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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“As a first step, I have decided to reduce the property tax rate of 16% by 1% to 15% of annual value across-the-board. The reduction will take effect from 1st July 1994. The revenue loss involved for Government is estimated at $84 million. The concessionary tax rate for owner-occupied residential property will remain at 4%. Duties on Cigarettes and Tobacco As duties on cigarettes and tobacco were last increased in 1993, there will be no increase this year. However, to meet GATT requirements, imported cigarettes will be subject to both import and excise duties with effect from 1st July 1994. To maintain the existing tax incidence, import duty on cigarettes will be reduced to $55 per kilogram. Excise duty on cigarettes will remain at $60 per kilogram. Existing import duty on tobacco of $60 per kilogram will be removed and replaced by excise duty of the same value. Details of the duty changes for the various types of cigarettes and tobacco are in Appendix 2 (Cols. 443 - 445). Appendix 2 (Cols. 443 - 445) Duties on liquor As duties on liquor were last revised in 1992, I do not propose to raise them again this year. However, to meet GATT requirements, import duties on hard liquor, sake, wine, vermouth, cider, perry, arrack and pineapple spirit will be removed and replaced by excise duties. Imported beer, stout and samsoo will be subject to two duties: import duties and excise duties. The existing excise duties on beer, stout and samsoo are $2.80 per litre, $3.10 per litre and $11.00 per proof litre respectively. To maintain the same tax incidence as before, the import duties on beer, stout and samsoo will be reduced to $0.80 per litre, $1.70 per litre and $4.50 per proof litre respectively. These duty changes will take effect from 1st July 1994.”
“Payment of Life and Personal Accident Policy Proceeds Without Probate or Letter of Administration Death benefits from a life insurance or a personal accident insurance policy are subject to estate duty. To provide immediate financial relief to the family of the deceased, the Insurance Act (Chapter 142) currently allows up to $50,000 of death claims to be paid by insurance companies without having to wait for clearance from the Inland Revenue Authority of Singapore. Over time, the adequacy of this $50,000 has been eroded. To restore the adequacy of the financial relief, the present $50,000 limit will be increased to $150,000 from 1st April 1994. Tax Deduction for CPF Contributions by Self-Employed Self-employed persons who contribute to the CPF are allowed to deduct their contributions, inclusive of compulsory Medisave contributions, from their assessable income. The present limit for such deductions is 18% of the assessable income from self-employment, subject to a maximum of $12,960. On 1st July 1993, the employer's CPF contribution rate was increased to 18.5%. In line with this, the limit for the tax deduction will be raised to 18.5% of the assessable income from self-employment, subject to a maximum of $13,320. This will take effect from the Year of Assessment 1995. OTHER TAX CHANGES Reduction in Property Tax Rate The property tax rate for industrial, commercial and let out residential properties was reduced from 23 to 16% in 1990. Nonetheless, our property tax rate is still higher than those in some of our neighbouring countries, such as Thailand and Malaysia. To help reduce business costs and enhance Singapore's competitiveness in attracting foreign investments, the property tax rate will be lowered in stages to 12% over the next 4 to 5 years.”
“The tax deductibility for these contributions, as well as contributions to other approved pension and provident funds, will be capped at the compulsory CPF limit. Similarly, employers will also be allowed a tax deduction for CPF contributions made in respect of staff posted overseas which are obligatory by contract of employment. This is provided that the staff posted overseas are engaged in activities related to the production of gains or profits which the employers receive in Singapore and are liable to tax thereon. However, at present, such contributions by the employers are taxable income to the staff posted overseas. To encourage regionalisation efforts, I am pleased to announce that such contributions in respect of ordinary wages will be exempt from tax, up to the statutory limit for compulsory CPF contributions by employers. The tax change will take effect from Year of Assessment 1995. Earned Income Relief for Taxable Retirement Benefits Last year, to rationalise the tax treatment of retirement benefits, I announced that all retirement benefits, other than compulsory CPF, received from private employers will be taxable. These taxable retirement benefits can be paid out in several ways: as a lump sum, an annuity over five years or a life pension. This has given rise to uncertainty as to whether earned income relief can be claimed for all taxable retirement benefits. As retirement benefits are earned income, I am pleased to announce that earned income relief will be allowed in respect of all taxable retirement benefits received by employees from their employers. This change will take effect from Year of Assessment 1994.”
“To assist taxpayers to better enjoy the procreation incentives, I have decided to extend the claim period for the special and further tax rebates from seven to nine years. This change will take effect from Year of Assessment 1994 for new claims as well as existing claims where the seven-year period has not expired. Tax Changes to Encourage Singaporeans to Venture Overseas In line with Government's call to Singaporeans to venture abroad, I announced last year that Singaporeans can choose to be non-residents for tax purposes if they have worked overseas for at least 6 months in any calendar year. As non-residents, they will not be taxed on their foreign income remitted to Singapore. In addition, these non-resident Singaporeans can claim special non-resident reliefs on their Singapore sourced income. With the substantial reduction in the non-resident tax rate since 1986, many Singaporeans working overseas who declare non-resident status for tax purposes are unable to enjoy the non-resident reliefs. To encourage Singaporeans to venture overseas, I have decided to reduce the tax rates used to compute non-resident reliefs with effect from Year of Assessment 1995. The revised tax rates for each tax bracket is in Appendix 1 (Cols. 441 - 442). Appendix 1 - REDUCTION IN INCOME TAX RATES USED TO COMPUTE NON-RESIDENT RELIEFS UNDER SECTION 40 (Cols. 441 - 442) Feedback indicates that employees are often reluctant to accept overseas postings as they are unable to enjoy tax deduction for voluntary CPF contributions. I would like to clarify that the law already allows tax deduction for contributions by such employees to the CPF which are obligatory by contract of employment, provided that they are residents for tax purposes.”
“CPF Share Ownership Top-Up Scheme (SOTUS) Last year, to help middle and working-class Singaporeans own shares in Singapore Telecom, we implemented a CPF Share Ownership Top-Up Scheme. Government contributed $200 into the CPF account of every citizen who had at least $500 credited into his account during the qualifying period. 1.26 million citizens received $242 million in matching contribution from the Government. The Government expects to privatise other major Government owned companies and statutory boards from time to time. The next major exercise will be about two years from now. In order to help Singaporeans build up enough CPF savings to buy shares in this company, this year the Government will implement a second SOTUS scheme to top-up CPF accounts of citizens aged 21 and above. The Government will pay $300 into the account of a CPF member, provided he or his employer contributes at least $750 during an 18-month period from 1st March 1994 to 31st August 1995. We have extended the qualifying period from 6 to 18 months, to make it easier for Singaporeans to meet their co-payment requirement. Members who pay in less than $750 will receive a pro-rated contribution from the Government. Extension of Claim Period for Procreation Incentives At present, the period within which the special and further tax rebates can be absorbed is seven years. When GST is implemented on 1st April 1994, personal income tax rates will be cut and a tax rebate of $700 given. With these, some taxpayers who are currently enjoying the special and further tax rebates will not be able to consume the rebates to the same extent within the seven-year claim period.”
