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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“Mr Speaker, Sir, the very rapid rise of credit cards and chargecards issued in recent years is a matter of some concern to the regulatory authority, the MAS. The MAS is in the process of reviewing the whole activity. However, I should point out that it is not the Government's duty to determine how the Singapore consumer should spend his money, although we would advocate against pursuing the syndrome of spend now and pay later. However, what is of concern to the authorities is that one of the consequences of the rapid proliferation of credit cards is that it would lead eventually to excessive credit creation by individuals who hold one or more cards and therefore multiply their credit extension. Multiple cards mean that for each card you will have a credit limit multiplied by X number of cards which you have. This could eventually lead to defaulting or write-off on bad debts. Also the experience elsewhere, particularly in the United Sates, has led us to believe that excessive proliferation of credit cards could eventually lead to fraud. So some degree of regulation might be necessary and the whole issue is being reviewed, bearing in mind that the last time the regulations were set was in 1983, at which time the credit threshold was for people with $2,000 a month and above and the age requirement was not less than 21 years.”
“Mr Speaker, Sir, the total number of credit cards, both main cards and supplementary cards, issued in Singapore was 318,966 in 1988, 449,762 in 1989 and 609,706 in 1990. The actual number of cardholders may be smaller because each cardholder may be holding multiple cards. As for chargecards, the total number of cards issued, both main cards and supplementary cards, was 161,716 in 1988, 181,975 in 1989 and 201,002 in 1990. The total rolled over balances of credit cardholders were $14.6 million, $135.1 million and $207.2 million at the end of 1988, 1989 and 1990 respectively. The rolled over balances refer to the minimum sum which is not settled by credit cardholders by due date as well as the balance that is rolled over after settlement of the minimum sum. The total balances exclude late payments of charge cardholders who are required to pay the amounts charged to their cards by due date. The low balance at the end of 1988 was because it excluded the rolled over balances of less than one month. The information on the latter was available only from 1989 when the Monthly Statement on Credit Card Transactions was revised.”
“Mr Speaker, Sir, I am not denying anything. I just fail to see the relevance of what he is trying to pursue.”
“I fail to see the purpose of this question. The crux of the matter is: was the information passed and was it passed before the sale of the shares? And the answer must be yes.”
“I will repeat again. The information was transferred during a prolonged period of negotiations, starting in late October. I have no details of the actual mechanics of the transfer of information. I suggest that the Member contact Mr Liem and see whether he would like to act as his advocate.”
“I mentioned earlier in my reply to the question that the information was passed over a prolonged period during the negotiation with Mr Liem's private company which was in the process of selling shares in the Marina Centre Holding to Singapore Land. This negotiation took place over several months. As far as the actual mechanics of the transfer of information are concerned, I do not have the details. But I can assume that such information must have been passed in many forms.”
“Mr Speaker, Sir, as Minister, I have not taken on myself to decide on this issue. It is the Monetary Authority of Singapore, as a regulatorybody, which made the recommendation which I support. I think the question on whether the MAS acted correctly is very straightforward. The MAS is the regulator of the securities industry. It routinely evaluates many cases of possible violations of the Securities Industry Act. Where there is prima facie evidence of wrongdoing, these cases are sent to either the Commercial Affairs Department (CAD) or the Attorney-General (AG) for further investigation and prosecution. In other cases, as in the UIC case, where the evidence is clearly insufficient to support prosecution, no further action is taken. For the MAS to send each and every case to the AG's Chambers and the CAD, even when it is clear that no offence is disclosed, is to abdicate its responsibility as a regulatory body. Further, this will only overload both the CAD and the AG's Chambers with redundant work. The evidence in this case is quite clear. Mr Liem bought shares from Messrs Lee and Oei. He had all the information available on the share losses incurred by the company. The law is also quite clear in this case. So I see no further reason to refer the matter to a separate commission.”
“Mr Speaker, Sir, under present arrangements, the Stock Exchange has, as I mentioned earlier, additional powers to delist the company's shares from the main board. But this would be a very extreme measure which would hurt the shareholders more than the individuals concerned. Beyond that, I amprepared to suggest to the SIC that they should advise SES to consider other measures more appropriate for offences of this nature. But I would like to point out that the Stock Exchange is an independent body which should act on its own and both the Government and the SIC can only advise it on what procedures it should adopt. But I am prepared to suggest to the SIC that they should advise SES to consider what measures they might want to introduce in future for offences of this type. I am also aware that, so far, the Stock Exchange has not issued reasons for rejecting applications for bonus issues and rights issues and this is a matter of some concern to the public. The MAS has, in fact, suggested to both the SIC and the SES that they should consider giving reasons if they feel that the disclosure of such reasons would be in the public interest. But again I would stress that this must be at the discretion of the SES. I have asked the SIC to consider this.”
“Based on these facts and on legal advice, the SES concluded that Mr Oei and Mr Lee had not committed insider trading as defined under the Securities Industry Act. The SES therefore decided not to pursue the matter. The Monetary Authority of Singapore (MAS) reviewed the evidenceand agreed with the Stock Exchange's decision.”
“The question for the company is whether it has complied with the Stock Exchange's disclosure requirements by withholding the investment losses from the public until 12th March 1991. The SES considers that it did not. The Stock Exchange does not dispute the need for Mr Oei, who then represented UIC, to disclose the losses to Mr Liem for the purpose of Mr Liem's purchase of new UIC shares to be issued by the corporation. But UIC should have informed its existing shareholders at the same time. The SES has therefore censured UIC publicly for non-compliance. Besides public censure, the SES can suspend UIC shares from trading temporarily or delist the shares from the Official List permanently. But such penalties would hurt UIC's public shareholders unnecessarily. A separate question is whether Mr Oei and Mr Lee, in their personal capacity as individual shareholders of UIC, infringed any legislative provision on insider trading. Section 103(11) of the Securities Industry Act states that it is a defence for a person charged with insider trading if he can prove that the other party to the transaction knew, or ought reasonably to have known, of the inside information before entering into the transaction. The rationale is that when both the buyer and the seller are then on an equal footing, the other party to the transaction, knowing the information, is not therefore at a disadvantage. Mr Oei informed Mr Liem about UIC's investment losses in late October 1990. Mr Lee sold his UIC shares to Mr Liem on 22nd November 1990. Mr Oei sold his UIC shares to Mr Liem on 28th December 1990. Thus, Mr Liem knew about UIC's investment losses before he bought the UIC shares from Mr Oei and Mr Lee.”
