Richard Hu Tsu Tau
Singapore
“Sir, I think it is eminently fair, because the proposal really is for the Government to spend money to give shares to Singapore citizens. Either you agree or you do not agree. Or, if you agree, perhaps you consider the amounts insufficient or too much.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The purpose of this Bill is to make provision in accordance with Articles 148(2) and 148C(2) of the Constitution for additional expenditure in excess of the provisions authorised by the Supply Act, 2001.”
“I think the Prime Minister and DPM Lee have already explained it will be based on income levels, with people living in flats as a proxy. So there is no political content in it. It depends on the income level, whether you have served national service or whether you are an elderly person.”
“I really do not understand. I know you are arguing on technicality for which I agree that you may have a point. But, nevertheless, because it is a proposal to share Singapore's surpluses with the population, the distribution is not something which you can argue against.”
“As I said, the estimates will be available around mid-October. I do not think, at this time, I want to give a specific date when the second package will be announced, but it will be done as soon as practicable. IN-PRINCIPLE AGREEMENT WITH MALAYSIA ON OUTSTANDING BILATERAL ISSUES (Assessment) 4.”
“Mr Speaker, Sir, when the $2.2 billion off-Budget package was announced in July this year, we said that the Government would do more to assist Singaporeans if the global economic situation worsened in the coming months.”
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“However, during periods of economic slowdown, we can accept a rise in the operating expenditure's share of GDP so as to avoid a degradation of basic public services and to support additional expenditure for early recruitment of teachers and other staff. Development expenditure Total development spending will amount to $13.9 billion, an increase of $1.2 billion from $12.7 billion in FY98. However, compared to FY97, the FY99 development budget is a hefty $5 billion or 50% more. In fact, Government has been increasing development spending over the last 5 years. Development spending has grown on average by about 30% each year since FY94. The FY99 development budget is about 3.5 times higher than development spending 5 years ago in FY94, when it amounted to only $4.0 billion. I should point out that the large sums allocated to development spending is not to pump-prime the economy because this would have limited effect as we are a small open economy. Instead, our aim is to invest in strategic development projects, especially those with long gestation periods, such as land reclamation and IT in education. These are investments which would reap benefits several years down the road. Against this backdrop, every sector of development spending has grown compared to FY97. The largest increase is spending on the social and community services sector, which has doubled from $3.1 billion in FY97 to $6.0 billion in FY99. In percentage terms, the social and community services sector is allocated the largest share of 43% of the development budget. The other major allocation goes to the economic and infrastructure development sector at 34%. Spending on education increased from $1.0 billion in FY97 to $1.7 billion in FY98, and to $2.2 billion in FY99. This is a 31% increase over FY98.”
“The other half of the increase is due to a central provision of $125 million kept by MOF to provide for new Government programmes which might arise in the course of the year. Due to the policy of wage restraint in the civil service, manpower cost will remain at $3 billion, despite providing for a net increase of 4,400 posts. The main increases are some 5,000 teaching posts and 400 posts for immigration and prison officers. This is partially offset by the deletion of some 900 posts in PWD, with its corporatisation from 1st April 1999. While running costs on the whole will rise by some $350 million to $14.0 billion, transfers will dip slightly by $50 million to $1.2 billion due largely to an extraordinary contribution of $79 million in FY98 to NTUC and ITE for the Skills Redevelopment Programme. Still, the level of transfers remained some 18% higher when compared to FY97. Subsidies to restructured hospitals take up about half of transfers, while a sum of $170 million is allocated to public housing subsidies such as subventions to town councils. Another $120 million is allocated to MCD for disbursement to community self-help groups, voluntary welfare organisations and needy individuals under various financial assistance schemes. As a share of GDP, operating expenditure will rise to 10.7%, up from 10.4% in FY98 and 9.7% in FY97. This is largely the result of slowing GDP growth, as operating expenditure has not risen substantially in absolute terms and is practically held at a standstill compared to FY98. It has been our policy to constrain operating expenditure to grow in tandem with, and no faster than GDP growth, in order to keep public sector expansion in check.”
“As security provides the basis for our nation's economic growth and prosperity, it is important that we maintain a strong defence capability. Defence spending will therefore continue at the FY98 level of $7.3 billion, accounting for 5.1% of GDP. As the future of Singapore will depend on the quality of our human resources, we will continue to invest more in education. For FY99, we have budgeted $5.7 billion for expenditure on education. Education's share of GDP has increased steadily from 3.0% in FY97, to 3.4% in FY98 and to just under 4.0% of GDP in FY99. Our medium-term target allocation for education is 4.0% of GDP. Spending by the Ministry of Manpower to promote manpower development has almost tripled from $58 million in FY97 to $170 million in FY98, and is allocated $150 million in FY99. In order to sustain growth against rising competition, our economy will have to constantly restructure towards higher value-added economic activities. The importance of upgrading and re-training our workers to ensure employability in an increasingly knowledge- based economy cannot be over emphasised. Overall, the social and community services sector is allocated the largest share of 39% of the budget, increasing its share over FY98, on account of higher spending on education and public housing. In the same order as last year, the security sector is next with 32% of the total budget, and economic and infrastructure development comes in third with 19%. Operating expenditure Operating expenditure is budgeted at $15.2 billion, a small increase of $300 million or 2% compared to FY98. Half of this increase is on account of a re-distribution of defence spending from development to operating expenditure.”
“The aim is to help businesses tide over this difficult period and to keep as many people employed as possible. While we grapple with the immediate problems of the economic slowdown, we must not lose sight of longer term challenges. After the region recovers, our competitors in Asia will emerge stronger and fitter if they undertake the economic reforms and restructuring needed to pull them out of the economic crisis. We must therefore resist the temptation to overdraw on our reserves to offset unavoidable wage cuts, or allow ourselves to succumb to the lure of welfarism which we cannot reverse later on. Instead, we should be taking steps to enhance our capability for long-term competitiveness. Before I move on to present details of the FY99 expenditure programme, allow me to recapitulate briefly the basic tenets of our expenditure policy. Our aim is to foster the growth of the private sector by keeping the public sector lean and trim, whilst maintaining a high quality of public service. We will live within our means by ensuring that budgets are balanced over the long term. Expenditure will be focused on fostering future growth by investing heavily on developing our human resources, in economic infrastructure and other areas which yield lasting returns. I will now highlight the salient features of this year's expenditure budget. FY99 EXPENDITURE ESTIMATES At 20.5% of GDP, total expenditure in FY99 is estimated at $29.2 billion. This is an increase of 5.6% or $1.5 billion over FY98. The increase is mainly due to a rise in development expenditure, which I will elaborate later. As in previous years, the largest allocations go to defence and education at 25% and 19% of total Government spending respectively.”