“The rental payments will be made on 1st April and 1st December and the S&C payments on 1st April, 1st August and 1st December this year. b) 2-Room Flats Payment on their behalf by Government of one month's net rent and three months' net S&C charges, after deduction of the GST offset rebates. The rental payment will be made on 1st April and the S&C payments on 1st April, 1st August and 1st December this year. c) 3-Room Flats Payment on their behalf by Government of two months'net S&C charges after deduction of the GST offset rebate. The payments will take effect on 1st April and 1st December this year. d) 4-Room Flats Payment on their behalf by Government of one month's gross S&C charges, to be made on 1st April this year. e) 5-Room Flats Payment on their behalf by Government of one month's gross S&C charges, to be made on 1st April this year. The additional costs to Government for these rental and S&C rebates are estimated at $28 million. Higher Interest Rate for the CPF Retirement and Special Accounts Government has recently announced the intention to raise the CPF Minimum Sum from $34,600 to $80,000. The increase will be done gradually over 10 years. Half of the CPF Minimum Sum is to be kept in the form of cash. As savings in these accounts are held for the long term, Government will pay a higher interest rate for the CPF Retirement and Special Accounts. With effect from 1st July 1995, cash savings in the CPF Retirement and Special Accounts will attract a rate which is 1.25 percentage points above the normal CPF interest rate. Details of the scheme will be announced by the Minister for Labour later.”
“Therefore although the period is not spelt out in the law, such taxpayers are effectively required to retain their records for 13 years since the Comptroller has 12 years to make assessments and tax is assessed on a preceding year basis. It is costly and onerous for such taxpayers to comply with these statutory requirements on record keeping. Under the Companies Act, companies are required to retain their accounting and other records for 7 years. I have therefore decided to reduce the current 12-year statute of limitation to issue assessments for non-fraud cases to 6 years for Year of Assessment 1995 and subsequent years, and to provide for accounting and other records relating to such assessments to be kept for 7 years. In the case where fraud or wilful default has been committed, assessment can still be made at any time. I turn now to the tax changes for individuals. TAX CHANGES FOR INDIVIDUALS Income Tax Rebate Because of the buoyant performance of the economy last year, I have decided to give an across-the-board one-off rebate of 5% on individual income tax for Year of Assessment 1994. The estimated revenue loss to Government is $76 million. Rebates on HDB Service and Conservancy and Rental Charges Also, because of the good economic growth last year, the Government has decided to grant rebates on HDB Service and Conservancy (S&C) charges and rentals. These rebates will be additional to the GST offset rebates which take effect from 1st April this year. The rebates will vary with flat type and are as follows: a) 1-Room Flats Payment on their behalf by Government of two months' net rent and three months' net S&C charges, after deduction of the GST offset rebates.”
“Extension of Relief Periods for Tax Incentives Since the 1960s, we have introduced a number of tax incentives under the Economic Expansion Incentives (Relief from Income Tax) or EEI Act to promote the development of our manufacturing and services sectors. Among these were incentives for: a) Expansion of Established Enterprises; b) Expansion of Service Companies; c) Export of Services; and d) Warehousing and Servicing. These 4 incentives provide for an initial tax relief period of 5 years or shorter. They may not be sufficiently attractive for projects with large initial investments. In addition, the Expansion of Established Enterprises Incentive and the Expanding Service Companies Incentive cannot at present be extended beyond the initial 5-year period. Companies are therefore not encouraged to expand after the initial incentive period. To enhance these 4 incentives, I have decided to extend the initial incentive period to not more than 10 years, with effect from Year of Assessment 1995. Thereafter, companies can apply for an extension of the tax relief period. The period for each extension will not be more than 5 years, subject to a maximum relief period of 20 years for each incentive. Reduction of Time Limit to Issue Assessments Currently, the Comptroller of Income Tax can make assessment or additional assessment on taxpayers within 12 years after the year of assessment concerned. The law also requires companies and other persons carrying on a business to keep and retain in safe custody sufficient records to enable their incomes and allowable deductions to be readily ascertained by the Comptroller.”
“In view of this, I have decided to include spot and physical trading in silver and platinum with approved parties as qualifying activities under the ACU incentive scheme. This will encourage financial institutions to conduct such activities in Singapore. The incentive will take effect from Year of Assessment 1995. Extension of Incentives for Transactions in Non-Singapore Dollar Securities At present, ACUs and ASCs enjoy the following incentives when they transact in non-Singapore dollar securities on their own account or on behalf of non-residents with other ACUs, ASCs and non-residents: a) 10% concessionary rate of tax on income derived; and b) exemption of contract note stamp duty. To further promote Singapore as a regional securities trading centre as well as a fund management centre, I have decided to extend the 10% tax concession to transactions of ACUs and ASCs with approved fund managers with effect from Year of Assessment 1995. Only transactions in respect of funds managed for foreign investors by such fund managers will qualify for the tax incentives. The exemption of stamp duty will also be extended to such transactions with immediate effect. Further Incentive for Approved Securities Companies (ASCs) At present, the tax exemption scheme for syndicated offshore credit and underwriting facilities is only open to ACUs. Non-bank financial institutions, such as securities companies, are fast becoming important players in arranging and participating in syndicated facilities. To encourage securities companies to expand their operations and conduct syndication business in Singapore, I have decided to extend the scheme to ASCs with effect from 1st March 1994. This will help to further enhance Singapore's position as a leading syndication centre in Asia.”
“TAX CHANGES FOR COMPANIES Tax Incentives To Promote Securities Lending and Borrowing To facilitate the growth of international derivatives trading and arbitrage activities and the trading of regional securities in Singapore, I have decided to extend the Asian Currency Unit (ACU) and Approved Securities Companies (ASC) schemes to include foreign securities lending and borrowing activities. With this extension, an ACU and an ASC will enjoy a concessionary tax rate of 10% on income derived from lending and borrowing foreign securities with another ACU, ASC or non-resident person. The fee income derived by approved fund managers from arranging securities lending and borrowing transactions on behalf of foreign investors will also qualify for this concessionary tax rate. We will also exempt from tax the securities lending fee, manufactured dividend and interest paid by the ACU or ASC to a non-resident person. Unless it is a bank or a branch of a bank, the non-resident person must not have any permanent establishment in Singapore. These changes will take effect from Year of Assessment 1995. With immediate effect, we will also not levy stamp duty on documents executed under seal and agreements in respect of such securities lending and borrowing transactions. I am confident that these incentives, together with an efficient and stable financial system, will help to attract more international financial institutions to use Singapore as a securities lending and borrowing centre. Incentives to Promote Silver and Platinum Trading Currently, ACUs enjoy a concessionary tax rate of 10% on incomes derived from trading in gold, but not other precious metals. There is a growing market interest in the trading of silver and platinum besides gold.”
