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.”
The complete record
Every one of 2,807 lines we hold for Richard Hu Tsu Tau, in date order, each linked to its source. Free to read, in full, without an account. Page 21 of 57.
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Income tax and stamp duty measures to discourage speculation in the residential property market were announced on 14th May 1996. The Income Tax (Amendment) Bill 1996 seeks to tax, as income, any gains arising from the sale of any real estate within three years of its purchase, as follows: (a) The tax shall be on the whole gain if the sale is within the first year of the purchase, 2/3 of the gain if within the second year, and 1/3 if within the third year; and (b) For sellers who are not tax residents, a lawyer shall be required to withhold tax (which is not a final tax) at 15%, 10% or 5% of the value of the property if sold within the first, second or third year of purchase respectively. Gains from sales of properties within 3 years to be taxed as income Gains made by property developers and traders from the sale of properties are already taxable as income. However, similar gains made by individuals and other companies are not subject to tax. To discourage speculation, clause 2 of the Bill inserts a new section 10F to deem gains from the sale of property within three years of purchase as income, to be taxed at individual and company rates respectively. However, even with the above tax treatment to discourage property speculation, Members of Parliament may be aware that taxpayers could circumvent this measure by transacting in shares in property holding companies instead. As such, it is necessary to amend the Income Tax Act to subject to tax the gains derived from the disposal of shares in a private company if the company holds at least 75% of its assets in the form of real property or shares in another property investment company.”
“Sir, I beg to move, In page 16, to leave out lines 6 to 10 and insert -- "(a) Paragraphs (a), (b) to (g) The grantee or transferee. (b) Paragraph (aa) (i) instrument effecting The parties in equal exchange shares unless only one party is disposing of his property under the instrument before the expiration of 3 years from the date on which it was acquired, whereupon duty shall be paid only by that party. (ii) in any other case. The grantor, transferor or lessor."; and". This is to provide that the new duty on instruments of exchange will be paid by the parties in equal portions unless only one is disposing of his property within the three-year period, in which case only he bears the duty. Amendment agreed to. Clause 19, as amended, ordered to stand part of the Bill. Clause 20 ordered to stand part of the Bill. Bill reported with amendments, read a Third time and passed. INCOME TAX (AMENDMENT) BILL Order for Second Reading read. 3.15 pm”
“Sir, I beg to move, In page 15, after line 36, to insert -- "(2) The First Schedule to the principal Act is amended by deleting Article 31 and substituting the following Article: 31. SURRENDER OF LEASE (a) for consideration The same duty as for a conveyance on sale for a consideration equal to the amount of such consideration (b) in any other case $10". Sir, this is to make clear that the surrender can be stamped as a conveyance on sale if there is a consideration. Amendment agreed to.”
“Sir, I beg to move, In page 15, to leave out lines 19 to 36 and insert -- "In addition to duty under paragraph (a) or (b), where the property, or any share in a private company referred to in section 22A(4), is disposed of in the following periods from the date of its acquisition: Amount of Exceeding Exceeding consideration or one year 2 years value of property, but not but not whichever Within exceeding exceeding is applicable one year 2 years 3 years (i) for every $1 $0.67 $0.33 $100 or any part thereof of the first $180,000 (ii) for every $2 $1.33 $0.67 $100 or any part thereof of the next $180,000 (iii) thereafter $3 $2 $1.". for every $100 or any part thereof Sir, this is to enable the new seller's stamp duty to be computed on the basis of a rate. Buyers under en bloc sales will have their duty computed on the global price. Amendment agreed to.”
“(3) For the purpose of determining any penalty under section 46, any contract or agreement which is chargeable with duty under this Act as amended by the Stamp Duties (Amendment) Act 1996 by reason only of any failure to comply with subsection (1)(c) or (2)(c) shall be deemed to have been first executed in Singapore or, if first executed outside Singapore, to have been first received in Singapore on the following dates: (a) in the case of a contract or agreement for the sale of an HDB flat -- on the date of the first appointment with the Board in relation to the sale; or (b) in the case of a contract or agreement resulting from an option referred to in subsection (2)(a) -- on 14th June 1996 or the actual date of its first execution or first receipt in Singapore, whichever date is later. (4) In this section -- "Board" and "Housing and Development Board" mean the Housing and Development Board constituted under the Housing and Development Act (Cap.129); "HDB flat" means any flat sold by the Board subject to the provisions of Part IV of the Housing and Development Act; "option" means an option where the grantor binds himself to sell; "owner", in relation to any flat, means a purchaser of a leasehold interest in the flat, including a purchaser under an agreement for a lease.". Sir, the reason for this amendment is to exempt instruments where sales and purchase agreements for HDB flats were signed where options of purchase were granted before 15th May 1996. Amendment agreed to.”
