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, one of the objectives of privatisation in Singapore is indeed to enlarge and deepen the stock exchange by listing new counters and by increasing the volume of shares of existing counters. This process, however, should not be artificially speeded up. First, the companies to be privatised through a listing in the stock exchange must be ready for listing. They must not only meet all the listing requirements of the stock exchange but also must be free of major problems that might raise a doubt as to their future viability or profitability. Second, the timing of the listing or secondary offer of shares in the market must be opportune in relation to market conditions and other factors. Since 1986, six Government-owned companies have been introduced to the stock exchange and shares of seven Government-linked listed companies have been sold through public offer or placement. Temasek Holdings has privatised almost all of its privatisable companies. MND Holdings has only two companies which it is contemplating to privatise. At lower levels, there are more companies which may be privatisable but their parent companies will have to make the commercial judgment as to the actual timing of their flotation. However, I expect that the delisting of Malaysian companies from the SES will create a healthy appetite in the market for new issues and this will encourage good quality companies, including Government-linked companies, to seek listings earlier rather than later. In addition, the Telecommunications Authority of Singapore and the Public Utilities Board have both announced plans to privatise parts of their operations and other statutory boards are also studying their positions. CAMBODIA (Government's policy) 10.”
“Sesdaq will remain as part of the Stock Exchange of Singapore. So I do not see any need to make any fundamental changes. PRIVATISATION OF GOVERNMENT-OWNED COMPANIES (Speeding up) The following question stood in the name of Mr Chng Hee Kok - 9. To ask the Minister for Finance if he will speed up the privatisation of Government-owned companies in view of the delisting of Malaysian companies from the Stock Exchange of Singapore.”
“Sir, I am not quite sure of the question?”
“Over time, the range of stocks would be increased as more companies, both local and foreign, list on the SES. As the SES broadens its activities in the trading of foreign stocks, investors would have a wider range of stocks to invest in.”
“Mr Speaker, Sir, the question is in three parts. I will answer them in order. The Malaysian Minister for Finance did inform me of his Government's decision to sever the linkage between the Kuala Lumpur Stock Exchange and the Stock Exchange of Singapore (SES) prior to his announcement in the Malaysian Parliament. At the moment, there are 182 Malaysian companies out of the 329 companies listed on the Singapore Stock Exchange. In the short term, the immediate impact of the delisting of Malaysian stocks from the SES is likely to be a decline in the turnover of the SES. Longer term, this setback should drive the Stock Exchange of Singapore to respond in two ways. Firstly, it will have to sharpen its competitive edge and upgrade the quality of services provided by stockbrokers in Singapore. Secondly, the SES will have to give greater emphasis to the trading of foreign stocks. Plans are being finalised to trade Hong Kong, Thai and Australian stocks in the over-the-counter (OTC) market through the SES electronic trading or CLOB system. With the present technology and international interest by investors, there has been an increasing trend in the trading of stocks outside home exchanges with business going to the most competitive and efficient centres. In 1988, over S$14 billion worth of non-Singapore and non-Malaysian dollar shares were traded in Singapore, more than the S$12.8 billion turnover of the Singapore and Malaysian shares on the Stock Exchange of Singapore. In the first half of this year, the volume of non-Singapore and non-Malaysian dollar shares traded in Singapore increased to S$12 billion. Investors in the Stock Exchange of Singapore would initially have fewer stocks to invest in.”
“My Ministry is not able to provide data on the exact amounts of money remitted out of Singapore according to who remitted the money and the source of the money. This is because we do not have foreign exchange controls. The Department of Statistics under the Ministry of Trade and Industry, however, has estimates of profits attributed to non-resident investors, divided between distributed and undistributed profits. But it is not known how much of the distributed profits have actually been remitted overseas. Some would be re-invested, together with fresh capital from abroad. The relevant estimates, made for the purposes of the Balance of Payment statistics, are given below. You will note that the total profits attributed to foreign investors over the nine years 1979 to 1987 was $17.0 billion. Complete data for the year 1988 is not yet available. TABLE ----- Profits attributed to non-resident investors, net of amounts retained in company or branch Year $ million -------------- 1979 922.3 1980 1,350.9 1981 1,867.2 1982 2,276.6 1983 1,789.3 1984 2,325.9 1985 1,869.1 1986 2,057.1 1987 2,496.3 (preliminary) ----- -------- Total 16,954.7 Source: Department of Statistics.”