“We must work together to implement them vigorously, but retain the flexibility to adjust our tactics if the external environment changes again. The benefits of the cost cuts will flow through to the Singapore economy and businesses this year. The key now is to grow our business revenues by expanding our export markets and sustaining investments. To underpin these key thrusts, we need to build up our economic capabilities, both in terms of infrastructure and manpower skills. To achieve this, the workers, management and Government must all work together. Then, we will weather this difficult period, and realise our vision for Singapore as an advanced and globally competitive knowledge economy. II THE FY99 BUDGET Mr Speaker, Sir, I move on now to the Budget for Fiscal Year 1999. EXPENDITURE POLICY Since the Budget Debate last year, the Government has responded to the regional crisis with two packages of stimulus measures to stabilise the Singapore economy. In June 1998, I announced a $2 billion off-budget package which carried an impact of $1.6 billion on our FY98 budget. In November 1998, just three months ago, DPM Lee presented to this House a $10.5 billion cost-cutting package. This was in response to recommendations of the Committee on Singapore's Competitiveness. The package has an impact on the FY99 budget of $1.8 billion. We did not wait until the FY99 Budget to implement these measures because timely response to the unfolding regional crisis is critical. Our approach is to monitor developments closely and respond with measures to maintain the competitiveness of the economy relative to our export competitors. The measures announced were designed to lower overall business costs.”
“Specific Government initiatives launched under the CET umbrella include the following: an initial budget of $120 million pledged for the expansion of the Skills Redevelopment Programme which pays special attention to unskilled and semi-skilled mid-career workers; and $800 million for the Initiatives in New Technology (INTECH) grant scheme targeted at manpower development in leading edge technologies, of which $50 million has been earmarked for EDB's new Training and Attachment Programme (TAP) which helps fund the cost of training new engineering graduates recruited by MNCs at their overseas plants. In addition, the Ministry of Manpower (MOM) is working out a broad funding mechanism to support the development of national manpower capabilities as part of the Manpower 21 (M21) exercise. The M21 Report will be announced in due course. Programmes in the pipeline include setting up a Skills Certification System to establish a skills progression path and skills acquisition benchmark for the workforce; the Strategic Manpower Conversion Programme to incentivise the deployment of under-utilised professional manpower into strategic sectors with skills shortages; and supporting learning providers to create and augment the infrastructure and curriculum for lifelong learning. Our aim is to build up a national framework for continuous enhancement of knowledge and skills. The goal is to educate, train and retrain workers so that they can continue to take on new jobs or enlarged duties. This is the essence of lifelong employability. CONCLUSION 1999 is likely to be another difficult year. Despite signs of improvement in the external environment, the outlook remains uncertain. The CSC has set out the key thrusts to help Singapore overcome the crisis and prepare for competition beyond.”
“Another key challenge is upgrading our manpower to keep workers employable. With the rapid pace of economic restructuring, the current unemployment can turn into structural unemployment over time, as unemployed persons may be mismatched with new job vacancies because they do not possess the right skills. This is a pressing issue. A disproportionate share of retrenched local workers in 1998 were older than 40 years of age and with less than secondary education. The duration of unemployment has also increased to 8.9 weeks in mid-1998, compared with 7.5 weeks a year earlier. As long-term unemployed workers lose their job skills and become stigmatised by employers, this could lead to increasing and persistent unemployment rates, a phenomenon seen in European unemployment for the last 15 years. We must press on with Continuous Education and Training (CET) and skills upgrading to tackle this problem of structural unemployment. While the threat is more immediate for older and lower-skilled workers, it is no less urgent for our executives and professionals. They too must hone their skills and expertise in order to develop new capabilities and anticipate the rapidly changing demands in the workplace. As such, our CET plans encompass the entire spectrum of the workforce - from young to old, and from semi-skilled workers to managers and professionals.”
“EDB will develop Singapore's manufacturing and exportable services sectors with a strong emphasis on technology, innovation and capabilities. Reflecting this shift, jobs created will have a higher proportion of skilled workers. Capabilities Building Finally, capabilities building. We will use the crisis period to upgrade both our physical infrastructure and human capital, so that we can compete in the global economic arena on the basis of world-class capabilities, while managing our cost competitiveness. Education and economic infrastructure will continue to remain a priority in Government's development expenditure programme this year. To build economic infrastructure, $1.9 billion worth of new development projects were approved in the off-Budget measures in June 1998. These included major projects such as the incorporation of IT into primary and secondary schools, upgrading of university facilities and further investment in Singapore ONE. In FY99, Government will continue to invest in economic capabilities for the long term. We will increase development spending by a substantial $1.2 billion to $13.9 billion. This is the highest development budget to date. We will continue to invest more in education, up from $1.7 billion to $2.2 billion, to provide better schools, campus infrastructure and facilities, teaching equipment and to roll out the IT Master Plan. These education projects will prepare our next generation for the challenge of a knowledge-based economy. We will also spend more to increase our industrial land stock with on-going reclamation at Jurong Island, Tuas View and Changi East. Likewise, we will increase spending on rail infrastructure, including the North-East MRT line and the Changi MRT extension.”
“Government has allocated an additional $20 million to TDI over the next two years. TDB will also be stepping up its market development efforts to increase companies' awareness of opportunities further afield. In 1998, around 800 companies participated in TDB's business missions and international exhibitions. This year, TDB will be organising some 100 trade missions and international fairs. About 30 such events will be targeted at the traditional growth markets, such as the US and EU. Another 40 events will be targeted at emerging markets in East Europe, South Asia, Middle East, Latin America and Africa. Investment Promotion Next, we need to step up investment promotion to sustain and upgrade the flow of investments into knowledge-driven activities and create challenging jobs for Singaporeans. To spur more investments in manufacturing and services, Government has re-introduced the Liberalised Investment Allowance Scheme (LIAS). This provides a 30% across-the-board investment allowance for expenditure on productive equipment. In addition, Government has also allowed for a higher, discretionary allowance of 50%, for approved investments that meet certain requirements, such as higher contribution to value-added. In 1999, EDB will intensify its investment promotion efforts, including stationing more officers overseas in the US, Japan and Europe, in order to achieve its target of $7.5 billion in manufacturing investments and $1.5 billion in total business spending this year. In line with the vision set out by the CSC for Singapore to develop into a globally competitive knowledge economy, EDB has also recently unveiled its Industry 21 (I21) Plan. The vision of I21 is for Singapore to be a vibrant and robust global hub for knowledge-driven industries.”