“Mr Speaker, Sir, in October 1990, UIC negotiated with Mr Liem Sioe Liong on two transactions: First, a proposal by Singapore Land Limited, a subsidiary of UIC, to buy shares in Marina Centre Holdings Ltd (MCH) and Marina Bay Hotel Pte Ltd (MBH) from Mr Liem's private company. Second, a proposal by Mr Liem's private company to buy new UIC shares. The negotiations continued through November and December, but on 21st December 1990, Singapore Land and Mr Liem's private company agreed not to proceed with the sale and purchase of shares in MCH and MBH. On 22nd November 1990, almost a month after UIC started negotiating with Mr Liem's private company on the two proposed transactions and before they agreed not to proceed with the sale and purchase of shares in MCH and MBH, Mr Lee Kim Yew, Chairman of UIC, sold his personal holdings of 25.3 million UIC shares to Mr Liem. On 28th December 1990, one week after Singapore Land aborted the acquisition ofshares in MCH and MBH, Mr Oei also sold his personal holdings of 182 million UIC shares to Mr Liem. During UIC's negotiations with Mr Liem in late October 1990, Mr Oei Hong Leong, in his capacity then as chief executive officer of UIC, told Mr Liem that the value of UIC's portfolio investments had fallen by between $50 million and $100 million. However, UIC did not announce this fact publicly until 12th March 1991, when UIC published its 1990 results, which showed a provision of $77 million for its investment in the shares of two Japanese banks. We must, Mr Speaker, Sir, distinguish between the actions of UIC and of its individual shareholders, that is to say, Mr OeiHong Leong and Mr Lee Kim Yew.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." My colleague, the Minister of State for Communications, has earlier proposed amendments to the Road Traffic Act to enable the implementation of the Weekend Car Scheme. Under the Scheme, a weekend car will be given a full rebate of the import duty, the net Additional Registration Fee and the quota premium, subject to a total maximum of $15,000. The import duty on motor vehicles is levied under the Customs Act. The Customs (Amendment No. 2) Bill will provide for the granting of the rebate on import duty for the weekend car. It will also allow for the rebate to be offset against the balance of the Additional Registration Fee levied under the Road Traffic Act. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Speaker in the Chair] Clause 1 -”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed.”
“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 Clause 2 of Article 145 and Clause 2 of Article 147 of the Constitution of Singapore for additional expenditure in excess of the provision authorised by the Supply Act, 1990. The additional sum has been scheduled as a Supplementary Main Estimate which has been considered and approved by the House as Command Paper No. 4 of 1991. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Sir, I beg to move, "That the Bill be now read a Third time." Question put, and agreed to. Bill accordingly read a Third time and passed. SUPPLEMENTARY SUPPLY BILL Order for Second and Third Readings read.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." In accordance with Article 145 of the Constitution of Singapore, heads of expenditure to be met from the Consolidated Fund other than statutory expenditure have to be included in a Bill to be known as the Supply Bill. The purpose of the Supply Bill before Members is therefore to give legislative approval to the appropriations from the Consolidated Fund to meet expenditure in the financial year 1st April, 1991 to 31st March, 1992. The heads of expenditure and the sums that may be incurred in respect of each head are shown in the schedule to the Bill. These have been approved by the House in the Main Estimates of Expenditure for the financial year 1st April, 1991 to 31st March, 1992, and appear on page 47 of Command Paper No. 6 of 1991. The Supply Bill, when approved, will empower me to issue warrants, authorizing expenditure up to the amount for each head as shown in the Bill to be paid out from the Consolidated Fund. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“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. SUPPLY BILL Order for Second and Third Readings read.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. First Resolution reported - "That the sum of $8,056,521,360 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1991 to 31st March, 1992, contained in Paper Cmd. 6 of 1991." Second Resolution reported - "That the sum of $6,478,003,100 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1991 to 31st March, 1992, contained in Paper Cmd. 6 of 1991."”
“Cooking oil has actually fallen in price from $5.46 per 2-kg to $5.24 per 2-kg today. Similarly, for sugar, 1 kg now costs $1.12 compared to $1.24 10 years ago. I think this amply illustrates that the basic cost of living has not fundamentally shifted, but the range of goods which can be very expensive has widened considerably. So the money which you have can go far or near depending on how you spend it.”
“Mr Speaker, Sir, I think Dr Lee's point is that, notwithstanding, the CPI changes, the cost of living has gone up substantially. In the first place, the CPI data do not support this conclusion. I think the difference in perception arises because compared to 10 years ago, the consumer today has a very much larger choice of goods to purchase. If you take eating out, for example, 10 years ago, one could eat very cheaply and well at hawker centres or eat more comfortably at restaurants at a higher price. Today, there is a very wide choice, covering a wide spectrum of prices, ranging from the still cheap hawker food in HDB estates to more pricey places like Newton Circus, food courts, fast food restaurants, gourmet restaurants and so forth. The same would apply to the comparative prices of other consumer goods sold in wet markets, hawker stalls, supermarkets and department stores. This means that a person can live modestly by careful shopping or live well by spending much more. The same $50 bill, which he mentioned last year, indeed can go very quickly, if he is prepared to spend on all the wide range of goods which are now currently available in Singapore. To quote him examples of price rises, again I would like to mention comparison between 1980 prices and 1990 prices. In the case of rice, one kg cost $1.05 in 1980 and today it costs 97 cents. Wheat flour, 83 cents per kg in 1980, it is 80 cents today. Bread has indeed gone up from 60 cents per 400 gm loaf to 72 cents, an increase of 20% over 10 years. Similarly, pork, $6.53 per kg in 1980 to $6.50 today. Fresh beef, $11.33 per kg in 1980 to $12.98, an increase of 14% over 10 years. Chicken, an increase of 5% from $3.95 to $4.15 per kg over 10 years. Hen's eggs went up by 2% over 10 years.”