“At present, the Act confines the Board's consultancy and advisory services only to "data processing". The NCB has also included a new function which is "to promote acceptance and usage of information technology in Singapore." Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee; reported without amendment; read a Third time and passed. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Lee Yock Suan]. Adjourned accordingly at Twenty-four Minutes past Three o'clock pm to a date to be fixed. WRITTEN ANSWERS TO QUESTIONS NUMBER OF PERSONS DETAINED UNDER THE CRIMINAL LAW (TEMPORARY PROVISIONS) ACT 1. Dr Lee Siew-Choh asked the Minister for Home Affairs if he will inform the House of the number of persons detained under the Criminal Law (Temporary Provisions) Act and the lengths of their detention given in blocks of five years.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The National Computer Board (NCB) Act has not been amended since its introduction in 1981, apart from the technical revision in 1985 initiated by the Law Revision Commission. The NCB's responsibilities and range of activities, however, have been enlarged over the years and, in particular, since the formulation of the National Information Technology Plan in 1986. The added responsibilities make it necessary for the Board to expand its membership and amend the description in the NCB Act of the Board's functions and powers. This Bill seeks to amend parts of the National Computer Board Act to better reflect the functions and priorities of the Board. The Board proposes that its membership be expanded from the present eight members to 12 members. This is to allow representation from organizations which have been identified as being crucial to the successful implementation of the National Information Technology Plan. With the expansion in membership, it is possible to include major public and private sector users of information technology as well as information technology research and development institutions. Sections 5(1) and 7(1) of the Act will have to be amended to accommodate the proposed expansion. The NCB has proposed that in section 11(1) of the Act, all references to "computer services industry" to be changed to "computer and computer-based information services industries". This is to extend the scope to include electronic data interchange systems, and other new computer-based information services. The NCB also proposes to include "information technology" as one of the areas in which the Board can provide consultancy and advisory services.”
“By retention, it means it is retained within Singapore Pools. WORK PERMITS FOR SMALL AND MEDIUM ENTERPRISES (Review) 11. Dr S. Vasoo asked the Minister for Labour what steps are being undertaken to review work permit approvals for small and medium enterprises.”
“Mr Deputy Speaker, Sir, unclaimed prizes of the Singapore Sweep lottery over the period 1979 to 1988 totalled $15.33 million. Such unclaimed prizes are retained by Singapore Pools and re-distributed as donations each year to charitable, social or sports organizations. Since 1979, Singapore Pools has contributed more than $42 million to such organizations.”
“The total sum received by the Government from Shell was S$569.5 million, representing proceeds from the sale of its shares in three companies within the petrochemical complex, namely, the Petrochemical Corporation of Singapore (Pte) Ltd, The Polyolefin Company (Singapore) Pte Ltd and Ethylene Glycols (Singapore) Pte Ltd. Government will continue to hold a 20% shareholding in the Petrochemical Corporation of Singapore. It should be noted that the money received from Shell is a provisional payment and the shares are still held in trust by Government, pending final completion of technical details in the transaction. ACCOUCHEMENT FEES VIS-A-VIS POPULATION POLICY 3. Dr Lee Siew-Choh asked the Acting Minister for Health whether he is aware that the present accouchement charges for the third, fourth, fifth and subsequent child in government hospitals are in conflict with the present policy of government to promote more childbirths in Singapore and whether he will reduce such hospital charges.”
“Sir, I beg to move, In page 2, line 7, to leave out "with less" and insert "without more". Sir, the amendment is to make it clear that the amount of petrol a vehicle must carry should be more than half the contents of its fuel tank. Amendment agreed to. Dr Richard Hu Tsu Tau: Sir, I beg to move, In page 2, after line 12, to insert - "(a) where a motor vehicle is driven past the Customs gantry before the departure bay of the Immigration Checkpoint at Woodlands, the person in charge of that motor vehicle shall be presumed, until the contrary is proved, to have attempted to leave Singapore in that motor vehicle;". May I explain the reason for this amendment? The amendment is to assist in the enforcement of the new law and to remove any possibility of any argument as to when a person has attempted to leave Singapore without more than a half tank of petrol. It will also be useful to motorists who will be able to know exactly at what point the law will be enforced against him. Amendment agreed to.”
“Bill accordingly read a Second time and committed to a Committee of the whole House. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Speaker in the Chair] Clause 1 ordered to stand part of the Bill. Clause 2 -”
“Fuel gauge, no. I said earlier that fuel gauge is not accurate enough and therefore there will be endless disputes on the quantity of we are talking about. The problem, I assure Members, has been thoroughly argued within Cabinet. We accept that it is not a perfect system and we would like to suggest that Singapore motorists should accept the Bill in the spirit in which it is intended and allow it to work and see how effective it is. If it does not work, we will be forced to introduce other more stringent and more painful measures in order to ensure that the use of petrol pricing as a method of controlling car usage is not bypassed. I would therefore ask Singapore motorists to allow this rather painless procedure to work, in which case, we need not do anything more. Mr Davinder Singh and Mr Shanmugam have raised questions on the legal implications of the bill. Whilst I recognize their concern I have explained that the bill was drafted to provide a practical solution to a difficult problem. I believe I have covered the majority of points raised by Members except there was a final question on how many Malaysian cars visit Singapore. I do not have the exact figures but my recollection is that more Malaysian cars cross the Causeway into Singapore than the other way round. They are here mainly on business, holiday and so forth. Finally, Sir, I would urge, all Singaporeans to accept the Bill in its spirit, check their meters before they cross the Causeway and there should be no need to apply any of the sanctions as there would be no offences. For the benefit of Mr shanmugam and Mr Davinder singh, I would say that it is not an offence if you do not commit the offence. Question put, and agreed to.”