“Sir, I beg to move, In page 10, after line 29, to insert -- "Exempted 22B.-(1) Notwithstanding any other provision instruments in this Act,where -- made on or after 15th (a) any contract or agreement for the sale May 1996 of an HDB flat is made before 15th May 1996 subject to the approval of the Housing and Development Board; (b) the owner of the HDB flat has immediately before that date occupied the HDB flat for not less than the period specified by the Board in relation to that owner; and (c) the application for the approval of the Board is made to the Board before 15th June 1996, the contract or agreement shall be chargeable with duty under this Act as if it had not been amended by the Stamp Duties (Amendment) Act 1996. (2) Notwithstanding any other provision in this Act, where -- (a) an option is granted in favour of the Board before 15th May 1996 in respect of an HDB flat or an option is granted before that date in respect of any other immovable property; (b) the option is exercised at any time after that date but before 15th June 1996; and (c) the contract or agreement resulting from the exercise of the option is presented at any stamp office before 15th June 1996 for the purpose of being stamped, that contract or agreement shall bec chargeable with duty under this Act as if it had not been amended by the Stamp Duties (Amendment) Act 1996.”
“Sir, I beg to move, In page 10, after line 25, to insert -- "(b) any person disposing of residential property in accordance with any of the provisions of the Residential Property Act (Cap.274) or any notice or direction issued thereunder; or". Sir, this is to exempt involuntary disposals acquired under the Residential Property Act. Amendment agreed to.”
“Sir, I beg to move, In page 9, after line 31, to insert -- "(d) where a person entitled to any property by way of security or to the benefit of a charge or incumbrance on any property deals with the property for the purposes of enforcing or giving effect to the security, charge or incumbrance, his dealings with it shall be treated as if they were done through him as nominee by the person entitled to it subject to the security, charge or incumbrance;". Sir, the reason for this amendment is to allow the mortgagee to sell foreclosed properties in the capacity of a nominee. This means that no stamp duty is payable if the property has been owned by the mortgagor for more than three years. Amendment agreed to.”
“Sir, I beg to move, In page 9, after line 24, to insert -- "(b) a reference to a relevant investment company is a reference to any private company which has residential property the value of which comprises at least 75% of the market value of its total tangible assets as at the end of the accounting period of the company immediately before the date of the conveyance or transfer of shares referred to in subsection (4);". Sir, the reason for this amendment is to clarify the definition of investment company in this context. Amendment agreed to.”
“Sir, I beg to move, In page 9, line 12, to leave out "by transmission on death or". Sir, this is a drafting amendment. Amendment agreed to.”
“Sir, I beg to move, In page 7, line 34, to leave out from "Where" to "the" in line 39 and insert "in any conveyance on sale of residential property (including any instrument which is chargeable in like manner)". Sir, this is a drafting amendment. Amendment agreed to.”
“Sir, I beg to move, In page 7, to leave out lines 15 to 33 and insert -- "conveyance or transfer, residential property or shares in one or more relevant investment companies, or both such property and shares, constitute in the aggregate at least 75% of the market value of the total tangible assets of the private company as at the end of the accounting period of that private company immediately before the date of the conveyance or transfer.". Sir, the reason for this amendment is to make the provision consistent with the Income Tax (Amendment) Bill 1996, which is that the disposal of shares in a private company will be subject to stamp duties if the company holds at least 75% of its assets in real property and shares in another private company of which not less than 75% of the market value of its total tangible assets comprises real property. Amendment agreed to.”
“Sir, I beg to move, In page 7, line 7, to leave out from "a" to "residential" in line 8 and insert "conveyance on sale of". Sir, this is a drafting amendment. Amendment agreed to.”
“Sir, I beg to move, In page 6, after line 36, to insert -- "(3) Subject to the provisions of this Act, any instrument made on or after 15th May 1996 whereby an exchange of any property is effected shall be treated for the purpose of this section as a conveyance on sale of residential property if residential property or any part thereof is being disposed of under the instrument by any party thereto before the expiration of 3 years from the date on which the party acquired the residential property or any part thereof; and that instrument shall be charged with additional ad valorem duty under subsection (1) as if it were an actual conveyance on sale of residential property by the party who acquired his property later for a consideration equal to the value of the property of greater value.". Sir, the reason for this amendment is to deal with instruments of exchange. Duty will be imposed on the higher of the value of the property that is exchanged. Amendment agreed to.”
“Sir, I beg to move, In page 6, line 32, to leave out "the residential property" and insert "residential property or any part thereof". In page 6, line 36, after "that property", to insert "or any part thereof". Sir, this is to make clear that an instrument is chargeable if a residential property is being disposed of, whether it has been subdivided or amalgamated previously. Amendments agreed to.”