“He has said that there is no drastic rise in the cost of living. Has he ever been into a supermarket? Every few weeks, food-stuffs have increased in price pasted on them. Even bread which used to be only 0.80 cents a loaf now sells at $1.20. Some brands sell at $1.40 and others $1.60. Is that not a higher cost of living? If that is not, what is? Bread is one of the necessities of life. And if that is not going to cause our Minister to think twice again, then I do not know what is going to cause him to think again for the pensioners. All these pensioners, Sir, have written to the Minister and they have, through various channels, also spoken to MPs, some of whom have spoken up in Parliament. But obviously our Minister does not seem to be responsive enough. In view of the high salaries that the Ministers have increased for themselves, it is only fair that those who are drawing low pensions should be given some extra allowances. 4.00 pm”
“Sir, the Member has asked the same question over the last two years and I explained that the increase in the Singapore Allowance was not justified. The question of a review of the Singapore Allowance was also raised with me by the Member for Punggol, Mr Ng Kah Ting, in December last year. And I have since advised him that conditions have not changed sufficiently to warrant further adjustments to the allowance in 1991. I should explain that the Singapore Allowance was introduced not as a system for indexing pension payments with normal CPI changes. It was first introduced in 1974 to assist pensioners at a time of unusually high inflation brought about by the first oil shock. In 1973 and 1974, the CPI increase was around 20% per year. The first revision of the allowance was made in 1980 to allow for the 8%-plus surge in inflation following the second oil shock of 1979. Subsequently, the allowance was revised upwards two more times, in 1982 and 1986. Since the last revision of the allowance in April 1986, there has not been any drastic rise in the cost of living. Inflation in 1990 was relatively mild compared to other countries. Food prices rose by only 0.8% overall in 1990. In fact, the overall price index of 10 selected foodstuff which I mentioned in last year's Budget debate has dropped by 0.5%. A further revision of the Singapore allowance at this time is therefore not warranted. I can assure Dr Lee that a review of the Singapore Allowance will be considered should there be unusual changes in the inflation environment in Singapore in the future. It would have been easy to say yes, to avoid being called "hard-hearted", but we have to operate by certain rules. Dr Lee Siew-Choh: Mr Speaker, Sir, his stock answer has come again.”
“I would like to thank the Member for Cheng San GRC for raising this question of job-hopping, which I did mention in my response in the Budget debate. I do consider that the growth of job-hopping has posed a serious problem for the economy and something ought to be done. The Member has suggested and in fact pointed out cases where job-hopping has increased to a point where it significantly affects both productivity and cost of labour. Unfortunately, the Government does not know at this stage the full extent of job-hopping beyond the anecdotal evidence that it is widespread, particularly among the young, and increasing and I believe is likely to persist as long as the unemployment rate, which was only 1.7% last year, remains substantially below the equilibrium level of full employment which is about 3%. I believe the problem is sufficiently serious for employers, trade unions and the Government to jointly examine the problem to assess the dimensions of the problem and to come up with possible solutions. At this stage, I really cannot make concrete suggestions on what form of solution is possible, because it is a decision affecting the three sectors which should be considered jointly.”
“Mr Speaker, Sir, the Government's privatisation programme has been carried out as planned. So far, some 40 companies have been privatised to varying extent. We have listed 10 companies on the Stock Exchange. These are shareholdings in six companies and completely divest our stake in 24 others. Temasek Holdings has privatised many of the companies as recommended by the Public Sector Divestment Committee. The remaining companies are either unattractive to investors presently, or do not have the necessary track records for listing on the Stock Exchange. Last year, the Government announced the impending listing of four companies under the Singapore Technologies Group. To-date, two companies have been listed - Singapore Shipbuilding and Engineering and Singapore Aerospace. The other two companies - SAL Industrial Leasing and Singapore Electronics and Engineering - which have also been identified for public listing are likely to be floated this year. Preparation is under way for the privatisation of Telecom in 1992. In October 1989, Government announced that Telecom will be privatised in two to three years' time and the privatisation of Telecom is therefore proceeding according to schedule. There has been no change in the Government's plan to progressively offer its companies for public listing over a number of years. The exact timing of each issue will depend on market conditions and the capital requirements of the company.”
“Sir, I note the Member's request, but he should know that civil servants are already working a full 5 1/2-day week. They need the weekends to rest and pursue leisure and look after their families. Without adequate rest and recreation, I think their health and quality of life must suffer. Rather than working on weekends, I think the pressure from civil servants is to have a 5-day week. Working part-time on weekends will also lead to conflict of interest with official work. I think widespread moonlighting will also reduce flexibility in the deployment of manpower, especially when overtime is required or there is shift work. The level of service to the public must suffer as a result. In view of this, I do not support the idea of letting civil servants do part-time work.”
“The second group comprises overseas companies which are already global in their operations but either have no presence in this region or want to establish better linkages here. Temasek can be a friendly long-term shareholder in such companies and acts as a bridge between the overseas group and the Singapore companies. The third group of companies are those which are strong in land-based industries such as forestry and extractive industries which are not found in land scarce Singapore. Temasek hopes to take a small stake in such companies as an induction into such industries.”