“I think it is no inconvenience at all because, if motorists have no intention of buying petrol in Johor, what is the harm in topping up beyond half a tank? If all Singaporean motorists enter into the spirit of the regulation, there should be no problem whatsoever. We might even be able to withdraw the Customs officials eventually! I now come to the suggestion by some Members for an alternative system whereby motorists declare their tank contents before they leave and declare again when they return. The objection to this proposal, which may be legally more logical than the method we are proposing is that it is likely to cause more problems in practice. I would emphasize, that the method of regulation proposed was chosen for practical reasons because it is likely to cause the least inconvenience to motorists. The reason why a declaration is difficult difficult is because it involves two operations. You have to fill in a form, hand it over. When you come back we have to check you. How do you check to ensure that the form is correct? You will have to dip the tank. And you cannot dip it effectively. In fact, you have to drain the tank in order to establish the quantity, otherwise the Customs officers will be forced to accept the declaration on face value with no means of checking.”
“A few years ago, smart Malaysians were coming down to Singapore to buy tyres because Singapore tyres were very much cheaper than Malaysian tyres. They came down in cars fitted with the oldest tyres they had and switched to a set of brand new tyres and brought them back to Malaysia tax free. This soon came to the attention of the Malaysian Government. Thereafter, tyres on cars returning to Malaysia were inspected visually. If they looked new they were deemed new and were taxed as if they were new. This was a perfectly legitimate reaction on the part of the Malaysian Government to stop a duty leadage. We never complained. Why should we? Furthermore, the Malaysian Government imposes import duties on goods bought in Singapore by their citizens who visit Singapore and return to Malaysia. This is applied universally against all products which are dutiable. Again, it is a perfectly legitimate operation. We have no objections and it has not created any problems. So I think this measure we are introducing now ought not to excite the Malaysians who should understand. They have a larger problem in that they have many more dutiable goods than we have. Mr Lee Yiok Seng has been supportive. He has suggested, however, that the regulations should be applied with discretion so as not to annoy our motorists. I entirely agree and the Customs officers have been told to act as inconspicuously as possible. Very few Customs officers will probably be deployed because we do not want to spend a lot of money policing this Bill. The Bill, a relatively high fine as a deterrent. We are hoping that no motorist need be caught at all. The intent of the Bill is for motorists to observe an honour system similar to the green lane at airports where if you have nothing to declare you merely drive through.”
“If it is less than full, top up along the way, pick up one or two gallons; it is petrol that he is going to use anyway. So what is the inconvenience? Once he has done that, the regulation does not exist any more. So what is the problem? I really do not understand. I now come to Dr Lee Siew-Choh now. I am afraid his performance is pretty typical of him, except he was smiling most of the time. So I have to assume that he really meant it tongue-in-cheek because what he said was totally absurd. He is the one who is irrational, schizophrenic, absurd, illogical and so forth. I can only presume he made all these statements because he was not listening to my speech and it appears to me he was reading from a set piece which he had written before my speech. Therefore, he was in no position to react to what I said because most of what I said directly contradicted everything he was charging the Government with. He even mentioned the fact that the duty loss somehow works out to be $1 million a month from the $2 million we have announced previously. I am not quite sure how he manages this division of 2, but that is typical of the Opposition's handling of statistics, don't you think? He has attacked the Government on principles of free market flow of goods, protectionism, and so forth. I have already explained this. I shall not go into it again. He has asked whether this might not trigger retaliation by the Malaysian Government. My colleague has already explained this but I will elaborate slightly on this. I do not expect any retaliation because the Malaysian Government has been enforcing rules on the import of dutiable goods all along. We have never retaliated because it is their perfect right. I will give you an example.”
“It is not unreasonable to assume that half of the cars which cross the Causeway do buy petrol, because any sensible Singaporean who happens to be going there for whatever reason, would arrange to buy some petrol and not to do so would seem to be quite insensible. So I think the assumption is not invalid. About 50% would buy about 40 litres each. Is the sum significant? Well, everything is relative. $2 million a month is roughly the tax which we would collect if we increased the PUB bill tax by 15%, or is also equivalent to the tax we would collect if we increase Telecoms bills by 15%. I leave it to you to decide which is preferable. I think I have answered most of the questions put by Dr Hong Hai. He was supportive in other areas but he was more concerned about the grouses which he has picked up. Indeed there are many grouses which I have picked up myself from my talks with my community leaders. These are fairly common. I think they are grouses which arise partly because we have not been able to fully explain the application of these regulations. The reason for this has been explained, but Dr Hong Hai has suggested that it may be helpful if we spend some time now to explain to Singapore motorists why we are introducing these rules so that they may be more willing to accept the regulations. I am suggesting that the best way to convince the motorist is for him to actually experience this at the Causeway. He will find that it is not inconvenient at all. I would like to suggest that if the regulation works effectively, there should be no concern whatsoever. In fact, the regulation need not be applied at all. Why do I say this? Because all that it involves is for anyone who wants to go to Johor Baru merely to glance at his petrol meter occasionally.”
