S. Dhanabalan
Singapore
“Mr Speaker, Sir, on a point of clarification. I said in my intervention on Tuesday that the general election is the right forum to determine the electorate's support because it puts the issue in a total and correct context.”
“Mr Speaker, Sir, with hindsight, of course, we can be very wise. But since one of the three islands was excluded, it was a substantial reduction in the scope of works. The assessment then, which I agreed with, was that if you called for a re-tender, you would get a substantially reduced tender.”
“To the extent that we can, we should work with countries that have a common interest, to come together and form economic groupings targeted at trade liberalisation. We have started this process within ASEAN under the AFTA Scheme. Economic linkages in groupings like APEC are also growing in significance.”
“Mr Speaker, all these questions make a lot of sense when the events are finished, and you look back. But the officer looking at the case at that time had to deal with the facts as they were at that time.”
“ASEAN countries agreed to publish all the Inclusions and Exclusions lists, as well as the full list of actual tariff reductions. The ASEAN Secretariat had since followed up and released, as scheduled, on 1st November 1993, the publications showing these lists.”
“Kallang Theatre was closed for five months in 1992 for cyclical maintenance and upgrading costing $3 million. This included a major upgrading of the toilets, recarpeting the auditorium, rewiring and repainting.”
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“I know, Sir, that this exercise is irksome and time-consuming, but it should serve to emphasize that no one in Singapore is above examination. And this can only be good for our future.”
“And so would Ministers and certainly SM and DPM. Is there something wrong or improper about this? The only way that Ministers can avoid the situation would be for the developers to discriminate against Ministers. Or, alternatively, Ministers must only buy properties where the demand is so low that there are no queues, ie, they must only buy dud properties. This is patently absurd. What is important is that Ministers and civil servants who may have dealings with a developer must make sure that there is no hint that they have been singled out for special favours so that they will be obligated to the developer. Like Caesar's wife, they must be above suspicion. The only legitimate question that can be raised is whether it is politically expedient for SM and DPM to openly buy properties in what are clearly high profile developments. Opinions can vary on this question. Should they have resorted to disguise and secrecy when buying these properties? To have tried to camouflage their purchases would go against the very grain of their character, especially since there is nothing illegal or improper about it. It has always been SM's philosophy to be open about his dealings. I am glad that instead of allowing the rumour mill to add juicy embellishments to the truth, we can put the record straight openly in Parliament. The investigation by PM, the statements by PM, SM, DPM, the Stock Exchange of Singapore, Hotel Properties Ltd, the public discussion, the proceedings in Parliament today, must all arouse considerable astonishment in outside observers of the Singapore scene. They must be wondering what is the fuss all about. But the public airing underlines the high standards Singaporeans have set for their leaders and the leaders have set for themselves.”
“Mr Ong Beng Seng is not in the business of charity. The fact that the prices today, barely a year after the initial sale, are so much above the developer's selling prices, shows that the developer was not able to foresee the escalation of prices. Hotel Properties Limited would surely have fixed a higher price, or even delayed sales, if they had known how the prices would move. At the time of the initial sale, Hotel Properties pitched their price at a level that they judged would meet the affordability of the small group of investors that they were targeting for their development. Buyers like SM and DPM had to make a judgment at that time whether the high prices that were being asked were sustainable. They turned out to be right. They had no privileged information about how the market would go and as to them being right, I think the jury in fact is still out. Who knows what will happen in the next few years? Another source of envy is that while they may have paid the same price as many others, it is unfair because they had the inside track in getting an opportunity to buy. This again has already been explained extensively by the Senior Minister. Of course, it is true that they have inside track. This will be so with any Minister. Even in normal times, without a property fever, good developments in choice sites will have a demand that exceeds supply. No developer has such a perfect knowledge of the market that he can fix the price at a level that will exactly clear his supply without any queue whatsoever. The developer will set his price so that it will result in slightly more demand than supply. In such a situation, some people like architects, lawyers and other professionals associated with the development will be on the inside track.”
“For example, those who purchased units in DBS Realty's Aspen Heights in October 1994 know this. Though there was strong interest before the sale was launched, the actual take up was below expectation. The market took a pause and for sometime, prices in Aspen Heights hardly moved from the initial sale prices. I know this, because I invested in a property in Aspen Heights in October 1994. And after about a year, I wanted to sell the property as I had found a better property to buy and hold. I could not even get a price that would cover my interest and other costs. It was only this year when prices began to move that I managed to sell it at a small margin. In this development, DBS Realty, in fact, decided as a result of market sentiment, to divide the sales into phases. The point I want to emphasize, Sir, is that there is no certainty of profit in property purchases. All these feelings of indignation, unease about the purchases by SM and DPM do not arise, I think, out of any perception that gratification has been given for favours done by them, or favours that will be done by them in the future. Singaporeans, whatever their cynicism, do not believe that SM or DPM has done anything illegal or improper. But the perception is that they had got a good bargain because of who they are and this is considered unfair. Senior Minister has already very graphically shown that there is no such thing as a level playing field. But even if you look at the price that they paid, was this a discount? Was this discount a bargain? I have already said that at least one serious investor judged that the price above $1,500 per sq ft was too high. Both SM and DPM paid prices that were well above $1,500 per sq ft. Moreover, no developer would sell one-quarter of his development at bargain prices.”