“Sir, since 1987 Temasek has embarked on an intensive programme of privatisation. By 1989 the proceeds from privatisation had exceeded $2.5 billion and Temasek has since been looking for opportunities to re-invest these funds. To avoid unnecessary competition with the private sector and to encourage Singapore companies to expand overseas, Temasek has adopted a strategy of co-investing overseas with suitable Singapore companies. Under this partnering strategy, Temasek will support Singapore companies which want to make greenfield investments or acquire companies or assets abroad. Temasek will leave the running of the acquired company to its co-investor. Temasek has referred numerous investment opportunities to Singapore companies and jointly investigated several of them. So far one investment has been made in the United States, together with the company, Yeo Hiap Seng. To complement the partnering strategy, Temasek has developed a networking strategy. Under the networking strategy, Temasek will on its own identify investment opportunities and make the investments. Apart from a good return on its investments, Temasek also looks for good contacts and connections which it can establish and pass on to Singapore companies. For such investments, Temasek seeks long-term relationships and mutual benefits with the overseas companies, and not control. Three groups of companies are of particular interest to Temasek. The first group comprises direct investment funds which are set up to acquire established companies. Temasek's participation in such funds will enable it to establish linkages between foreign companies and Singapore companies.”
“The Government and the public service welcome sincere feedback and suggestions from the public. I would assure Singaporeans that both the Government and the public service will spare no effort to keep up the improvement on our quality of service. Finally, on the point raised by Dr Ong on the Business Enterprise Committee. That was formed in 1986 in the aftermath of the recession in order to cut red tape and facilitate the approval of requests from the public for planning, etc. Most of its work was done and completed in 1987, so that the Unit is no longer active and its responsibilities had been handed back to the Ministries and departments concerned.”
“The programme is designed to improve contacts with the general public by helping front-line staff provide more friendly, polite, attentive and helpful service. The programme is currently in its first phase which concentrates on improving the counter staff's face-to-face contacts. So far, 4,700 counter personnel, their supervisors and managers have been trained. Another 400 will be trained in the next few months. Supervisors are taught to regularly observe the dealings of their counter staff with the public using a checklist of 38 standards. This has been carried out in 80 departments and statutory boards. So far, 85% of the organisations have reported that more than 80% of the standards have been met. Under the programme, members of the public also participate by assessing the service behaviour of counter staff and giving feedback. Most rated the service they had received favourably at four or higher on an ascending five-point scale. In phase II of the PCIP, public officers will be taught how to improve telephone skills, and in phase III, how to improve writing skills. The Sunday Times Editorial on 10th March 1991 aptly summed up the current status of the quality of service rendered by the public sector. It was reported that while the public sector has improved considerably in recent years, in some cases the quality of service rendered was comparable with the very best in the private sector. We are proud of this achievement which was the result of continuous training and upgrading as well as the strong emphasis placed by senior management. Nevertheless, the report also stressed, and the Government agrees, that there is always room for improvement and it is natural for the public to expect better service.”
“However, in response to the request by the Member for Cheng San GRC and Dr Ong that the Unit should be supervised by an independent body, the Prime Minister has decided to appoint a supervisory committee to which the management committee will report. The Chairman of this Committee will be Mr Mah Bow Tan, Minister of State, Trade and Industry and Communications. The members are Mr Chandra Das (Member of Parliament for Cheng San GRC), Dr Hong Hai (Member of Parliament for Bedok GRC), Assoc. Prof. Maurice Choo (Nominated Member of Parliament) and Mr Mohammad Maidin (Deputy Director, NTUC, and Political Secretary in the Ministry of Information and the Arts). I hope that the composition of the Committee meets with Dr Koh Lam Son's requirements. To complement the Unit, Ministries, departments and statutory boards will each have their own Service Quality Improvement Unit within their responsibilities, headed by a superscale officer. In addition to inputs from the main Unit, these will also directly obtain suggestions from their own clients, collect and review feedback, investigate complaints and establish or approve appropriate grievance/appeals handling mechanisms and procedures. For greater efficiency, Government would like to reduce counter services to a minimum by encouraging more payments by GIRO and the wider use of electronic devices such as Teleview. Government will continue to train staff properly to man the remaining counter services. This move will be in line with the recommendations by Mr Lau Ping Sum. Members of the House may wish to know that the Civil Service Institute launched a Public Contact Improvement Programme (PCIP) in November 1989, which was specially targetted at front-line staff.”
“Sir, first, I would like to thank the Members for their compliments on the civil service which is greatly appreciated. But I also note their reservations about red tape and the need to be continually responsive to new needs of the population. It is for these reasons that in the President's Speech he announced the formation of a Service Quality Improvement Unit. I will now respond to the questions of the four Members together. The intention is that the Unit will be established under the Prime Minister's Office and will be headed by the Permanent Secretary (Prime Minister's Office). It will have the manpower and authority to monitor, audit, and assess the quality of service provided by Government departments and statutory boards. Besides identifying problem areas and making recommendations to relevant Ministries for corrective action to be taken, the Unit also collects and processes feedback and suggestions submitted by the public. Ideas for greater effectiveness and better coordination like those to create more one-stop centres would be given full consideration by the Unit. The day-to-day operations of the Unit will be the responsibility of a management committee comprising the following persons: The Chairman will be Mr Ngiam Tong Dow, who is Permanent Secretary in the Prime Minister's Office and also the Ministry of Finance (Budget and Revenue Divisions). The Deputy Chairman will be Mr Chuang Kwong Yong, Second Permanent Secretary in the Ministry of Finance. The members will be Mr Tan Boon Huat, Deputy Secretary (Public Service Division), Ministry of Finance, Ms Low Sin Leng, Deputy Secretary (Budget Division), Ministry of Finance, Mr Lim Theam Siew, Director in the Auditor-General's Office, and Mr Chan Heng Wing, Press Secretary to the Prime Minister.”