“Feedback indicates that these changes to LEFS have met the needs of local companies. Between April and December 1998, more than $470 million of LEFS loans were approved to local enterprises. In particular, short-term LEFS loans increased by up to 600% during this period, reflecting the short-term cash needs of local companies. To strengthen the equity base of promising local enterprises (PLEs) and help them enhance their capabilities and growth, EDB will step up the pace of its co-investment in PLEs. It will take up short-term equity stakes of up to 30% in these companies. After an appropriate period, EDB will exit from these investments, for example, by selling its shares back to the PLEs. This enhanced co-investment programme will support companies in both the manufacturing and hub services sectors. Market Diversification Third, we need to diversify our export markets. Singapore needs to develop strong trade and business linkages to all parts of the global economy. This will make our economy more resilient, and help to offset cyclical slowdowns in any particular region or industry. The Trade Development Board (TDB) will be adopting a three-pronged approach to ensure that Singapore maintains its competitive edge in the global trading arena. This will involve accessing emerging markets, expanding demand into traditional markets such as the US and EU, and consolidating resources in regional markets. To strengthen market access, TDB has expanded the scope of its Trade Development Incentive (TDI) to help companies promote trade and participate in specialised programmes such as international franchising and brand marketing. Since FY96, TDB has approved some 250 cases amounting to $11 million under the TDI.”
“This has given us unique flexibility to adjust our wages quickly in the current downturn, to preserve our competitiveness. This has not only reduced business costs but also helped arrest the fall-off in labour demand. Without the necessary wage adjustments, even more jobs would have been lost and the unemployment rate would have risen to more than the 3.2% actually registered in 1998. Our cost-cutting package has been well received by both analysts and investors. A recent Merrill Lynch report commented that as a result of the cost-cutting measures, "unit labour costs should plunge back to the 1992-93 level, substantially boosting the economy's cost competitiveness". Another report by ABN-AMRO noted that "Singapore is demonstrating that with the package it can adjust its prices and costs quickly. The package will help boost confidence in the economy". Investors too have reacted positively. The substantial cost savings, particularly from the CPF cut, will help businesses ride out this difficult period. The package has also helped the Economic Development Board (EDB) convince investors that Singapore offers them an attractive business proposition, even in the midst of the recession. Ensure Access to Working Capital Second, it is necessary to improve access to working capital. Government has significantly enhanced the Local Enterprise Finance Scheme (LEFS). This includes raising the overall credit line available, increasing the maximum loan quantum per company and widening the scope of the scheme to cover more local enterprises. In addition, EDB and the Productivity and Standards Board (PSB) have been active in helping participating financial institutions obtain a better understanding of the loan applicant's business case.”
“With these strategic intentions in mind, the Committee on Singapore's Competitiveness (CSC) has recommended comprehensive measures to help Singapore regain its competitiveness, weather the crisis and emerge stronger. Besides keeping Singapore cost competitive and maintaining economic activity, we have to compete more effectively by growing the revenue side of the business equation. Cut Business Costs First, it is vital to cut business costs to stay competitive in a period of reduced overall business demand. The Government implemented a comprehensive $10.5 billion cost reduction package in November last year, covering all the key elements of business cost, including wages, rentals, utilities and transportation costs. This was in response to the CSC proposals to help companies survive the crisis and to preserve jobs. This major package will take time to show results. Many of the cost cutting measures only came into effect on 1st January 1999. It is still too early to assess their beneficial impact on businesses and the economy. Hence, this Budget will not contain any additional major new cost-cutting initiatives, although it will not neglect appropriate rebates to individuals, which had not been included in the November package. The cost reduction package has received the wholehearted support of Singaporeans. Workers have accepted the 15% reduction in overall wages. The spirit of tripartism is strong and resilient in Singapore. We have always emphasised policies to reduce stickiness in wages and improve the flexibility in the labour market. We have progressively built up a flexi-wage component over the years, and avoided restrictive mechanisms such as minimum wages, wage mark-ups or job security legislation.”
“In particular, the possibility of civil unrest derailing the reform and recovery process is worrisome. An unsettled Indonesia will colour the entire ASEAN region, including Singapore. Amidst this backdrop of uncertainties, the Ministry of Trade and Industry has maintained a 1999 GDP forecast of between -1% and +1% for Singapore. If the global and regional environment remains benign and none of the major risks I have outlined above materialise, and in particular the situation in the region stabilises and begins to turn around, then it is conceivable that our GDP growth may exceed +1% in 1999. On the other hand, if some of the critical uncertainties in the external environment do unravel, then Singapore will face a more dismal economic backdrop and GDP may contract by more than 1%. On balance, we feel that -1% to +1% is an appropriate forecast in an uncertain situation. MANAGING THE CRISIS Since the regional crisis erupted in July 1997, the Government has monitored its development closely and calibrated our response carefully. At the last Budget, we made some adjustments to keep our business environment competitive, but emphasised a conservative fiscal stance as it was too early to determine the full impact of the crisis. In June 1998, Government implemented a $2 billion off-Budget package of cost-cuts and spending measures. These were not intended as the final package. Regional developments at that juncture remained volatile and we needed to assess how events would develop. While we deliberated over policy options during this period, we identified the critical issues: to maintain the framework for continued economic activity; help companies tide over the crisis and minimise unemployment; and enhance our capabilities and competitiveness for future growth.”
“After last year's package of counter-cyclical policy measures, the Japan Economic Planning Agency (EPA) has estimated that with sufficient stimulus, real GDP growth of 0.5% in FY1999-2000 should be achievable. The Diet has passed a stimulatory budget worth 82 trillion yen for the coming fiscal year. If the Japanese economy recovers as expected by the EPA, it can be the locomotive to pull Asia out of its slump. However, the chances are that economic stagnation will continue for some time. Competitive pressures may undercut export earnings. Rising bond yields have raised long-term borrowing costs, while over-capacity in the manufacturing sector is dragging down profits. Consumer and business sentiments are bearish, weighed down by bankruptcies and high levels of unemployment. These factors make prospects for a near term recovery very uncertain. Socio-Political Developments in the Region The success and pace of economic reforms, restructuring and recovery in the region hinges on restoring and maintaining social and political stability in the affected countries. Popular support and social order are pre-requisites to carry out tough reforms, implement rational policies and restore confidence. This is a challenge which all the crisis-hit Asian economies are grappling with. The biggest uncertainty is Indonesia, where social and political tensions threaten to undermine financial and economic reforms. The coming June elections will be a milestone in determining how the fragile political and social conditions develop. If the elections proceed smoothly, the newly elected government can ride on its popular mandate to rebuild the economy. However, there are considerable stress points ahead.”
