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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“But this edge is a finite one, and we cannot take it for granted. We need to educate and train each Singaporean to his maximum potential in economically relevant areas. We also need to press on with the flexible wage system, and avoid ossifying cost levels and structures as the labour force ages. In the developed countries, especially in Europe, wage costs are inflated by social security taxes and other non-wage payments, as well as shorter working hours and longer paid holidays. For every $1 of wage cost to employers, 25 to 30 cents go towards taxes and levies in these countries. In Singapore, the proportion is only 16%, due mainly to employers_ contributions to the Central Provident Fund (CPF). There is a fundamental difference between the CPF and social security taxes in other countries. Our CPF contributions, though compulsory, are not put in a common pool to be re-distributed to others. CPF savings belong to individual members who can use them for their retirement needs and to buy a home or invest in a wide range of instruments like education, shares, gold and property. Furthermore, the level of discretionary savings is high. Even with $66 billion worth of savings in the CPF, Singaporeans have $20 billion worth of deposits with the POSB and another $72 billion with commercial banks. The emphasis on fundamentals is sound, as they, unlike short-term cost advantages, are harder to replicate. Getting the fundamentals right is a matter of building sound institutions, investing for the long-term, and continuously building on and improving our systems. There are no short-cuts and no compromises. Meticulous attention to detail ensures the success of our plans. Fortunately for us, these competitive advantages also take some time to be eroded.”
“These are: a) keeping the business environment clean and efficient, b) maintaining prudent and stable macroeconomic policies, and c) improving human resources. Fortune magazine has ranked Singapore the Number One city to do business in. This is not because Singapore has the lowest cost, but because Singapore is an easy place to do business in. Singapore may be more expensive in terms of upfront costs, but there are no hidden extras. This is no accident but a matter of design. There should be no slackening of standards of integrity and efficiency in Singapore even as we adapt our practices to suit the different markets in which we invest. Singapore is welcomed as an investor in the region partly because of the way we do business and our reputation. This "brand name" distinguishes us from other investors and should not be tarnished. A prudent and stable macroeconomic environment creates the best conditions to sustain investor confidence. Consistently low inflation, a strong currency, sound public finances with low taxes, and a triple-A credit rating reduces to a minimum the risk of investing in Singapore. The Government_s conservative fiscal policy has enabled us to build infrastructure and pay for essential public services like education and basic health care while setting aside savings for future needs. Later, I will discuss in greater detail how fiscal policy can be further refined to maintain competitiveness. As Singapore faces keener international competition, the quality of our human resource becomes a critical competitive advantage. So far, investors have been prepared to pay a premium because they recognise the quality of our workers, and because our overall business environment enables them to make the most of their workers here.”
“Because we make these adjustments promptly when they become necessary, we need to make only small changes each time, and the process need not be a traumatic one. This is the real reason for raising SP's tariffs. It is not to raise more money for the Government, or to enable the Government to float SP on the stock exchange. Many Singaporeans ask: why does the Government need to raise SP_s tariffs and other government charges, when it runs comfortable budget surpluses? The answer is that when the Government runs surpluses, it will share the fruits of growth with Singaporeans. But it must do so in ways which help Singaporeans build up their assets and strengthen their stakes in Singapore, and not ways which hinder the working of our economy, and damage the growth on which our future depends. The amounts which the Government has given back to the people, in the form of HDB housing subsidies, rebates on service and conservancy charges and HDB flat rentals, SOTUS share top-up schemes, and discounted Singapore Telecom shares, are much larger than the additional revenue which SP will earn from the higher tariffs. Later I shall be announcing a scheme of rebates to PUB bills for lower income HDB households. The amounts per household from this new rebate alone will also exceed by many times the projected increase in their electricity bills. This proves the point that the purpose of the SP tariff revision is not to enable the Government to collect more money, but to get an important factor of production, namely electricity, priced correctly, so that our economy will function properly and grow, to benefit all Singaporeans. Let me now turn to the other supply-side fundamentals.”
“These centrally-planned economies deliberately under-priced factors of production like oil, coal, electricity and steel, and then allocated them to favoured industries and consumers by central command, instead of by using market forces. They believed that oil, electricity, etc. were "strategic" sectors of the economy, and that pricing these resources cheaply would reduce costs for the targeted consumers of these resources, and help them to grow faster. Unfortunately, the results massively disappointed these hopes. Far from low factor prices boosting the economy, they distorted structures of production so badly that sometimes the real value of the output was even less than the value of the material inputs. The Economist described it as: "Valuable metal, plastic, cardboard, rubber, energy go in at one end; Trabant cars worth less than the sum of these parts emerge at the other. ["The value-substractors of Eastern Europe" in The Economist, 5 Jan 91]. Eventually the whole system collapsed. The former Eastern European countries have, to varying degrees, carried out economic reforms. The adjustment to a market economy has been a very painful process for them, particularly in Russia, where it has caused major social and political upheaval. They have all had to recognise explicitly what has always been the case, that under-pricing energy and other inputs have a market price and an opportunity cost, and this true cost was much higher than the nominal price the central planners had set. Singapore is far from the predicament of the former Communist economies. But it is the same logic which forces us to recognise that Singapore Power_s electricity tariffs are too low, and that we must raise them gradually over several years, to enable SP to earn an adequate return on its capital.”
“The prices of key inputs to the economy, such as land, labour, electricity, fuel, and telecommunication services must reflect their scarcity and the cost of producing them. For example, the cost of electricity includes the cost of the fuel oil or natural gas consumed, the manpower costs of Singapore Power staff, the rental or depreciation of the equipment used as well as the land occupied by the power stations and grid. In addition, the cost also includes the cost of the capital in the form of loans and equity which finances Singapore Power_s business. In the case of loans, this cost is the interest on the borrowings. In the case of equity, this cost is a competitive rate of return on the equity. Pricing factors of production too high places a burden on the rest of the economy, and damages economic growth. But pricing them too low - ie below the cost of producing them, including the cost of capital - is also harmful, as it encourages over-consumption of these resources. When consumers and firms do not see or bear the true cost of these factors, they will use these factors even when they are worth less to them than what they really cost. As a result, instead of adding value, they will be subtracting value. It is painful to have to raise prices of important factors of production like electricity, because this affects almost all households and firms. Yet these are precisely the resources where mis-pricing does the greatest harm. The former Soviet Union and the Communist countries of Eastern Europe, provide a dramatic if extreme example of the harm caused by mis-pricing key factors of production.”