“The first case involved an amount of S$500,000, of which S$127,000 was recovered. In the second case there was restitution of the full amount of S$24,000. In both cases, the culprits were arrested and successfully prosecuted in Court under the Penal Code. The third case involved a security guard's intrusion into a computer system owned by the organisation at which he was stationed. The culprit had only accessed the system to play computer games and there was no financial loss. He did not have any special training in computer operations. In this case, no prosecution was instituted on the Public Prosecutor's advice. I understand that he was dismissed from service of the security organisation.”
“The impact of SDU's efforts is not confined only to its members. Spinoffs from SDU programmes and activities have benefitted non-members as well. SDU programmes and activities create awareness of the importance of marriage and encourage all graduates to socialise early. Over a period of 7 years, the number of graduate marriages at the national level increased to 1,362, a 150% increase over the figure of 529 marriages in 1983, the year before SDU was formed. (v) The average ages of the male and female members who married, compared with the national averages in the same period - The national ages of brides and grooms in the SDU pool as compared to national mean age are as follows:- TABLE 4 Grooms 1988 1989 1990 (years) (years) (years) SDU pool 31.5 31.4 31.5 National 29.9 29.6 29.9 Brides SDU pool 28.8 28.7 29.2 National 27.3 27.2 27.4 In comparison the mean age of SDU's brides and grooms is about 1.5 years above the national average. In the long term we expect a lowering of the ages to the national averages because members joining SDU are getting younger than before. COMPUTER CRIMES 2. Mr Heng Chiang Meng asked the Minister for Home Affairs how many computer crimes were committed in 1988, 1989 and 1990;what were the financial values of these crimes; and what was the rate of successful prosecution. Prof. S Jayakumar: During this period there were only 3 reported cases, all occurring in 1989. In two of the cases, the accused used the computers as a necessary step in a series of transactions to cheat and commit criminal breach of trust. They were employees who had authorised access to the computers and manipulated them fraudulently. They were not computer "experts" and there was no 'hacking' or breaking of any security code.”
“(i) Membership in SDU for the years 1988 to 1990 was as follows:- TABLE 1 Year No of Members (as at Dec 31) 1988 7,951 1989 9,559 1990 10,911 The 10,911 members in SDU represent 39% of the total single graduate population. (ii) The numbers of marriages between members for the same years were:- TABLE 2 Year No of Marriages No of Marriages For the Year (Cumulative from 1985) 1988 214 625 1989 239 864 1990 253 1,117 Since the unit was set up in 1984 up to the end of 1990, 2,234 SDU members were married. (iii) The total expenditure, including subsidies of activities for each of the years 1988 to 1990:- SDU organises a range of activities including social activities, sporting activities, courses for self development and workshops. SDU's current policy is to charge participants a small margin over direct variable cost, excluding administrative overheads. However, in the initial years, workshops in resorts in neighbouring countries were subsidised fully, to kick off the project. This subsidy was gradually reduced as SDU gained wider acceptance. Such workshops have been discontinued since November 1990. For the last 3 years, an average of 211 activities each year were organised with an average 9,832 attendances per year. Total collection from these activities averaged $460,337 per annum against an annual direct variable cost of $466,253. The subsidy was $5,916 per year. (iv) The average expenditure per marriage for the years 1988 to 1990:- SDU's recurrent budget and the number of marriages for the 3 years were: TABLE 3 Year Budget No of Marriages 1988 $803,924 214 1989 $818,835 239 1990 $824,623 253 The average expenditure of a marriage between SDU members was $3,471.00 or $1,735.50 per member. This is but a rough indication.”
“The tax concessions introduced in the FY 90 Budget took effect from the Year of Assessment 1991, that is, they are applicable to income earned in 1990. Companies are still in the process of filing their tax returns with the Inland Revenue Department for Year of Assessment 1991. In view of this, it is not possible, at this point in time, to estimate the revenue loss arising from the tax concessions introduced in the FY 90 Budget. The amount of corporate income tax collected for each financial year from FY 86 to 90 is given below: Corporate Income FY Tax Collection ($m) 86 1,361.2 87 1,549.7 88 1,871.1 89 2,664.6 90* 3,003.0 * Estimated Collection list - EXAMPLES OF SCHEMES/POLICIES INITIATED BY MINDEF TO RECOGNISE AND ASSIST RESERVISTS OVER THE YEARS (Cols. 487 - 488) charts - GROSS RATE OF RETURN IN MANUFACTURING vs REAL GDP GROWTH, NOMINAL GDP GROWTH, PROFIT SHARE AND CHANGES IN PROFIT BEFORE TAX OF COMPANIES, SINGAPORE'S RELATIVE UNIT LABOUR COST AGAINST THE OTHER NIEs AND UNIT BUSINESS COST OF MANUFACTURING (1980=100) (Cols. 489 - 494)”
“Sir, it is a local variety. Question put, and agreed to. Resolved, That Parliament approves the financial policy of the Government for the financial year 1st April, 1991 to 31st March, 1992. ADJOURNMENT Resolved, "That Parliament do now adjourn." - [Mr Wong Kan Seng]. Adjourned accordingly at Four o'clock pm. Committee of Supply - MAIN AND DEVELOPMENT ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1991 TO 31ST MARCH, 1992 (Cols. 395 - 398)”
“I would like to point out that these 156,000 people are accounted for mainly by part-time workers and by students working during their vacation. Therefore, using such figures can be misleading. In fact, in 1989, the average monthly earning for the whole economy in all occupations was reported at $1,427 per month. Finally, Mr Speaker, Sir, I believe that we have reason to be optimistic. The ending of the Gulf War will restore business confidence and this will have a positive effect on our economy. We should be able to achieve our economic growth target this year. 25 years have passed since Singapore became an independent nation. We have done very well. In this short space of time, we have become a modern thriving economy and we are now into a new phase of development. Our businesses must transcend the national boundary. This budget will help them widen their international linkages and create more economic space. It also focuses on our continued investment in our people to enable them to move on to higher value-added and better paid jobs. I am confident that we have what it takes for Singapore to stay ahead in the next lap. [Applause].”