“Last year, I introduced a package of tax incentives to promote our external economy. These should be given time to work through. I also announced a 3 percentage point reduction of corporate tax rate. As the economy is expected to grow at a rate well above the target range of 4-6%, there is no need to adjust our tax rate this year to further stimulate the economy. As part of our major tax reform, GST will be introduced. Corporate and personal income tax rates have been cut. A package of tax and non-tax rebates has been given to offset GST. Total GST to be collected in FY94 is estimated at $960 million. The tax cuts and rebates introduced will reduce Government revenue by $1.2 billion. The net effect is expected to be revenue-negative. The operating framework for GST is now in place. From 1st April 1994 we will be operating one of the simplest and most flexible GST systems in the world. With GST in place, we will have a more balanced tax structure, better suited to support the next phase of our economic development. Our medium term goal is to bring our corporate tax rate down to 25% to maintain our competitiveness in an increasingly competitive world market. Personal tax rates will also be kept low to reward effort and enterprise. Provided we exert careful control over operating expenditures and sustain good economic growth, we should have adequate revenues even though the GST rate will remain at 3% for at least 5 years. 1993 was a very successful year. A strong fiscal position gives the Government scope to pass part of its surplus back to the economy and to enhance the assets of its citizens. I will elaborate on the details later. Let me now deal with the tax changes for companies.”
“Linking the budget of a department to the results expected will make the accountability of the public sector manager clearer. It should also help encourage greater initiative, entrepreneurial thinking and financial discipline within the civil service. Zero-base Reviews At the request of the Ministry of Finance, the Auditor-General has been conducting zero-base reviews of individual Ministries. These are to ensure that Ministries' major policies and practices remain relevant and effective, and that overall, their resources are efficiently utilized. Over the past year, reviews of the Ministries of Law, Labour, Environment, Finance (Public Service Division) and the Public Service Commission were completed. Over the next one and a half years, the Auditor-General's Office will review the Ministries of Finance (Budget and Revenue Divisions), Information and the Arts, National Development, Health and Communications. The Auditor-General has agreed to make known his findings and recommendations to Parliament through the Public Accounts Committee. PART III OF FY94 BUDGET STATEMENT Mr Speaker, Sir, let me turn next to the fiscal position and the proposed tax changes. The better than expected growth in 1993 yielded a healthy budget surplus. While next year's economic performance is not expected to be as strong, the projected growth of 6-8% will nonetheless exceed our medium term target range of 4-6%. Revenue collection in FY94 is estimated at $18.9 billion. With operating and development expenditures budgeted at $16.7 billion, a surplus of $2.2 billion is anticipated. As our economy matures, we will be looking towards a consolidation of the fiscal measures we have introduced over the years to promote growth. There will be more adjustment to and extension of existing schemes.”
“Grants will be extended to provide recreational and welfare facilities for the elderly and to upgrade Singapore Sports Council facilities. Funds are also allocated for strategic investments and other economic development schemes under the Economic Development Board, including the recently announced Cluster Development Fund. Another major project will be the development of Jurong Island, amalgamating the cluster of petrochemical islands. MANAGEMENT AND CONTROL OF GOVERNMENT EXPENDITURE I will now give the House a brief update of measures taken by Government to manage and control expenditure. Singapore Government Management Accounting System Computerised management accounting systems, acronymed SIGMA, have been successfully introduced in all ministries. SIGMA equips the Government with accurate cost information to help ensure that operations are cost-effective. It also assists managers in evaluating competing options, such as whether certain activities should be performed in-house or contracted out to the private sector. SIGMA will continue to be enhanced and extended to all departments. Budgeting for Results SIGMA provides a basis for rational decision making by managers. In addition, it is an important step forward in our on-going efforts to link budgets to performance and outputs. We call this Budgeting For Results. Under this arrangement, the budget provided to a department is directly linked to the quantity and quality of goods and services to be provided by that department. For example, the budgets of several educational institutions are already based on a pre-determined sum per student-year. We hope to extend the system gradually to other departments where feasible.”
“A capital subsidy of $601 million for public housing has been provided, an increase of 7.5% over FY93. A substantial part of this will be for the Upgrading Programme, including Interim Upgrading to improve the quality of existing HDB estates. Provision is also made for other infrastructure work in HDB new towns and for specific works in existing estates. Funds are also needed to pay for the discount on the sale of tenanted HDB shophouses. Research & Development (R&D) is crucial to Singapore's efforts to leverage science and technology for industrial competitiveness and to locate higher value added activities in Singapore. The National Science and Technology Board (NSTB), established 3 years ago, will continue to spearhead this effort. A total of $400 million or 0.4% of GDP will be provided for Government-funded R&D in FY94. This represents an increase of $187 million over FY93. The emphasis will continue to be on industry-related R&D, with $350 million allocated to the R&D Fund to be administered by NSTB. Another $50 million will be allocated for research projects of an academic nature to be undertaken by various institutions under the Ministry of Education. Capital grants totalling $2.2 billion will be given to other statutory boards. This is an increase of $916 million over FY93. The projects include a new campus for Temasek Polytechnic, upgrading of the National University of Singapore, and development of aided and independent schools, junior colleges and vocational institutes. Other projects include the Woodlands extension of the MRT system, the development of water works, recreational facilities and attractions on Sentosa, extension and improvement of community centres, and the redevelopment of Outward Bound Singapore.”
“Additional grants and subsidies totalling some $30 million will also be given for education, healthcare and public housing to offset the impact of the GST. A grant will also be given to the Singapore Tourist Promotion Board to compensate the loss of revenue to STPB when the cess rate is reduced from 4% to 1% with the introduction of GST. As mentioned earlier, Pensions Expenditure is expected to remain at 0.4% of GDP, increasing by $30 million over the FY93 allocation to $388 million. This is because of a larger number of pensioners and the rising cost of medical subsidies for pensioners. Development Expenditure Development Expenditure is expected to reach $6.2 billion in FY94 or 6.9% of GDP. This is almost 37% of total expenditure, as against 32% in FY93. Government's intention is to allocate an increasing share of the budget for development expenditure, to reach 40% over the medium term. The main part of the development budget will go towards the provision of social and economic infrastructure. Major healthcare-related projects include the development of Eastern General Hospital, the new Kandang Kerbau and Tan Tock Seng Hospitals, and the combined Institute of Health and National Dental Centre. Infrastructural projects include land reclamation works at Changi East, Tuas, and Buran Darat, the Schools Building Programme, the Roads Building Programme and the Sewerage and Drainage Programmes. To improve public transportation, Government has set aside funds for the development of bus interchanges and the Electronic Road Pricing System. The public can also look forward to better service with the construction of the new Immigration Building and the second phase of the redevelopment of Woodlands Checkpoint.”