“EDB is working hard to attract some of these wafer fabs to Singapore. The Singapore port had another record year in terms of containers handled but faces keener competition as regional ports gear up for a slice of the transhipment business. In financial services, new forms of service delivery like automated teller machines, Internet banking and electronic cash cards are being introduced. Several cities in the region are gearing up to become financial centres, and rival Singapore. Singapore must respond to and take advantage of these business changes. We need to strike a judicious balance between long-term strategic considerations and tactical moves in the short- to medium-term. This will help us to set our sights on a steady growth path while accepting temporary deviations from trend. The Government_s basic philosophy is to keep the supply-side fundamentals sound and ride on opportunities as they arise, in order to strengthen our long term competitiveness. We must improve our own performance in an expanding market, instead of hoping that our competitors or potential competitors will fail. Much as some sections of the business community would like us to, we cannot artificially depress cost levels or resort to protectionist measures to gain an advantage over the competition. These palliatives are detrimental to economic efficiency. They will slow down growth and cause us to misallocate and waste resources. This will benefit nobody in the long term. This is what economists mean when they speak of distortions to supply and demand. One important way to avoid distortions is to price factors of production correctly.”
“In successive budgets, the Malaysian government has liberalised the economy by lowering or abolishing tariffs, and promoted more competition in both the manufacturing and services sectors. It has improved the business environment, and relied on sound policies, a conducive business climate, and skilled manpower to move up the technology ladder. It has introduced tax incentives similar to ours, like Operational Headquarters (OHQ) incentives for both manufacturing and services and pioneer status for wafer fabrication companies. Singapore welcomes Malaysia_s pro-growth economic policies, even though Malaysia_s success will put pressure on Singapore. We will just have to push ahead, raise our skill and productivity levels, and continue to attract still higher quality investments here, if we are not to be displaced. This pressure to improve ourselves is positive and constructive. Malaysia_s success is an opportunity, not a threat to Singapore. It opens up fresh possibilities for win-win economic cooperation, and much closer trade, investment and business linkages between our two countries. A more prosperous and self-confident region makes for a better environment for further growth, even as healthy competition pushes each country to achieve its best. Domestically, our lack of domestic market, small size and ageing population can become handicaps. For Singapore to continue to attract manufacturing and services investments, we need to remain significantly more efficient than other countries. We must mobilise and maximize our resources to respond to the exciting changes in the business world. For example, major semi-conductor companies are racing to build new capacity, to meet the severe worldwide shortage of semiconductors.”
“0% per annum recorded in the preceding 10 years. The better labour productivity performance has been accompanied by a trend of improving Total Factor Productivity (TFP) growth. Since the recovery from recession in 1986, TFP growth has averaged 2.8% per annum compared with the -1.4% during 1974-86. MTI_s projection is for growth potential to be about 7% per annum for the next 5 years. In good years, we may do better but with consequences like rising costs and a tight labour market. In weaker years, growth may fall below 7%. Because Singapore is so heavily dependent on external demand, we must adapt to changes in the environment. MEETING FUTURE CHALLENGES Keeping the economy on course for about 7% annual growth will be a real challenge. The nature of global competition has changed with the entry of new and big players, like China and India into the international economy. Closer home, as ASEAN countries progress, they will increasingly compete against us for foreign investments, even as their development generates new opportunities for economic cooperation. In Malaysia, economic growth has averaged 8.9% per year in the last 8 years. Per capita incomes have grown by 6.3% per year in real terms. Malaysians are proud of their country_s achievements, and are galvanised by Vision 2020 to make Malaysia a developed country. Malaysia has been systematically building up a diversified manufacturing base. In recent years it has attracted industrial projects that are as sophisticated as those coming to Singapore. They include high-end activities like disk drives and wafer fabrication, which Singapore is also pursuing. The productivity and quality at electronics factories in Penang are high.”
“1993 was a record year when China saw foreign direct investment approvals reach US$110 billion. The transformation in ASEAN was no less dramatic. Indonesia liberalised foreign investment in 1983, Malaysia and Thailand in 1986. India, after years of pursuing economic self-reliance, opened up in 1991. The liberalisation has made the region as a whole more attractive to foreign investors. Furthermore, ASEAN_s move to liberalise and deregulate their economies coincided with rising cost pressures in Japan and the NIEs and hence increased the outflow of foreign direct investment from these countries. Foreign direct investment into the ASEAN countries, China and India rose dramatically, from US$20 billion in 1988 to US$160 billion in 1995. Exports by Asian countries (excluding Japan) also saw dramatic growth. Between 1985 and 1995, exports grew by 17% per annum, compared with 14% per annum between 1975 and 1985. The increase in trade and investment linkages has resulted in closer economic integration of the Asian economies. For Singapore, regional growth has given an added boost to the economy and cushioned us against slower growth in the OECD countries over the last 5 years. Domestically, we have expanded our supply-side growth potential due to three factors. First, the female labour participation rate has increased from 45% in 1985 to 50% in 1995. Second, the workforce has expanded faster than we had anticipated, partly because of higher immigration and partly because we have allowed in more foreign workers who now account for about 1 in 5 workers. Third, our years of investments in education, training and infrastructure are now paying off in higher productivity growth. Productivity growth during 1985-95 averaged 4.7% per annum, higher than the 4.”