“Despite all Dr Lee's complaints about the rising cost of goods and services through Government intervention, the average annual growth of CPI inflation over the past decade was only 2.2%, notwithstanding two bouts of high oil prices. As a result, the purchasing power of workers' income has been protected, with average annual real earnings in Singapore growing at the rate of 6.6% between 1980 and 1990. This is an outstanding record matched by few places in the world. Finally, a word about Government's policy on subsidies. Government is committed to providing every citizen a high level of basic necessities, such as jobs, education, health, housing and leisure. Beyond that, everyone must work and contribute towards improving the quality of life. There is no free lunch as we cannot afford it. Our accumulated reserves are the nation's insurance policy and must be preserved for the security of future generations. Dr Maurice Choo has raised some questions on the health policy which, I think, are more appropriately answered in the Committee of Supply. And I will refer these questions to the Minister for Health. Dr John Chen has suggested that there should be a 1% tax advantage given to citizens. This is an issue which is being studied by the Government on the basis of the recommendations by RECORD and I think it will be premature for me to make any statement now. Mr Chng Hee Kok has said that we should pay more attention to cost comparisons with the ASEAN competitors. I think I did raise this matter during my Budget speech and indeed MTI keeps a very close watch on comparing costs with Thailand, Malaysia and Indonesia. Finally, Mr Goh Chee Wee has quoted figures to show that 12% or 156,000 workers, a substantial number of workers in Singapore, have wages below $400 per month.”
“Instead I will outline for him some aspects of the Government's economic philosophy. The Government does not believe in maintaining a crutch economy in which the rich are taxed heavily to support the poor. Many countries, much bigger, much richer and much cleverer than we, have found that this is a formula for disaster. I believe that most Singaporeans know this instinctively, are not lemmings, and will not be seduced by Dr Lee, the pied piper. The Government's aim has always been to build a stable economic environment in which the talented and industrious, both local and foreign, will find attractive as a place to invest their skills and capital. The continuing flow of high quality investments we have been able to attract over the years is the best testimony to the success of fiscal incentives offered. Dr Lee claims that the Government has given away billions of dollars through these fiscal incentives. Let me remind him that if the fiscal incentives did not bring investors here in the first place, there would be nothing to give away anyway. Instead of eroding the work ethic through subsidies, another basic aim of the Government is to ensure that every Singaporean who can work, will have work, and be paid wages that grow in line with the economy and with productivity increases. Over the last ten years, the unemployment rate has been consistently below 3.3% except for the 1985/1987 recession years. Last year, it stood at 1.7%, substantially below the long-term level of full employment, which is around 3.3%. Providing full employment is the most effective way of providing a human being with the pride of self-reliance, instead of the indignity of having to subsist on State handouts.”
“In particular, the provision for education has increased to $2.6 billion or 16.5% of total expenditure in FY91 as against $1.7 billion or 11.6% in FY87. Introduction of the Edusave Scheme will further increase Government's contribution to education. Similarly, Government's expenditure on health services has more than doubled, from $449 million in FY87 to $959 million in FY91, after taking into consideration the revenue forgone for the restructured hospitals. Public housing subsidies show a decline from 7.1% of total expenditure in FY87 to 5.5% in FY91, mainly because the public housing development programme has slowed down. The Member for Potong Pasir, Mr Chiam See Tong, has, based on a few expenditure items in the Budget Book, concluded that the Government has not been prudent in the expenditure of public monies and that closer scrutiny is required. I think it is fallacious to draw generalised conclusions on Government's expenditure patterns and priorities by picking out a few individual line items of expenditure. I would suggest that if the Member wants detailed clarification on line items of expenditure, he should do so in the Committee of Supply. If he has not put in the required cut, he might ask a friendly Member of the Opposition to introduce it for him. Dr Lee Siew-Choh has again chosen to attack Government's financial policies. He has trotted out the usual litany of complaints about the Government - that the Government has done very little for the poor, favours the rich and foreign multi-nationals. He wants more subsidies for the poor and higher taxes for the rich. As there is nothing new in what he says, and I have responded to them in the past, I do not propose to discuss his complaints in detail.”
“He felt that the percentage should be lowered as Government privatises more of its operations. The setting of the ceiling is a self-imposed discipline aimed at containing Government's share of national resources. It is also to ensure that Government's expenditure does not exceed revenue. Government's revenue is around 27% of GDP. Planned expenditure is therefore kept below 25% for prudency reasons, and to give ourselves a comfortable margin for meeting unexpected expenditures. As Government privatises more of its functions, the expenditure ceiling will be reviewed. Dr Vasoo has called on the Government, in view of its budget surplus, to provide more for basic services, such as education, health and housing. Let me assure the Member that although Government has enjoyed a budget surplus for several years, this has never been at the expense of providing basic services to its people. Government will ensure that such services will remain affordable to its population. As I have mentioned in my Budget speech, Government places high priority on the provision of quality education, affordable housing, a clean and green environment, and good health care services. This can be seen from the fact that the social and community services sector, comprising education, health, community development, environment and public housing, will take up the largest share, or almost one third of total Government expenditure in FY91. Expenditure on Community Development, Education, Environment and Health Services has increased significantly from $2.6 billion or 18% of total expenditure in FY87 to $4.4 billion or 28% in FY91. Per capita real expenditure on these services has increased from around $1,000 per annum in FY87 to about $1,400 per annum in FY91, an increase of nearly 40%.”
