Richard Hu Tsu Tau
Singapore
“Sir, I think it is eminently fair, because the proposal really is for the Government to spend money to give shares to Singapore citizens. Either you agree or you do not agree. Or, if you agree, perhaps you consider the amounts insufficient or too much.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The purpose of this Bill is to make provision in accordance with Articles 148(2) and 148C(2) of the Constitution for additional expenditure in excess of the provisions authorised by the Supply Act, 2001.”
“I think the Prime Minister and DPM Lee have already explained it will be based on income levels, with people living in flats as a proxy. So there is no political content in it. It depends on the income level, whether you have served national service or whether you are an elderly person.”
“I really do not understand. I know you are arguing on technicality for which I agree that you may have a point. But, nevertheless, because it is a proposal to share Singapore's surpluses with the population, the distribution is not something which you can argue against.”
“As I said, the estimates will be available around mid-October. I do not think, at this time, I want to give a specific date when the second package will be announced, but it will be done as soon as practicable. IN-PRINCIPLE AGREEMENT WITH MALAYSIA ON OUTSTANDING BILATERAL ISSUES (Assessment) 4.”
“Mr Speaker, Sir, when the $2.2 billion off-Budget package was announced in July this year, we said that the Government would do more to assist Singaporeans if the global economic situation worsened in the coming months.”
The complete record
Every one of 2,807 lines we hold for Richard Hu Tsu Tau, in date order, each linked to its source. Free to read, in full, without an account. Page 31 of 57.
“The breakdown of women civil servants by marital status is as follows: Status Number % Single 11,054 34.3 Married 20,078 62.2 Divorced 544 1.7 Widowed 587 1.8 ______ _____ 32,263 100.0 ====== ===== If women civil servants were accorded the same medical benefits as their male counterparts, the estimated increase in medical subsidy is $8.1 million or about 0.4% of total payroll. There are about 940 women officers whose spouses are also in the Civil Service. Annexes - ADMINISTRATIVE SERVICE, POLITICAL, JUDICIAL AND OTHER STATUTORY APPOINTMENTS (Cols. 1277 - 1282) BENCHMARKS, PRE & POST 1994 RANKINGS, AVERAGE 1987 & 1991 MONTHLY INCOME OF THE TOP THREE LOCAL EXECUTIVES IN A SELECTION OF COMPANIES AND PROFESSIONAL FIRMS (Cols. 1283 - 1290)”
“When the civil servants see the entire package, including the salary adjustments, I think there will be no grounds for concern. Incidentally, the civil service unions have been told this morning about the broad outline of the new Scheme. AFFORDABLE HEALTH CARE (Motion) Order read for Resumption of Debate on Question [10th November, 1993], "That this House endorses the principles and approaches set out in Paper Cmd 16 of 1993 on "Affordable Health Care" as the basis for Government policies to contain health care costs and to keep good basic health care affordable to all Singaporeans." - [Minister for Trade and Industry]. Question again proposed. 1.00 pm”
“On maternity issue, I am not clear. I do not have the actual facts. I have to obtain the facts and let him know. Serving officers have two choices. They can either opt for the MSO Scheme, in which case the terms of the MSO Scheme will apply to them, or they can elect to remain on the present scheme, in which case they would have to accept the Comprehensive Co-payment Scheme. So these are the two alternatives. He is free to choose.”
“The cap is necessary. Otherwise the ratio between Division IV officers' compensation of the 1% and those who are in the higher salary range would be too large and therefore inequitable. I can assure the Member that any perceived or real loss of benefits due to the cap will be more than covered by salary adjustments.”
“The $7,000 cap is imposed in the same way that we limit the contributions to CPF on the principle that those who are earning above $7,000 are already sufficiently remunerated. The salary adjustment built into the package will more than allow for the small loss they may incur by not receiving the 1% Medisave on the balance of their pay above $7,000”
“If the new pay package takes effect from 1st January, then of course that would be his salary base. The third point raised is whether, if the cap of $350 is not used, it could be returned to the officer. There is no provision for that at the moment because this is a statistical figure, which is an average cost. Mr Loh Meng See: What about the $7,000?”
“This is for retirement before 1st January?”
“I will take his three points raised in turn. Firstly, those who retire on 31st December 1993 will enjoy the existing benefits. Those who retire after 1st January 1994 would of course receive the new terms under the new package. But I have said that any loss of benefits would be more than made up by the civil service salary adjustments. That is part of the total package. I have said earlier that we view the total remuneration package of civil servants, or the private sector, as a combined package. You look at medical benefits as part of your total remuneration. And in devising this scheme, full allowance has been made for the increased cost to the civil servant in the conversion process, and this is more than made up for in the salary revisions which are planned.”