“Now in this buoyant market, in this fever, those who bought units in Nassim Jade and Scotts 28 seem to have done well, that is, if one goes by the stories of those who have sold their bookings and made huge profits. But could anyone have guaranteed at the time the buyers committed themselves that the market would continue to rise? Mr Heng Chiang Meng has already shown that it was, in fact, a period when the sentiment was bearish. It is only on hindsight that one can say that these properties were initially sold at attractive prices. But at the time of the initial sale, the prices even after discount were high, compared to similar properties. I can quote one piece of evidence that shows that the price was indeed high and was not considered a bargain. Sometime in March 1995 when Nassim Jade was coming on the market, a company that is associated with the company I am working for, seriously considered buying the whole development as an investment for rental. A price of $1,500 per sq ft was offered to the agent, who was trying to broker the deal, but the developer wanted $1,600 per sq ft. No deal was done. The final selling price of Nassim Jade averaged well above $1,500 per sq ft, even after discount. So here clearly was a different judgment as to what was an acceptable and attractive market price at that time. With hindsight, it is easy to say that those who bought units in Nassim Jade obtained attractive prices. The market, however, is not so predictable. Even in the last 10 years, as I mentioned, there have been periods of flat prices and even dips in the price. These flats and dips were temporary, but that they were temporary is only clear on hindsight. Nobody knew at that time that they were temporary.”
“No developer would underprice such a large number of units in order to give these buyers a huge profit. In this case, the pricing policy was obviously one to test the market and to continue to adjust the prices upward according to demand. So what is the reason then for this sense of indignation that SM and DPM have bought units in Nassim Jade and Scotts 28? The reason, Sir, is the fever, like a feeding frenzy, that seems to exist now in the residential property market in Singapore. Speculation has become a very strong feature of the market. The majority of buyers may intend to live in the property or hold it as a long term investment. But the proportion of speculators who book units to make a quick profit is very significant. Developers, in fact, would not mind if a few of their buyers make such speculative profits so that all their other buyers who intend to hold their properties would feel happy that they have properties with much more value than what they have paid. This would also, of course, help developers in their future projects. But if a large number of buyers in a housing project can turn around immediately and sell, and make huge profits, it shows clearly that the developer was unable to foresee the market strength and therefore underpriced his house, because no developer would underprice such a large proportion of his development. Prices in the residential property market have been moving up over the last 10 years. There have been, of course, periods of flats and dips, but on the whole, it has been rising steadily. And many think that there is no end in sight to the steep rise, although the measures recently announced by the Government to curb speculation should have a sobering effect.”
“There are also discounts if a company or institution can gather together 10 or 20 buyers and make a block booking. I remember, Sir, when I bought my first house in 1965, 10 of us who worked in EDB made a block booking and we were offered a 5% discount. Developers also pitch their prices as high as they dare and then they test the market with discounts at soft sales and vary the discounts according to the response. A discount is also given, very often, to a small number of buyers who are known in society to be careful and discerning in their purchases. Purchase by such buyers becomes a seal of quality and reliability of the development and the developer. Developers spread word about such buyers to sell the units at a higher price. I am sure Members who have had occasion to go and look at developments would have been told that so-and-so bought that house, or so-and-so has booked this house. So developers know that some people command respect in the market and others would take their actions as a guidance for their own actions. SM and DPM would certainly fall into this category, and their judgment would have a strong influence on others. I am sure that Members would agree that it would be absurd to suggest that because their purchases would influence others, they should keep out of the market or purchase secretly behind the names of nominees. In all discount schemes, the developer is very selective as to who and how many people get discounts. This is in the very nature of their sales policy. These practices have always existed and discounts are not given as a favour to the buyers but as part of a sales strategy to maximise profits for the developer. In the cases of Nassim Jade and Scotts 28, about one-fifth of the buyers were given discounts.”
“Mr Speaker, Sir, I would like to first declare that I work in a corporation whose shareholders own property development companies in Singapore. Mr Speaker, Sir, there has been quite a stir of excitement, quite unjustified in my view, over the discounts given to SM and DPM Lee Hsien Loong in their purchases of units in Nassim Jade and Scotts 28. Even though about one-fifth of the buyers in these two developments were also given varying discounts, the whole matter is being treated as an extraordinary affair. Sir, I would not pretend that their purchases should arouse no interest nor attract any attention at all. SM's actions especially, however mundane, are bound to attract attention but the degree of interest and gossip in this instance has exceeded normal curiosity. Why? Is it so unusual for developers to sell properties at a discount? It has been explained to us by both Senior Minister as well as Mr Heng Chiang Meng that this is very common. And Members of the House and members of the public who have had any experience of buying properties at all must know that discounts are very common in the property market. Developers who aim to build a business which would support a steady stream of new developments over a long period of time make sure that their design, quality, and their sales and pricing policies are able to sustain a long term business with maximum profits. And discounts are part and parcel of their sales and pricing policies. They give discounts for the same reasons that any business gives discounts - they want to generate more sales and more overall profits. There are many kinds of discounts, some of which have already been touched upon. These are early bird discounts.”