“Current account deficits are at a record high. The US economy is widely expected to moderate to slower growth this year. This is viewed as a welcome breather for the overheated economy. There are, however, several downside risks to this projection for a soft landing in the US economy. For one, a sharp correction in the US stock market may push the US economy into a sharp contraction rather than a benign easing. An estimated 40% of the average US household's net worth is in the stock market. The negative wealth effect from a substantial correction on Wall Street is potentially large. The OECD has estimated that a 20% fall in US equities could lead to a 1% reduction in US GDP as a result of lower consumer spending. (December 1998 OECD Working Paper, "Stock Market Fluctuations and Consumption Behaviour: Some Recent Evidence".) This does not account for the impact on investments or the secondary knock-on effects, particularly on global financial markets, which are likely to be substantial. Aside from the equity risk, there could also be significant repercussions on the US banking sector and economy if Brazil falls into full-blown recession and drags down the rest of Latin America. The US extended 51% of its total overseas lending and directed 21% of its exports to Latin American countries. In terms of corporate exposure, 20% of US' earnings from direct investments abroad were derived from Latin America. The linkages are significant and pose a potential threat to the health of the US economy. Economic Recovery in Japan Japan accounts for 64% of Asia's output and absorbs about 12% of Asia's exports. It is a key source of capital investments and loan financing for Asia.”
“Demand for disk drives and semiconductors is on the upturn, following the corrections in inventory overhang and healthy new orders from the US. The global semiconductor industry is forecast to grow by 15% in 1999, after contracting by 6% last year (Source: Dataquest.). Global shipments of disk drives are expected to rise by 18%, with revenues growing by 7% (Source: TrendFocus). Despite these positive signs, 1999 may well turn out to be another difficult and challenging year for Singapore. We are in a period of sharp discontinuities. Many uncertainties in the external environment can still unravel, including significant economic, social and political risks. Their outcome will substantially affect our prospects this year. Global Financial Market Volatility Financial markets, especially in the emerging countries, are still fragile and prone to bouts of nervousness, as is evident from the recent episode of the Brazilian Real flotation. More importantly, the process of de-leveraging and portfolio re-balancing in response to heightened volatility and risk aversion in emerging markets is not yet complete. This will restrict the region's much needed access to international capital. Health of the US Economy With Japan stagnating and EU adjusting to its new monetary union, the US remains the linchpin of the global economy. Some analysts have remarked that "what happens in the US is make-or-break for the world economy this year". (Financial Times, "Cracks in Wall Street", 7 January 1999, Samuel Brittan.) The current US expansion has entered its 92nd month, the longest peacetime expansion since the 1850s. Rapid above-potential growth, however, has led to some macroeconomic imbalances in the US economy. The savings rate has turned negative.”
“The combination of external and domestic contraction has produced Singapore's second economic recession since independence. Unlike the 1985 recession, the current downturn is primarily a result of the sharp moderation in external demand. In several regional countries, structural economic and financial problems have been complicated by more fundamental political and social factors. These will take a longer time to resolve. OUTLOOK FOR 1999 Notwithstanding the bleak picture in 1998, some positive signs have emerged over the last three months that the crisis is stabilising. The quick succession of US federal rate cuts and the co-ordinated interest rate reduction initiated by European central banks toward the close of last year helped to allay concerns of a global credit crunch and set the stage for a rapid, albeit fragile, recovery of financial markets in early 1999. Financial indicators have also stabilised in the region. Interest rates have dropped sharply, improving liquidity and reducing debt-servicing expenses. Confidence has been further boosted, particularly in Korea and Thailand, by credible progress on policy reforms, sizeable trade surpluses and strengthening foreign reserves. In Singapore, some economic indicators are starting to improve. The Composite Leading Index (CLI), which leads economic activity by about nine months, increased marginally in the third quarter of 1998 and picked up momentum in the fourth quarter, after three consecutive quarters of decline. Increased new orders, lower manufacturing unit labour costs and improvements in business expectations helped fuel the turnaround in the CLI. There are also nascent signs of a recovery in the global electronics industry.”
“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1999 to 31st March, 2000. I REVIEW OF THE ECONOMY ECONOMIC PERFORMANCE IN 1998 In contrast to 1997 when we were relatively unscathed, the Singapore economy experienced the full impact of the regional crisis in 1998. Economic growth last year slowed sharply to 1.5%. On a year-on-year basis, GDP growth has turned negative for the last two quarters of 1998, after registering negative quarter-on-quarter growth for the first three quarters of 1998. The sharp contraction in regional demand was the key cause of our economic weakness. The crisis-afflicted economies of Indonesia, Thailand, Malaysia, Korea and Hong Kong all suffered recessions in 1998, with significant output declines throughout the year. The economic situation in Japan also worsened considerably, with rising concerns about its banking system. Through our close economic linkages, problems in these six Asian economies impacted on Singapore, particularly for the more regional-oriented services sectors. For example, overall trade shrank by 7.5% in 1998, visitor arrivals declined by 13%, while activities in the Asian Dollar Market contracted by 10%. Retrenchments reached an all-time high of 28,300 as rising competitive pressures, coupled with the fall-off in business demand, led to consolidations in business operations. Job insecurity and lower wage growth caused a 0.1% decline in private consumption spending. As demand declined, prices fell and the Consumer Price Index contracted by 0.3% for 1998. A significant fall in domestic asset prices added to the bearish sentiment and exacerbated contractionary pressures associated with the economic decline.”
“Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,779,000", "$2,404,700", "$841,300" and "$17,000" in the second column and substituting the figures "$1,568,000", "$2,137,900", "$952,500" and "$241,200" respectively. Sir, it is proposed that a provision of $1,672,,400 be supported for Class I expenditure. This is $211,000 less than the FY98 provision because the President has decided to apply the wage cut on the Privy Purse. The provision for Class II expenditure (Salaries for Personal Staff) is expected to decrease from $2,404,700 to $2,137,900 mainly due to the wage cut implemented for the Civil Service in January 1999. A provision for $952,500 is required for Class III expenditure (Expenses of Household). This represents an increase of $111,200 or 13.2% over the FY98 provision as higher maintenance expenditure on Istana grounds and utilities charges are expected. For Class IV expenditure (Special Services), a budget of $241,200 is allocated which includes a provision of $235,000 for the replacement of the President's official car. It is therefore necessary to vary the provisions in the Schedule in the Civil List and Pension Act (Chapter 44) as indicated in the Motion before the House. Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,779,000", "$2,404,700", "$841,300" and "$17,000" in the second column and substituting the figures "$1,568,000", "$2,137,900", "$952,500" and "$241,200" respectively.”
“Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. INFECTIOUS DISEASES (AMENDMENT) BILL Order for Second Reading read.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported. "That the sum of $280,999,980 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Main Estimates of Expenditure for the financial year 1998/1999". "That the sum of $1,323,921,090 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Development Estimates of Expenditure for the financial year 1998/1999".”
“It has nothing to do with the satisfaction of the Prime Minister. I say it again that there is no prima facie evidence of anything that has gone wrong. So why are you pursuing the subject, especially when your Party Member has had the opportunity during the debate to raise these same questions?”
“I fully agree on the need for transparency but three days of debate in Parliament should be more than adequate.”
“May I respond to Mr Chiam? I was not in any way referring to him or his Party. I was referring specifically to one individual.”
“If Parliament is not the proper forum, I do not know what is, especially in the circumstances where there is no prima facie evidence of any improprieties.”
“There was no evidence whatsoever from Mr Koh Beng Seng's report to justify any such action. It would be a waste of time. Are you suggesting that Mr Koh is incompetent in his investigations?”
“Clause 15: External Assets Clause 15 seeks to amend section 22 to specify three other types of external assets in the Currency Fund, namely, equities, corporate bonds, and currency and financial futures. This amendment makes it clear in the legislation the inclusion of the three additional external assets which have already been approved by the President. The other amendments are of a drafting nature to rectify inconsistencies, and clarify provisions where there have been difficulties in interpretation. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment; read a Third time and passed. COMMISSION TO EXAMINE DEFAMATION LAW (Motion) 5.43 pm”
“Clause 12: Provision on Currency Reproduction Clause 12 seeks to amend section 20(1) and (2) to clarify and extend the restriction on the use of photographs, drawings or designs of Singapore currency notes and coins. The clause also seeks to enable BCCS to impose conditions in granting permission on the use of these photographs, drawings or design of currency notes and coins. The effect would be that selected manufacturers and others who have been licensed to use Singapore currency note or coin design for souvenirs, merchandise, etc, could have their licences rescinded by BCCS should they fail to comply with the conditions specified in the licences. [Mr Deputy Speaker in the Chair] 5.40 pm Clauses 14 and 18: Currency Fund and Liquidity Requirements Clause 14 amends section 21(5) to remove the percentage of 30% of the Currency Fund which must be held in liquid portion. This specification is considered unnecessary as currently, the liquid portion can be varied with the unanimous approval of the Board. Clause 14 also seeks to delete section 21(6) which defines the list of assets previously deemed to be liquid, such as gold, silver, foreign exchange and Government guaranteed securities maturing in less than two years. The amendment brings the Act up to date with current developments in the financial landscape, in which liquidity is no longer static or quantifiable concept, given that the ease with which investments are liquidated would differ under varying circumstances. The proposed amendment will accord the Board greater flexibility in maintaining adequate liquidity in the Currency Fund to meet demand.”
“Therefore, instead of seeking to continue strong and direct controls which disadvantage Singaporeans and inhibit industry players, especially those based in Singapore, we have chosen instead to speed up the development of a new Portrait series of Singapore currency notes that are more resistant to counterfeiting via colour copiers. BCCS will be issuing the new Portrait Series incorporating the latest anti-colour copier and anti-scanner security features, including the Common Mark System (CMS) in 1999. The CMS is designed to distort the image of any attempted colour photocopies of these notes. It is timely for the existing controls of colour copiers to be lifted. The main beneficiaries would be Singaporeans, who will now have wider access to full colour copiers, and the business community, not only users but also manufacturers trying to create a mass market for low-cost colour copiers. The other proposed amendments to the Currency Act are to improve the practices and procedures of the BCCS. I will now bring the House through the main amendments. Clauses 4 and 5: Board Appointment Clause 4 seeks to amend section 6 of the Act to clarify that all members of the Board, including the Chairman and Deputy Chairman, shall be appointed for a specific period not exceeding three years and shall be eligible for re-appointment. The proposed amendment is made in view of the provision since 1991 that the post of Chairman, BCCS, is no longer held automatically by the Minister for Finance, hence the need to specify the duration of the Chairman's appointment. Clause 5 extends the general disqualification provision in section 8(1) of the Currency Act to apply to all members of the Board, including the Chairman.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House principally focuses on the repeal of the provision in the Currency Act which currently imposes strict controls on the existence of full colour copying machines in Singapore. Apart from this major amendment, opportunity is also taken to incorporate 16 other amendments to improve and update practices and procedures of the Board of Commissioners of Currency of Singapore (BCCS). Clause 13: Lifting of Controls over Colour Copiers Clause 13 of the Bill seeks to repeal the existing provision on the controls of colour copiers governed by section 20A of the Currency Act and the Currency (Full Copying Machines) Regulations of 1996. These statutes require a permit for the use of colour copiers, as well as a counterfeit prevention system (CPS) to be fitted in every such machine licensed for use in Singapore. Controls on colour copiers had been put in place since 1979 to combat counterfeit activity. They were enhanced in 1995 when currency counterfeits made by even low-end colour copiers were found to be good enough to be passed off as real currency. However, with rapid advances in technology, a drastic reduction in the cost of producing colour copiers, and therefore the widespread availability of these colour copiers worldwide, the Government has acknowledged that our controls on colour copiers are becoming increasingly onerous and impractical, and cannot be expected to be water-tight.”
“Mr Speaker, Sir, I beg to move, (1) In page 7, line 22, to leave out "become insolvent or who has". (2) In page 7, lines 23 and 24, to leave out "or who has entered into a composition with any creditor". Again, Members will recall that I had earlier explained that due to the current economic environment, business revenues may be severely affected leading to unavoidable credit problems. As such, insolvency when entering into composition with creditors should not constitute grounds for summary removal. These words should be omitted from the Bill. Instead it is proposed that such cases continue to be referred to the PAB Inquiry Committee, which is currently the practice and already provided under section 21 of the Act. Amendment agreed to. Clause 11, as amended, ordered to stand part of the Bill. Clauses 12 to 15 inclusive ordered to stand part of the Bill. Bill reported with amendments, read a Third time and passed. CURRENCY (AMENDMENT) BILL Order for Second Reading read.”