“Pensioners will continue to receive their existing benefits which they received at the time of retirement. So that status quo is maintained.”
“Government estimates that placing new officers on the MSO Scheme will cost about the same, which will be below the 2% cap on tax deductibility on medical benefits for private sector firms. Converting serving officers to the Comprehensive Co-payment Scheme will mean that the officers have to bear additional medical costs, amounting to 0.3% of the current manpower bill. It is, however, not Government's intention through this exercise to cut down on its manpower costs. The Government will continue to offer an attractive overall remuneration package to civil servants, competitive with the private sector, in order to retain and reward good officers and to attract fresh talent. Salary revisions for the whole civil service, which generally will more than offset the conversion to the Comprehensive Co-payment Scheme, will also be effected from 1st January 1994. Details of the salary changes will be announced when they are ready. The new medical benefits arrangements for civil service will promote personal responsibility for health and help to control rising health costs. We encourage the private sector to follow the lead taken by Government and convert their medical benefits in kind to additional Medisave contributions.”
“Female Officers Some Members of this House have asked for women to be given the same medical benefits as men. The Government has studied this question carefully in formulating the new scheme. The MSO Scheme gives female officers benefits which are closer to their male colleagues. Women on the Scheme will receive the same additional 1% Medisave contribution as the men. They can use their Medisave savings for other family members if they wish. However, there is still a difference in treatment between female and male officers. Women on the MSO Scheme will not be eligible to claim outpatient subsidy for their husbands or dependent children. Similarly, women on the Comprehensive Co-payment Scheme will not have medical benefits extended to other family members. This is the status quo. The reason for this is not the cost of extending equal benefits to women, but the principle that in our Asian society the husband is the head of the household. It is his responsibility to look after the family's needs, including their medical needs. This is how our society is structured. It would be unwise to tamper with this structure. Doctors and Ancillary Medical Staff Currently, Government medical staff, such as doctors and nurses, receive completely free medical benefits. This is an anachronism. From 1st January 1994, serving and new medical staff will be treated in the same way as other civil servants. Restructured hospitals will also cease providing free medical benefits and instead adopt civil service practices. Statutory Boards The new medical benefits package will also apply to statutory boards. Cost Implications The current cost of providing medical benefits is approximately 1.4% of payroll.”
“Total subsidy for outpatient treatment per officer and family will be subject to an annual cap of $350. The amount is based on average expenditure of civil servants who used outpatient services in 1992. This should be sufficient as outpatient expenses are not expected to increase rapidly. Pensionable officers on the MSO Scheme will continue to receive MSO benefits after retirement. President and Political Office Holders The President, Cabinet Ministers and other political office holders will convert to the MSO Scheme from 1st January 1994. Serving Officers - Comprehensive Co-payment Scheme The Government will allow other serving officers to opt for the MSO Scheme, but it will not compel them to do so. However, the option, once exercised, is irrevocable. The Government will revise the co-payment terms for the existing medical benefits scheme in line with the principle of personal responsibility. Currently, civil servants pay 20% of ward charges, while their dependants pay 50% of ward charges. The Government bears the remainder of the ward charges, plus all other hospitalisation charges, namely, investigations, treatment, surgical operations and drugs. From 1st January 1994, civil servants receiving medical benefits in kind will pay 15% of all hospitalisation charges, and not just 20% of ward charges. Dependants will pay 40% of all hospitalisation charges, instead of 50% of ward charges. Officers and dependants on this Scheme will also be required to co-pay for outpatient expenses, at the same rates of 15% for officers and 40% for dependants. However, there will be no cap on the subsidy for outpatient treatment because serving officers have hitherto enjoyed free and unlimited treatment at Government and restructured hospital outpatient clinics.”
“It will provide for employees' hospitalisation needs, but at the same time discourage unnecessary consumption. It gives the employee the freedom to choose how to use Medisave funds. He can use them for other family members, or buy more insurance protection with MediShield II. Whereas presently all Division I officers automatically get Class A treatment, the new scheme gives them more freedom to opt for lower class wards if they wish to save money. Similarly, Division II, III and IV officers will not be tied to a particular class of ward, but will have the flexibility to upgrade or downgrade to suit their individual needs. Above all, the additional Medisave contributions will remain in his account and MediShield will still cover him even if he changes employers. New Officers - Medisave-cum-Subsidised Outpatient (MSO) Scheme The new package to be introduced by Government will apply to employees who join the civil service on or after 1st January 1994. This new package is called Medisave-cum-Subsidised Outpatient Scheme (MSO). Instead of hospitalisation benefits, Government will pay an additional 1% of gross monthly salary, tax-free, into the employees' Medisave account, up to the normal CPF limit of $7,000 of salary. As Medisave cannot be used to pay for most types of outpatient treatments, the Government will continue to provide outpatient benefits under the MSO scheme. Currently, civil servants and their dependants get free outpatient treatment. This arrangement creates no incentive for economy. To promote greater individual responsibility in health care, civil servants will co-pay 15% of the outpatient expenses in future. Dependants who are eligible for benefits will co-pay 40%.”