“Mr Speaker, Sir, on a point of clarification. I said in my intervention on Tuesday that the general election is the right forum to determine the electorate's support because it puts the issue in a total and correct context. I want to clarify that the point that I wanted to make is that issues like these are not issues that should be decided in isolation through a referendum. These are issues that can be seen in context in a general election. But this does not mean that the motion before this House should be kept in abeyance until the next general election. This system of linking Ministers' salaries to private sector salaries was an issue in the last general election. Fine-tuning the system, as is proposed in the White Paper, will, I am sure, be an issue of the next general election and in many more general elections to come until it becomes accepted as conventional wisdom. It does not therefore mean that the motion before the House should be postponed.”
“However, I suggest that a high-level supervisory committee be set up to evaluate the salaries of the Ministers and top civil servants, so that our people will understand the manner in which the Ministers' salaries are linked to the private sector. At the same time, the committee will be able to look into the details arising from the implementation of the long-term plan and formula. Finally, I wish to stress that when the Government decides to pay a higher price to attract potential Ministers and top civil servants, it should also emphasize the need to devise a more comprehensive plan to enhance the assets of the people, ie, to enable the ordinary people to receive better technical training, to have better means of livelihood and to improve their standard of living. Through these asset enhancement schemes, such as the issue of Telecom shares to the people when the TAS was privatized. I hope that when the other statutory boards are privatized, we can distribute more assets to our people. At the same time, as we are engaged in debates over our transport problems, the Government should set aside more money to improve our public transportation system so that the ordinary people and workers will enjoy more convenient means of transport. As for creches and child-care centres, the Government should be more generous in its funding of such facilities which will particularly benefit the working mothers. If our people feel that they do have a share in the prosperity of Singapore they would be glad to support the White Paper.”
“When we are faced with serious crisis and challenge, our leaders will be able to stand firm and will not succumb to pressure. I personally agree with the principle of the White Paper which sets out a long-term salary plan for our Ministers and top civil servants. I feel that this is better than having to come back to Parliament every year, or from time to time, to revise their salaries. Therefore, this long-term and transparent formula to set out their remuneration is most appropriate. We all know that other countries are using various methods. Some provide for entertainment allowances which may run into hundreds of thousands, or free cars and houses to camouflage the Ministers' salaries. This is not a good method. Therefore, in Singapore, we use a transparent formula where everything is included in the salary. I feel that this is more sensible. At the same time, we all know that the risk and responsibility the Ministers have to take is much heavier than that of a CEO in a private enterprise. At every General Election, they have to face the voters who will decide their future, ie, whether they will be returned to office after each General Election. The Ministers have to sacrifice their privacy and time, as well as those of their families. In addition, the social pressure they have to encounter comes from all the people in the country and not just the directors, shareholders and customers of the company. Their decisions affect the quality of life of all the people in the country, and even the future of the country. As such, I support the long-term plan of the White Paper.”
“Now, the White Paper proposes to benchmark the salaries of our Ministers based on the leading local professionals, and I feel it is very reasonable. Another thing is how do we make the people understand the consequences of this shortage in talented people. Sometimes we may forget that the quality of these leaders is directly linked to our future and the future of our children. In fact, looking for the right and suitable talents to govern the nation is to create more wealth for the nation and the people. Therefore, we must make the people realize that by getting the best talented people to be our leaders, it is the people who will get the benefits in the end, and not just these leaders. More often than not, we are emphasizing too much on economic benefits, and often believe that salary is the determining factor of the quality of our political leaders and civil servants. I feel we should also attach more importance to the spiritual well-being of our people and their mission to serve. The people we are looking for should not only be capable, talented but also possess a social mission to serve society and the people. They should be dedicated to looking after the well-being of the people. Therefore, when we are selecting potential Ministers, we should look not only for talent, capability and qualification, but also integrity and high moral standard. With these qualities, we can be assured that when our nation is prosperous and wealthy, our leaders will not indulge in extravagant and dissipated lifestyles and squander away our hard-earned money. When we are poor, our leaders should have the courage and strong will to see us through, and will not falter in their determination.”
“They can easily find a place in various countries in the world, which means that the talented people that we have trained can easily find good job opportunities in the USA, UK, Hong Kong and China. Because of this, their value is greatly enhanced. However, most people do not understand that there is a great gap in the market value of the ordinary people and these specially trained professionals. The type of competition they face is different. For the ordinary workers, competition comes from China, Taiwan, East Asia and even South America, Middle-East. To them, competition does not enhance their value. On the contrary, they have to maintain a global level of competitiveness. The competitions are moving in two different directions. So, the ordinary people cannot accept the fact that in the face of international competition, they are actually losing out, while the professionals are gaining capital for advancement. Therefore, we have to explain to the ordinary workers the question of supply and demand of talents, and the theory of market economy. Another point is that many people fail to understand why we are having the problem of shortage in talents. With regionalization and the flourishing economies of the region, these talents are frequently absorbed by the multi-national corporations, and many of them are even leaving their employment to start their own enterprises. The business opportunity now is truly unprecedented. From the international financial magazines, we learn that the salaries of Chief Executive Officers of the big international enterprises are measured not in terms of thousands or millions, but in hundred millions and even by billions. So, if we are to compare the salaries of these international CEOs with our ordinary workers, the gap will be even wider.”