“Singapore has also made good progress in a wide range of socio-economic indicators (Table 1 (Cols. 807 - 808)). Table 1 - SOCIO-ECONOMIC INDICATORS (Cols. 807 - 808) Strong economic growth and sound public finances have enabled the Government to enhance the assets of citizens, by upgrading HDB flats, and selling at a discount Singapore Telecom shares, HDB shops and hawker stalls. OUTLOOK FOR 1996 The outlook for the external environment remains positive, but sentiments in Europe and the US have turned less optimistic in recent months. Regional growth is also expected to be lower after strong growth in recent years. Prospects for the electronics industry remain bright though growth in demand is expected to moderate from that in 1995. With slightly slower growth in external demand and continued pressure on costs and competitiveness, the Singapore economy is likely to see slower growth in 1996. The Ministry of Trade and Industry has therefore retained its earlier forecast of 7-8% growth for 1996. MEDIUM-TERM GROWTH OUTLOOK Singapore has enjoyed faster growth than we had thought possible in 1986. Then, the Ministry of Trade and Industry had projected our long-term indigenous growth rate to be 4-6%. This 4-6% represented the supply-side growth potential for the Singapore economy in the next 30-40 years if no more new foreign workers were allowed. In reality, growth has averaged 8.5% in the last 10 years. This is due to two important developments, one external and one domestic. Since the late 1970s, there has been a wave of economic reform and liberalisation in Asia. China_s economic reform programme in 1978 led first to a boom in trade via Hong Kong and then to an upsurge in foreign direct investments into China.”
“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1996 to 31st March, 1997. I REVIEW OF THE ECONOMY ECONOMIC PERFORMANCE IN 1995 Mr Speaker, Sir, the Singapore economy had another good year. Overall growth was 8.9%, with strong showing in manufacturing, transport & communications and commerce. This reflected the strength of the global electronics cycle and buoyant regional growth. For the period 1990-95, Singapore_s economic growth averaged 8.5% per annum, better than the other Asian Newly Industrialised Economies and about the same as Malaysia and Thailand. The strong growth performance has led to continued cost pressures. The Unit Labour Cost (ULC) Index for the manufacturing sector rose by 0.9% in 1995. Our relative competitiveness in manufacturing worsened in 1995. The Relative Unit Labour Cost Index in US$ against the NIEs grew by 9.1%. This was due to the appreciation of the Singapore dollar and larger increases in ULC against Hong Kong and Taiwan. However, consumer price inflation moderated because of the strong Singapore dollar, weaker sentiments in the property and stock markets, and keen competition in the retail industry. The external economy continued to grow in tandem with the domestic economy. Factor income from abroad accounted for 12% of GNP, compared with 11% for 1994 [Defined as foreign income from abroad (FIFA) as a percentage of the sum of GDP and FIA.] The good economic performance has meant real progress for our citizens. In the last ten years, per capita income increased by 5.9% per annum in real terms. Real wages rose by 3.8% per annum. In 1995, 90% of our households owned their own homes, up from the 73% in 1985.”
“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 "$1,341,300", "$62,000", "$2,908,900", "$737,300" and "$351,500", in the second column and substituting the figures "$1,556,100", "$80,000", "$3,176,500", "$732,000" and "$216,100", respectively. ANNUAL BUDGET STATEMENT”
“Mr Speaker, Sir, I beg to move the Motion* standing in my name under item No. 2 on the Order Paper. *The Motion reads as follows: 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 "$1,341,300", "$62,000", "$2,908,900", "$737,300" and "$351,500", in the second column and substituting the figures "$1,556,100", "$80,000", "$3,176,500", "$732,000" and "$216,100", respectively. Sir, it is proposed to increase the provision for the Privy Purse from $1,341,300 to $1,556,100. The increase is necessary to provide for the revision in the pay of the President in July 1995. An increase in the provision for Entertainment from $62,000 to $80,000 is also needed to meet the larger number and higher costs of official functions. The provision for Salaries of Personal Staff is increased from $2,908,900 to $3,176,500 to cater for normal salary increments and filling of vacancies. A provision of $732,000 is needed for Expenses of Household. This is marginally lower than FY95 amount by $5,300. The provision for Special Services is decreased from $351,500 to $216,100. A lower provision is needed because the President has decided not to purchase a new car in FY95 but to retain the existing one. Provision has therefore to be made in FY96 for payment of the prevailing vehicle quota premium for this car. It is, therefore, necessary to vary the provisions in the Schedule to the Civil List as indicated in the Motion before the House. Sir, I beg to move. Question put, and agreed to.”
“Mr Speaker, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. CIVIL LIST”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported - "That the sum of $2,551,273,840 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1995 to 31st March, 1996, contained in Paper Cmd. 3 of 1996". "That the sum of $417,150,000 shall be supplied to the Government under the Head of Expenditure for the Public Services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April, 1995 to 31st March, 1996, contained in Paper Cmd. 3 of 1996".”
“The total amount of revenue collected from vehicular and road taxes, fees and fines was $2,864 million in FY1992, $4,089 million in FY1993, $4,589 million in FY1994 and $2,190 million from April to December 1995. WRITTEN NOTICE OF EXPULSION TO STUDENTS 2. Mr Cheo Chai Chen asked the Minister for Education whether his Ministry will provide instructions to all principals of schools to give written notices to the parents before expelling students from the schools.”
“The total issue is in billions of dollars. I do not recall the exact figure. But the Government Securities Fund accounts for all Government bonds issued which have maturities exceeding one year, two years, five years and seven years and all bonds issued to the CPF Board. So it runs into billions of dollars. 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] Clause 1 -”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill is related to the Local Treasury Bills (Amendment) Bill which the House has just passed. It seeks to amend the Government Securities Act such that all proceeds raised under the Local Treasury Bills Act on or after the commencement of the Local Treasury Bills (Amendment) Act may be paid to the Government Securities Fund instead of the Consolidated Fund. The Bill amends section 3 of the Government Securities Act to provide for the proceeds from the issue of treasury bills to be paid into the Government Securities Fund. The amendment to section 5 of the Act is to allow the redemption of treasury bills and other related expenses to be met from the Government Securities Fund. The Bill also amends section 6 of the Act such that if the Government Securities Fund proves deficient in meeting the principal payments on treasury bills, the deficiency will be charged to the Consolidated Fund. This provision is similar to the existing provision in the Government Securities Act which allows the Consolidated Fund to be drawn upon when the moneys in the Government Securities Fund are insufficient to meet any obligations arising from the Act. Sir, I beg to move. Question proposed.”