“Sir, I will be speaking on a new Government medical benefits scheme for the civil service. The White Paper on Affordable Health Care has recommended that our health care financing should be based on individual responsibility coupled with Government subsidies to keep basic health care affordable. It recommended that patients should pay directly for part of the cost of medical services which they use in order to avoid the pitfall of over-consumption of medical services which are provided `free' to the patient. Many employees see employer-provided medical benefits as something which they get over and above their wages. This is a misconception. In reality, the cost of medical benefits is borne by the employees themselves because it is part of the total labour cost. More benefits must mean less pay and vice versa. Currently, the civil service provides almost free access to unlimited medical services. The Government, as the largest employer in Singapore, will take the lead in moving towards the system recommended by the White Paper by introducing a new medical benefits scheme to coincide with the forthcoming salary revisions for the civil service. The new scheme is built upon the national system of health care financing, namely, Medisave and MediShield. The Government will make extra contributions to employee Medisave accounts in lieu of hospitalisation benefits. However, as Medisave does not pay for most types of outpatient treatments, the Government will retain outpatient benefits in kind. Civil servants will also be able to use MediShield II to obtain additional insurance protection when this is introduced, should they wish to do so. Converting medical benefits to additional Medisave contributions has several advantages.”
“HDB awarded some 60 contracts for public housing in 1984. Detailed information on the financing/overhead and professional/supervisory costs for each contract awarded 9 years ago, in 1984, is no longer maintained by HDB. All these costs, however, would have been well within the market equivalents. For example, interest on Government loans for the construction of flats for sale was 6% p.a. in FY 84/85, as compared to the prime lending rate of 9.4% in that year. HDB's professional/supervisory costs have also been historically stable at around 4% to 5%. ARRANGEMENTS FOR SINGAPOREANS ABROAD TO APPLY FOR TELECOM GROUP A SHARES 2. Dr Kanwaljit Soin asked the Minister for Communications whether any special arrangements can be made for Singaporeans above the age of 21 who are studying or working abroad to apply for Singapore Telecom Group A shares so that they too can have a share in the economy of Singapore.”
“Mr Speaker, Sir, the net proceeds from Singapore Telecom's initial public offer was about $4 billion. The amount withdrawn from CPF members' accounts to purchase Singapore Telecom shares was about $2.18 billion. The funds will be reinvested. How this will be done will depend, among other things, on what investment opportunities are available. The expected returns will depend on the nature of the investment, as well as the economic and market conditions prevailing at that time. SINGAPORE TELECOM GROUP A SHARES (Reasons for non-application by eligible Singaporeans) 5. Mr Chia Shi Teck asked the Minister for Communications if he will state (i) the number of eligible Singaporeans who did not apply for the Singapore Telecom Group A shares and (ii) the reason(s) for their non-application.”
“It will depend on the Stock Exchange and the size of future offerings. SINGAPORE TELECOM VENDOR SHARES (Funds received by Temasek Holdings Pte Ltd) 4. Mr Robert Chua Teck Chew asked the Minister for Finance, as a result of the successful sales of Singapore Telecom Vendor Shares by Temasek Holdings Pte Ltd to the public, (a) how much was received by Temasek Holdings; (b) how much of the funds received was derived from Central Provident Fund members' accounts; and (c) how does Temasek Holdings intend to invest such funds and what is the expected range of returns on such investments.”
“That may be difficult because you need to confirm a sale transaction and a verbal request may not be sufficient.”
“If an investor is unsure whether to sell his Telecom shares, he would be asked to consider the matter carefully before rejoining the queue to sell his shares. Singapore adopts the universal banking concept whereby our banks provide a wide range of services to their customers. Banks are exempt dealers under the Securities Industry Act. Accordingly, they are permitted to deal in securities on behalf of third parties. All the local banks have their own subsidiaries which are members of the Stock Exchange. Hence, the branches where the special terminals are located are merely acting as agents of their subsidiaries in carrying out the share transactions.”