“If, as a result of the system that we have and which we are fine-tuning through this White Paper, we find that people are attracted to politics by the income they can earn, then we are attracting the wrong type of people into politics. That is the irony of the system. That is why the selection process of candidates for Parliament, Backbenchers as well as those with the potential for office, is so important. And the People's Action Party has such a selection process. The continuation of good political leadership depends upon the incumbents and they have to attract and induct new leaders who share the same competence, integrity, courage and spirit of service that the incumbents have. We run a high risk, high reward system. In the right hands, the system can enable the nation to scale new heights of success. At present and for the foreseeable future, it is in the right hands. The PM's job is to identify and persuade the right people to join him so that his team can ensure continuity as far into the future as is reasonably possible. We should give him the tools to get the job done. Mrs Yu-Foo Yee Shoon (Yuhua)( In Mandarin): Mr Speaker, Sir, if Singaporeans are unhappy or do not agree with the benchmarking of the Ministers' salaries as recommended by the White Paper, it is quite understandable. First, they do not realize that this is a question of supply and demand of talents, neither do they understand the principle of scarcity. The talented people in Singapore are normally proficient in the major international languages. As Singapore is a metropolitan city, the people we have trained are of international standard, ie, the market for these talented people is very international.”
“You also have the risk that some personal flaws will come to the fore in unforeseen situations and destroy you like some Shakespearean tragic hero. And over everything, there is the risk of a brutal and public rejection by the voters. All these and more, people have mentioned to me. The people I spoke to are all earning more than what they can expect as Ministers. But loss of income has never been mentioned by them, but I do know that this must be a factor which they take into consideration, though it is not an important factor. But to the extent that salaries of Ministers is a negative factor, it adds to all the other negative factors. As against all these stresses and risks of entering politics is the attraction of continuing in paths where these people have a track record of success. I am not surprised that I have been so unsuccessful in persuading people or that, as the PM has said, we have not been able to identify and persuade one person per year of Ministerial calibre to enter politics. There is little that we can do to remove the factors that dissuade people from taking the risk of running in an election with a view to taking office. These negative factors that I have mentioned are part and parcel of the job. It is only in the area of incomes that we can do something to mitigate the unattractiveness of politics to successful Singaporeans. To do nothing where something can be done would be irresponsible. Even with the proposed benchmark, nobody that I have spoken to will accept the political challenge because the income is attractive. Only a sense of service, of wanting a hand in shaping the future of our society will bring the right people into politics.”
“My change in view has come about basically as a result of my experience in trying to persuade successful Singapore professionals and executives who have the potential to become Ministers to consider entering politics. As I discussed with them, I discovered that the generation that comes after mine is far more intelligent and careful in assessing and weighing the pros and cons of giving up a successful career to enter politics. Compared with them, mine is a generation of wide-eyed innocent babes in the woods. With the exception of only one person, and he is more of my generation than the generation after mine, I have failed to persuade anyone to enter politics with a view to taking office. As I discussed with them, I found that the negatives just seemed too large for them. First, there is the stress and responsibility of office. You are a Minister. You observe the ordinary Singaporean on his way to work, at work, at leisure, in the hawker centre and at home. You think of the economic and social problems that he or she will face that you are expected to anticipate by the policies that you help to formulate together with your colleagues. You think of how the ordinary person's life and routines and hopes and expectations can be completely thrown into disarray by events and forces beyond his or her control, but which you as a Minister together with your colleagues have responsibility for. You think of these things and you can be overwhelmed by how much things depend on you and your colleagues. Many do not want to take on such a responsibility. Then there is the personal risk, the loss of privacy, the pressures on the family, even on the young children who are expected to be different because the father or mother is a Minister.”
“We can of course resort to subterfuge and secrecy and make hidden payments and perks and keep the nominal salary of Ministers at a low level. But that is not our style and it would be an insult to the integrity of our leaders. Speaking for myself and my colleagues, those who are still in the Cabinet and those who have left for the private sector, I can say that salary was never a consideration in our decision to enter politics. In fact, when the late Mr Hon conveyed the PM's wish for me to join the Cabinet as an office holder and I agreed, I did not even know until the day before the press announcement whether I would be appointed Minister of State or Senior Minister of State or what my salary would be. And I think my colleagues can testify to similar experiences. I know that there are many who are in the Cabinet today who can earn much more outside in the private sector than what they would be paid under the proposed scheme. And I also know that if they can get competent people in whom they have confidence to take over from them, they would be prepared to leave for the private sector for less than what they are getting today. My own view for a long time on the salary for Ministers has been that Ministers must be paid adequately but not necessarily related to market or near to market rates for positions of similar responsibility. I have expressed this many times to the Senior Minister when he was Prime Minister and he always told me that I am unrealistic and that my thinking has been shaped by my years in public service and in GLCs. I must say that over the years, I have had to change my mind, and I must confess with some regret.”