“So the half-tank rule was chosen for practical reasons. He has asked whether we are not being petty? Is the revenue loss serious? I have said at the outset that the reason for the Bill is not revenue. Revenue is important but not the primary reason. The primary reason is to allow Government to control car usage through petrol pricing and we cannot allow motorists to avoid this by merely nipping across to Johor. I think the Malaysian Government recognizes this. However, on the question of revenue, our estimate is a revenue loss of $2 million a month and I will explain this because it answers Dr Hong Hai's question: how do you arrive at this figure? Is it a reasonable figure? Or is it perhaps exaggerated? The estimate is based on actual Customs checks on Singapore registered cars crossing the Causeway over extended periods. The Customs does this regularly to monitor the position. I have explained in my speech that the current level of car crossings is about 6,000 per day, peaking at over 10,000 to 15,000 on holidays. We can assume that the typical car which crosses the Causeway is of 1.6 litre engine capacity (which is the average car in Singapore) with a fuel tank capacity of 52 litres. I think the average Singaporean is a logical person, if he is going to be there anyway, why not buy. This is perfectly legitimate. So if we assume that, he buys 40 litres and about half the people who cross over would buy, ie, 3,000 a day. 3,000 times 40 litres times a duty of 50 Singapore cents per litre times 30.5 days, which is the average month, comes out to about $1.8 million. Round it up, about $2 million. So that is how the figure is derived. So it is neither a hypothetical nor an exaggerated figure.”
“Neither country can afford the massive duty loss which will result if there were even a token allowance of duty free imports of these products. Therefore, this practice of restricting duty free imports of these specific three classes of products is universally practised and in no way represents restriction of free trade or choice. No one has the right to buy tobacco from the United States because it happens to be very cheap there and import it freely into Singapore? What is the difference between that and petrol? So this red herring should be totally disposed of right from the outset. In the case of Singapore, other than these three products, we do not levy import duties or excise taxes on, practically anything else, which is not the case for most other countries in the world, including Malaysia. And we do not object because every country has a right to impose excise taxes for its own internal reasons and these have to be respected. I will now deal with the individual remarks. Mr Chandra Das was concerned about relations with Johor but this has been adequately answered. He has asked: why should we not impose a three-quarter or full tank requirement. That seems more logical. Why half-tank? The reason is a practical one. The fuel gauge is not a very accurate instrument, except in the middle. Therefore, a three-quarter tank rule would be very difficult to implement because the three quarter point mark is either missing altogether or very near the full mark. Why not a full tank? I have explained earlier in my speech that a full tank rule will require topping up or using a dipstick because there is no way you can tell from the reading of the meter whether it is full because between three-quarters and full the meter reading is almost the same.”
“Mr Speaker, Sir, first, I would like to thank my colleague, the Minister for Foreign Affairs, for disposing of some of the questions which have been raised on the impact of this Bill on our bilateral relations with Malaysia. I think there were 14 speakers. Obviously, this is a subject of great emotional interest. I therefore propose to take a little more time on it than I would normally do because of the large diversity of subjects which have been raised. But before doing so, I will dispose of one main misapprehension which has been raised by Dr Lee and several other Members here. This is that this half-tank regulation - I think that is going to be a common name now - will in fact result in restriction of the trade and is against the rules of free trade which we ourselves support. This is totally untrue and I will explain why. Practically every country in the world levies substantial excise taxes on products like petrol, tobacco and liquor, for reasons either to control its usage or in most other cases for revenue collection. Therefore, practically all countries in the world restrict the duty free import of these products. I think everybody knows that. In the case of liquor and tobacco there is a limitation on how much you can bring in duty free into every country in the world. I think it is 200 sticks of cigarettes and one bottle of hard liquor or the equivalent. And that applies equally to the case of Singapore for imports of these goods from countries other than West Malaysia. In the case of West Malaysia, duty free imports of these goods are totally disallowed by mutual agreement with the Malaysian Government because of the large numbers of people who move between Singapore and West Malaysia daily, by car and by plane.”