“Economic and infrastructural development, including transportation, R&D and other civil engineering projects, will take up another 18%. Let me now elaborate on the FY94 expenditure proposals. Operating Expenditure Operating expenditure comprises Expenditure on Manpower, Other Operating Expenditure, Grants-in-Aid and Pensions. In FY94, operating expenditure is projected at $10.6 billion, up 11.1% over the revised FY93 expenditure. Expenditure on Manpower will go up by $294 million to $2.5 billion. This is 2.8% of GDP, compared to 2.7% in FY93. The increase is to cater for the salary revision effective 1st January 1994, normal salary increments, and for filling essential vacancies. Under the Government's Zero-Growth in Manpower policy, Ministries will continue to meet new demands through productivity improvements. Other Operating Expenditure or OOE is projected at $5.5 billion or 6.1% of GDP. This is $413 million or 8.2% more than FY93. Apart from inflation and higher workload, the increase also caters for additional expenditure by the Ministries and departments on input GST. Other increases include higher provision for training bursaries for nurses, teaching bursaries, scholarships, and for maintenance of buildings and roads. The implementation of the Small Families Improvement Scheme to help low income families meet housing and educational expenses also accounts for part of the increase. Grants-in-Aid to various Government funded statutory boards and restructured hospitals are expected to come to $2.2 billion, or 2.5% of GDP. This represents an increase of $316 million over FY93. Larger grants are required to meet the higher operating costs of aided schools, polytechnics and universities.”
“Part of Government's reserves will be transferred to the Pension Fund to provide for the past service pension liabilities of pensioners and serving officers. On-going service pension liabilities will be funded by an annual budgetary contribution, estimated at approximately 17% of pensionable emoluments. A Pension Fund with dedicated assets to back pension liabilities will be a solid assurance to pensionable public officers that their pensions will continue to be paid. At the same time, future taxpayers will be relieved of the burden of paying for services rendered by current and past public officers. I will now turn to the FY94 Expenditure Estimates. THE FY94 EXPENDITURE ESTIMATES Total operating and development expenditure in FY94 is expected to amount to $16.7 billion, which is 18.6% of GDP, up from 17.0% in FY93. The substantial increase is primarily due to increased development expenditure, from 5.5% of GDP in FY93 to 6.9% in FY94. Operating expenditure, on the other hand, will show a more modest increase, from 11.5% to 11.7% of GDP in FY94. These expenditure levels are within Government's medium term policy target of keeping total expenditure to 20% of GDP, with no more than 12% for operating expenditure. The $16.7 billion budgeted for total Government expenditure in FY94 is 19% more than in FY93. As in previous years, Social and Community Services will take up the largest share at nearly 40%. More than half of this will be for education. The rest will go into healthcare services, subsidies on public housing, environmental protection, community development and support of the arts. The second largest share, at 32% of total expenditure, will be taken up by National Security, including Defence and Home Affairs.”
“As a percentage of GDP, it is expected to remain steady over the medium term at approximately 0.4%. Although the annual payment is not large, the current funding arrangement is unsatisfactory for a variety of reasons. Firstly, the Constitutional protection afforded to pensioners under this arrangement is good only so long as there are funds available in the general purpose Consolidated Fund to pay the pensions. The present arrangement does not recognise pensions as a sizeable future liability, and hence there are no dedicated funds set aside for this purpose. The present arrangement also understates the manpower cost of the civil service. It requires future taxpayers to pay for the services rendered by the present generation of civil servants and military personnel. This is fine so long as the economy continues to do well and future taxpayers do not mind additional taxes. Should there be a downturn, they will find it a painful burden to bear. It is prudent therefore for Government to recognise pensions as a future liability and to make provision for it explicitly. This is simply good housekeeping practice. We do so for other explicit liabilities. For example, every year a substantial amount is provided in the Estimates for Sinking Fund contributions. For FY94, the amount is $2.6 billion. These Sinking Fund contributions have to be made by law for the redemption of maturing loan stocks issued to CPF Board by Government. We should similarly start making provision for future pension liabilities. We should do so now when revenues are strong. Government will therefore introduce legislation later this year to set up a Pension Fund.”
“Our financial reserves are therefore of crucial importance, not only to see us through times of crisis but also for securing investor confidence in our future. Our budgetary surpluses also allow us to build up the assets of Singaporeans through grants to buy quality assets, like Telecom shares. It also enables us to embark on programmes like Edusave and Medifund. Government has in the last two years channelled a large part of our budget surpluses into Edusave and Medifund. I announced in the last Budget Speech that Government would inject $500 million into Edusave in FY93. In view of Singapore's strong economic performance and healthy budget balance, I have decided that Government's contribution to the Edusave fund for FY93 should be increased to $1 billion. Supplementary Estimates to effect this will be tabled in Parliament next week. For FY94, another $500 million will be channelled to Edusave and $100 million to the Medifund from the projected surplus. Pension Fund Our favourable fiscal position will also enable us to set up a Pension Fund for public officers. Currently, pensions for them are paid out of Government's annual operating expenditure. Pension payments to retired public officers are protected under the Constitution. Pensions constitute a charge on the Consolidated Fund, which means that pension obligations must be honoured regardless of the Government's budgetary position or the state of the economy. This is rightly so. Civil servants and military officers who have served the nation faithfully should not spend their retirement in fear that the Government may not have the money to pay for their pensions when times are bad. Total annual pensions expenditure currently amounts to some $390 million.”
“We must avoid the pitfalls of welfarism which, as the experience of socialist and western democratic governments have shown, sooner or later leads to dependency and destruction of the work ethic. We prefer to spend in ways which build national resilience and promote enterprise, hard work and prudence. Government's role is to put in place the necessary infrastructure, provide a clean and safe environment, and train our people to the best of their potential. The FY94 Budget reflects these long term priorities: an emphasis on education, sound economic infrastructure, affordable health care, good public housing and national security. At the same time, we will increase funding for the arts, sports and recreational activities to satisfy the broadening aspirations of Singaporeans, to advance social cohesion and to improve the quality of life of Singaporeans. A strong and dynamic private sector must remain the engine of growth in Singapore. The size of the public sector will therefore be controlled so as to release more manpower to the private sector. At the same time, the public sector will continue to make improvements in the management of its financial and human resources. Since recovery from the recession in 1987, revenue growth and careful control over expenditures have allowed us to generate budget surpluses every year. This has been achieved without dampening economic growth or holding back any productive investments. As a result we have been able to set aside substantial sums each year to reserves. At this point it is worth repeating that in the special circumstances of Singapore, it is essential that in good years we accumulate surpluses to reserves of Government. Singapore has little land and no natural resources to fall back on.”