“Sir, may I have your approval to move amendment Nos. 13 and 14 together?”
“Sir, I beg to move, In page 6, lines 10, 14 and 21, to leave out "residential" in each case. In page 6, to leave out line 24 and insert "a conveyance on sale of". In page 6, line 29, to leave out "residential". Sir, these are drafting amendments. Amendments agreed to.”
“Sir, may I have your approval to move amendment Nos. 10 to 12 together as they are drafting amendments? The Chairman: Yes.”
“Sir, I beg to move, In page 6, line 1, to leave out "the residential property" and insert "residential property or any part thereof". In page 6, line 5, after "property" where it secondly occurs, to insert "or any part thereof". Sir, the reason for these amendments is to make clear that an instrument is chargeable if a residential property is being disposed of, whether it has been sub-divided or amalgamated previously. Amendments agreed to.”
“Sir, may I have your approval to move amendment Nos. 8 and 9 together?”
“Sir, I beg to move, In page 5, line 33, to leave out "residential". In page 5, line 34, to leave out "under section 22" and insert "pursuant to section 22 (including any instrument chargeable in like manner)". In page 5, line 38, after "sale", to insert "as if it were an actual conveyance on sale of residential property". Sir, these are drafting amendments. Amendments agreed to.”
“Sir, may I have your approval to move amendment Nos. (5) to (7) together as they are drafting amendments?”
“Sir, I beg to move, In page 5, to leave out lines 28 to 30 and insert -- "(8) Subject to the provisions of this Act, this section shall apply to instruments made on or after 15th May 1996.". This is an amendment consequential upon the introduction of new section 22B. Amendment agreed to.”
“Sir, I beg to move, In page 4, after line 38, to insert -- "(c) the property is acquired or is proposed for acquisition by any public authority pursuant to the provisions of any written law authorising or empowering the public authority to acquire land compulsorily.". This is to allow for refund of stamp duty where a contract is rescinded because of compulsory acquisition. Amendment agreed to.”
“Sir, I beg to move, In page 4, line 35, to leave out "the" and insert "a". Sir, this is a drafting amendment. Amendment agreed to.”
“Sir, I beg to move, In page 3, to leave out line 37 to line 18 in page 4 and insert -- "(4) Where a person, having contracted jointly or otherwise for the purchase of any property but not having obtained a conveyance thereof, directs the vendor of the property in writing to convey or transfer the property or any share therein -- (a) to another person; or (b) where the person contracted for the purchase ofthe property jointly with another, to the joint purchasers in shares other than as specified in the contract for the purchase of the property, the direction shall, for the purpose of this Act, be treated as a contract or an agreement for the sale of that property or share therein for a consideration equal to the value of that property or share therein and shall be chargeable with duty as if it were an actual conveyance on sale of that property or share therein.". The amendment serves to require stamp duty to be made payable at the time of execution of the direction instead of the time of conveyance. Amendment agreed to.”
“Sir, I beg to move, In page 2, line 33, after "10(a)", to insert ",(aa)". Section 15 presently allows for relief from stamp duty in cases of reconstruction or amalgamation of companies. The amendment seeks to extend these concessions to section 15 with respect to the new seller's stamp duty. Amendment agreed to. Clause 4, as amended, ordered to stand part of the Bill. Clause 5 ordered to stand part of the Bill. Clause 6 --”
“[Mr Speaker in the Chair] Clauses 1 to 3 inclusive ordered to stand part of the Bill. Clause 4 --”
“Any waiver would be on a case-by-case basis, because we want to avoid a blanket exemption. Otherwise, a mortgagee may voluntarily force a sale in order to benefit from any property gains. But on a case-by-case basis where genuine hardship can be proven, we will consider it. She wants to know whether the Commissioner has power to grant a waiver, the answer is no. The power rests with the Minister. Applications can be put to him and he can implement it, if the Minister agrees. She has said that the scope for refunds is limited at the present time. There is scope for extension of the relief mechanism. This, again, will be on a case-by-case basis, eg, in cases where properties were acquired compulsorily by Government, or where genuine hardship is provable. We have some flexibility in this area because the Minister is empowered in the Stamp Duties Act to make exemptions. She has asked whether a letter of authority is subject to stamp duty. The answer is yes, and is payable within 14 days of the date of the letter of authority. Like Dr Ow and Mr Leong Horn Kee, she has also asked whether there can be an extension of the date of completion and also to reduce the cash flow problems of genuine buyers. I have already explained the reasons why not. In fact, the measures have already caused a fall in prices which is beneficial to genuine buyers. She has also asked whether the renewal of leases should be subject to stamp duty, the answer is yes. Stamp duties have always been payable upon renewal of leases. 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.”