“Mr Speaker, Sir, the more than half-tank requirement is proposed for practical reasons, even though a full-tank requirement would have been much more effective. Officers from the Customs and Excise Department will carry out random visual checks on the fuel gauges of vehicles which have passed the designated point and this will be done when the motorists are queueing up for immigration clearance. I would emphasize that in the initial stages, the officers would use their discretion in enforcing the regulations and would, wherever possible, give motorists the benefit of the doubt. On the other hand, Mr Speaker, Sir, I would like to point out that if the control procedure proposed should prove ineffective, other more stringent measures may have to be introduced. Full details of the control and operating procedures will be released after the Amendment Bill has been approved by Parliament and has received Presidential assent. My colleague, the Minister for Communications and Information, will also be presenting amendments to the Road Traffic Act later today, on matters relating to motor vehicle fuel gauges, insofar as they affect the implementation of the control measures proposed under the Customs (Amendment) Bill (Bill No. 20/89). Sir, I beg to move. Question proposed.”
“On the surface, this would appear to be a fair and equitable control measure as it would only affect motorists who actually bought petrol in Johor. Unfortunately, it is unworkable in practice because there is no simple way to identify petrol bought in Johor from petrol bought in Singapore when they are mixed together in the same tank. To do so would require the addition of chemical tracers to petrol sold in Singapore. It would require the draining of petrol from fuel tanks of cars entering Singapore and the analysis of this petrol. The procedure would be hazardous, time consuming and would lead to massive traffic congestion at the Woodlands Checkpoint. (c) Another measure considered was to require all Singapore registered cars to top up their fuel tanks at designated petrol stations near the Woodlands Checkpoint before they are allowed to cross the Causeway. This would have been an effective control measure but is likely to cause severe congestion at these designated stations and traffic hold-ups along the approach road to the Woodlands Checkpoint, particularly during peak holiday periods. The implementation of the regulation will be carried out with the least inconvenience to the motorist and in a manner which will avoid interrupting the smooth flow of traffic at the Woodlands Checkpoint. Under the proposed regulations, when a Singapore registered vehicle passes a specified point on the road approaching the Woodlands Checkpoint, its fuel tank must contain more than half of its total capacity of motor spirit, failing which, any person in charge of such a vehicle shall be guilty of an offence and will be liable on conviction to a fine not exceeding $500.”
“A ferry link to Southwest Johor will soon be established. A second road-link is under consideration. We can expect, and indeed we want, more Singaporeans to go to visit West Malaysia, just as we welcome more Malaysian visitors to Singapore. A decision on the control measure to be used was only made after careful consideration of its impact on Singapore visitors to Johor. The measure had to be simple to operate, should not inconvenience the motorist unduly or cause traffic congestion which would affect the flow of traffic to Johor. The half-tank measure was chosen because it satisfied all these requirements. Many alternative measures were examined and Members may be interested in a few which were considered but not accepted for a variety of reasons. (a) The imposition of a levy on every Singapore registered car either entering or leaving Singapore was considered seriously. The levy would be adjusted periodically to offset the price advantage of buying a tankful of petrol in Johor. For example, the present difference in the price of petrol between Singapore and Johor is 25 Singapore cents per litre. If a typical 1.6 litre car with a fuel capacity of 52 litres tops up with 40 litres of petrol in Johor, the savings to the motorist would be $10. An exit or entry levy of $10 would therefore offset this price difference. A levy would be the simplest scheme to implement. But we decided against it because we did not want it misunderstood that the Government was indiscriminately opposed to Singaporeans visiting Johor. However, if the half-tank regulation should prove to be ineffective, a levy may have to be reconsidered. (b) The imposition of excise duty on petrol purchased in Johor and imported into Singapore was another measure which was considered.”
“In September 1985, the ad valorem duty was brought back to 50% as a counter recession measure and the volume of cars crossing to Johor immediately fell back to some 3,400 per day. For most of 1986 and 1987, the Causeway crossings fluctuated between 3,000 and 4,000 per day, reflecting normal car travel to Johor on business, shopping or leisure. Since last year, there has been a steady rise in the number of daily crossings again. They now average more than 6,000 per day and on holidays, sometimes more than 10,000 cars cross over into Johor in a single day. No doubt other factors, unrelated to petrol prices, have contributed to this increase. Many Singaporeans now visit Johor to enjoy the beaches and entertainment and to take advantage of the cheaper shopping and seafood and these attractions will continue to draw Singaporeans into Johor. But part of the traffic clearly results from the difference in petrol prices, which is now 25 Singapore cents per litre cheaper in Johor. This price difference makes it worthwhile for some Singapore motorists to visit Johor just to buy petrol and for others who are already there to top up. Mr Speaker, Sir, I would emphasize that the purpose of the amendment is not to discourage Singaporeans from visiting Johor. Indeed, the opposite is true in that the Government is committed to the development of economic relations with Johor and to cooperate in the development of the tourist industry in Johor. There are many attractions which draw Singaporeans to visit Johor for their leisure and the Government wants to encourage this trend. Work has started on increasing the number of clearance lanes at the Woodlands Checkpoint in order to speed up traffic clearance. The existing Causeway is already being widened.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Customs (Amendment) Bill will make it an offence for a person in charge of a motor vehicle registered in Singapore to leave or attempt to leave Singapore without more than half a tank of petrol in that vehicle. Under the Amendment Bill, Singapore motorists will be liable on conviction to a fine not exceeding $500. For this purpose, I draw the attention of the House to clause 2 of the Bill. The regulation will not apply to foreign registered vehicles which hold valid permits to enter and remain in Singapore. Mr Speaker, Sir, the Government has been concerned for some time now over the increasing number of Singapore motorists going across the Causeway to fill up with petrol which is cheaper in Johor. This action undermines the Government's use of petrol pricing as one of the measures to curb car usage in Singapore. The main purpose of the Bill is therefore to ensure that the use of petrol pricing to control the usage of roads in Singapore is not bypassed. Additionally, loss of duty on petrol is estimated at around $2 million a month. In order to curb the rise of road congestion in Singapore, the Minister for Communications and Information is studying measures to control car usage instead of just car ownership in Singapore. The use of petrol pricing is one of the measures being considered and if petrol duty has to be revised upwards as a result, motorists can simply beat the measure by buying their petrol in Johor. That was what actually happened in 1985 when the ad valorem duty on petrol in Singapore was raised from 50% to 60% in March that year. The volume of Singapore registered cars crossing daily to Johor immediately doubled, from an average of some 3,000 per day to over 6,000 per day.”