“Mr Speaker, Sir, I want to confine what I have to say to the benchmark for Ministers' salaries. The White Paper's proposal is to average the earnings of the top four earners in six professions, that is, 24 earners and pay Ministers two-thirds of this average. Pegging at two-thirds of the top 24 would, in fact, work out to the average of the top 15 to 20 persons in each profession, that is, the average of about 120 persons in the six professions. Perhaps, putting it this way would be less eyebrow raising. But whichever way it is presented, the vast majority of Singaporeans do not earn anywhere near this amount. The figures to them are mind-boggling. They probably never even realised that there are people who earn these types of incomes. They can understand people who own properties and businesses having huge incomes. But that people who work are actually paid these salaries and fees is something that is beyond their capability to grasp. And when Ministers' incomes, as is suggested, are pegged to this, many people get apoplectic. We are conducting a very bold experiment in Singapore. We are attempting to persuade the electorate to think rationally and logically and see the total picture and assess the value of good political leadership for the nation. The general election is the right forum to determine the electorate's support because it puts this issue in a total and correct context. In fact, other countries which have a much longer history of democracy and a better educated population dare not even broach the subject as one that should be debated and decided by the electorate in the general election. I am not sanguine that the vast majority of Singaporeans can see and understand the issue. Nevertheless, we ought to try and treat the electorate as adults.”
“It allowed VC companies with approved investments having linkages with Singapore to enjoy tax exemption for gains from the sale of their investments, dividend income from overseas investments and interest income from overseas convertible loan stock. The VC incentive under the Economic Expansion Incentives (Relief from Income Tax) Act was also amended recently to relieve the investor the burden of having to set up a separate holding company for each VC investment. Further Expansion of Scheme EDB is discussing with several fund management groups on the establishment of new VC funds totalling some S$200 million. In addition to fund availability, VC investors will bring with them their network of contacts, knowledge of industry trends and professional management expertise including advice on business strategies and financial matters. With the formation of more new VC funds and the success of an increasing number of VC-based local companies, we can expect more and more Singapore companies to accept VC funding for their growth. WIFE-BATTERING CASES FROM 1983 TO 1992 5. Dr Kanwaljit Soin asked the Minister for Home Affairs (a) how many wife-battering cases were reported from 1983 to 1992 and of them, how many were prosecuted; (b) what are the reasons for non-prosecution; and (c) what training police officers receive to deal with domestic violence cases.”
“The EDB Venture Capital (VC) Scheme was introduced in 1985. The objective was to pool together the financial resources from the private sector businesses and individuals, and channel them to start up technology-based companies and expand promising local companies. To-date, the EDB VC programme has invested in 21 Singapore companies (S$12.6 million) and three Singapore VC funds (S$16 million). More importantly, the EDB VC Scheme has led the way to the growth of a substantial VC industry in Singapore. Singapore Companies in the VC Programme There are now 21 VC fund management groups and more than 27 active corporate investors managing about S$2.6 billion between them. As at 30th September 1993, 142 Singapore companies received VC funding, of which, 14 companies are public-listed with an aggregate market capitalisation of S$3.4 billion and 28 are Singapore-based, seed or early stage projects. Further Incentives to Promote Venture Capital The Pioneer Service Status and the VC Incentive were introduced in 1986 to provide tax exemption for VC funds and to enable capital losses in VC to be offset against taxable income. The Pioneer Service Status require a percentage of the funds to be invested in start-up projects in Singapore. Todate, 14 VC funds have been awarded Pioneer Service status. The VC Incentive has been awarded to 19 companies of which five are for Singapore projects. In 1992, the training of VC fund management professionals was included for funding under the Initiative in new Technology (INTECH) Scheme. One award has since been given. Earlier this year, the tax incentives for VC were further enhanced. A new incentive was introduced under Section 13H of the Income Tax Act.”
“ASEAN countries agreed to publish all the Inclusions and Exclusions lists, as well as the full list of actual tariff reductions. The ASEAN Secretariat had since followed up and released, as scheduled, on 1st November 1993, the publications showing these lists. The private sector may make reference to these lists at the Trade Development Board. Hard, as well as software, copies of these lists may also be purchased from the ASEAN Secretariat. CRIMES COMMITTED BY FOREIGN WORKERS FROM 1990 TO 1992 2. Mr Chia Shi Teck asked the Minister for Home Affairs (a) whether he will provide statistics on the different categories of crimes committed by foreign workers in Singapore from 1990 to 1992 and (b) whether Police is coping well in containing these crimes.”
“The initiative for an ASEAN Free Trade Area (AFTA) was launched at the fourth ASEAN Summit in Singapore in January 1992. ASEAN agreed to establish the AFTA using the Common Effective Preferential Tariff (CEPT) Scheme as the main mechanism within a time frame of 15 years beginning 1st Janaury 1993 with the ultimate effective tariffs ranging from 0% to 5%. While ASEAN countries had earlier committed to begin implementation on 1st January 1993, Singapore was the only country to actually implement tariff reductions on this date. Duties on a total of 373 tariff lines were reduced. Malaysia introduced notional cuts. The other ASEAN member countries were not able to implement reductions on time due to internal administrative constraints. At the 25th ASEAN Economic Ministers Meeting in Singapore in October 1993, ASEAN member countries reached an agreement to operationalise the CEPT Scheme. They agreed to commence tariff reductions by 1st January 1994. This inital package would cover between 15% and 38% of member countries' total number of tariff lines. With these impending tariff cuts, MNCs would find it more attractive to invest in the ASEAN region, thereby enhancing intra-ASEAN trade. Furthermore, this also demonstrates ASEAN member countries' belief in the benefit from a free trade area, and their commitment to implementing the CEPT Scheme on schedule. Singapore is reasonably satisfied with the progress in the implementation of the CEPT Scheme. In order to facilitate businessmen and investors in their commercial plans and decisions, Singapore and others felt that it was important for the private sector to have as much information as possible on ASEAN member governments' plans for the CEPT.”