“The Bill will only apply to treasury bills issued on or after the amended Act has come into force. 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. [Mr Speaker in the Chair] Clause 1 -”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to amend the Local Treasury Bills Act to provide for the proceeds, redemption and related expenses of treasury bills to be accounted for under the Government Securities Fund instead of the Consolidated Fund. Treasury bills are issued as part of MAS' money market operations and to provide liquid assets to the banking system for their reserve requirements. They are not issued to finance Government's expenditure. However, the proceeds and expenditure of treasury bills are currently accounted for under the Consolidated Fund. As a result, the Consolidated Fund is inflated each time proceeds from the issue of treasury bills are paid into it, and are drawn down when bills are redeemed or when related expenses are incurred, even though these do not form part of Government's expenditure. To avoid such distortions to the Consolidated Fund, we have decided to account for the proceeds and expenditure of treasury bills under the Government Securities Fund. The Government Securities Fund, or GSF for short, was set up in March 1992 as a self-contained fund to account for all loans, other than those raised to finance development projects. The proceeds from the issue of Government securities are paid into the GSF. The redemption and related interest payments of Government securities are also charged upon and payable out of the GSF. Bringing the treasury bills under the ambit of the GSF will rationalise Government's debt accounting practices through the use of a single fund, which is the GSF. The Bill amends sections 4, 5 and 7 of the Local Treasury Bills Act by deleting the words "Consolidated Fund" wherever they appear and substituting them with the "Government Securities Fund".”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before this House seeks to amend the Inland Revenue Authority of Singapore (IRAS) Act by introducing a new clause enabling IRAS to perform new functions as approved by the Minister for Finance. The IRAS Act specifies certain functions which the Authority may perform. These are based on IRAS' primary mission of administering the tax system on behalf of the Government. However, the Act does not provide for IRAS to carry out other functions not related to tax administration, even though such functions are to be performed on behalf of other Government bodies and are more efficiently carried out by IRAS, for example, the collection of television licence fees. The Act also does not allow IRAS to provide consultancy in the computerisation of tax administration systems. To enable IRAS to cooperate more fully with other Government bodies and to better exploit the efficient systems which it has developed, I have decided to allow the Authority to carry out additional functions subject to a proviso that these must be explicitly approved by the Minister for Finance. The proposed clause thus amends section 6 to give legislative effect to this change. 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. [Mr Speaker in the Chair] Clause 1 -”
“Dr Kanwaljit Soin asked the Minister for Information and the Arts (a) what is the main mission of Radio Singapore International and (b) why the broadcasts are not available for local consumption. The Parliamentary Secretary to the Minister for Information and the Arts (Encik Mohamad Maidin B P M) (for the Minister for Information and the Arts): Mr Speaker, Sir, Radio Singapore International (RSI) was launched on 1st February 1994. The mission of RSI is to provide external audiences and Singaporeans abroad with a reliable and objective source of news and information on international, regional and domestic events. Through RSI, Singaporeans abroad are kept in touch with what is happening at home. RSI also enables others who are interested in Singapore, a convenient way to learn more about us and to see the way Singaporeans view the world. RSI broadcasts are not available locally because its services are for listeners outside Singapore. The transmissions in shortwave cannot be heard in Singapore. This is similar to the United Kingdom where BBC World Service shortwave transmissions are also generally not receivable in the country. However, local listeners do not need RSI's services as they have 14 local radio channels which cater to their needs.”
“Ho Peng Kee: Sir, in the case of the Jehovah's Witnesses, the group, for example, claims a neutral position in war time. Therefore, this led to a number of its believers in National Service refusing to perform any military duties; some, in fact, refused to wear uniform. In the case of the Christian Conference of Asia, the group professed to be a religious organisation but was in actual fact an organisation involved in politics. It encouraged inter-faith dialogues for political ends and involvement of religious organisations in politics. In the case of the Moonies, the group brainwashed families and broke them up, and members gave up their possessions to the Church. These are examples which illustrate the basis for the ban on these organisations. Assoc. Prof. Walter Woon: Sir, would the Senior Parliamentary Secretary reconcile these bans with the constitutional protection on freedom of religion? Assoc. Prof. Ho Peng Kee: Sir, certainly there is freedom of religion in Singapore. Article 15 of our Constitution provides for it. However, Article 15(4) says that, "This Article does not authorise any act contrary to any general law relating to public order, public health or morality". In so far as these organisations have been banned, that is the basis for not allowing them to propagate their beliefs in Singapore. Assoc. Prof. Walter Woon: Sir, is there any mechanism to review the bans, or are the bans perpetual? Assoc. Prof. Ho Peng Kee: I am sure the Member would know that there have been certain groups, for example, the Jehovah's Witnesses, that have challenged the legality of the Ministerial orders in court, and the courts have upheld the legality of these orders. RADIO SINGAPORE INTERNATIONAL (Mission) 5.”
“Following from the Inspectors' Report, there were suggestions that other people might be involved with Leeson in the fiasco. The Commercial Affairs Department has been pursuing these leads and they are in the process of finalising their report. Let us wait for it. It should not be too long. RELIGIOUS/QUASI-RELIGIOUS ORGANISATIONS (Ban) 4. Assoc. Prof. Walter Woon asked the Minister for Home Affairs how many religious or quasi-religious organisations have been banned in Singapore under the Societies Act or other legislation. The Senior Parliamentary Secretary to the Minister for Home Affairs (Assoc. Prof. Ho Peng Kee) (for the Minister for Home Affairs): Mr Speaker, Sir, three religious or quasi-religious organisations have been deregistered under the Societies Act. Assoc. Prof. Walter Woon: Sir, would the Senior Parliamentary Secretary please give details to the House? Which three, and why? Assoc. Prof. Ho Peng Kee: Sir, the three organisations are, firstly, the Singapore Congregation of Jehovah's Witnesses (deregistered in January 1972), the Holy Spirit Association for the Unification of World Christianity or the Unification Church, whose followers are known as the "Moonies", (deregistered in April 1982) and its front organisation, the Moral Home Society (deregistered in July 1990), and the Christian Conference of Asia (deregistered in December 1987). Sir, they were deregistered under section 24 of the Societies Act by a Ministerial order on the grounds that their activities were prejudicial to public welfare and good order. Assoc. Prof. Walter Woon: Sir, could the Senior Parliamentary Secretary give us further details? In what sense were their activities prejudicial to good order? Assoc. Prof.”