“Mr Speaker, 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. ACKNOWLEDGEMENT TO THE CHAIR”
“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 authorized by the Supply Act, 1988. The additional sum has been scheduled as a Supplementary Main Estimates which has been considered and approved by the House as Command Paper No. 6 of 1989. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time. Third Reading”
“Mr Speaker, 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, 1989 to 31st March, 1990. 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, 1989 to 31st March, 1990, and appear on page 49 of Command Paper No. 8 of 1989. 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”
“Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions." Question put, and agreed to. Resolutions accordingly agreed to. 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 $6,741,003,170 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, 1989 to 31st March, 1990, contained in Paper Cmd. 8 of 1989." Second Resolution reported - "That the sum of $5,127,537,180 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, 1989 to 31st March, 1990, contained in Paper Cmd. 8 of 1989."”
“I hope that Dr Lee is not suggesting that pensioners should be buying brand new cars. And HDB flat prices have not, in fact, changed substantially as far as I am aware.”
“I think Dr Lee would have to be more specific on the items which he has spoken.”
“If the CPI is not relevant, then what is relevant?”
“Sir, this question of pensions has been raised several times in the past and I do not think the position has really changed in that the calculation of pensions is based on past services rendered and are therefore dependent on length of services and the salaries earned during such service. They bear no relation to salaries of serving officers which take into account the labour market forces and therefore the basis for calculating pensions is completely different from the basis in which we have to determine whether current wages of serving officers need to be reviewed. Therefore, I do not see there is any way in which I can amend the method in which pensions are calculated. However, ex-gratia adjustments have been made in the past, starting in April 1974 in order to take account of the rather unusual and abnormal inflation situation which followed from the first oil crisis. A Singapore Allowance was paid, starting in that year, and subsequently these were reviewed three further times, twice more, in 1980, 1982 and the last revision being in April 1986. Since the CPI change between 1986 and this year is very small there is no basis for a further revision at this time. As to the question from Dr Lee about whether the income from savings earning interest in banks could be tax-free, this is a completely separate issue because we do not exempt interest earnings generally and it would be a major departure. One has to be very careful in making changes of this type as it affects the whole basis for assessing tax.”
“I am not aware of Ministers taking part in it. I think the inference might be that there is some political indoctrination involved, in which case the answer is no.”
“Mr Chairman, Sir, the Civil Service Institute was first opened in March 1973. Currently its annual budget is $3.4 million, and it has a permanent staff of 50. The Institute's principal mission is to support the goals and programmes of the Civil Service in two ways - firstly, through selective training, especially in management and supervision, clerical and secretarial skills, languages and related areas; and secondly, through promotion of productivity, especially through the Work Improvement Teams programme. In the period 1988/89, the Civil Service Institute conducted 240 management related courses for 4,550 officers and 880 Core Skills for Effectiveness and Change (COSEC) courses for 22,000 officers. Essentially, the purpose of the Institute is to specialize in the training of all Government civil servants in more effective ways of doing their business and improving their service to the public. As to the final question, I am not quite sure I understood what Dr Lee meant. Is he asking whether I train my staff personally?”
“And periodically, we will also have external audits by the Management Services Department and by the Auditor-General's Department to ensure that the funds allocated to each Ministry are properly spent. I can assure the Member again that, under the new system, performance and quality of service will not suffer.”