“For example in health care, the Government has restructured hospitals, allowing them greater autonomy in day-to-day operations while retaining Government oversight of the health care system. This has kept the hospitals efficient, kept costs low and ensured that basic health care costs remain affordable for all Singaporeans. Singaporeans now enjoy good service in restructured hospitals while those who cannot afford to pay the full cost of treatment can still enjoy varying amounts of subsidies. Even in tax administration, conventionally seen as a core area of Government responsibility, the Government has converted the Inland Revenue Department into a statutory board - the Inland Revenue Authority of Singapore. The improvement in the level of service and the attention paid to customer service are clear to the taxpayers. In this, Singapore is not alone. Several countries, for example, the UK and New Zealand, are also converting previously government functions into executive agencies with well-defined goals and service targets. CONCLUSION Singaporeans have achieved much in the last 20 years, due to the combination of sound economic management by the Government and hard work of the people. We can all be proud that each of us has contributed towards the effort of economic growth and nation-building, whether as part of the public sector, as a risk-taking entrepreneur, or as a salaried employee. This teamwork must continue as we strive to gain promotion into the First League. PART II Mr. Speaker, Sir, I will now move on to the Budget for the next financial year. EXPENDITURE POLICY Government expenditure will continue to focus on areas that support and promote economic growth for Singapore.”
“In the developed countries, government expenditures vary from about 30% of GDP as in the case of the United States to over 60% of GDP in Sweden. As a result, these countries have had to impose high personal and corporate taxes. They have in the process eroded their national competitiveness. In Singapore, the Government has prudently kept Government expenditure low. Government expenditure in FY93 was below 17% of GDP. The Government has always budgeted for and achieved a modest surplus each year, in order to accumulate sufficient reserves to tide us over bad years, as well as prepare for the rapid ageing of the population. The low Government expenditure and the surplus have enabled the Government to reduce tax rates over the past years. Singaporeans today pay one of the lowest tax rates in the world. Total Government operating revenue in 1993, which includes income taxes, motor vehicle taxes and customs and excise duties, amounted to only 22% of GDP. This compares with 31% to 58% in the developed countries, and 25% in South Korea and Taiwan. At the individual level, married Singaporeans earning below $25,000 per year in fact pay no income taxes, while those earning $50,000 per year pay only 4% of their earnings in income tax. Contrary to popular perceptions, the vast majority of Singaporeans certainly do not pay high taxes. The actual areas in which the Government acts also cannot remain static. These must change with new circumstances. We will need to change the way some public services are managed, giving them greater operational autonomy, to make them more efficient and responsive to the needs of the public.”
“Others will be displaced and need re-training to take up new jobs. The Government will work with the trade unions and employers to upgrade the skills of older workers, and re-train those who are displaced. The Skills Development Fund (SDF) will continue to play a key role in the skills training and upgrading of our workers. In FY92, the SDF disbursed more than $50 million in support of training programmes to upgrade workers' skills. This is much more than the $15 million collected through the Skills Development Levy that year. The Levy is based on an employer contribution rate of 1% of the pay of each employee whose monthly salary is $750 or below. Over the years, collections through the Skills Development Levy have been falling. This is because fewer people earn monthly salaries of less than $750 with each passing year. At the present SDF disbursement level, the Fund will eventually be depleted. As we step up the training, upgrading and re-training of the workforce in the coming years, SDF disbursements will also increase. The Government has therefore decided to revise the salary ceiling for Skills Development Levy collection from $750 to $1,000, with the levy rate remaining at 1%. This revision will take effect from FY95. We will need to further revise this salary ceiling over time to match the annual Skills Development Levy collection with actual disbursements. SDF can then have adequate funding to help our workforce into the 21st century. Evolution in the role of the Government But while Government needs to remain engaged in economic management, there are limits to its direct involvement. Greater Government role must translate into higher Government expenditure, and eventually, into higher taxes. This will reduce our ability to compete in world markets.”
“It did so only when the private sector did not have the necessary expertise or capital, or when entrepreneurs found the risks of the ventures too high. The Government will continue to invest directly in strategic projects to promote the development of key sectors of industry, especially in manufacturing. The Cluster Development Fund will enable us to invest in selective strategic projects in the coming years. This will help to spark off other complementary projects, and promote medium and long-term growth in the industry groups involved. Our local enterprises already play an important role as supporting industries to MNCs. The Cluster Development Fund will also be used to help the more promising ones develop their operations to keep pace with their customers, and to become MNCs in their own right. Furthermore, the Fund will be used to invest in the region, together with local and multi-national companies, to bring about spin-offs for our domestic industry clusters. Skills training and upgrading As we progress up the technological ladder, capital investment per worker will increase. We must therefore ensure that our workers possess the relevant technical and operational skills to work optimally and productively. Only then can employers compete effectively in the international market place, obtain a reasonable return on their investments, grow and create more employment opportunities for Singaporeans. Our economy will continue to restructure as competitors develop and become more competitive. Companies will need to continually upgrade their technology and product lines. Some may have to relocate to neighbouring countries because they are no longer viable here, and be replaced by new companies. In this whole process, workers will need to continually acquire new skills.”
“Singapore must find niches for ourselves, either as a critical node in the global network or as the host of a key industry cluster. This involves building up mutually reinforcing sets of core capabilities that will help to reduce the cost of the finished product. The Government will play an active role in identifying, building up and selectively investing in such industry clusters. This is why the Government has set up the $1 billion Cluster Development Fund. The Fund will make strategic investments, together with private sector partners, to bring to Singapore projects which develop core capabilities within our industry clusters. This is similar to the catalytic role played by the Government in the earlier days of our economic development. In the 1960s, we needed to build a new economy that could absorb the large number of people entering the labour force. The Government started various new enterprises like Sembawang, Jurong and Keppel shipyards, DBS Bank, NATSTEEL, Neptune Orient Lines and Singapore Airlines. When necessary, the Government even took significant equity shares in private sector projects which involved higher risks than usual, but which were strategically vital because they brought in new jobs, new technology and access to markets. One good example is the petrochemical complex. Our initial equity investment of $520 million in 1977 paved the way for major investments by prominent international companies in this key sector. Total petrochemical investments amounted to $2.7 billion by the end of 1993, and 1993 output totalled $1.7 billion. The Government did not go into these activities to "crowd out" the private sector.”
“We will publicise the demand and career prospects for the various professions, and encourage school leavers to apply for the available courses. While the choice of courses ultimately depends on individual applicants, we cannot passively accept these individual choices as the final word, and admit everyone into the course of their choice, regardless of employment prospects. We must guide and channel students towards more promising areas and disciplines. Where the supply of students exceeds the number of places we need, we have to ration these places, according to merit. Let me give an example. Manufacturing is a cornerstone of our economy. Our education system must produce sufficient numbers of computer scientists, engineers, technicians and skilled workers to support the manufacturing sector and to attract high technology companies to locate in Singapore. Many Singaporeans may find it interesting and rewarding to pursue a career in Medicine or Law. But, if too many of our best and brightest gravitate towards these disciplines, not enough will become engineers and computer scientists. The viability of our economy will therefore be at risk. Upgrading the economy The rapid economic development and growth of the regional economies will mean more competition for Singapore. They will be able to produce at a lower cost some of the products currently produced here. Our companies will need to continue upgrading into higher value added activities in order to remain competitive. But, because we are already at a higher base with higher cost levels, we need to be even more imaginative in finding competitive niches. Changes in technology and markets necessitate our taking a total approach to strengthening our competitiveness.”