“Kallang Theatre was closed for five months in 1992 for cyclical maintenance and upgrading costing $3 million. This included a major upgrading of the toilets, recarpeting the auditorium, rewiring and repainting. In the next cyclical maintenance exercise for Kallang Theatre in fiscal year 1997, the Arts Council will improve the acoustics, sound and lighting systems, create new dressing rooms, upgrade mechanical and electrical equipment, and carry out roofing works and general improvements to the auditorium. BUILDING OF NEW HDB FLATS IN TELOK BLANGAH CRESCENT 10. Dr S. Vasoo asked the Minister for National Development whether there are plans to build new Housing and Development Board flats in Telok Blangah Crescent.”
“Mr Speaker, Sir, it is a matter of judgement. The officer made the right judgement because it was quite logical to think that if only two islands were cleaned, the tender must be less. I am sure that if the Member himself were presented with the facts at that time, he would have made the same decision. And if the officer had recommended to me, I would also have decided that re-tender would be right. But looking at it now, after all the events have been completed, of course, one can be very wise. KALLANG THEATRE AND VICTORIA THEATRE (Upgrading of facilities) 9. Mrs Yu-Foo Yee Shoon asked the Minister for Information and the Arts, in view of the fact that the Singapore Arts Centre is only due for completion in 1999, whether there are any interim plans to upgrade the facilities of Kallang Theatre and Victoria Theatre. The Minister of State for Information and the Arts (Dr Ker Sin Tze) (for the Minister for Information and the Arts): Mr Speaker, Sir, the National Arts Council has an on-going plan for the maintenance and upgrading of Victoria Theatre and Kallang Theatre. In July and August this year, the sound and lighting facilities at Victoria Theatre were upgraded at a cost of $840,000. The Arts Council has further plans to renovate and upgrade the main bar, reception room, dressing rooms and the interior furnishings of the theatre foyer in the next cyclical maintenance exercise for Victoria Theatre in fiscal year 1995. A major retrofit will be carried out after the opening of the Singapore Arts Centre in 1999, when we can afford to have Victoria Theatre closed for a longer period. We will take the opportunity to improve the theatre's acoustics, stage flooring, orchestra pit, lighting system, seating arrangement, and air-conditioning.”
“Mr Speaker, all these questions make a lot of sense when the events are finished, and you look back. But the officer looking at the case at that time had to deal with the facts as they were at that time. Naturally, any officer looking at the tender, ie, the tender price for two islands was higher than for three islands, must have thought that something seriously had gone wrong, either collusion, or some mistake. Therefore, it was decided to have a re-tender. And when the second re-tender was called, the first re-tender was still alive and that is why we went back to award to the lowest tenderer in the first re-tender. Mr Low Thia Khiang: Does the Minister agree that actually it was a wrong decision by the officer concerned, not to award to the lowest tenderer in the first tender?”
“Mr Speaker, Sir, with hindsight, of course, we can be very wise. But since one of the three islands was excluded, it was a substantial reduction in the scope of works. The assessment then, which I agreed with, was that if you called for a re-tender, you would get a substantially reduced tender. Whereas, if you were to just adopt the omission method, you would have to negotiate compensation which would result in a tender price which would cover the cost of cleaning the two islands plus compensation for not cleaning the third island. If a re-tender were called and just the two islands were let out for tender, it was expected that the price would be much less. Of course, as I said, with hindsight, perhaps, if they had negotiated on the first tender, they would have got a better price. But at the time that the decision was taken to call for the re-tender, we did not have the benefit of hindsight.”
“I do not know what the Member means by an omission clause. But there are normal rules in tender that if the scope of works is reduced, it could negotiate another price. But normally, the tenderer would demand compensation for a reduction in the scope of works.”
“Chua Chin Cheong Contractors was also the lowest tenderer of the second re-tender. As you are aware, Government tender procedures are governed by strict rules to ensure that the system is fair and transparent to all. Government does have some flexibility within the procedures to decide to recall a tender if it believes that Government will benefit from its doing so. There were good reasons for calling each of the above re-tenders. It was judged that re-tender would result in lower prices. As it turned out, the officers' assessment was not borne out by the market outcome.”