“The comments relate to earlier investigations by the British Serious Fraud Office and by the Bank of England in the early stages of the Barings fiasco. There were legal technicalities which did not allow the Singapore authorities to provide comprehensive information and there was some mis-communication. I think these had been largely settled. Assoc. Prof. Walter Woon: Sir, now that Mr Leeson has been convicted and sentenced, have the investigations into the Barings matter been closed or can we expect further prosecutions?”
“Who were making the comments? Assoc. Prof. Walter Woon: There were some statements made. I believe the Chancellor of the Exchequer did say that.”
“The steps being taken by SIMEX should enable it to monitor its risk exposure to large accounts and take the necessary action to contain these risks. This would minimise systemic risk arising from the failure of a firm having knock-on effects on other participants in the market. However, it should be emphasized that no regulatory system, however comprehensive, can guarantee that a firm will not fail as a result of fraud or excessive speculative trading. Assoc. Prof. Walter Woon (Nominated Member): Sir, there were certain comments made by British authorities in the wake of the Barings collapse that they were not receiving full cooperation from the Singapore side, ie, from SIMEX or other authorities. Would the Minister comment on that?”
“In April 1995, SIMEX also appointed a consultant, Dr Roger Rutz, the former Chief Executive Officer of the Board of Trading Clearing Corporation, one of the world's largest clearing houses. He was asked to review SIMEX's clearing and settlement operations and its system for market surveillance so as to improve its clearing and risk management functions. The key measures recommended by the consultant included: (i) Establishing a Risk Management Committee to oversee policies on capital requirements, financial and segregation requirements, position limits and reporting and clearing house systems; (ii) Improving internal risk analysis procedures to identify accounts and members carrying large positions which may result in substantial losses, and perform tests on these accounts to determine the potential risk to both members and large account holders; (iii) Performing detailed analysis of settlements and margin calls on clearing members on a daily basis; (iv) Monitoring closely positions carried by clearing members and large accounts which constitute a high percentage of the positions in the market; and (v) Upgrading computer systems to provide real-time, on-demand information for clearing processing and risk management. SIMEX has adopted all the recommendations made by the Panel and its consultant. It has already implemented the majority of these recommendations and is in the process of implementing the balance, which involve software modifications or rule changes. In line with the recommendations, a new Regulatory and Risk Management Division within SIMEX has been created, comprising the Audit, Floor Compliance, Market Surveillance and Clearing House Departments. Staffing for the division has been strengthened from 48 to 68 members currently, and an eventual total of 78.”
“Mr Speaker, Sir, in March 1995, SIMEX appointed an International Advisory Panel comprising experts from the global futures industry. They include Dr Wayne Angell, a former member of the Board of Governors of the Federal Reserve System, Mr John Gilmore, a former Chairman of the Chicago Board of Trade, Mr Michael Jenkins, the Chairman of the London Commodity Exchange, Mr Leo Melamed, the former Chairman of the Chicago Mercantile Exchange and Mr Jack Sandner, its current Chairman. They were appointed to advise on best practices in the futures industry worldwide that could be adopted to improve SIMEX's operations and systems and to enhance customer protection. The Panel concluded its study in October 1995 and made the following recommendations to SIMEX: (i) To establish rules and evaluate those in place regarding customer protection with respect to proper margining of positions, segregation and trading floor practices; (ii) To upgrade SIMEX clearing policies, systems and procedures to incorporate real-time clearing and settlement and critical risk management systems; (iii) To establish confidential information sharing arrangements with mutual offset partners and other exchanges; (iv) To establish a requirement for clearing members that a senior officer, who must be in a position of full authority for all business of the firm at SIMEX and related activities on other exchanges, be registered with the Exchange; (v) To enhance SIMEX's Market Surveillance Department which is charged with responsibilities including monitoring market positions and their potential impact; and (vi) To establish a comprehensive large trader reporting system which will enable the Exchange to determine the ultimate owner of large positions on SIMEX including those maintained in omnibus accounts.”
“The enclosed table at Annex 1 (Cols. 403 - 406) lists the organisations that received donations from the Singapore Totalisator Board since 1991, or have been approved funds for future disbursement as well as the amounts involved for the period 1991 to October 1995. Annex 1 - SINGAPORE TOTALISATOR BOARD DONATIONS TO ORGANISATIONS SINCE 1991 (Cols. 403 - 406) NON-CONTRIBUTION TO CENTRAL PROVIDENT FUND 2. Mr John De Payva asked the Minister for Labour (a) whether his Ministry (i) will act upon anonymous complaints about non-contribution to the Central Provident Fund (CPF) by employers and (ii) will be aware of such non-contribution if no complaints are made; and (b) how his Ministry will deal with an employer who has not been contributing to the CPF for its employees for ten years.”
“Let me say once again, so that I am not misunderstood, that I do not think that this will solve the problem of parents who are not maintained because the law is not a panacea. But with this in place, with education in place, and with the continuing emphasis that we have placed on preservation of the family and family values, I have every confidence that we may be able to preserve family as the basic building block of our society. It is my sincere hope that nobody has to make recourse to the Tribunal, but if that is required, at least, the mechanism is there. May I end by once again thanking all the Members who have spoken for the Bill or against the Bill and the representors who have taken the time to write in and to appear, and again to the Ministry officials and to the Minister for his support. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Third time and passed.”