“Mr Speaker, Sir, may I have your approval to move the two amendments together?”
“Mr Speaker, I beg to move, In page 6, after line 10, to insert - "(c) by deleting the words "has been adjudicated bankrupt or" in sub-paragraph (v) of subsection (1)(a);". Members will recall that I had touched upon this in my speech earlier. The reason behind the amendment is that for cases where the public accountant has been adjudged a bankrupt, summary removal of his name from the Register of Public Accountants without the need for further inquiry is an appropriate course of action. Amendment agreed to. Clause 9, as amended, ordered to stand part of the Bill.”
“On PAB resources, Dr Neo has commented on the amendment to section 5, which provides for PAB to prescribe the accounting standards and procedures to be followed by public accountants. She would like to know what kind of resources will be committed to this function. At present, the Institute of Certified Public Accountants of Singapore prescribes auditing and accounting standards, and as earlier explained, the amendment will expressly empower the PAB to adopt such standards. Therefore, I do not expect this to result in a significant increase in resources required for the PAB. Nonetheless, I wish to point out that I have already introduced, by way of clause 4, a change to the self-funding status of the PAB. The Government is prepared to extend operating grants to PAB, and this co-sharing of regulatory costs signifies the Government's commitment towards strengthening the integrity of the financial system. I believe that this, and other proposed changes, will all contribute to a major enhancement of the regulatory framework for the accounting profession, and deserve the support of this House. On the issue of summary removal due to composition arrangement with creditors, I have already addressed this in my Second Reading speech, and I believe that Dr Neo and Mr Ee should be pleased with the outcome. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses 1 to 8 inclusive ordered to stand part of the Bill. Clause 9 -”
“As I have mentioned in my Second Reading speech, the Inland Revenue Authority of Singapore would be examining ways of ensuring the continued high professional standard of tax agents, and this will be announced when ready. Under the Tax Acts, where there are errors (and omissions) in tax returns, IRAS can prosecute those who flout the law. If the error is due to negligence of the tax agent, he would be required to pay penalties. On regulation over non-practising accountants, Mr Gerard Ee also feels that there should be greater regulation and control over non-practising accountants who are the frontline people preparing or influencing the preparation of financial statements. I think this is a fair statement. But control already exists in the Institute of Certified Public Accountants of Singapore (ICPAS) as it regulates non-practising accountants who are its members. For example, ICPAS has also made continuing professional education (CPE) hours mandatory for such members, who can also be deregistered from ICPAS for various offences. ICPAS, however, has no hold over non-practising accountants who are not its members, and it is unclear that such regulation should be mandated. This was debated at length by the PAB Working Committee to Review Accounting and Auditing Standards, whose rationale was as follows. As non-practising accountants generally work for companies, it is more of an employer-employee relationship. And since it is the responsibility of company directors to ensure that the proper records are kept and that accounts are properly drawn up, it is less imperative that such accounts preparers be directly regulated.”
“As for Dr Neo's concern that section 15(5)(c) is overly wide, I would like to assure her that the Board will continue to confine itself only to technical and professional issues. There is no intention to deliberately make it more difficult for public accountants to renew their licences. On the issue of composition fines, Dr Neo has commented that the new section 56A, which allows PAB to compound offences of up to $1,000, is inconsistent with provisions in the Accountants Act on other offences, some of which can result in fines of up to $2,000. I think there should be a clear distinction between a compoundment of an offence and a statutory fine. A composition sum is that which the authority administering an Act allows an offender to pay, in lieu of prosecuting him in the court for the offence, whereas a statutory fine results from a conviction in court, and covers more serious offences. Thus, the penalty for compounded offence should necessarily be lower than that of a statutory fine, as the two are not equivalent. Compounding is really for more minor offences or offences where there are mitigating factors, such that a prosecution is not warranted. Without an option to compound fines for minor offences at a lower amount, the High Court may be clogged up with even the most minor offences. If the composition fine is raised, offenders may find it more attractive to fight it out in court in the hope of getting undeserved acquittals. This would defeat the whole purpose of the compoundment provision. On regulation of tax consultants, Mr Gerard Ee has asked who will regulate the tax professionals.”
“On the issue of renewal of certificate of registration, both Dr Neo and Mr Gerard Ee have asked for clarification on how the new provisions in section 15 on the renewal of certificates of registration will work in practice. As I said earlier, renewal of certificates will no longer be automatic, but conditional on satisfying "continuing professional education" (CPE) and "appraisal of the public accountant's professional conduct and practice". In response to Mr Ee's question, the annual CPE records of public accountants will be considered by the Public Accountants Board when the renewal of public accountants becomes due. But given the three-year compliance rule, consideration will be given to whether or not the public accountant has fulfilled the requirements for the preceding three-year period on a rolling basis. For practice reviews, the Board shall consider only the reports of accounting firms for which the review has been completed in that year. Only the public accountants of these particular firms will have the renewals of their licences to be subject to the practice review reports being satisfactory. However, over a three-year cycle, all public accountants will be covered as it is intended for all public accounting firms to be reviewed. The practice review of accounting firms with public listed companies as clients will be more regular. For both CPE and practice review requirements, if a public accountant does not satisfy either requirement for the first time, he will be issued with a warning letter. Only if he persists in failing to meet the requirement will the licence not be renewed. The PAB's Rules will be suitably amended to incorporate the new provisions in due course.”
“It thus establishes the legal recourse (of suspension or deregistration) for failure to act professionally and independently, resulting from a range of causes, including that of engaging in business at odds with the demands of the profession. I am therefore confident that the amendment should not in any way hinder entrepreneurship, as public accountants would remain quite free to carry on non-accountancy-related services, as long as there is no conflict of interest. The proposed amendments to section 19 are really consequential to the broadening of the causes for deregistration in section 21. The amendment will allow an Inquiry Committee to be set up when a public accountant brings disrepute to his profession, by behaviour in areas beyond his professional capacity. Some may say that this appears draconian, but let me assure Members that the provisions will not be triggered when a public accountant has committed an improper act per se. An inquiry can only proceed if the act has an adverse impact on the general standing of the profession, or shows that the public accountant is unfit for his profession. This is a fair application of the law, in order to safeguard and uphold the integrity of the accounting profession. The powers are crafted broadly in the statute in order to ensure that the PAB has a wide enough remit to achieve its objective. But I expect the PAB to be circumspect in its administration. Members may also be interested to know that largely similar provisions exist in the Legal Profession Act, where "misconduct unbefitting . an advocate or solicitor" is also grounds for discipline by the Courts.”