“Mr Speaker, Sir, Sentosa Development Corporation (SDC) is the Government's agent for the management and maintenance of offshore islands. SDC employs term contractors to maintain the hygiene and cleanliness of the islands. SDC called for tenders in February 1992 to clean Buran Darat, Pulau Renggit, and Lazarus Islands. After the close of the tender, SDC decided to delete Buran Darat from the contract in view of reclamation works on the island. Buran Darat had been handed over to the contractor handling the reclamation, and SDC felt that the reclamation contractor should be responsible for the island's maintenance. Since the deletion of Buran Darat from the cleaning contracts resulted in a significant reduction in the scope of work, SDC decided to recall tenders for cleaning and maintaining the other two islands. It was expected that a re-tender would yield a lower tender price as the scope of works was reduced. Contrary to SDC's expectations, the lowest tendered price submitted during the re-tender was much higher than the lowest bid submitted in the first tender for the three islands. As SDC felt that the tender prices received were unreasonably high for just the two islands, it decided to call for a second re-tender. As it turned out, the tender prices received for the second re-tender were even higher than those received in the earlier two tender exercises. SDC then decided that further re-tendering would not necessarily result in lower tender prices, and proceeded to award the tender to the lowest tenderer of the first re-tender because that tender was still valid, and the lowest tenderer was Chua Chin Cheong Contractors at a tender price of $114,660. This tender price is $2,460 more than the lowest tendered price in the original tender for the three islands.”
“They should return to follow the full training syllabus appropriate to their ranks and vocation in the same manner as their counterparts who are not disrupted.”
“As far as possible, he will be deployed to a unit which is undergoing the type of training he has missed during his disruption. All national servicemen must undergo the key phases of full-time training and be operationally ready by the time they finish national service. To achieve this, the period they spend for training after disruption has to be long enough to enable them to complete the phases they have missed. It would be wasteful and counter-productive for the serviceman if he were to return to the SAF for short spells just so that he can complete his 2 1/2 years service without receiving the appropriate training. Furthermore, national servicemen who are disrupted for further studies are likely to hold the rank of officer or junior commander. They must be fully trained to take on leadership roles in their reservist units. Those who miss the prescribed higher level courses before they finish national service will have to be sent for such courses during the remaining period. There will be little or no opportunity for them to take such courses when they have become reservists, as the length of most of the courses at this level is greater than the normal reservist call-up period. To ensure proper deployment and minimum waste of the servicemen's time, the SAF therefore requires that the remaining service be served in one continuous period. Most servicemen have no problems over this requirement. 83% of disrupted servicemen have a balance period of only two months or less, and can complete their service during their first university vacations. The rest, who have longer balance periods, would have missed substantial portions of their training.”
“Sir, even if we have a series of duties, our market is not that significant that we can expect to negotiate substantial benefits for ourselves on a bilateral basis. But I think we must concentrate on working with countries which do realise the advantage of a free global system and try and help them in GATT, or if GATT fails, in other negotiations, to come together to create a more liberal system. Sir, it is a bit too early to talk and elaborate on what will happen if GATT fails because there are fairly good indications that it will succeed. As I said, it might be a smaller package than originally envisaged, but still it is better than a complete failure. NATIONAL SERVICEMEN (Disruption of service for further studies) 2. Dr Wang Kai Yuen asked the Minister for Defence what is the rationale of requiring national servicemen, whose service was disrupted for further studies, to complete their service in a continuous period lasting no less than six months, where applicable. The Parliamentary Secretary to the Minister for Defence (Mr Matthias Yao Chih) (for the Minister for Defence): Mr Speaker, Sir, disruption for further studies is granted to national servicemen who have 2 1/2 years of full-time liability. Ideally, such servicemen should remain in the Singapore Armed Forces (SAF) for the whole 2 1/2 years to complete all the required training courses and exercises. However, disruption is allowed to this group after they have served a minimum required period so that they need not start their further studies later than those who have only two years to serve. Disruption is a postponement of full-time training. It is not the end of full-time national service. The balance period should be effectively used to prepare the servicemen for an operational role.”
“To the extent that we can, we should work with countries that have a common interest, to come together and form economic groupings targeted at trade liberalisation. We have started this process within ASEAN under the AFTA Scheme. Economic linkages in groupings like APEC are also growing in significance. We should continue to explore various forms of tie-ups and linkages to expand business opportunities when the time is right. Such groupings cannot replace a global trading system like GATT. But they can give us some respite until we move to an open global free trade system. In essence, we will continue to maintain our free trade policy and encourage our neighbours to do so. We shall continue to introduce policies and invest in those areas that will keep Singapore competitive. We will also join economic groupings that aim at promoting free flow of trade and investment.”
“Mr Speaker, Sir, the Uruguay Round negotiations are not going smoothly. As the deadline of 15th December approaches, there is a special effort underway to resolve the more contentious points. It is therefore likely that the major players will come to some compromise at the last minute. The compromise may result in a smaller package than what is presently being negotiated. A smaller package is better than a complete failure provided that the areas that are excised from the final agreement do not tilt the balance of interests between the developed and developing countries. Sir, it s not possible to predict with certainty the outcome of a failure. Certain dangers are clear. The present GATT regime has been eroded by protective measures taken by countries such as arbitrary Anti-Dumping measures, voluntary export restraints, and other unilateral actions. Failure to conclude the Round is likely to accelerate this trend and protectionist sentiments may become dominant in countries which are having difficulty competing against imports. Protectionist measures taken by one country may lead to counter protectionist measures by others. Free trade would come under strong threat, negating the achievements made by GATT in the past decades. A spiralling series of protectionist moves with consequent reduction in international trade cannot go on forever. At some point, countries will realise, after paying the price, that a multi-lateral trading system with free flow of goods and services is the only option for economic growth. While we await such a change, we must continue to be nimble, adapt to new circumstances, and use our resources to make ourselves more competitive. We must seek new opportunities and niches in a more protectionist regional and international market.”