“Mr Chairman, Sir, I can assure the Member for Eunos GRC that the intention of this scheme is not to reduce the quality of service or merely to conserve money and save money, and therefore cut the quality of services available to the public. The philosophy underlying the block vote budgetting control system is that each Ministry should be run like a business, with the Minister as the Chairman of the Board and his Chief Executive Officer being the Permanent Secretary - the Permanent Secretary being responsible for the implementation of policies laid down by the Minister and approved by the Cabinet in a way which will achieve the Ministry's goal with the least cost to the taxpayer. Monetary control system in place will enable the central agencies and top management of the Ministries to monitor that the delegated financial authority is used in the best possible way. The Government's financial accounting system is fully computerized, an on-line system, and facilitates the tracking of the expenditure of each cost centre. The performance of each programme is also regularly monitored against quantitative performance indicators, now published in the Budget document which MPs are free to monitor also. If the Ministry's performance, as measured by the indicators, shows a negative or downward trend, it will be clearly up to the Permanent Secretary to take necessary action, either in terms of improving the quality of performance for the public or in terms of discharging its particular programmes. The responsibility lies with the Permanent Secretary to ensure that his Ministry continues to operate in a most efficient and cost-effective way.”
“Mr Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Main and Development Estimates for the financial year 1989/90, and ask leave to sit again on Monday, 27th March 1989.”
“Dr Koh Lam Son asked the Minister for Community Development whether he will consider a grant to working mothers who place their children with registered foster mothers.”
“Mr Speaker, Sir, as I have mentioned in my Budget Statement, a broad-based consumption tax has considerable impact on the economy, especially on individuals and on our export and tourist trade. My Ministry is still considering the form in which such a tax should take in order to minimize its possible adverse impact, for example, whether it should be a Value Added Tax similar to those introduced in Europe or New Zealand, or a general sales tax at the retail level like the United States or at the wholesale level like Switzerland. Consideration would also be given as to the degree of integration desired between the existing and the new consumption tax, and the number of inspections necessary to police the system to ensure minimal abuse. As such, and until these matters have been agreed to, it is rather premature for me to provide an estimate of the expenditure to be incurred in the setting up of the collection machinery. However, the experience of other countries in terms of staffing ratios is interesting, if not indicative. For example, New Zealand employs one staff member for every 304 taxpayers; Italy employs one staff member for every 267 taxpayers; in the Netherlands, one staff member is required for every 190 taxpayers and in the United Kingdom, one staff member is required for every 115 taxpayers. In terms of the initial capital outlay, much depends on whether the existing computer system can be used or if some upgrading is necessary or whether a whole new system need to be purchased. Needless to say, much of the costs to be incurred would depend on the complexity of the consumption tax system adopted. GRANT FOR PLACING CHILDREN WITH REGISTERED FOSTER MOTHERS 6.”
“Sir, the points raised by the Member for Chua Chu Kang are indeed valid because we all recognize that for our industries to grow in future we will need many more post-graduate engineers. This is explicitly recognized by Government in that substantial sums have in fact been allocated for research and development in this year's budget. As to the provision of incentives for our local engineering students to take up post-graduate work, I think this is an area where the bodies responsible for allocation and selection of post-graduate engineering scholarships should take note and I would certainly commend his proposals to the people concerned, such as the Public Service Division of my Ministry, the Public Service Commission, Mindef, the Econo- mic Development Board, all of which have various scholarship schemes. Perhaps these schemes need to be reviewed to ensure that the financial terms are attractive enough to induce more post-graduate students to enter this field.”
“Mr Speaker, Sir, I would like to begin by thanking all Members who have spoken in support of the Government's Budget proposals over the last two days. There have been many useful and constructive suggestions and we will take these into account in the implementation of policies. Regretfully, we have not had the same response from the two Members of the Opposition. Both Mr Chiam and Dr Lee appear to be opposing the Budget on political grounds. Because it is a Budget put up by the PAP Government it must be bad and must be opposed and attacked on principle.”
“Being a price taker, we must continue to be vigilant in maintaining and defending our competitiveness. Government will monitor closely the impact on businesses when reviewing statutory charges. We must continue to run a tight ship and never allow ourselves to live beyond our means. Hence the Government will continue with its policy of collecting adequate revenue to cover expenditure. At the same time, Government expenditure will be scrutinized closely to ensure that each tax dollar collected is well spent and efficiently employed. An efficient public sector will not soak up valuable resources needed by the private sector. So long as we continue with these policies, we will be well prepared to face the uncertainties of the future. With a people who have shown their resilience and determination to overcome adversities, I am confident we have what it takes to succeed. Sir, I beg to move. [Applause]”
“The import duty on tobacco and excise duty on cigarettes will also be increased to $42 and $40 per kilogram respectively. With your permission, Sir, I would like to table Appendix I (Cols. 43 - 46) showing the details of the increases. These increases will take effect from today. (Copies of document distributed to hon. Members). Appendix I - DUTIES ON CIGARETTES AND TOBACCO (Cols. 43 - 46) Taxes on Public Utilities and Telephone Services The suspension of the tax on electricity and gas is due to expire on 31st March 1989. At present, a 10% tax on water charges in excess of $20 per month remain in force. I have decided to replace this from 1st April 1989 with a 5% tax on the combined PUB charges for water, gas and electricity consumed by domestic users in excess of $40 per month. There will be no tax in the case of non- domestic users. With this change, domestic consumers will pay additional taxes of $7 million per year. Similarly, the suspension of the 20% tax on domestic telephone services and trunk call services to West Malaysia is due to expire on 31st March 1989. I have decided to restore from 1st April 1989 a 5% tax on these services for residential subscribers. The suspension will, however, remain for the business subscribers. It is expected to bring in revenue of about $8 million a year. CONCLUSION Our economy has done well in the past year. This is due in no small measure to the willingness of our people to make short-term sacrifices for the longer term. They have accepted cuts in pay and CPF in order to see the economy nursed back to health. The cost-cutting measures put together in 1986 have restored our international competitiveness and put us back on the path of growth.”