“We must continue to ensure that our housing estates are racially and socially well integrated, and strengthen social tolerance and harmony. The Government will continue to uphold our system of meritocracy. It has enabled Singaporeans to enjoy high social mobility. Those who are capable and prepared to work hard can move ahead regardless of their social background. This reduces social tensions and benefits everyone, able and less able alike. The Government must also intervene to provide the necessary social infrastructure. Left to market forces alone, most Singaporeans will not have decent housing and many will not have adequate access to medical services. The Government will therefore continue to provide the necessary social infrastructure for lower income earners, and adequate subsidies for essential health, education, and housing. Education We must maximise the potential of every Singaporean. The Government has an indispensable role in keeping the education system, and the knowledge and skills that it imparts to students, relevant to the needs of the economy. Those entering the workforce must possess the knowledge and skills to make them employable, and give them and their employers a competitive edge over their foreign competitors. With our limited manpower resources, it is vital that we minimise wastage of precious human talent. We must continually find ways to improve our education system, and reduce drop-out rates. The Government will continue to plan and anticipate demand for the different types of post-secondary school manpower required to support our economy, so that universities, polytechnics and the ITEs can provide the relevant types of courses and intake capacity.”
“Examples include maintaining a stable macro-economic environment with a strong currency, low inflation and high savings; the planning and development of infrastructure; the provision of education and training facilities, public housing and public health care. While governments do not create wealth, they can create the conducive environment necessary for economic growth. The Government cannot adopt a totally laissez-faire approach, and blindly hope that market forces will make everything work out in the end. For example, we embarked on the design and building of the MRT system long before traffic congestion in the city became serious. Similarly, the Government built Changi Airport, and subsequently Changi Terminal Two in anticipation of significantly increased air passenger traffic. These were high risk decisions that commercial banks would have balked at financing. Had the Government not taken the lead, the private sector would never have built an MRT or a Changi Airport, and Singapore would have been worse off. We must continue to plan well into the future to keep our infrastructural development ahead of demand. At the same time we must further streamline administrative procedures and reduce the Government involvement in areas where it is no longer necessary. The Government is also responsible for ensuring social stability, especially given our potentially volatile multi-racial and multi-religious mix. For example, left to natural forces, people will find it more comfortable to gravitate towards the like-minded. But the cumulative result of many such individual choices will be racial and religious enclaves, a sure formula for social strife as we have seen in other parts of the world.”
“Its advice is for governments to focus on three areas: providing a stable macro-economic environment; ensuring flexibility in the labour market through education, training, re-training, enterprise promotion and flexible wage-setting process; and a better-designed system to maintain a degree of social solidarity in the face of high unemployment. After painful experiments in central planning and painstaking studies, the role of government in economic management is now more clearly understood. The government's role is to provide a conducive environment for private initiative while intervening directly only in areas where there is market failure. These are precisely the areas where the Singapore Government has focused its energies. Singapore Government's role Singapore's philosophy of economic management is that the Government's role is not to supplant the private sector but to help its development, so as to provide Singaporeans with a good life. With this guiding principle in mind, Government's intervention has been, and will continue to be, in four main areas. These are: a) providing a conducive environment for economic growth and social stability; b) maximising the employment potential of Singaporeans through a practical and rigorous education system; c) upgrading economic structure through selective direct investments in strategic projects; d) ensuring Singaporeans have relevant skills by providing up-to-date training and skills upgrading programmes. Economic growth and social stability This is a natural area for Government involvement, because there are substantial factors, both internal and external, that individuals and the private sector cannot on their own control or take into account of.”
“This re-assessment is now more urgent as these mature economies face strong competition from younger economies in East Asia. The East Asian countries have been the subject of a serious two-year study by the World Bank, in an attempt to discover lessons that can be applied to other countries. The results are summarised in a report entitled "The East Asian Miracle: Economic Growth and Public Policy". The emphasis on public policy is noteworthy. It suggests a positive role for government, if it can be applied in those areas that support private initiative. For example, while heavy investments in basic education up to secondary level are highly productive, generous welfare provisions are not. In particular, the World Bank has identified two elements in the role of government. The first is in "getting the fundamentals right". This means high levels of domestic savings, broadly based human capital, good macro-economic management, and limited price distortions. Rapid productivity growth was helped by liberal policy on the acquisition of technology either through openness to direct foreign investment or licensing. Public investment complemented private investment while education policies stressed universal primary schooling and improvements in quality at primary and secondary levels. The second element is in careful policy interventions that had strict limits on their cost and caused minimal distortions to the economy. The developed countries have come to a similar conclusion. The OECD undertook a study into the problem of high unemployment in 1992. It concluded that high unemployment results from a combination of weak macro-economic policy, weak human resource development policies, rigid labour markets and technological change.”
“The path will be uphill, as we face tougher competition for investments and in the market place from other developing countries and NIEs. In the next phase, the role of Government will be no less important than that during our take-off stage. I shall now review the role of Government in economic management in Singapore, and examine its relevance in our current stage of development. Role of Government in economic management That governments have a role to play in the economic affairs of a nation is not disputed. Even Adam Smith, the advocate of the "invisible hand", envisaged a minimum level of state provision. Economic history in the last 80-90 years has defined two models for economies - central planning and the free market system. The former has proved to be a dismal failure. However, the question of the proper role of government is not settled as even in so-called market economies, the role of government varies considerably. A market economy encourages competition and the efficient use of available resources. But, carried to the extreme, market solutions are harsh on the less able who become the poor and low income earners. On the other hand, heavy government intervention and subsidies entail high taxes, which discourage hard work and enterprise. In the face of sluggish growth and high unemployment, many Western countries have been critically re-assessing the role of government, especially in the provision of welfare benefits. Everywhere in the OECD, governments are trying to reduce welfare benefits to improve the incentive for work, reconfigure the education system towards skills relevant to the economy, and reduce the tax burden on the productive sectors.”
“But it was also fortuitous that a generally benign world economic environment, with strong US leadership and a liberalising trade regime, gave developing countries like Singapore a chance to grow out of poverty. Today, we are at a turning point. We have become a Newly Industrialised Economy (NIE), and are on the threshold of the First League of nations. Our per capita GDP has overtaken some OECD countries. But Singaporeans must not be lulled into thinking that we have arrived, and start relaxing and taking progress and prosperity for granted. We have some way to go before entering into the First League of nations. Manpower is Singapore's only resource. Our educational profile has improved greatly, but it is still far below that of the developed countries and even the NIEs. Among the NIEs, we have the lowest educated workforce. Only about 54% of our labour force have attained at least a secondary school education, compared to over 70% in Hong Kong, Taiwan and South Korea. And only about 25% of our labour force have at least a post-secondary education, compared to about 50% in Taiwan and South Korea. In the developed countries, about 75% of the workforce in Japan and Switzerland have at least a post-secondary education, and 87% in the USA. Our economic structure is also very much that of a developing country. We depend heavily on foreign technology. Our R&D expenditure as a percentage of GDP is about 60% of Taiwan's and South Korea's, and only 40% of the developed countries. Very few of our companies rank as world-class corporations. The great challenge facing Singapore is how do we collectively manage the leap into the ranks of the First League.”