“Finally, on the question raised by Dr Ow, I would like to say that the whole purpose of introducing this package of measures was to curb speculation. Any attempt to try and change it by softening some parts of it will reduce the effectiveness of these measures. It does not really benefit the genuine buyer either, because the effect of these measures is already visible in the market. Whether you say prices have softened by 5% or 10%, the fact is that it has, in fact, stopped price rises, and actual prices may have softened 5% or 10%. This is already advantageous to the genuine buyer. These reductions in prices more than offset the 3% duty levied. An indication of this is that some developers have actually volunteered to pay for the duty, or by other means to absorb these extra measures. Mr Leong Horn Kee has suggested some variations on the payment period for the new duties. Again, the answer is no, for the same reasons I have explained that any attempt to do so will merely make the measures less effective. I can assure him that it is not the Government's intention to over-kill the market or cause it to crash because, as he says, this is in no one's interest. Events have in fact proved that this is not the case. The market, although softened, remains fundamentally sound, as seen from some recent sales of new properties in the market. We will, of course, keep a very close eye to ensure that nothing drastic happens. But I think the package of measures has achieved, at least for the time being, the desired effect. Dr Soin has posed a series of questions. I hope I have got the questions correctly. In the case of a mortgagee forced sale, she asked whether the sale is subject to stamp duty. The answer is yes, unless specific hardship can be proven.”
“Dr Ow has asked whether the new stamp duties should not be applied to new projects only. The answer is no, because speculation can take place on both new and existing completed properties. If we confine the new stamp duties to new projects only, I think the effect of curbing speculation would be diminished. He has also asked whether first-time property buyers should be exempted from paying stamp duty upfront. Again, I have to say no, because it is very difficult to define whether a first-time property buyer is or is not a speculator. Someone who has not owned a property before can quite easily also become a speculator, if he finds that after he buys a property, he can make a profit quickly. He will buy a second property and sell off the first property. He is still a first-time buyer. So the definition of a "first-time" buyer, whether he is a speculator or not, will be very difficult to define. So I think the answer has to be no. He has asked whether a first-time buyer can use his CPF funds to pay for the stamp duty. The answer is no. This is because the restriction on the total credit of 80% is imposed in order to reduce the ability to finance new purchases. So we should not allow this to be eroded by any use of CPF funds for this purpose. He has asked whether there should be more flexibility in the refund of stamp duty in situations where the sale cannot proceed because of circumstances beyond the seller's control. There is some flexibility in this area. We will deal with it on a case-by-case basis depending on the circumstances. The Minister has the power in the Stamp Duties Act to grant exemptions, and I have done so in some cases.”
“Additional stamp duty to be paid by the seller if any residential property is sold within 3 years of its purchase As part of the new tax measures, stamp duty is payable by the seller if any residential property is sold within three years of its purchase. The stamp duty on sellers is equal to the existing stamp duty on purchasers in the first year after the purchase, 2/3 of this in the second year and 1/3 in the third year. Clause 6 of the Stamp Duties (Amendment) Bill inserts a new section 22A to provide for this. Clauses 18 and 19 amend the First and Third Schedules to specify the rates of the additional stamp duty payable by the vendor or transferor. Consequential amendments resulting from stamp duty changes announced in the 1996 Budget Clauses 3, 4, 8, 9, 10, 11, 12, 13, 16 and 17 amend and repeal various provisions in the Stamp Duties Act to reflect stamp duty changes announced in the 1996 Budget. In addition, to facilitate the enforcement of the new stamp duty measures, the Stamp Duties (Amendment) Bill provides for the Commissioner of Stamp Duties to appoint agents to recover unpaid duties, similar to that presently provided for in the Income Tax Act. The Commissioner of Stamp Duties is also empowered to impound any document for which insufficient duty or no duty has been paid. This is to ensure that in cases where stamp duty is payable by both buyer and seller, both sets of duty are paid before the document is stamped. Clauses 14 and 15 provide for these changes by inserting new sections 72A and 73A. Sir, I beg to move. Question proposed.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Government recently introduced a package of measures to discourage speculation in the residential property market. The aim is to stabilise the market and prevent prices from overshooting. The Stamp Duties (Amendment) Bill 1996 and the one following it, the Income Tax (Amendment) Bill 1996, will provide for the legislative effect of the announced measures. The Stamp Duties (Amendment) Bill 1996 seeks to do the following: (i) to extend the coverage of stamp duty to every sale and sub-sale of properties; (ii) to levy additional stamp duty, to be payable by the seller, if any residential property is sold within three years of its purchase equal to the existing stamp duty payable by purchasers if the sale is within one year of the purchase, 2/3 if in the second year and 1/3 if in the third year; (iii) consequential amendments to stamp duty changes announced in the 1996 Budget. Stamp duty to be extended to all sales and sub-sales of properties Previously, a buyer who purchases an uncompleted property from a developer need not pay stamp duty until the title is transferred to him. If he resells the property before the transfer of title, he does not pay stamp duty at all. This means that property speculators who quickly resell properties pay no stamp duty. Clause 6 of the Stamp Duties (Amendment) Bill repeals the existing section 22 and inserts a new section 22 to provide for stamp duty to be imposed in respect of every sale and sub-sale of property and for the duty to be payable at the time of agreement to purchase the property. This makes speculative activities more costly. This provision will apply to residential as well as other types of properties.”