“The Member for Eunos GRC, Mr Zulkifli Mohammed, has asked for the profile of the 40% households which will be affected by the 5% water conservation tax. Members may wish to note that the majority of these households are those living in HDB five-room flats, HUDC and private residential homes. Their average monthly bills will be increased by about 30 cents. Entertainments Duty The Member for Cheng San GRC, Mr Heng Chiang Meng, has suggested that revenue from the 5% entertainments duty should be channelled to promote the arts. Government's fiscal practice has always been to pool tax revenue into the Consolidated Fund. Allocations from the Fund are then made in accordance with budgetary process. The Member's proposal, if accepted, will be a breach of this process. It should be avoided as the linking of tax revenue to specific end users will introduce rigidities and does not permit a proper allocation of revenue among competing users. The Member has commented that the arts require more financial support. Members of the House may wish to note that Government's provision for the arts programme has been raised to $7 million in FY91 from $5 million this year. There are also many schemes to help cultural and arts groups, for example, the Projects Grant Scheme, the Theatre-in-Residence Scheme and the Arts Housing Scheme. There are also various tax incentives to promote culture and the arts. These include exemption for donations to arts and cultural bodies given the Institution of Public Character status, and waiver of entertainments duty for cultural performances organised by non-profit making organisations. The Member for Eunos GRC also wants to know the basis for setting the long-term limit for Government expenditure at 25%.”
“Goods and Services Tax (GST) Some Members have raised concerns over the proposal to introduce a goods and services tax. As I announced in my Budget speech, a White Paper, together with the draft legislation for the proposed GST, will be tabled in Parliament and made available to the public when it is ready. As there will be ample opportunity to debate the merits or demerits of the tax, I will not deal with it today. Water Conservation Tax The Member for Yio Chu Kang has asked whether the water conservation tax could be applied on a sliding scale. The price of water to the domestic consumers is already divided into three different tariff rates, depending on the level of consumption. The first 20 cubic metres is charged at 53 cents per cubic metre, the next 20 cubic metres at 75 cents per cubic metre and, thereafter, every additional cubic metre is charged at $1.10 per cubic metre. There is, therefore, no need to apply the tax on a sliding scale to further encourage conservation. The tax also recognises the minimum domestic needs of a household by exempting the first 20 cubic metres of water consumed per month from being subject to the tax. For non-domestic users, the situation is different. Unlike domestic households, the non-domestic group is not homogeneous. The amount of water consumed depends on the type of organisation and the nature of its activities. In order not to penalise certain business activities over others, water to non-domestic consumers is charged at a flat rate by PUB. For the same reason, it would not be appropriate to impose the tax unevenly or even to have a threshold level for exemption from the tax if we are to treat all businesses on par.”
“We have a variety of child reliefs and rebates to help lower such costs for parents. These would include normal child relief, enhanced child relief and double child relief for children studying overseas. Over the years, these reliefs have been increased substantially. Normal child relief was increased to $1,500 for the Year of Assessment 1990, and the enhanced child relief was also raised at the same time. Other than tax measures, education in Singapore at primary and secondary levels is also very heavily subsidised. This has kept the levels of school and miscellaneous fees paid by pupils at affordable levels. The combined effect of tax reliefs for children and heavy subsidies for schools has substantially lightened the burden of parents in educating their children. In addition, the introduction of the Edusave Scheme in 1992 will provide further assistance for parents. Government will continue to ensure that no child is deprived of a place in school because of financial constraints. Some Members have suggested that parents be allowed to contribute to the Edusave account for their fifth and subsequent children and to claim deduction for these contributions. The existing reliefs for children are given only up to the fourth child. It is therefore not appropriate to allow a deduction beyond the fourth child for Edusave. The Member for Marine Parade GRC, Mr Choo Wee Khiang, has suggested that incentives be given to encourage Singaporeans to work abroad. I would like to point out that working abroad is a multi-faceted problem. I do not think that tax is a major consideration. There are other factors such as marriage, national service and children's education which loom large. Government is looking into these other issues.”
“Government does not therefore favour increasing personal reliefs as this would lead to a significant reduction in our tax base. Instead, we have preferred to reduce the overall tax burden for everyone by lowering tax rates at all levels over the years. The Member for Marine Parade GRC, Mr Choo Wee Khiang, has suggested that incentives for the third and fourth child be extended to the husband. I would like to point out that the normal child relief of $1,500 as well as the special tax rebate of $20,000 for the third and fourth child may be claimed by either parent. However, the enhanced child relief is only given to the mother. There is a reason for this. This relief is intended to encourage married women to rejoin the workforce after giving birth. It is therefore designed such that the level of tax savings is pegged to a percentage of a woman's earned income. The purpose of this relief would be defeated if a husband is allowed to claim. This principle similarly applies to the tax rebate given in lieu of maternity leave for the third and fourth child. The Member has also suggested that the handicapped child relief be increased as it is not easy to maintain a handicapped child. He may wish to note that parents of handicapped children already get a higher relief than parents of normal children. Whereas the normal child relief is $1,500, the handicapped child relief is $3,500. In addition, the handicapped child relief is given regardless of age, and even if they are working, provided the income ceiling of $1,500 is not exceeded. This is not the case for normal child relief. The Member for Tiong Bahru GRC, Dr Vasoo, has asked for an education tax relief. Government recognises the expenses incurred in bringing up children, including paying for their education.”
“After taking into account these two rebates, the lower income groups would have enjoyed much higher tax savings in terms of the percentage fall in average tax payable, compared to the higher income groups. The 5% across-the-board rebate is a proportional rebate. This means that a person paying more tax will enjoy a higher amount of rebate in dollar terms than one who pays less tax. This is in no way inequitable. Moreover, as the rebate is based on tax calculated at progressive rates, it does not reduce or alter the progressiveness of the existing tax rate structure. The rebate is a simple way of affording tax reduction while maintaining the same degree of progressiveness within the tax structure. Dr Vasoo has commented that the 5% rebate cannot buy even two plates of nasi lemak. I take it that he means that for some taxpayers the rebate will only be a few dollars. If this is the case, then it simply proves that the taxpayers have paid very little tax in the first place. Some Members have asked that tax deduction be allowed for expenses incurred by individuals on education or to service housing loans. As a general principle, such private expenditure should not be granted tax deduction as they are not incurred in the production of income. The result will be a significant erosion of the tax revenue. This principle is also followed in most countries. The Member for Aljunied GRC, Mr Chin Harn Tong, has also asked that the Government consider increasing personal reliefs in view of increases in the cost of living. Government's policy is that as many citizens as possible should pay some tax, however small, so that all share in paying for the cost of public services and facilities. Therefore, we should maintain as wide a tax base as possible.”