“Mr Speaker, Sir, I would like to thank Dr Neo and Mr Ee for their comments and points raised and I will try to address their concerns. First, disciplinary proceedings. Dr Lily Neo has commented that section 21(1)(a)(viii) is too stringent and may deter entrepreneurship. She also feels that it will pose hardship, especially on small time accountants, since in most cases they do provide other non-accountancy related services. She is also concerned that section 19(1) may be too wide as the grounds for an Inquiry Committee to be set up have expanded beyond professional misconduct, and now include an "improper act or conduct" which brings disrepute to the profession or makes them unfit for practice. I will address these two concerns together, as they are related. First, in moving the amendment, I had earlier informed the House that every public accountant has to observe the Code of Professional Conduct and Ethics and has to conduct himself or herself in a manner consistent with the good reputation of the accountancy profession. The Code already imposes the requirement that public accountants should not be substantially engaged in any other business, other than that of a public accountant. This is to pre-empt situations where public accountants are put in a position where their independence is compromised, and there is a conflict of interest between his professional responsibilities and the pursuit of wider business interests. The amendment to section 21 merely picks up on these professional obligations which are, in fact, being observed already. Section 21 sets out the grounds for the PAB to suspend or cancel a public accountant's licence, following investigations by an Inquiry Committee.”
“Presently, the Board is funded solely by fees collected from the registration and renewal of public accountants' licences. This is not sufficient to cover the Board's operating expenditure, especially when legal and inquiry costs need to be incurred. The grant is necessary as the Board's expenditure will continue to be pushed up by rising administrative expenses as well as investigation, prosecution and legal assessment costs for increasingly complex complaint cases. These costs are essential to ensure a thorough, fair and effective complaints inquiry process. The other amendments are to clarify interpretations and relate to consequential amendments to the Bill. Sir, I beg to move. Question proposed.”
“While the practice of the Public Accountants Board is to adopt the standards issued by ICPAS, its power to do so is implied by section 5(d) as one of the Board's functions is to "control and regulate the practice of the profession of accountancy by public accountants". In comparison, in the United States and United Kingdom, the regulatory bodies for the accountancy profession have the legislative power to prescribe such standards. Hence an amendment is required to amend section 5 of the Accountants Act to expressly empower the Board to prescribe the standards, methods and procedures that public accountants have to follow in the course of their professional work. Clause 12: De-Regulation of Tax Consultants Clause 12 amends section 48 to enable persons not registered as public accountants to practise as tax consultants. Tax consultancy should not be the sole preserve of public accountants and solicitors, as currently provided under the Accountants Act. Indeed market forces will drive tax consultants who do not deliver good quality service out of business. In addition, unlike public accountants whose work has a great impact on the public, the argument for the protection of general public interest holds less weight in the case of tax consultancy as it is a service offered exclusively to an individual paying customer. There is thus no specific need for the Board to regulate tax agents. Nevertheless, the Inland Revenue Authority of Singapore (IRAS) will be examining ways of ensuring the continued high professional standard of tax agents, and this will be announced when ready. Clause 4: Change to Self-Funding Status of PAB Finally, clause 4 amends section 7 to enable the Board to meet its expenses through Government funding.”
“In particular, in the current economic environment, business revenues may be severely affected, leading to unavoidable credit problems. As such, I have decided to remove "insolvency" and "entering into composition with creditors" as grounds for summary removal. Instead, in such cases, we will rely on existing provisions under section 21 of the Act, which requires an Inquiry Committee to be first set up, with its appropriate appeal channels. However, in cases where the public accountant has already been adjudged a bankrupt through the usual processes, there is really no need for the PAB to go through a further Inquiry Committee. Hence, there are grounds for summary removal in the case where a public accountant is an adjudged bankrupt. I propose to move amendments to clarify these points. With the consent of this House, I will therefore be proposing these changes to the Bill when we are in Committee stage later on. Clause 13: Imposition of Composition Fines Clause 13 inserts a new section 56A. This enables the Board to impose deterrent fines on minor offences without having to bring offenders to court. However, offences involving personal misconduct, which will be dealt with under the Board's disciplinary proceedings and subject to due process, shall be excluded. I now turn to other amendments which will improve the operations and efficiency of the Public Accountants Board. Clause 3: Adoption of Accounting Standards Currently, PAB rules already require a public accountant to carry out his professional work in accordance with technical and professional standards expected of him as a public accountant.”
“He has to conduct himself in a manner consistent with the good reputation of the accountancy profession, which demands high standards of integrity, objectivity, independence and moral character. The amendment gives legal effect for failure to conduct oneself properly. Consequential amendment is made via clause 6 to section 19 to allow an Inquiry Committee to be set up for purpose of ascertaining whether an infringement or failure to observe the Code has been committed. Public accountants will also benefit from this amendment, which provides that any suspension, de-registration or imposition of penalty on a public accountant may take effect only after the expiration of one month from the date on which the appeal against the decision made to the High Court has been determined or withdrawn. This new provision seeks to minimize losses suffered by the public accountant as a result of the cancellation or suspension of his licence. The High Court may also assess any cost charged against a public accountant. Clause 11: Voluntary De-Registration Upon Complaint/Summary De-Registration Clause 11 amends section 23 to add to the grounds on which a public accountant may be summarily removed from the Register of Public Accountants. A new provision is inserted to prevent a public accountant from applying to be removed from the Register of Public Accountants if disciplinary action is pending against him or if he is being investigated by an Inquiry Committee. This is a loophole that should be plugged and is a fair amendment. Since the introduction of the Bill, we have however received feedback from various sources that the other intended provisions may be too harsh.”