“And a concern was expressed that there might be in future bedroom communities of elderly Singaporeans resident outside Singapore but who have not abandoned their Singapore homeland, as it were, and rather than have a situation where these people are asking to be supported, the Select Committee accepted the recommendation made by one representor that only those who are resident in Singapore as well as being domiciled in Singapore should be entitled to make an application. The Bill, as amended, also states the definition when a person is unable to maintain himself and makes clear now in clause 3 that we are not talking about sharing the wealth. So the concern of some people that parents might try to get a share of the wealth of their children undeservedly would have been addressed. This is not meant to ensure that you can have a share of your children's wealth. This is basically to ensure that you are supported at the basic minimum, to provide basic amenities and physical needs. And this, one will find in clause 3 of the Bill. The other provisions of the Bill are consequential on the creation of a Tribunal and a Commissioner. They provide for matters like costs and procedures. The Minister is empowered to make rules to implement this Bill and to address the concern that some people have raised that there might be vexatious claimants, the rules will also provide the Tribunal with power to dismiss vexatious claims at an early stage. So, all in all, may I say to Members that I hope with these changes, much of the reservations that were expressed at the Second Reading of the Bill may have been addressed.”
“One of the features of this Tribunal is that no lawyers will be allowed to represent clients because the introduction of lawyers in sensitive matters like this, ie, to sling mud at the other side, tends to exacerbate the differences amongst the parties. So we have taken away the legal representation although, of course, if there is an appeal to the High Court or Court of Appeal, lawyers might come in. One hopes that the disputes will not go that far. So for the most part it would be the applicants themselves, the parties themselves who appear or, with the permission of the Tribunal, who have a representative who is not paid, or a Commissioner, which is also provided for in the Bill, may make an application on behalf of an applicant. The Tribunal would not be bound by the normal rules of evidence, nor would it hear in public unless there is an application to do so. Again, it is a sensitive thing. Apart from the creation of the Tribunal, there has been fine-tuning of the provisions of the Bill. A minimum age has been stipulated to be tied to the Retirement Age, although people who are unable to support themselves physically or because of mental infirmity will be able to make applications even though they are below that minimum age. The proposed Bill has also been confined not only to those who are domiciled in Singapore but also to those who are residents. Perhaps I might just explain this. The legal concept of "domicile" does not require a person to stay in Singapore.”
“Walter Woon (Nominated Member): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time." The Maintenance of Parents Bill was committed by a resolution of this House to a Select Committee on 27th July 1994, more than a year ago. 1,003 written representations were received, which I think might very well be a record. However, only nine representors were invited to give evidence and Members will see the details of this evidence in the Report that has been presented to the House. When I summarised the debate during the Second Reading of the Bill last year, I did say that many Members had made very good suggestions as to the creation of a non-argumentative and non-confrontational mechanism. But I also, as a Private Member, was not in a position to promise anything. I expressed the hope at that time that the Acting Minister for Community Development would look into the possibility of creating such a non-confrontational mechanism and that the Minister for Finance would look indulgently on financing the mechanism. I am glad to report to the House that that is exactly what the Acting Minister for Community Development has done and I am in his debt and in the debt of his officials for all the hard work that they have put in to create this new and non-confrontational mechanism. If I might just take the House briefly through the changes that have been made. The primary change takes the question of maintenance of parents away from the courts which are not equipped to deal with family disputes or family matters, and to vest it in a specially created tribunal, a tribunal that is now established under clause 13 of the proposed Bill. The Tribunal will have a President who is legally trained and other members who are not necessarily legally trained.”
“Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with section 4 of the Asian Development Bank Act (Chapter 15), resolves that the Minister for Finance be authorised to increase, on behalf of the Government, the total subscription of Singapore to the authorised capital stock of the Asian Development Bank by a sum not exceeding seventy-two million and six hundred thousand United States dollars. Sir, the Board of Governors of the Asian Development Bank has adopted a Resolution to increase the capital stock of the Bank by 100%. This is the fourth increase in the Bank's capital stock. The first increase of 150% took place in 1972, the second increase of 135% in 1977, and the third increase of 105% in 1983. At present, Singapore's subscription to the authorised capital of the Asian Development Bank totals 6,020 shares. Under the proposed increase, we have been allotted a further 6,020 shares amounting to US$72.6 million. 2% of this amount has to be paid in. Parliament is requested to authorise the Government to increase the total subscription of Singapore to the authorised capital stock of the Asian Development Bank by a sum not exceeding US$72,600,000. Sir, I beg to move, Question put, and agreed to. Resolved, That this Parliament, in accordance with section 4 of the Asian Development Bank Act (Chapter 15), resolves that the Minister for Finance be authorised to increase, on behalf of the Government, the total subscription of Singapore to the authorised capital stock of the Asian Development Bank by a sum not exceeding seventy-two million and six hundred thousand United States dollars. MAINTENANCE OF PARENTS BILL (As reported from Select Committee) Order for Third Reading read. Assoc. Prof.”
“According to the IRAS database of assessments issued for YA94 based on income for the accounting year ending in 1993, there were 28 lawyers and 5 doctors who earned $1 million or more from their legal and medical practice respectively. CHINESE LANGUAGE TEACHERS (Promotions) 4. Mr Cheo Chai Chen asked the Minister for Education how many Chinese language teachers there are and how many have been promoted during the recent promotion exercise.”
“The clause also provides clearer definition of the offences and penalties for such offences. The other amendments to the Currency Act are to update and improve the procedures of the Board. These include: (a) Clause 3, which allows the Board to charge expenses relating to the investment of the Currency Reserve Fund to the Currency Fund Income Account; and (b) Clause 4, which confers protection from personal liability on any member, officer or employee of the Board for anything done in good faith in the execution or purported execution of the Act. 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. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." -[Dr Lee Boon Yang]. Adjourned accordingly at Twenty-Two Minutes to Four o'clock pm to a date to be fixed. WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 3.00 PM WINDING UP - CREDIT CONSULTANT (ASIA) PTE LTD 13. Mr Cheo Chai Chen asked the Minister for Law what was the total asset of Credit Consultant (Asia) Pte Ltd when the Official Assignee and Public Trustee/Receiver took over at its winding-up (No.229 of 1993); how many debtors have already received their dividends; and how was it assigned to the debtors.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Amendments are proposed to the Currency Act (Cap. 69) to provide for the control of the importation, manufacture, sale, possession and use of full colour copying machines that can reproduce Singapore currency notes or any design resembling Singapore currency notes. Amendments to the Act are also proposed to update and improve the practices and procedures of the Board of Commissioners of Currency, Singapore (BCCS). Rapid advances in colour copying technology have made full colour copying machines a threat to the integrity of currency notes. Such machines have become the main media for counterfeiting of currency notes in the world. While we have no serious problem with the counterfeiting of currency notes in Singapore at the present time, there is a need to take preventive measures to ensure that such problem will not surface here in the future. Since 1979, BCCS has maintained control on the import of colour photocopying machines through the Control of Imports, Exports and Transhipment (Endorsement) (Amendment) Order. Anyone importing colour photocopying machines into Singapore is required to obtain the endorsement of the Board on the Inward Declaration Form before the machines are allowed to be brought into Singapore. Under the Order, BCCS has the authority to allow or disallow the import of the colour copiers, but it has no legal power against any importer, manufacturer or owner of such colour copying machines who violates the conditions for importation imposed by the Board. Clause 2 of the Bill will empower the Board to control the importation, manufacture, sale, possession and use of full colour copying machines.”