“As I have mentioned earlier, the exact formulation for the issue has not been finalised. This will be announced in due course.”
“On Mr Chng's question whether the sale of the new shares will have a depressive effect on the existing shares, I think it is not possible to give an exact answer to his question because it depends on the reaction of the market. But our experience with the ST1 issue was that the majority of the shares issued had been held and the volume of shares which were sold was very small. It was less than 1%. That being the case, I think the effect of this issue of shares on the market is likely to be quite moderate, if at all. But a great deal depends on the sentiment of the market at the time of issue. The other point, of course, is that Government will have to ensure, at the time of issue and allocation, that the discount offered is sufficiently large to absorb any temporary fluctuation of the share price at the time of issue. As to his second question whether there are other exclusive rights, I will have to refer his question to the Minister for Communications, who is more familiar with the intricacies of telecommunications business. Mr Chng Hee Kok: The Minister has not answered my question on the A, B and C tranches.”
“In computing the amount, the consultants established all cost and revenue drivers, and took into account all key factors such as service streams, price erosion, market share loss, stimuli in market growth, and Singapore's operating environment to simulate as closely as possible the impact of competition to ST. Government has accepted their recommendation and will compensate ST the sum of $1.5 billion to be paid in full on 31st March 1997. ST, who engaged its own consultant, has, after due deliberation, accepted the compensation amount. Item 3 A supplementary sum of $3.05 billion is required under the Development Estimates. This is composed of $2.76 billion required to compensate statutory boards for lands returned to the Land Office. These lands are surplus to the statutory board's requirements and are not germane to their operations. A further sum of $0.29 billion is required for payment of lands acquired as a result of the construction of the North-East MRT line.”
“This required a modification to the licence granted to Singapore Telecom on 1st April 1992. The granting of a licence and the rights, terms and conditions under the licence are rights conferred by Government to a public telecommunication operator granted the licence. These rights could be modified subject to compensation, where appropriate, for any damage arising from the modification. This is provided under the Telecommunications Authority of Singapore (TAS) Act 1992. TAS has to make sure that the Government is fair to these operators who have made substantial investments in infrastructure and network facilities in order to provide services within the understanding of the licence given to them earlier. This reputation of fairness is something we want to uphold. The Government engaged Deloitte & Touche, an international accounting and financial consultancy firm, to give an independent computation of the compensation amount. It has the necessary expertise and understanding of the global telecommunications market and development to recommend to Government a compensation amount that is fair and reasonable to ST. The consultants used an economic model to derive the compensation amount. The model projected ST's earnings based on the current situation, ie, with competition in the year 2002 and expiry of exclusive rights in the year 2007. They compared this against ST's projected earnings when its exclusive rights expire in 2000. The difference between these two figures is ST's likely loss. The consultants have computed this amount to be $1.5 billion.”
“The Government is able to offer this subsidy only because the economy has done well, and we have achieved healthy budget surpluses. As long as Singapore continues to prosper, Singaporeans can look forward to more of such discounted share offers, and other asset enhancement schemes. And they will see their assets grow together with the economy. The Government's Asset Enhancement Programme will ensure that Singaporeans will always be able to share in the success of Singapore. Item 2 -- Payment of $1.5 billion compensation to Singapore Telecom On 1st April 1992, Singapore Telecom (ST) was granted a licence which gave it exclusive rights to provide telecommunication services in Singapore for a period of 15 years until the year 2007. At the time, it was not possible to foresee the speed with which the telecommunications market worldwide and in the region would be opened up, and the rapidity with which technical advances would revolutionize the telecommunications and information transmission markets. These changes make it necessary for the telecommunications market in Singapore to be opened up to international competition much earlier than envisaged, so as to allow Singapore to harness the full benefits of the technological changes in order to maintain our position as a telecommunications hub in the region. As a result, Government announced on 11th May this year its intention to introduce competition in the telecommunication industry in the year 2000, to allow Singapore to benefit from the full range of capabilities and opportunities made possible by the deployment of the latest technology, services and applications and to prepare the industry for the intensifying of world-wide competition.”