“The Government has also put in place major programmes like the regionalisation drive, the Goods and Services Tax (GST), the health care cost containment measures, and improvements to our education system to build the foundation of our future well being and success. The Ministry of Trade and Industry has forecast 1994 growth to be in the range of 6-8%. In view of the continued good growth of the economy, the Government will proceed as announced in the last Budget to make the final 1.5 percentage point adjustments to CPF contribution rates. From 1 July 1994, the employers' CPF contribution rate will be increased from 18.5% to 20% while the employees' rate will be reduced from 21.5% to 20%. Employers and employees should take this adjustment into account in their wage negotiations. I will now turn to longer-term issues in economic management. Preparing for the future Singapore has sustained rapid economic growth over the last 20 years. Singaporeans today enjoy high incomes, a good standard of living and an excellent health care system. Good education and our system of meritocracy allow Singaporeans to start from the same starting line and succeed on the basis of ability and hard work. We achieved rapid economic development not solely through good luck. Otherwise many more countries would similarly have succeeded. It was the result of the deliberate efforts of the Government, strongly supported by Singaporeans. The Government was able to garner the support of the people to pursue tough policies that helped economic development. And Singaporeans had the tenacity to try out unconventional solutions to daunting problems. We succeeded against the odds.”
“4% reflected both a cyclical recovery from the weak productivity growth in 1991 and 1992, and the upgrading of our manufacturing activities. As a result, the Unit Labour Cost Index fell and contributed to the continued decline in the Unit Business Cost Index. Against the other Newly Industrialising Economies, Singapore's competitive position also held steady. One sign of our continued attractiveness to investors is the record $3.9 billion worth of investment commitments in the manufacturing sector which we received, in a year when investor countries cut back on outward investment or diverted investments to China and Vietnam. ECONOMIC OUTLOOK FOR 1994 The external environment has improved. The successful conclusion of the Uruguay Round of trade talks has given a clear signal that most trading nations are committed to the continued liberalisation of world trade. Among the developed economies, the USA, which is Singapore's largest export market, is expected to continue on a path of sustained recovery. Germany and Japan are now in recession but are expected to recover gradually during 1994. This should have a positive impact on the rest of continental Europe and Asia. In Asia, growth is expected to continue at a brisk pace as domestic consumption and investment boost demand. Singapore will benefit from the improved economic prospects in the world because we are competitive, and continued investments in infrastructural development, education and skills upgrading will help us to maintain our competitive edge. Our local entrepreneurs have continued to seek out opportunities in the region.”
“Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1994 to 31st March, 1995. PART I ECONOMIC PERFORMANCE IN 1993 Mr. Speaker, Sir, the Singapore economy grew by 9.9% in 1993. Growth was broad-based, with all major sectors doing well though overall growth was also boosted by the strong performance of the financial and business services sector, in particular the stock market. We were able to achieve good growth despite sluggish growth in most of the developed countries because the Singapore economy benefited from strong regional growth and good prospects in certain product niches like electronics. The manufacturing sector expanded by 9.8% on the back of strong demand for electronic products like disk drives, telecommunications equipment, semiconductors and printed circuit boards from the USA, Europe and the booming Asia-Pacific region. The financial and business services sector saw its growth rate more than double from the 5.3% in 1992 to 13% in 1993. The faster growth was due to buoyant activity in the stock market and foreign exchange trading, faster growth in domestic lending and a modest recovery in the Asian Dollar Market. Boosted by buoyant entrepot and transhipment trade, the commerce sector and the transport & communications sector also did well. The commerce sector grew by 8.5% and transport & communications grew by 9.6%. Construction activity remained buoyant with growth of 8.0% due to the strong pipeline of contracts awarded in 1992 and 1993. For the first time in three years, productivity growth exceeded real wage growth. The strong productivity growth of 6.”
“Mr Speaker, Sir, I beg to move the Motion* standing in my name as it appears in the Order Paper. *That pursuant to Article 148F(10) of the Constitution of the Republic of Singapore, the salary and allowances of the Auditor- General shall be as follows with effect from 1st January 1994:-- (a) Basic salary : $10,175.00 p.m.; (b) Monthly Variable Component : $3,012.87 p.m.; (c) Non-Pensionable Component : $2,012.13 p.m.; plus (d) Non-Pensionable Variable Payment : $866.40 p.m. Sir, Article 148F(10) of the Constitution of the Republic of Singapore states that "Parliament shall by law provide for the remuneration of the Auditor-General and the remuneration so provided shall be charged on the Consolidated Fund". Along with the general salaries revision for the Civil Service, the Government also decided to revise the salaries of political, judicial and statutory appointment holders with effect from 1st January 1994. It is therefore necessary for such revision of the Auditor-General's salary and allowances to be effected through a Motion in Parliament. Sir, I beg to move. Question put, and agreed to. Resolved, That pursuant to Article 148F(10) of the Constitution of the Republic of Singapore, the salary and allowances of the Auditor-General shall be as follows with effect from 1st January 1994:- (a) Basic salary : $10,175.00 p.m.; (b) Monthly Variable Component : $ 3,012.87 p.m.; (c) Non-Pensionable Component : $ 2,012.13 p.m.; plus (d) Non-Pensionable Variable : $ 866.40 p.m. Payment”
“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 "$868,800", "$53,000", "$2,249,900", "$411,300" and "$146,600" in the second column and substituting the figures "$1,190,400", "$55,000", "$2,175,700", "$561,600" and "$51,500", respectively. SALARY OF AUDITOR-GENERAL”
“Mr Speaker, Sir, I beg to move the Motion* standing in my name under item No. 5 in the Order Paper. *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 "$868,800", "$53,000", "$2,249,900", "$411,300", and "$146,600" in the second column and substituting the figures "$1,190,400", "$55,000", "$2,175,700", "$561,600" and "$51,500", respectively. Sir, it is proposed to increase the provisions for privy purse and entertainment allowance to $1,190,400 and $55,000 respectively. These increases for FY 94 are necessary to provide for an adjustment to the pay of the President and anticipated higher entertainment expenditure. A lower provision of $2,175,700 is allocated for the salaries of personal staff because of a reduction in the provision for vacancies. A higher sum of $561,600 is required to meet Expenses of the Istana household in FY 94. The increase is to cater for higher expenditure on public utilities and maintenance of the building. The allocation for Special services in FY 94 is decreased from $146,600 to $51,500. The lower expenditure in FY 94 is because the replacement of a car and other machinery and equipment was carried out in FY 93. 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.”
“To remove this inconsistency, clause 15 of the Bill provides the Armed Forces Council with the power to refer the case to the Chief Military Posecutor if it considers that the case should be tried by a subordinate military court. With the restructuring of the NCO Corps, the definition of servicemen will be expanded to include new terms such as enlisted personnel, ratings and airmen. The obsolete rank of "Corporal First Class" will be deleted. These changes are provided for by consequential amendments in the Bill. Sir, I beg to move. Question proposed.”