“Rather than an automatic renewal of the licence once every three years, it is now provided that the Board will renew the certificate of registration of a public accountant only if he has complied with the prescribed requirements relating to continuing professional education (CPE), and meets what is expected in his professional conduct and practice. This re-emphasises the importance of training and practice review to maintain the high standards of accounting and auditing practices in Singapore. It will give legal effect to standards already required of public accountants by ICPAS. Clause 8: Preliminary Information/Need for Deposit Clause 8 amends section 20, which governs procedures on complaints. The Board, in the event of a complaint against a public accountant, can now require the accountant to respond to its preliminary inquiries, before the complaint is referred to an Inquiry Committee. A maximum fine of $2,000 may be imposed if the accountant concerned refuses, without good reason, to respond to the preliminary inquiry. To weed out frivolous complaints and abuse of the disciplinary process, the amendment will also allow the Board to require a refundable deposit not exceeding $1,000 to be placed with the Board. This amount may be forfeited in full or partially if the complaint is found to be frivolous or vexatious, or dismissed because the complainant refuses to co-operate with the Board. Clauses 6 & 9: Suspension and De-Registration Clause 9 amends section 21 to add to the grounds on which the Board may suspend or de-register a public accountant. Every public accountant who is registered with the Board has to observe the Code of Professional Conduct and Ethics, set out in the Third Schedule of the Board Rules.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The Bill before the House mainly seeks to improve the standard of the professional accounting practice in Singapore, as well as to streamline disciplinary proceedings for better regulation of the profession. With the worldwide trend towards greater transparency and disclosure in corporate regimes, there is a need to ensure that our public accountants continually improve their high standards to ensure the continued integrity of our financial system. I believe that the proposed amendments take us a step further in that direction. The amendments in the Bill arose mainly out of recommendations made by the Accountants Act Amendments Committee and the Public Accountants Board (PAB) Working Committee to Review Accounting and Auditing Standards in Singapore. The two Committees included academics and practitioners from the Nanyang Technological University, the Stock Exchange of Singapore, the Auditor-General's Office, the Attorney-General's Chambers, the Institute of Certified Public Accountants of Singapore (ICPAS), and the Registry of Companies and Businesses. I will now briefly explain the key provisions of the Bill, starting with those which strengthen the regulatory framework of public accountants, contained in the following clauses of the Bill. Clause 6: Validity Period of Licence and Prescribed Requirements Clause 6 repeals and re-enacts section 15, which governs the certificate of registration of a public accountant. The duration of the registration of a public accountant is reduced from three years at present to one year. The Public Accountants Board will then be able to gain more timely information about applicants, and more effectively regulate errant practitioners.”
“Mr Speaker, Sir, I would like to thank Mr Rai for his comments. I consider the figure $50,000 adequate for the time being although the suggestion that the Minister should be allowed to vary it is reasonable which may be incorporated in future. On the introduction of legislation to exempt small estates, I will consider the suggestion. On interest rates, if an affidavit is filed within six months, the interest rate should be zero. Thereafter, the interest rates are applied to induce estates to submit their affidavits in a timely manner so as to expedite the process. But we will always review this from time to time. Finally, on his suggestion to abolish estate duty altogether, I would like to assure him that the issue of estate duty revision is reviewed annually, and I will take his request into consideration in the next Budget, although I cannot promise anything now. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment, read a Third time and passed. ACCOUNTANTS (AMENDMENT) BILL Order for Second Reading read.”
“For consistency with the Income Tax Act, donations, gifts and bequests to IPCs or the Government will be exempt from estate duty regardless of the point of time they are made to these institutions. Clauses 3 and 4 amend the Act to provide for the estate duty exemption on donations/gifts and bequests made to these institutions while clause 13 repeals the Ninth Schedule which is no longer required. To facilitate administration of estate duty, clauses 2, 5, 6 ,7 and 8 amend the Act to provide for the following: (a) To empower the Commissioner of Estate Duty, instead of the Minister for Finance, to determine the forms for notice of assessment, estate duty affidavit and the estate duty form of account; (b) To remove the requirement for the Commissioner of Estate Duty to certify the payment of estate duty on the estate duty affidavit or the form of account for internal record purposes; and (c) To allow the shares of a deceased person in the CDP account or CPF investment account to be transferred without estate duty clearance if the market value of such shares in either account at the time of death does not exceed $50,000. Statistics show that such cases are generally not liable to estate duty. Sir, I beg to move. Question proposed.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a second time". The Estate Duty (Amendment) Bill 1998 seeks to give legislative effect to reductions in the interest payable on estate duty, exemption of donations/gifts and bequests made to Institutions of a Public Character or the Government from estate duty, and to changes which will facilitate the administration of estate duty. Currently, interest of 3% is payable on all estate duty within the first six months after death. The rate is 6% if estate duty is unpaid 6 to 18 months from the date of death, and there is no provision to reduce the rate if reasonable cause for the delay can be shown. For the period beyond 18 months, the 12% interest rate can be reduced to 6% provided reasonable cause for the delay can be shown. To encourage the administrator or executor of an estate to file in a complete affidavit early, the rate for the first six months after death will be reduced to 0% if a complete affidavit is received. The rate on unpaid estate duty 6 to 18 months after death will also be reduced from 6% to 3% if reasonable cause for the delay can be shown. Clause 12 re-enacts the Sixth Schedule of the Estate Duty Act (the Act) to empower the Commissioner to reduce the interest rates payable under these circumstances. Under the Act, gifts or donations made more than a year before the death of the donor for public or charitable purposes are not subject to estate duty. However, under the Income Tax Act, tax deductions are allowed for donations made to Institutions of a Public Character (IPCs) or the Government at any point of time.”
“Government of Singapore Investment Corporation (GIC), which manages the Government's reserves, has not invested Government's reserves in any hedge fund. The Government-linked companies (GLCs) make their own decisions on the investment of their surplus funds. They do not report their investments to the Ministry of Finance. PUBLIC UTILITIES CHARGES AND JURONG TOWN CORPORATION RENTALS 6. Mr Chuang Shaw Peng asked the Minister for Trade and Industry if he will furnish statistics on the rates of increases/decreases in respect of public utilities charges and Jurong Town Corporation rentals from 1988 to 1997.”
“Mr Speaker, Sir, I would like to assure Mr Ong that the Government has not and will not use CPF funds to finance budget deficits. Where it is necessary to incur operating budget deficits in order to pay for tax cuts and economic recovery expenditures, the deficits will be financed by drawing down from the pool of budget surpluses accumulated by the present Government. AMNESTY FOR DISMISSED FOREIGN WORKERS 6. Mr Simon S C Tay asked the Minister for Home Affairs whether the Government will offer recently dismissed foreign workers who have overstayed in Singapore a period of amnesty to report for repatriation to their home countries. The Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee) (for the Minister for Home Affairs): Sir, foreigners whose work or visit passes have expired must leave Singapore and not stay on illegally here. Singapore is a small country with limited resources. We cannot afford to allow people to disregard our laws and stay on illegally, because such overstayers would impose a strain on our social system, leading to law and order problems. The Government has no intention to grant an amnesty to foreign workers who overstay. It would send the wrong signal to potential immigration offenders that they will be forgiven when they commit immigration offences in Singapore. This would erode the deterrent effect of our immigration laws and enforcement action, and lead to a more severe overstaying problem in the longer run.”