“Mr Speaker, Sir, the recent public offering of Singapore Telecom (ST) shares is by far the largest flotation in Singapore's corporate history. It attracted the largest number of Singaporean investors with more than 1.4 million Singaporeans subscribing for and being allotted ST's "A" and "B" shares. Before the flotation, there were only about 400,000 investors with CDP securities accounts. In anticipation of the large number of people wanting to sell their ST shares during its initial period of trading, special SES trading terminals were set up at 107 branches of local banks located around the island. This is to provide members of the public with easy access to information about ST's share price, and to enable shareholders to sell their shares easily without having to go through a stock broking firm. Besides avoiding over-crowding at the stock broking firms, having the terminals located at various housing estates also reduces inconvenience to the investors, especially the senior citizens. They need not travel personally to the central business district just to sell a couple of hundred shares. About 14,750 investors sold their "A" and/or "B" shares on the first day of listing of Singapore Telecom through these special terminals. The existing SES stockbroking firms would not have the capacity to handle such a large number of individual sellers in addition to the usual daily transactions in the other counters. These special trading centres are set up specifically to only allow the investor to sell his ST "A" or "B" shares. Staff of the bank manning the terminals are not required to provide advice to investors on their share investments. Their job is just to key in the sell orders into the trading terminals to match the current best bid in the market.”
“No. They are the wages of people. Wages must go up. The important thing is that we grow faster, and incomes rise in line with productivity and economic growth, and hopefully, with our ability to do both, which means that as economic growth rises, we would expect all salaries to rise in proportion. Otherwise, what is the purpose of having economic growth?”
“I understand Mr Low's concern, but I think I had better clarify a few points. Firstly, we do not say that GST is not regressive. It is recognised that the lower income group spends more or proportionately more on their essentials. That is why we have designed the package, precisely to offset this. And we can afford to do this. The figures will show that we are giving back more than we think the GST is going to collect. I can show you the actual figures. We can show you the calculated figures for the impact of GST on different income groups of families, and the amount of rebates given more than offsets this because of the possibility of calculation or statistical error. So it is a general package designed precisely for this purpose. His concerns are understood and they are being addressed. Secondly, Mr Low says that civil service costs have gone up. Indeed, they must, because the bulk of the civil service costs is wages. Are you suggesting that we should freeze civil service wages?”
“The East Asian Consultancy (S) Pte Ltd (EAC) was set up on 15th October 1992, as a wholly-owned subsidiary of the Institute of East Asian Political Economy (IEAPE). The IEAPE is a non-profit organisation, certified as an institution of public character and effectively operates as a charitable research institution. EAC was set up to provide research and consultancy services on China to companies operating in Singapore intending to make investments or do business in the People's Republic of China. The Commissioner of Inland Revenue and the Deputy Managing Director of MAS are non-executive directors of EAC. They receive no remuneration and will not be involved in the day-to-day business and the running of EAC, nor are they personally involved in providing consultancy and advisory services. They provide specialised advice to the Board of EAC. Senior civil servants sit on the Boards of Government-linked companies (GLCs), many of which are publicly listed, and which transact business both in Singapore and outside Singapore. Whenever there is a potential conflict of interest because of the civil servant's official position and his membership on the Board, he declares his interest and disqualifies himself from taking part in the decision making on that matter. There are adequate checks and balances within the Civil Service system to ensure prior resolution of any potential conflict of interest. COST REVIEW COMMITTEE REPORT (Motion) Order read for Resumption of Debate on Question [12th October 1993], "That this House endorses the conclusions of the Cost Review Committee contained in Paper Misc. 5 of 1993 and calls on the Government to accept the Committee's recommendations to contain rises in the cost of living." - [Mr Chng Hee Kok]. Question again proposed. 1.10 pm”
“Individual companies. EAST ASIAN CONSULTANCY (S) PTE LTD (Appointment of Directors) 12. Mr Low Thia Khiang asked the Minister for Finance whether it is appropriate for a Deputy Managing Director of the Monetary Authority of Singapore and the Commissioner of Inland Revenue to be directors of East Asian Consultancy (S) Pte Ltd.”
“As I mentioned earlier, they are being held by Temasek Holdings temporarily as an investment. There will be no interference with the operations of the companies. Eventually, all these will be divested back to them. It is a question of timing. There is no intention to re-acquire the shares to re-exert control.”
“MND Holdings and Temasek Holdings are 100% Government holding companies. Therefore, this restriction does not apply.”
“Yes, any company, unless they are specifically exempted. But the exemptions are being withdrawn now. The only holders who will be exempted would be Temasek Holdings and MND Holdings, which are Government holding companies. Even Government-linked companies (GLCs), for example, Keppel, will not be allowed to hold more than 3%.”
