to pull themselves up, I am not sure the Government should force them to do so. We can extend the hand. Yes, we will not give up hope. Explain, encourage, persuade and - almost - force them to grasp the hand which has been extended. I have made many speeches to this effect. If some other MPs would like to join me in doing so, MTI would be most grateful. But I do not think it is completely hopeless because I am not sure how representative the NUS survey was of the retail sector. Certainly we know of some companies which are doing well.”
“Privatization may not create new wealth and could be a mere transfer of ownership unless the private entrepreneurs pump in more capital, expand the activities of these enterprises which they take over and raise their efficiency. Moreover, our domestic market is limited. Local private entrepreneurs should therefore seek business opportunities overseas. Government have assisted in providing market development and technical assistance and, as the Minister for Finance has just announced in his Budget Statement this year, tax incentives for deduction of losses in overseas investment. But the Government should also consider taking a more active role in overseas investment. Could the Government divert the fund from the resources and fund released from privatization to set up joint ventures with local private entrepreneurs in new markets, especially in China, India and Southeast Asia? We have comparative advantages in building and managing ports, airports and other infrastructure, town planning, construction, hotels and tourist-related projects. We should take advantage of these, whether it is private or public sector. We have been called "Singapore Incorporated". Why do we not live up to the name? Finally, not only tax schemes should be modified to achieve a better balance between risk and reward in favour of business ventures. Tax schemes should also be adjusted to discriminate against unproductive and speculative activities in, for example, stock market, foreign exchange market and real estate and in favour of investment of plant, factories, machinery and equipment, which expand our productive capacity.”
“If our private sector is to become an engine of growth, we need to promote our local private entrepreneurs. As my colleague Dr Koh Ai Tee and Dr Lee (Tsao) Yuan, have written in an article published in the Straits Times on 9th March, the promotion of local entrepreneurship also brings about an additional benefit, that is, diversification of markets and products. Two separate studies by NUS economic students have rated difficulty of raising funds as the number one problem faced by our local enterprises and local entrepreneurs. The article by Dr Koh Ai Tee and Lee (Tsao) Yuan also mentioned that financial constraint is a very real one. So one way the Government can help to promote local private entrepreneurship is to increase the availability of capital for our local entrepreneurs. I note that the loans provided under the Small Industries Finance Scheme has increased to $296 million last year. This is a good start. But may I ask the Minister what are the criteria in approving these loans and whether these firms are mainly in the manufacturing sector or the service sector or other sectors and whether the sum of $296 million is sufficient. I noted that in 1987 the investment commitment was about $1.7 billion. These loans represented about 17% of the investment commitment. Coming to the question of privatization which was suggested as one of the ways the Government can help to promote local entrepreneurship, I endorse Government's effort to privatize our Government-linked companies (GLCs). Privatization of GLCs will create investment opportunities for our local entrepreneurs in our local market.”
“The second issue I would like to discuss is the local entrepreneurs. We are an enterprising people. We do have entrepreneurs in banking, trading, hotels and real estate. Our development in the past 20-odd years has relied more on foreign capital and public enterprises. Local private entrepreneurs have played a very limited role compared to their counter-parts in other NICs. Why is this so? Many people have given many reasons. For example, the Economic Committee has listed eight reasons. I am not going to repeat these eight reasons here. I simply want to summarize three or four basic reasons. (1) Crowding out effects by the public enterprises and NICs - Whether these crowding out effects are real or perceived. (2) Mentality and attitude of our people. We have the so-called "kia soo" mentality. We also have low tolerance for failures. Hence, most of our graduates and talents prefer to opt for secure and well paid jobs in the public sector and MNCs. (3) We have been too protective. We have provided too many safety nets as observed in the Economic Committee Report. One clear example is our Minister for Education. He is too worried that we will produce unemployed graduates when we increase our intake of university students. I wonder sometimes in the 1960's and 1970's how many former Nantah graduates have become entrepreneurs in Singapore and Malaysia as compared to the graduates from the University of Singapore during the same period. (4) Our tax structure and CPF scheme have also tilted the risk reward balance against risk-taking business ventures. The CPF contributions increase the opportunity cost of becoming an entrepreneur while the tax structure is uneven or asymmetrical between profit and loss.”
“Also, is it wise to reallocate labour from the manufacturing sector to these foreign departmental stores and chain stores, especially in view of our current labour shortage? May I suggest to the Minister that the SME (Small-Medium sized Enterprise) development plan should evaluate objectively the social and economic costs and benefits of foreign competition in the retail trade sector. The Master Plan should also recommend ways and means to reorganize the retail trade sector so as to meet the changing demand pattern as a need to raise efficiency of these sectors. Special assistance must be given to provision shops and other retail outlets, as it will be very difficult for these shops to upgrade on their own.”
“But one-third or 30% of the 3,758 provision shops had a turnover of less than $100,000 per year. In terms of employment, the 137 supermarkets and departmental stores employed about 10,500 persons whereas the nearly 4,000 provision shops employed about the same number, 10,223 persons. Moreover, most of the persons engaged in the provision shops are working proprietors and partners and their unpaid family members. Expectedly, these small retailers have a very low productivity and efficiency. The retail trade sector as a whole is facing three challenges: (a) foreign competition; (b) changing demand patterns and shopping habits, especially after the operation of the MRT; and (c) the need to upgrade and modernize their operations. On the question of foreign competition, the percentage share of foreign capital in the retail trade sector has increased from 13.8% in 1975 to 34% in 1983, quite a substantial increase. Last year, I asked the Minister whether we needed so many foreign departmental stores. I want to bring up this question again. His reply then was that our consumers and retailers stood to benefit. I agree with him to some extent. I might add that these foreign departmental stores help to attract tourists. However, we should also examine the social and economic costs of this so-called "open door policy" in the retail trade sector. What price should we pay for these benefits? Could our smaller retailers survive this competition, especially in view of the stagnant demand which I quoted just now and declining profit margin? I have done some calculations. Operating surplus to turnover ratio declined from about 7% in 1971 to 1.5% in 1985.”
“Sir, the first issue I would like to raise is on the retail trade sector. In 1985, the retail trade sector had a turnover of $9.46 billion and employed about 59,000 persons. These figures were lower than those in 1983. I quoted those figures in last year's debate. Could the Minister inform this House whether the sector's performance in 1987 was better? I do not have the figures because the latest Report on the Survey of Wholesale and Retail Trade, Restaurants and Hotels 1985 was released only in December 1987. May I ask the Minister whether this survey of the commerce sector could be carried out annually, just like in the case of industrial production? Sir, the retail trade sector is characterized by a dual market structure. On one hand, there were only about 100-plus relatively large firms. On the other hand, there were thousands of small independent shops and retail outlets. Let me quote some figures here. Sir, I do not intend to distribute a table in case I am accused of overdoing it. I must emphasize that the figures I am going to quote are from the survey. They are actual figures. They are not estimates for illustration purposes. This is the distinction I must state because this distinction is something that the Minister of State for Education could not understand. In 1985, there were only 137 relatively large supermarkets and departmental stores. But there were 3,758 general provision and sundry shops; 3,752 retailers selling textiles, apparels and personal effects; 1,577 selling furniture, furnishings and household equipments; and another 1,000 or so selling transport equipments. There is a great contrast between these two sub-sectors. For example, 82 out of the 137 supermarkets and departmental stores had an annual turnover of more than $5 million.”