“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. CURRENCY (AMENDMENT) BILL Order for Second Reading read.”
“Clauses 5 and 9 amend sections 10C and 14 for these tax changes. At present, private sector employees and directors of companies are taxed on non-monetary benefits like car allowances received while similar benefits received by the Chairman and members of statutory boards are not taxed. To be consistent, clause 2 amends section 2 to subject non-monetary benefits provided to Chairman and members of statutory boards to tax. Finally, the last three amendments are needed to clarify certain tax treatment under the Act. Firstly, clause 3 amends section 10 of the Act to clarify the meaning of "income received in Singapore from outside Singapore". The amendment makes clear the circumstances under which foreign-sourced income falls within the meaning of "received in Singapore". This gives certainty and will assist taxpayers in complying with the law. At the same time, this amendment also ensures that arrangements to circumvent the intention of the law are prevented. Secondly, clause 6 inserts a new section 10E to the Act to clarify the circumstances under which expenses incurred by a company carrying on the business of holding investment are deductible under the Act. Finally, an amendment relating to tax exemption for charities. At present, the income of a charity is exempt from tax if at least 80% of its income is applied to charitable objects in Singapore in any Year of Assessment. To be clear that the proviso includes donations, clause 7 amends section 13 of the Act to direct charities to apply 80% of their donations and income to charitable objects in Singapore in order to qualify for the tax exemption on their total income. 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.”
“To plug this tax loophole, clause 3 amends section 10(4) to provide that only a portion of the balancing charge arising from the sale of such vessels will not be deemed to be income chargeable to tax. The second concerns our tax concession for insurance companies. Insurance companies are taxed at a concessionary tax rate of 10% in respect of profits derived from the offshore business. At present, this tax concession is granted automatically to all insurance companies which carry out offshore insurance activities. However, under certain circumstances, some insurance companies may not wish to enjoy the tax concession. Clause 20 thus amends section 43C to allow the Minister to grant the tax concession on an approval basis. The third tax change relates to the art and antique market. To attract offshore activities to Singapore and facilitate Singapore's development into an international art and antique market, I had announced in the 1993 Budget a 10% concessionary tax rate for income derived by approved art and antique dealers from transactions on behalf of non-residents through approved auction houses. To further promote the art and antique market, I have decided to lift the condition that such activities must be carried out through approved auction houses. Clause 21 amends section 43L for this change. The next two amendments pertain to the taxation of individuals. To encourage private sector employers to follow the Government's lead in providing employees with additional Medisave contributions in lieu of hospitalisation benefits, I have decided to allow employers tax deduction for similar Medisave contribution made on behalf of their employees. The employees will also be exempt from tax on such Medisave contributions made by their employers.”
“At present, the Act empowers the Comptroller of Income Tax to appoint any person as an agent of the taxpayer concerned. Such an agent is then required to pay any tax due by the taxpayer from the taxpayer's monies held in the agent's custody. However, in the event that the taxpayer holds monies in a joint bank account or has proceeds from the sale of a property to which he has a share, the Comptroller is unable to garnish from such joint-interest. This is a tax loophole which should be closed. I have thus decided to amend the Act to empower the Comptroller to garnish from such joint-interests. Clause 26 thus amends section 57 for this purpose. Members may be aware that it is provided in the Goods and Services Tax Act that if the supply of goods and services is for a consideration in money, the consideration received by the traders should be inclusive of the GST chargeable. However, there are some traders who, contrary to the GST Act, treated the price paid by customers as exclusive of GST and have claimed that the so-called "absorbed" GST as an expense to be deducted from their profits. To discourage such practices, clause 15 amends section 15(1) to disallow such "absorbed" GST to be deducted as an expense. I will now turn to the three amendments that are needed to fine-tune the provisions of our existing tax incentive schemes. The first relates to our tax incentive for shipping companies. Currently, any balancing charge arising from the sale of a vessel operated under certain tax incentive schemes will not be deemed to be income chargeable to tax. This tax concession can, however, be exploited by companies who time their entry into the schemes with the sale of their vessels in order to derive this tax-free benefit.”
“To encourage banks to set aside a greater proportion of their profits as general provisions, I have decided to increase the limit for deduction from one quarter percent to half percent of qualifying assets. Clause 13 amends section 141 for this extension of the incentive. I have announced the increase in the limit for tax deduction for CPF contributions, inclusive of compulsory Medisave contributions, by self-employed persons. The present limit for such deductions is 18.5% of assessable income from self-employment, subject to a maximum of $13,320. The limit will be increased to 20% of the assessable income from self-employment, subject to a maximum of $14,400 with effect from the Year of Assessment 1996. Clause 19 amends section 39 to effect the change. Following the good performance of the economy last year, I have also announced a one-off 10% rebate on personal income tax payable for the Year of Assessment 1995. Clause 28 provides for this rebate. I shall now deal with the tax changes not announced in the 1995 Budget Statement. Several of these changes are needed to streamline and improve tax administration. Members may be aware that, at present, employers are required to prepare and deliver a return in the prescribed form to the Comptroller of Income Tax. The Act, however, does not explicitly require employers to send a copy of this form to their employees as well, though it is required by the employees in declaring their annual employment income in their income tax returns. Clause 27 thus amends section 68(2) to make it clear that such returns are to be made to the Comptroller of Income Tax as well as to any persons specified by him through a Gazette notification. Another change pertains to the collection of tax arrears from taxpayers.”