“We have not decided on this. The companies would be allowed to sell the shares over a two-year period. So it is unlikely we will start selling SPH shares well before the end of this period because we are not certain how much will be collected. So the simple answer is that we have not decided on it.”
“Under the Newspaper and Printing Presses Act, no person can hold more than 3% of the ordinary shares in a newspaper company unless it is exempted from this requirement. This 3% rule was introduced in 1977. Until the present order was announced, several companies, principally the OCBC Group and Great Eastern Life, held more than 3% of the ordinary shares of Singapore Press Holdings (SPH). They have hitherto been exempted from this rule. In September 1993, we announced that the 3% rule will be applied to all ordinary shareholders of SPH. Those who hold in excess of 3% are required to divest their excess shares equally to the stock market and Temasek Holdings or MND Holdings over two years. Temasek Holdings and MND Holdings will initially hold these shares placed with them as investments. Later, when these shares are split into small board lot sizes, which are affordable, they will be offered to Singapore citizens, who can use their CPF funds to purchase them. The rationale behind the whole exercise is therefore to allow more Singaporeans to own shares in a company with a strong track record. This is in keeping with the objective announced by the Prime Minister in his 1993 National Day Rally Speech to help Singaporeans enlarge their ownership of assets, including shares.”
“As I said, it is not a real cost in the sense that you cannot remove it by not asking questions. I am merely making an appeal that if you ask questions, make sure that the questions are relevant, in which case the Government would be very happy to respond. In other words, it is well worth it. NATIONAL UNIVERSITY HOSPITAL (Expansion plans) 5. Mr Loh Meng See asked the Minister for Health whether there are plans to expand the National University Hospital and, if so, whether he will include Class C wards in the plans.”
“The imputed cost of answering a question raised by an MP in Parliament is estimated to range from $500 to $1,300 depending on the complexity and nature of the questions asked. This imputed cost is not necessarily a real incremental cost that taxpayers have to pay as the preparation of responses to MPs' questions constitutes only a part of the duties of public officers. In other words, the imputed cost may not be saved even if MPs ceased asking questions altogether. However, I should point out that every time a question is raised by a Member of Parliament, the Minister and public officers of the Ministry concerned do spend considerable time and effort to ensure a satisfactory answer is given. If the questions asked by MPs are pertinent and not frivolous, the time and effort spent is well worthwhile as they provide Ministries with an opportunity to explain and clarify Government policies or rules and regulations. On the other hand, if the questions asked are repetitious or of marginal public interest, the time and energies of public officers may be diverted from more urgent matters.”
“The campaign is not to make easy money. It is to teach them to invest in blue chips like ST which is part of the Singapore economy. Our hope is that they will confine their purchases to the blue chips in companies like ST, SPH, SIA and so forth which are part of the Singapore economy, and not speculate on companies without any assets where they are likely to get burnt. ANSWERS TO PARLIAMENTARY QUESTIONS (Cost to taxpayers) 4. Mr Koo Tsai Kee asked the Minister for Finance what is the cost taxpayers have to bear every time a question is filed and answered in Parliament.”
“That is indeed a risk. But we cannot totally eliminate this risk and I am afraid that some people who have a stronger gambling instinct are likely to get burnt. I just hope that people will use their discretion and get burnt lightly before they learn a lesson.”
“Singaporeans who use the CPF share programme are only allowed to buy trustee stocks. To that extent, they are already limited in the range of shares they can buy. They are not allowed to use their CPF savings to buy shares on the Clob which are highly speculative, as the Member has said.”
“Yes, that is the primary reason although in the process there is a wider education programme which is linked to it, ie, to make people understand the purpose of shares and the risks involved. Having learned how to buy ST shares, there is also definitely the possibility that they will buy other shares which are more risky and they should know the consequences.”
“We should be able to achieve the target of doubling the present number of share owners in Singapore.”