“Hence, Singaporeans will not only pay less than the market value for the shares, but will also receive bonus shares which they do not have to pay for, provided they hold on to their shares. Every Singaporean who takes up the offer will therefore enjoy a direct subsidy on the ST shares. The present Government will bear the cost of the subsidy. It will pay out of the Budget to Temasek Holdings a sum equal to the difference between the market price and the discounted price of the shares, plus the value of the loyalty shares. This will make the subsidy explicit. We have not yet finalised the details of the share offer. We will announce the number of shares per citizen, and the price of the shares in due course. I have budgeted a sum of $2.7 billion in the Supplementary Supply Bill for the total subsidy, based on preliminary estimates. This is about the same amount as the subsidy involved in the first Singapore Telecom shares issue. But for ST1, we did not bring the subsidy out explicitly, so that Singaporeans were unaware of the large subsidy they had received. Hence, the Government has decided to treat ST2 differently. The eventual subsidy will depend on the discounted price of the shares, the prevailing market price of the ST shares at the time of share issue on allotment, the number of shares offered, and the take-up rate. If the $2.7 billion turns out to be insufficient, we will increase the budget further. The subsidy of $2.7 billion will be paid from the budget surpluses accumulated by the present term of Government. It is a major expenditure, equivalent to 2% of GDP, or more than $1,000 per adult citizen. It is also more than 40% of the budget surplus originally estimated for FY96 of $6.4 billion.”
“Mr Speaker, Sir, the First Supplementary Estimates of Expenditure for the Financial Year 1st April 1996 to 31st March 1997 will be introduced to Parliament in the Committee of Supply later today. In it, the FY96 Main Estimates approved by Parliament for FY96 will need to be augmented by $4.2 billion under the Financial Transfers head of expenditure. $2.7 billion of this sum will be required to pay for Government's subsidy in its second offer of Singapore Telecom shares later this year. The remaining sum of $1.5 billion is the compensation Government will pay to Singapore Telecom for the earlier termination of its exclusivity rights. In addition, the FY96 Development Estimates approved by Parliament will also have to be augmented by $3.05 billion through Supplementary Development Estimates. The additional sums requested are to meet several items of expenditure for which no provisions were made in the FY96 Budget. I will now explain the reasons for these requests. Item 1 -- Government subsidy for the second offer of Singapore Telecom shares (ST2) In the Budget Statement this year, I announced that the Government will be making a second offer of Singapore Telecom (ST2) shares to Singaporeans this year. This is part of Government's effort to build a share-owning society, to enhance the assets of Singaporeans, and to give Singaporeans direct stakes in the growth and prosperity of Singapore. The shares will be offered at a discount to the market price. They will also come with a loyalty bonus package, similar to that offered in the first Singapore Telecom issue (ST1) in 1993, to encourage Singaporeans to hold on to the shares as long-term investments.”
“It is difficult to produce an exact formula because of the way in which rebates are distributed. They are in the form of S&C rebates, so many months, rental rebates, so many months, and utilities rebates are in a fixed amount. If rebates are always given in this combination, the Member's suggestion might be possible because we can round them off using the utilities rebates. But, in general, if rebates are given in the form of S&C or rental rebates it will be difficult to follow the formula without arriving at some rather awkward situation. However, I will take the Member's suggestion into consideration. MEMBER OF PARLIAMENT (Postponement of court hearing to attend Parliament sitting) 6. Mr Cheo Chai Chen asked the Minister for Law whether a Member of Parliament, who is a lawyer by profession, will be allowed to postpone a court hearing when it coincides with a Parliament sitting.”
“Households with smaller bills will continue to enjoy the balance of the rebates until they are used up. The effects of the changes I have announced above are summarised in the Annex (Cols. 471 - 472) which has been distributed to Members of the House. Annex - Table 1: Rebates Granted in FY96 Budget ($), Table 2: Rebates Granted After Revision ($), Table 3: Schedule of Utilities Rebates (Cols. 471 - 472)”
“Mr Speaker, Sir, I have earlier announced that Government would review the package of rebates given to 3-room households. This was because the total benefits, including the various rebates and tax savings arising from the reduction in individual income tax rates, given to 3-room households in the FY96 Budget were comparatively lower than those given to 1-, 2-, 4- and 5-room HDB households. The reason is that 3-room flats are mainly owner-occupied and households could not be assisted through rental rebates. Also, unlike 4- and 5-room households, the majority of 3-room households would not benefit from any tax savings arising from the announced reduction in income tax rates. The Government has reviewed this and has decided to raise the total amount of rebates for 3-room households by $55. The increase is made up of two components, namely, a one-month increase in net S&C charges of about $25 after deduction of the GST offset rebate; and a $30 increase in utilities rebates to $150. The increase would bring the total rebates given to 3-room households to around the average given to 1- and 2-room households. The estimated cost of the increase is about $13 million. The extra month of S&C rebates for 3-roomers will take effect on 1st August this year. This is on top of the one which has already been given on 1st July and the two to be given on 1st September and 1st December later this year. As for the utilities rebates, they will be paid in two equal instalments for all eligible households. The first payment will be given for the September bill and the second for the November bill. As the utilities charges for each month can only be billed after that particular month, the actual cash flow will take place in October and December.”