“However from 1st July next year, the property tax rate of 23% will be reduced to 16% of annual value across the board. I would like to reassure Members that the Government will continue to monitor closely our property tax system to ensure that it remains competitive. Also, from 1st July 1990, a concessionary property tax rate of 4% of annual value will be levied on all non-HDB owner-occupied residential properties. This will replace the present system of granting owner-occupied concessionary tax under the proviso to Section 6(5) of the Property Tax Act. A new system of assessing HDB residential properties will also be put into place. An announcement on its implementation will be made in due course. OTHER TAX CHANGES Stamp Duty for Property Transactions At present, all property transactions except stocks and marketable securities are chargeable to stamp duty at the rates of 2% for the first $30,000, 2.5% for the next $20,000 and 3% for amounts exceeding $50,000. To reduce the cost of buying and selling HDB properties and to facilitate upgrading and relocation, I have decided to lower the stamp duty on property transactions (except stocks and marketable securities) to 1% for all properties up to $90,000, 2% for the next $60,000 and leave the rate unchanged at 3% for all incremental values above $150,000. The revised structure will take effect from 1st April 1989. This measure will cost the Government about $44 million per year in revenue. Duty on Tobacco and Cigarettes Duties on cigarettes were raised last year as part of the national effort to discourage smoking. In line with this continuing effort, I propose therefore to increase the import duty on cigarettes by $10 per kilogram to $85 per kilogram.”
“Tax deduction for contributions to CPF and other approved pension and provident funds Obligatory contributions by individuals to the CPF and other approved pension and provident funds are at present fully tax deductible. To prevent the use of these funds as tax shelters, I have decided that the following changes shall take effect from Year of Assessment 1990. The deduction for an individual's contribution to approved funds, including the CPF, shall not exceed the statutory contributions under the CPF Act. In the case of additional wages, which include bonuses and commissions, deduction will be limited to the statutory CPF contribution from additional wages not exceeding 40% of the annual odinary wages. I also propose that where an employer's contributions to the approved funds and CPF are in excess of the statutory requirements under the CPF Act, or are based on additional wages in excess of 40% of the employee's annual ordinary wages, the employee should be assessed to tax on the excess. PROPERTY TAX Three major property tax concessions which were announced during my Budget Speech of 7th March 1986 have already been adopted as permanent structural adjustments to our property tax system. These are the exemption from property tax for lands under private development; the property tax assessment on hotels at 15% of gross receipts for rooms and 5% for food and beverage outlets; and the payment scheme of property tax by monthly instalments through GIRO. The 50% rebate on property tax is due to expire on 30th June this year. This rebate scheme, as Members of the House would recall, has been part of an incentive package introduced by Government as far back as 1st July 1985. I have decided to extend the rebate scheme for another year until 30th June 1990.”
“(e) Enhanced Child Relief for the second, third and fourth child below 12 years of age will be raised from the present 10%, 15% and 15% of the mother's earned income to 15%, 20% and 25% respectively. The maximum claim for the Enhanced Child Relief for each child below 12 years old shall also be raised from $10,000 to $15,000. I hope that these increased reliefs will go some way to alleviate the financial burden of families with children, aged or handicapped dependants. The revised reliefs will result in an expected revenue loss of $50 million a year. Procreation Incentives I announced in my 1987 Budget Speech the Special Tax Rebate of $20,000 for newborn third child. To further encourage new births, the Government has decided to introduce a similar Special Tax Rebate of $20,000 for the newborn fourth child born on or after 1st January 1988. In other words, a tax free period of up to five years can be claimed by either the husband or wife, subject to a maximum rebate of $20,000 against their total tax liabilities over the period. This rebate will be available from Year of Assessment 1989. This will remove the anomaly that a woman gets Enhanced Child Relief for the fourth child but not Special Tax Rebate. An additional rebate equivalent to 15% of the wife's earned income will also be granted for the birth of the fourth child in lieu of maternity leave. However, this additional rebate can be offset only against the wife's income tax liabilities and must be absorbed within a period of five years. Normal Child Relief of $1,500 will also be given to the fourth child born on or after 1st January 1988.”