“Singapore Telecom's (ST) listing in a few weeks' time will be the largest listing so far in Singapore. Through the ST listing, and the sale of Group A ST shares at a discount to citizens, the Government is promoting long-term, widespread share ownership. This will give Singaporeans a direct stake in the country's success, and enable them to share in its prosperity. Currently, out of 1.9 million adult Singaporeans, only 250,000 have ever owned shares. Of the 700,000 CPF members who qualify for the CPF Approved Investment Scheme, 120,000 have actually bought shares under the scheme. To promote widespread ownership, we need to raise the level of awareness and knowledge of shares among the general population. Hence the publicity campaign. The programme is targeted at the entire adult population of Singaporeans, especially those who are unfamiliar with shares. It has two objectives: general share education, putting across the basic facts about shares as a form of investment, the potential risks and rewards, and the mechanics of buying and selling shares; and specific information about ST's listing, especially the offer of Group A ST shares. The total cost of the public programme is estimated at $3.6 million. This is small compared to the magnitude of the education effort required, and to the size of the ST listing. As a percentage of the proceeds from the ST listing, it is less than the amount spent on similar public education programmes in other privatisations overseas, for instance, the British Telecom listing. Our surveys have shown a high level of awareness of and interest in the ST listing. Many of those surveyed have said they intend to buy ST shares, although we will not know how many actually do so until the actual offer.”
“No. The restructured hospitals do not pay property tax because they do not own the land they occupy. Their land and buildings are on TOL, so they pay rent to the Government. The rental is at market rates, to reflect the proper costing and pricing of the scarce land resources which they are using. However, because the hospital land is zoned for institutional use, this market rental is only a fraction of rentals for commercial or residential property. In any case, the subsidies for B1, B2 and C Class patients are sufficient to cover completely their share of rental costs. Polyclinics do not pay property tax because they are part of the Government. Tertiary institutions do not pay property tax on their educational and sports facilities because they are exempted under the proviso to section 6(5) of the Property Tax Act.”
“Essentially, a flexible benefits plan allows employees to choose from a menu of various staff benefits, based on their individual needs. The concept is new to Singapore. In a survey conducted last year by the National Productivity Board and the Singapore Institute of Labour Studies, about three-quarters of the companies surveyed indicated reluctance to introduce a flexible benefits scheme. The main reasons cited for the reluctance were the lack of a model to follow, uncertainty in cost implications and a substantial increase in administrative workload. It is also necessary to mount a massive education exercise to explain the scheme to workers. Although a flexible benefits scheme contains some attractive features, practical difficulties remain and its overall cost-effectiveness is unclear. However, the Member can rest assured that the Public Service Division keeps track of innovations in human resource management and will implement new schemes which are clearly useful and cost-effective. EXPENDITURE ON ARTIFICIAL REPRODUCTIVE TECHNOLOGIES 5. Dr Kanwaljit Soin asked the Minister for Health (a) how much was spent on artificial reproductive technologies in 1990, 1991 and 1992; (b) what is the eventual cost of one live birth; and (c) what percentage of total health spending per year is diverted to artificial reproductive technologies.”
“In 1991, a pilot scheme was implemented in Pasir Ris to build 2-room studio apartments on the ground floor of a block with 4-room and 5-room flats on the upper floors. This was to enable aged parents and their children to stay in close proximity to each other, and at the same time retain a degree of privacy. Under the pilot scheme, 21 2-room studio apartments were built in Block 142 Pasir Ris, and offered for sale to parents whose married children had also submitted requests for bigger flats in Pasir Ris in the 3rd Quarter 1991 Booking Exercise. Only 6 parents submitted requests for these flats. Eventually, only 4 selected the 2-room studio apartments. The balance 17 units were offered for sale under the December 1992 Walk-In Selection exercise. Priority was accorded to parents or parents-in-law with a child who either had booked an HDB flat in Pasir Ris, or was a lessee, tenant or authorised occupier of an HDB flat in Pasir Ris. Of the 17 units, 11 were selected by applicants with a child in Pasir Ris, and 3 by applicants who did not have a child in Pasir Ris. The balance 3 2-room studio apartments will be offered in future Booking or Walk-In Selection exercises. As the response to the pilot project has not been encouraging, HDB has decided not to implement the programme on a wider scale. HIGHER FERTILITY RATE IN LOWER-INCOME FAMILIES 3. Dr Kanwaljit Soin asked the Minister for Health what are the possible causes of the higher fertility rate in our lower-income families leading to higher order births.”
“Persons already licensed under the Monetary Authority of Singapore Act, Banking Act, Finance Companies Act, Securities Industry Act or Futures Trading Act will however be exempted. The Authority has found it necessary from time to time to issue directives to carry out its functions under the Insurance Act. Clause 20 empowers the Authority to issue directions via notices and circulars to insurers while clause 19(b) makes provision for penalty for non-compliance with such directions issued. With the development of offshore insurance business, two other types of insurers have merged from a market structure originally consisting of direct insurers. In view of this substantial change in the market structure and to facilitate references when drafting regulations, notices and circulars, clause 3 provides for the registration of insurers by the type of insurer, namely, direct insurer, professional reinsurer or captive insurer, in addition to the existing practice of registration by class of business. The other amendments made by the Bill do not warrant any special mention in addition to what has been stated in reference to them in the Explanatory Note. 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. PARKING PLACES (AMENDMENT) BILL Order for Second Reading read.”