“But based on the latest IRAS figures of private sector earnings in 1994, at 60% of the private sector average, Ministers would only rank 195. In other words, the private sector has generally moved ahead faster than anticipated, and the target of 60% of the private sector is a conservative one. Please see Table 2 below. Table 2: Ranking of Minister's annual salaries among top private sector earners Using 60% Using 60% Using 56% AVE24 AVE24 Prime Minister* 32 72 72 Senior Minister 11 17 18 Deputy Prime Minister 23 33 43 Minister (II+12%) 62 95 113 (I) 134 195 230 *no Car Allowance The gross monthly and annual salaries as at 31st December 1994 and 31st December 1995, and the projected gross monthly salaries from 1 July 1996 (before 1996 NWC adjustments, which had not been decided yet) for the office holders you have mentioned are given in the Annex (Cols. 249 - 252). Annex - SALARIES FOR POLITICAL APPOINTMENT HOLDERS (Cols. 249 - 252) MULTI-STOREY CARPARK AND WET MARKET 2. Mr Chew Heng Ching asked the Minister for National Development whether and when the Government will build a multi-storey carpark-cum-wet market at Neighbourhood 7, Bedok Reservoir Road.”
“The 1994 White Paper on Competitive Salaries for Competent and Honest Government established formal salary benchmarks upon which to peg salaries of Ministers and Administrative Service officers: For Staff Grade I Minister:Two-thirds AVE24 i.e. two-thirds the average principal earned income of the top four individuals from each of six selected professions (bankers, accountants, engineers, lawyers, local manufacturing companies and MNCs); and For Superscale G:15P32 i.e. the average of the principal earned income of the 15th person aged 32 belonging to the same six professions. The salaries for the other political office holders would be interpolated and extrapolated from these two benchmarks. The White Paper stated that the Staff Grade I salary would be increased from 48% AVE24 to 60% AVE24, and the Superscale G salary from 75% 15P32 to 100% 15P32, through progressive revisions over a period of three years. The first revision consequential to the White Paper recommendations took effect from 1st July 1995, and the second revision will take place from 1st July 1996. Table 1 shows how the Staff Grade I and Superscale G salary will compare with their salary benchmarks with each revision. Table 1: Movements of Staff Grade I and Superscale G salaries against their respective private sector benchmarks Percentage of respective salary benchmark Grade 1st Jan 94 1st Jul 95 1st Jul 96 1st Jul 97 Staff Grade I 48% 52% 56% 60% Superscale G 75% 83% 91% 100% As a cross check, PSD has verified the rank order of Ministers' current salaries against the private sector. The White Paper had estimated that when public sector salaries reached 60% of the private sector, a Staff Grade I Minister would rank 134 against private sector earners.”
“I am confident that after today's and tomorrow's debate, the House will agree with me that the integrity and reputation of Senior Minister and DPM Lee has in no way been besmirched. The fact that we are debating the issue at all testifies to the integrity and soundness of the Singapore political system. On a more personal note, I first came to know Senior Minister and DPM Lee personally when Senior Minister invited me to enter politics in 1984. In these past 12 years, I have come to know them well and to know that the accumulation of personal wealth and its trappings rank very low in their scheme of things. Members may be interested to know that over the years Senior Minister had contributed over $2 million to a variety of charities. Some $1.4 million was from awards received from defamation actions and the remainder was from honorariums and fees he received from lectures and speeches around the world, and from the sales of his book of speeches, photographs and CD-ROMs. DPM Lee has made similar donations to charity from his libel awards. I therefore find it difficult to understand how anyone could believe that Senior Minister and DPM Lee would use their positions to gain unfair advantage in the purchase of properties.”