“To enable disciplinary action to be taken in such cases, clause 20 of the Bill provides for the period of three years to run either from the date of the offence itself; or from the time the offence is reported to a disciplinary officer or a military policeman, whichever is later. A serviceman who claims trial in a subordinate military court will have his case adjourned to another date for hearing. And to remove any doubt as to when the three-year limitation ends, the Bill provides the limitation period to stop running once the servicemen is produced before a court martial. Lastly, the Bill provides for a new bail system for military offenders, rectify anomalies in the Armed Forces' Council power and other nomenclature changes. The SAF Act provides for the bail provisions of the Singapore Criminal Procedure Code to apply to military offenders. At present, bail may be offered when a person subject to military law is arrested or detained or is brought before a military court, except for offences which are punishable with death or life imprisonment. These Criminal Procedure Code provisions are unsuitable in that they are designed to apply to proceedings in a civil and not military court. Clause 28 of this Bill provides for specially tailored provisions of bail to be offered to military offenders when they are arrested pending investigations or are brought before the subordinate military court. The provisions are modelled on the bail provisions existing in the Criminal Procedure Code. At present, the Armed Forces Council can quash the decision of a disciplinary officer at a summary trial. It may order that a case be retried by the same or another disciplinary officer but it has no power to order a court martial.”
“The Bill also provides for a summary trial system for senior military officers in the rank of Lieutenant Colonel and above. At present, senior military officers of the rank of Lieutenant Colonel and above can only be tried summarily by the Armed Forces Council (AFC) which also serves as the Reviewing Authority for all disciplinary cases. The Bill seeks to resolve the apparent conflict between the judicial and reviewing responsibility of the Armed Forces Council. Although it is possible to refer every disciplinary case involving senior military officers to a subordinate military court, this might seem to be denying them an expeditious hearing that is currently available to other servicemen. Clauses 7, 8, 12 and 13 of the Bill provide that the Chief of Defence Force (CDF) will have jurisdiction to deal with Lieutenant Colonels summarily while Colonels and above will be dealt with by a Senior Disciplinary Committee (SDC) which will be a special committee of the Armed Forces Council. The SDC will have at least three members appointed by the Chairman of the AFC. The Senior Disciplinary Committee will basically have similar powers to those currently exercised by the Armed Forces Council in summary trials of senior officers. The Bill also provides a time bar provision for the trial of any offence under the Armed Forces Act. Currently, no disciplinary action can be taken against servicemen three years after the date of the offence itself or after the three years time bar. In some cases, particularly those arising from an audit, the offence itself is not discovered until after three years and the offender is not arrested until after this time.”
“Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. SINGAPORE ARMED FORCES (AMENDMENT) BILL Order for Second Reading read. 3.00 pm The Second Minister for Defence (Dr Lee Boon Yang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to amend the Singapore Armed Forces Act to recognise the establishment of the Corps of Warrant Officers, enact new disciplinary procedures for senior SAF officers, redefine the time limit for disciplinary action and, lastly, introduce a new bail system for military offenders. In July 1992, the Singapore Armed Forces restructured its Non-Commissioned Officer Corps into the Corps of Warrant Officers and Corps of Specialists. It is part of the overall effort to improve their status, image, professionalism and career development and also to attract better qualified, better educated personnel into the SAF. This amendment is necessary to define the rank of Warrant Officer, spell out the procedures for the appointment of Warrant Officers by the Armed Forces Council and make provisions for their higher responsibilities and additional duties. Warrant Officers may be appointed to hold junior officer appointments in the SAF. They will have enhanced disciplinary responsibilities including the powers of investigating officers in cases where the offender is below the rank of Warrant Officer. Clause 5 of the Bill provides for a Warrant Officer holding the appointment of a Company Commander or its equivalent to be vested with the powers to deal with junior military offenders summarily.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. First resolution reported - That the sum of $246,246,630 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, 1993 to 31st March, 1994, contained in Paper Cmd. 1 of 1994". Second resolution reported - "That the sum of $900,000,000 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, 1993 to 31st March, 1994, contained in Paper Cmd. 1 of 1994".”
“The coins will be made available. You cannot physically distribute the coins to people unless they ask for it. They will be available to retailers who feel that there is a need for it. SHIPYARD ACCIDENTS (Precautions) The following Question stood in the name of Dr Kanwaljit Soin - 5. To ask the Minister for Labour what further precautions the Government intends to take to reduce loss of life and limb in shipyard accidents. ENFORCEMENT OF SAFETY REGULATIONS IN SHIPYARDS 6. Dr Toh Keng Kiat asked the Minister for Labour whether more effective enforcement of safety regulations will be carried out in shipyards in order to prevent further accidents due to explosions and flash fires.”
“Mr Speaker, Sir, there is no need for Government to fix its fees and charges to the nearest one cent when GST is implemented on 1st April 1994. This is because Government rates will remain unchanged on 1st April 1994, notwithstanding that Government fees and charges will attract GST where similar supplies are or might be made by the private sector. Government's purpose in doing this is to facilitate the implementation of GST. Government fees and charges are adjusted periodically to account for increase in costs. When changes become necessary, the increases are fixed by rounding down to the nearest 10 cents for ease of collection. To allay public concern about excessive price increases and profiteering, retailers are encouraged to round off their prices to the nearest one cent. The Board of Commissioners of Currency, Singapore (BCCS) will increase the circulation of one-cent coins to meet additional demand.”
“These are the half-hourly and hourly charges. But item 6 probably refers to the season car park charges. The car park charges cover a range of increases. It is possible that one of the increases could be 12 1/2% and therefore what the Member says is true. ONE-CENT COINS (Promotion on use) 4. Mr Koo Tsai Kee asked the Minister for Finance whether he will promote the use of one-cent coins by encouraging the Government to fix charges and fees to the nearest one cent.”
“Which one is 12%? Mr Robert Chua Teck Chew: Actually it is 12 1/2% because the charges were raised from 40 cents to 45 cents and from 80 cents to 90 cents.”
“Car park charges cover a range of increases. I do not know which particular one the Member is referring to.”
“University fees are outside my portfolio. But I will refer the Member's request to the Minister for Education.”
“Mr Speaker, Sir, between February 1993, when GST was first announced, and the end of January this year, fee increases were implemented by six Government departments, institutions or statutory boards. These are listed in the Annex (Cols. 439 - 440) already distributed to hon. Members. Annex - FEE INCREASES BETWEEN FEBRUARY 1993 AND JANUARY 1994 (Cols. 439 - 440) Fee increases are necessary when manpower, material or operating costs have risen significantly. The increases introduced since February last year were unrelated to GST. Government's policy is to recover unavoidable manpower and material related cost increase through gradual and periodic fee increases in order to minimise their impact on inflation. Delaying such increases will only result in larger and more painful adjustments later on.”