“Otherwise, the "90/10" rule will apply, that is to say, profit accrued from the non-par business will be subject to the "90/10" rule in distribution to the par policyholders. The second regulatory measure introduces the concept of the "Appointed Actuary" for direct life insurers and will take effect from 1st January 1994. Traditionally, an actuary is involved in determining the premium rates, designing insurance products, valuing policy reserves and recommending profit distribution to participating policyholders. Given the greater volatility in the economic and financial environment, and a greater concern with the financial solvency of life insurers, this traditional role is increasingly viewed as limited and inadequate. In line with the United Kingdom and Canada, the concept of an "Appointed Actuary" is adopted in which the role and responsibility of the actuary is expanded. Some of the new responsibilities of the actuary relate to the investment of assets and the assessment of capital adequacy to support new business growth and the long-term financial solvency of the insurer. Clause 8 empowers the Authority to approve the appointment of an actuary and to prescribe the duties of the appointed actuary. These two new regulatory measures have been extensively discussed and agreed with the insurance industry. To minimise the possibility of abuse and problems of conflicts of interest by the insurers, clause 9 introduces restrictions on the amount of unsecured loans given by the insurer to its directors and employees. In view of the public interest involved in the bond and guarantee business and that such activities are closer to insurance, clause 2 empowers the Authority to control persons engaged primarily in such business under the Insurance Act.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Insurance Act was last amended in 1986. In view of the insurance developments that have taken place since, further amendments to the Act are necessary to ensure that it remains relevant for the effective supervision of the insurance industry. The first regulatory measure, which will take effect from 31st December 1993, deals with the allocation and distribution of profit from life insurance business. A substantial proportion of life policies sold in Singapore is of the participating (or par) type, that is, the policyholders share the profit arising from the participating life business each year. Presently, the Act requires that participating policyholders get at least 80% and the insurer not more than 20% of the total amount of the profit distributed each year. However, this "80/20" rule is no longer relevant as most life insurers now allocate 90% or more of the distributable profit to policyholders. Clause 5(c), therefore, amends the "80/20" rule to the "90/10" rule which will be phased in over a period of five years commencing 1993. The amendment also clarifies that where an insurer chooses to receive less than the maximum allowable profit in a given year, the insurer cannot seek recovery of the difference in future years. Life policies may be of the non-participating (or non-par) type. Profit accrued from such non-participating life business need not be distributed to the non-par policyholders. Clause 5(a) requires insurers to keep a separate fund for their non-par business if they do not wish to share the profit from such business with policyholders.”
“The Minister for Trade and Industry responded to that.”
“I will leave the discussion on Mr Low Thia Khiang's comments on GST to the debate on the Cost Review Committee Report tomorrow and the day after.”
“We are making a proportionate reduction for second-hand cars and not trying to assess the value of the second-hand cars, net of ARF and COE. Certainly, a more complex formula will be possible but it will make the administration very complex. He has also expressed concern about the so-called double taxation of condominium management committees because of the GST system. I should point out that when a condominium management committee pays GST on goods and services, it should be able to claim the GST incurred as part of tax credit. So he is not taxed twice. Condominium dwellers essentially pay GST only once on their subscription fees. If he needs any more clarification on these matters, I would be happy to discuss with him separately. Mr Speaker, Sir, I think that generally covers the questions Members have asked. I would just like to conclude by saying that the new tax is a fundamental change in the Government's taxation policy. It is designed to position our tax structure for the next century where we will have a more appropriate balance between direct and indirect taxation. It is designed primarily to ensure that Singapore remains competitive in attracting investors in the future, and to ensure that we generate jobs. Without jobs, subsidies would not help. We have gone thoroughly into these matters by introducing changes which meet businessmen's concerns. Nevertheless, I am certain that there will be snags in the actual implementation of GST but I can assure Members that in the implementation procedure, we will be as flexible as possible. Where we find a need to make changes, this will be done either through regulations or through amendments to the Act, to ensure that the new tax system does not unduly interfere in business operations nor reduce our competitiveness.”