“For this reason, the stability of our banking system must be preserved at all times. This is more crucial now with the increasing fragility of the international banking system. Our banks also operate in a highly volatile environment of the world financial markets. Adequate provisions would allow them to better cushion themselves against losses and diminution in the value of their assets, and lead to a more stable financial system in Singapore. Unlike banks and merchant banks, finance companies do not compete in the international arena. In addition, most of the loans of the finance companies are secured as they can only grant unsecured loans of up to $5,000. For the finance companies, therefore, there is less concern about the exposure to the volatility of the international markets. In view of this, there is no need to extend the deduction of general provisions to finance companies. Individual Income Tax The Member for Potong Pasir has asked for a lowering of the personal tax rates. I have mentioned in my Budget speech that our rates are competitive. As personal tax rates are graduated, the effective rate for individuals in the highest tax bracket is in fact considerably lower than the 33% nominal value, and are effectively below 30%. There is hence no need to alter the tax schedule. The Member for Aljunied GRC, Mr Chin Harn Tong, has commented that the income tax rebate of 5% will benefit the professionals more than the ordinary workers who form the bulk of the population. Members will note that the 5% one-off rebate announced this year is in addition to the 15% rebate of the first $10,000 of chargeable income already in the Income Tax Act.”
“Secondly, residents may be encouraged to site operations in a low tax country to the detriment of our economic base. Thirdly, we risk being labelled a tax haven. This could result in our foreign investors being penalised by anti-tax avoidance measures in their own countries. There is also the risk that our existing tax treaties may be terminated. For these reasons, my position on the taxation of foreign income is that impediments to the repatriation of foreign income should be removed as far as possible. Where double taxation occurs, we should resolve this through tax treaties. However, any unilateral tax concession for the taxation of foreign income should be considered on a case-by-case basis against its economic benefits for Singapore. On the issue of OHQ status for local companies, let me say that local companies are among those which have been given the OHQ tax incentive. The reason why fewer local companies have been able to benefit from the incentive is that not many have a regional base or a network of companies big enough to warrant an OHQ. However, I would like to inform the House that companies with the potential to grow into a full-fledged OHQ within five years are eligible for the "Lesser OHQ" scheme. It is a scheme to encourage smaller companies to develop into Regional Business Centres and eventually into OHQs. Under the scheme, certain foreign income is exempt from tax. Local companies have been given this incentive. The Members for Yio Chu Kang and Cheng San GRC have asked whether the deduction of general provisions, which would be allowed for banks, could be extended to finance companies. I have explained in my Budget speech the need to encourage our banks to build up adequate provisions. Banks play a vital role in our economy.”
“I would like to point out that under our full imputation system, the two-tier structure will in effect lead to a tax deferral for small companies. This is because once their profits are distributed, these will be subject to tax at the shareholders' marginal rates. There are also a number of problems with a two-tier tax system. For example, companies may be tempted to reduce their overall tax burden by hiving off parts of their operations to subsidiaries. Those with a fluctuating income stream could be disadvantaged against those with a stable stream of income. Some may also want to shift income from one year to the next to avoid higher corporate rates. I am, hence, not in favour of a two-tier corporate tax system. The Nominated Member, Mr Leong Chee Whye, has asked whether the Operational Headquarters tax incentive and exemption of foreign income under section 13(7) of the Income Tax Act could be made generally available to local companies wishing to expand overseas. Let me first deal with the issue of the taxation of foreign income. There have been many similar calls for a broadening of tax concessions on foreign income. These range from requests for unilateral tax credit to be given for all taxes paid or spared in foreign countries to a blanket exemption for all foreign incomes. While I agree that such measures could be strong incentives for our companies to expand or relocate some of their operations abroad, I must say that there are many problems with such a liberal treatment of foreign incomes. Firstly, a loophole would be created for residents to channel taxable Singapore income offshore and to remit this back tax-free. For example, income and funds which are deposited or managed here could easily be transferred to a tax haven or low tax country.”
“Overall, our aim is not to compete to have the lowest tax rates in the world, but to keep our rates sufficiently low so as to attract a continuing flow of high quality investments, and to ensure that entrepreneurs will find it attractive to base their operations in Singapore. Let me assure the House that Government will continue to monitor global tax developments closely. We will always ensure that our tax structure is kept internationally competitive and adequately rewards effort and enterprise. Some Members have commented that Government has not given adequate assistance to local entrepreneurs, in particular, our small and medium sized enterprises (SMEs). Contrary to this, I believe that our SMEs are well taken care of. The EDB has a division to look specifically into the development of these enterprises. There are also in existence a number of tax incentives for SMEs. These include the pioneer, post-pioneer and investment allowance incentives. Besides these incentives, there are many financial assistance schemes to help SMEs. These include the Small Industries Finance Scheme, the Market Development Assistance Scheme, the Product Development Assistance Scheme, Business Development and Small Industries Technical Assistance Scheme. These schemes are aimed at helping SMEs to improve their operations and products, and hence to compete internationally. Through them, the SMEs can obtain low-cost financing for their operations and also grants to cover a substantial part of the costs incurred by them in market, product and business development. The Member for Cairnhill has asked whether Government would consider introducing a two-tier progressive corporate tax system whereby smaller companies will enjoy a lower tax rate.”