“I was present at several of the discussions and it became clear to me that the purchases were completely normal. SM and DPM Lee had paid prices which they considered reasonable, but their actions had become entangled with the complex schemes used by developers to price and sell their new developments, involving the use of movable list prices and variable discounts. What we were facing was therefore a public perception problem. Against this background, I had recommended to the Prime Minister that Senior Minister and DPM Lee should consider giving back the difference between what they received in discounts and what the public would perceive as normal discounts of around 5% usually given to early-bird buyers. Although Senior Minister and DPM Lee had done nothing wrong and were perfectly entitled to keep the discounts, I felt that this gesture would be seen as underlining the fact that they had not sought any special advantages. There was risk, of course, that some would misunderstand the gesture as an admission of wrongdoing, but this was a risk, I thought, worth taking. My feeling was that the public would only focus on the discounts given in the belief that Senior Minister and DPM Lee had received preferential treatment and that this was unfair. As you know, in the end, Senior Minister and DPM Lee both decided to donate all their discounts on their purchases and not just the differentials to charity. This was a generous gesture which I fully support. I have related in some detail on the circumstances which led to today's debate. For those of us who were directly involved in the investigations, it was a wrenching but necessary exercise.”
“Mr Koh, working through the Stock Exchange, carried out a thorough investigation into HPL's handling of the sales of Nassim Jade and Scotts 28. After tracing through all communications between SES and HPL on Nassim Jade and Scotts 28, the Stock Exchange was satisfied that HPL had not committed any violations of SES regulations nor had the company made any attempt to conceal the purchases by Senior Minister and DPM Lee. All the transactions were above board and properly recorded. The company was however criticised by the Stock Exchange in a public statement issued on 22nd April 1996, but the criticism dealt with the company's tardiness in obtaining shareholders' approval for sales to directors. Both Senior Minister and DPM Lee fully endorsed the SES's investigations and its subsequent statement. On the issue linking Senior Minister to HPL through the purchase of its properties, the SES was able to establish, through HPL, that Senior Minister and DPM Lee had indeed purchased units at Nassim Jade and Scotts 28. HPL also provided data on the prices and discounts given for all the units sold at both developments. The information showed that SM and DPM Lee received discounts of 7% and 12% respectively for purchase of units at Nassim Jade and discounts of 5% each for the units at Scotts 28. In the case of Nassim Jade, six other buyers also received 7% discounts, but only DPM Lee was given a 12% discount. This information was reported to the Prime Minister. As the Prime Minister has related, he questioned Senior Minister and DPM Lee on their purchases as the discounts they received appeared to be on the high side. Both SM and DPM Lee were able to satisfy the Prime Minister that their purchases were above board and that there was no impropriety involved.”
“Mr Speaker, Sir, the Prime Minister has just recounted the sequence of events which started from a MAS report I received in March this year from Mr Koh Beng Seng, Deputy Managing Director of MAS in charge of financial institutions in Singapore. This report ultimately led to today's debate. As I was intimately involved, I believe it will be helpful to the House if I gave an account of how the investigations evolved and my own conclusions. One of Mr Koh's responsibilities is to keep me informed of developments which will have impact on our financial markets. Around mid-March, he received reports that there was widespread market talk that Senior Minister and members of his family had purchased units in all HPL developments, with the suggestion that it involved some sort of cozy arrangement. This was immediately reported to me as the implications were very serious, as Senior Minister was involved and HPL was a listed public company. The MAS routinely investigates market rumours of this type. But as this case involved Senior Minister, the Prime Minister had to be informed. The PM's instructions were specific - investigate and report. The rumours could not be allowed to fester, lest it undermined the integrity of the Government. Around this time, there were also press reports of minority shareholders' unhappiness over HPL's handling of the sale of Nassim Jade. As HPL was a listed company, the case began to take on wider implications. There were two parts to the investigation. Firstly, we had to establish whether HPL had done anything illegal or had violated any SES regulations in its handling of the sale of units at Nassim Jade. Secondly, the rumours linking Senior Minister to purchases of HPL properties had to be thoroughly investigated.”
“Some international banks which have operations in Singapore have centralised their data processing function in their head office or other overseas branches in order to reap cost-reduction benefits from economies of scale and for a more efficient and effective management control. In order that their Singapore operations may also enjoy these benefits, the Bill proposes to allow certain types of information to be transmitted by foreign banks in Singapore to their head offices and other such overseas branches for data processing purposes. The Bill also proposes that the Goods and Services Tax Act be included in the definition of "written law" under section 47(11) of the Act so that banking secrecy may be lifted for investigation and prosecution of offences under the GST Act. Other than the above amendments, the Bill also contains a number of other house-keeping amendments to the Act merely to give the force of law to administrative procedures. These amendments do not warrant any special mention in addition to what has been stated in reference to them in the Explanatory Statement. Sir, I beg to move. Question proposed.”