“So we are going to mount a new campaign shortly before the implementation of the tax and follow it through for the first few months. Finally, Dr Ow wants an assurance that, in future, all changes of GST will not be simply approved by the Minister through regulations. This is not possible. All tax changes, whether GST or corporate income tax changes, must be tabled in Parliament and approved by Parliament. Mr Robert Chua has said that his only concern is that the Government should consider exemption or zero-rating of all educational institutions' fees and training programmes. We have, in the White Paper and during the Second Reading debate, explained quite clearly why we prefer not to do this. It is because the subsidies for education are basically not a tax matter. It is a matter of social policy, ie, how much we want to subsidise education. We have said that school fees will not be increased because of GST, and that the subsidy to schools and educational institutions will be increased to fully offset the impact of GST. In future, any additional subsidies we may want to introduce, either for education in general or for training programmes, we should explicitly provide through grants, rather than through a tax relief. This is so as not to confuse tax policy with social policy. I must apologise to Prof. Low because he spoke so quickly in Mandarin that I lost touch with him half way through his speech. If I do not respond to his points adequately, we can discuss them separately outside the House. He was concerned about the formula used for calculating GST on used cars. The 50% discount factor is based on an average arrived at for different models of cars over a number of years.”
“In connection with computer programs, the IRAS is not introducing a sophisticated new system of computer program for the GST system. It will be using a really straightforward simple system, because the introduction of GST is not really complicated. The estimated total manpower cost will be about $16 million. Computer cost, including development cost, will be about $13 million, while total start-up cost is $29 million. A question was also asked on the cost of GST collection relative to the collection of income tax. The estimate is that it will cost 2.3 cents to collect $1 of GST. The comparable figure for income tax is 1.65 cents per $1 collected. The reason why the figure for GST is higher is that the tax rate is lower. Dr Ow is also concerned that there seems to be not enough focus and attention paid to the education and publicity for individuals who have to pay the tax. Soon after the introduction of the White Paper, and following the introduction of the Bill itself in Parliament, Ministers and MPs gave a series of talks at community centres to explain the purpose and the implementation of GST to all the grassroots people. After this, the main concentration of effort was by IRAS and the Government in explaining the implementation details of GST to the business community who have to implement it. Nearer the time of the actual introduction of GST on 1st April 1994, there will be a resumption of publicity and campaigns via television, media talks, and so forth, targetted at consumers who have to pay the tax. Memories are short and if we try to explain these matters well before the date of implementation, they will probably be completely forgotten.”
“But, nevertheless, I would reiterate that we are concerned about the impact of GST on these people and there is a special provision of funds for CCCs to help such cases when they are identified. In general, most pensioners and retirees will be covered under one or more of the rebate schemes announced in the Budget. Those with taxable incomes would benefit directly from the tax reductions proposed. Others living with their families would have their children claiming aged parents' relief. In the case of retirees who are Government pensioners, the Singapore Allowance has been increased. So they are also being looked after. But, nevertheless, I think we recognise there will be a core of people who fall between all our provisions, and special attention has been paid to them. We will certainly consider their cases carefully. Dr Ow has asked a series of questions. The first two deal with CASE and measures against profiteering which the Minister for Trade and Industry has already addressed and I shall not repeat them. He has asked some questions on the cost of implementing GST and the number of people who might be involved. IRAS and Customs and Excise have estimated that a total of 296 new staff would be required, of which 100 will be transferred from the existing IRAS staff pool, because their services will no longer be required following the introduction of the tax cuts and reduction in the taxable pool of people. Therefore, there would be a net requirement to recruit 196 additional people. There is no problem in recruiting accountants and other tax officers. These are mostly at the level of polytechnic graduates and we do not believe that these requirements will drive up the wages of accounting clerks and computer programmers.”
“Mr Speaker, Sir, as you have pointed out, although I thank the Members for supporting the Bill, most of the questions raised in fact are not relevant to the Third Reading of the Bill. Nevertheless, as the subjects raised are of public interest I will respond to them. Dr Vasoo and Dr Soin were concerned over the impact of GST on charities. I think the request is that they should be exempted from GST. The point we have made during the Second Reading debate and the Budget debate was that if charitable organisations conduct taxable activities such as running a bookshop or a commercial shop, and these activities exceed a turnover of $1 million a year, then they would be subject to GST, like any other business. Exemption for these reasons would not be equitable because they are competing directly with other businesses. However, other non-business activities conducted by charities will not be taxable. Examples are running an old age home or a children's home where the services are provided to the poor without charge. Donations in cash to charities without any benefit or return are not subject to GST. However, if a taxable business donates its own goods to charities, then it would be subject to GST. However, in cases like this, in order to avoid discouraging companies from donating their own goods to charity, the Income Tax Department will consider accepting a low sale value for these goods. So the actual GST, although theoretically payable, would not be significant. Dr Vasoo has also expressed concern about the plight of retirees and other low income people. This question has been dealt with at previous discussions on the subject.”