“To further encourage companies to invest and expand into the region, I have announced that approved expenses incurred by companies to promote master franchising and master licensing activities overseas would be granted double tax deduction. Clauses 10 and 11 amend sections 14B and 14C to provide for this tax change. A tax incentive was also introduced to foster the development of the domestic unit trust industry. With this incentive, all income except Singapore dividends received by approved unit trusts will no longer be taxed at the level of the unit trust. The tax treatment of distributions made out of unit trust income will depend on the type of income and the tax status of the recipients. Clauses 3, 4, 12, 18 and 23 amend various sections of the Act to provide for this incentive. Another tax incentive announced was to encourage offshore aircraft leasing activities. At present, aircraft leasing companies which operate from Singapore enjoy a 10% concessionary rate of tax on income derived from offshore aircraft leasing. To complement this concessionary tax treatment, I have announced that approved aircraft leasing companies would also be allowed the flexibility to depreciate their aircraft over 20 years instead of the normal five years. Clause 16 amends section 19(2) for this purpose. Members may recall that I have announced in an earlier Budget to allow general provisions made by banks and merchant banks to cushion themselves against unforeseen losses in their loan and investment portfolios to be tax deductible. The limit allowed for deduction is either 25% of qualifying profits or one quarter percent of qualifying assets, whichever is lower. In addition, the total amount of general provisions eligible for tax deduction is limited to 2% of qualifying assets.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 1995 gives legislative effect to income tax changes announced in the 1995 Budget Statement, and other changes not announced in that Statement. I shall begin with the tax changes that were announced in the 1995 Budget Statement. First, on changes pertaining to foreign income received in Singapore. At present, a Singapore company does not have to pay Singapore tax on foreign income received if tax exemption has been granted or if the foreign tax credit is equal to or more than the Singapore tax payable. Such income received by shareholders of the company is also tax-exempt provided they hold at least 50% stake in the company. However, this is currently limited to two levels of shareholding. I have announced that such foreign income would be exempt beyond the two levels of shareholding if the 50% shareholding requirement is satisfied. In addition, I have also announced that the 50% shareholding requirement may be waived on a case-by-case basis. Clauses 7 and 8 amend sections 13 and 13E to provide for these changes. Currently, Singapore companies deriving foreign dividend income from countries whose tax rates are comparable to or higher than Singapore's do not have to pay Singapore tax on such income provided they own at least 25% of the company paying the dividends. As there are cases of large multi-party ventures where the Singapore holding company may have less than 25% shareholding, I have announced that the 25% requirement would be waived on a case-by-case basis. Clause 25 amends section 50A to enable the Minister to waive this requirement for deserving cases.”
“I assure the Member that adequate time will be allowed for a shareholder to decide whether to respond to the option as to whether or not he wants to have the full accounts. Adequate time will be provided. 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.”
“This will ensure that the summary financial statement does not present misleading information and is inconsistent with the company's full accounts and directors' report.”
“The company must send an option form to shareholders, together with the summary financial statement or full financial report, to enable them to change their previous option. For shareholders who have opted out of receiving any report, the company could either send the option letter directly to each shareholder or print a notice in the newspapers for use, whichever is the most cost-efficient means of disseminating the option form. If the shareholder does not respond to the option letter, the company could assume that the shareholder wishes to continue with his previous year's option. In all instances, the regulations would be drafted such that the shareholder will not incur any additional charges for changing his previous option or for opting to receive the full annual report, instead of the summary financial statement. The regulations will also enable a shareholder to communicate his wishes to change options in his own writing without resorting to the option form provided by the company. The regulations will also specify that the summary financial statement must provide certain minimum information. This would include essential information on the company's performance, like company's balance sheet, profit and loss accounts, chairman's statement highlighting any material changes to the company's financial position, a summarised directors' report highlighting certain pertinent information on the directors, shareholders' statistics and a copy of the auditors' report. The detailed contents of the summary financial statement would be listed in the regulations. The company's auditors will also have to give their opinion whether the summary financial statement is consistent with the full accounts and the directors' report and complies with the regulations.”
“The first question Assoc. Prof. Walter Woon asked is whether the amendments apply to all companies. The answer is yes. All listed companies have the option to decide to send out summary statements. The answer to the second question is that it is an opt-out scheme in which all shareholders will receive summary reports with an option letter in which they can respond to say whether they want to receive the full accounts. To elaborate on this, I will give into some details to enlighten the House. The regulations are being drafted and expected to be gazetted in about a month's time. They specify how a shareholder could indicate to the company his wishes to change his option to request for the full annual report or to opt out and not receive any report at all. The regulations would also specify certain minimum information that will be contained in the summary financial account statement. The main points of the regulations are as follows: In the first year of the issue of the summary financial statement, the company would have to provide all shareholders with a copy of the summary financial statement, together with a consultation letter, for them to indicate whether they would like to receive the full financial statement. Consultation letter will also allow shareholders to opt out from receiving any report in future years. Failure to respond to the consultation letter would be an indication to the company that the shareholder wishes to continue receiving summary financial statements in subsequent years. In the subsequent year, and for every year thereafter, the company must provide the shareholders the means to change his previous option to either receive the summary financial statement, the full financial report, or no report at all.”
“Is it every listed company that will be allowed to dispense with the sending of the full statement? Or is it only certain mega companies? Second, if the Minister would not mind clarifying, is the question of whether this is an opt-in or opt-out type situation. If we look at clause 203A(2), it seems to suggest that it is up to the shareholder to request for a summary financial statement. In other words, if he does not request it, then the normal rule is that the full statements will go out. Whereas listening to the Minister and looking at sub-clause (3), I get the impression that it is going to be a situation where we will get a summary statement unless we ask for the full accounts. What exactly is the position? Apart from these two requests for clarification, I fully support the Bill.”