“Mr Speaker, Sir, I would like to thank all Members who have spoken during this debate and I have no intention of trying to summarise all that they have said. I think it will be fair to say that almost all support the basic philosophy and the principles of our health care system, and all recognise that we do have a good health care system. I want to thank Members for their suggestions. All suggestions would be considered by the Minister for Health and those that can be implemented, I am sure that he will implement them. I also want to thank Members for some of the fears and reservations that they have expressed because these point to the need for us to explain more clearly to the public our underlying intentions, philosophy and thinking of our present health care system and, of course, wherever necessary, we will fine-tune some parts of the system. The White Paper does not propose revolutionary changes. In fact, for the most part, it explains our existing system and why we do things the way we do. It clarifies the underlying philosophy behind the present system. It makes a number of recommendations on how we can improve the system. These improvements will ensure that our health care system evolves and keeps pace with the changes in our society, in our economy, and also with medical and technological progress. With that, Sir, I want to thank you for being so patient. Resolved, "That this House endorses the principles and approaches set out in Paper Cmd 16 of 1993 on "Affordable Health Care" as the basis for Government policies to contain health care costs and to keep good basic health care affordable to all Singaporeans." LEGAL PROFESSION (AMENDMENT) BILL Order for Second Reading read. 4.43 pm”
“Prevention is better than cure. Before the situation gets out of hand, we should think of preventive measures, and this is consistent with the style of the Government. The White Paper is a good example. Apart from strengthening our health care system, a more important message is that every Singaporean must be responsible for his own health. Good eating habits, moderate living, healthy lifestyle, are important things that our people must look into.”
“This is a good measure but we should look further into it because it may be unfair to some people. For example, those who are involved in road accidents will have to be hospitalised, and they may have to be operated on several times. It does not mean that they are over-using their medical benefits. The 2% cap may be used to buy medical insurance but they will still have to pay out of their own pockets. Those people who have hereditary diseases such as diabetes need more medical care. It is not because they do not care about their own health. It is because of their own hereditary reasons and not because they neglect their health. So they need medical care. So the question of how these costs could be distributed fairly should be looked into further. I endorse the Government's view that everybody must be responsible for his own health. But for some other diseases such as heart diseases, diabetics, and with more and more such cases around, I think we should pay attention to them. According to a survey of the Ministry of Health, 10% of our students have high cholesterol levels and 15% of the students are overweight. It is because they eat more meat, but if you inculcate good eating habits from young you could prevent a high level of cholesterol, excess blood sugar and prevent high blood pressure. I think we must pay attention to this. The Ministry of Health and the Ministry of Education have worked out a scheme to encourage people to take care of their diet by eating less sugar and drinking more water. I think this is a very good way of looking after the health of people. But apparently, the White Paper has not dealt in detail about preventive health care. I think the Ministry of Health might already have something in mind. I hope that this can be published in due course.”
“It is also because of the right attitude of the people and the management of these statutory boards that they are very competitive. I think these are more important. According to the White Paper, Mr Speaker, Sir, A class beds should not exceed 9% of the total number of beds in the whole country or 11% of subvented hospitals and the individual subvented hospitals should not have more than 13% of A class beds. This measure is to ensure that the middle and lower income groups have affordable basic health care. I think it is a correct move. But in subvented hospitals, I think this percentage should be further reduced. The reasons are: (1) Those who can afford A class beds can go to the private hospitals. (2) Subvented hospitals now face the problem of manpower shortage. To increase the number of A class beds will further aggravate the manpower shortage situation. (3) The more A class beds there are, the faster will the B and C class beds reach the point of saturation, and some of the patients may be transferred to A class beds. On community hospitals, I think Mr Chandra Das also said sometime ago that the number of A class beds should be further reduced in community hospitals, because such hospitals are set up to provide affordable health care services and A class beds are not affordable. Workers' welfare and Medisave. The employers do not want their employees to over-use their medical benefits. So the Government is taking the lead to provide extra contributions to Medisave in lieu of medical benefits for the new civil servants. I think this measure to encourage employees to take care of their own health will enable those who are paying attention to their own health to have more Medisave balances in their accounts.”
“To ensure that, as the Minister has said, the patients do not know the good and bad points of medical treatment and they have no time to choose which hospital, which expert or specialist to see. I think the moral and ethics of doctors are important factors that will determine medical costs. So I hope that the Medical School in Singapore, in addition to inculcating and imparting the medical expertise, should also inculcate the correct attitudes and moral values to relieve people from pain and suffering in the service of society and for the benefit of mankind. I hope that the subsidised Government hospitals will, through competition, increase service quality and lower operating costs. I think these two are conflicting factors. If you want to improve the quality, you must have more medical, administrative and other staff. But the increase in staff means more expenditure and that will increase operating costs. On the contrary, if the Government wishes to save money by cutting down staff, then the workers will have a heavy responsibility. Morale will be down and the quality of service will also be affected. So between the two factors, I think it is a great challenge for the hospitals to maintain a balance. I hope that the Government hospitals or subvented hospitals should pay attention to improving the quality of service and should not be quibbling too much about cost savings. I think it is very easy to measure the financial performance of a hospital. But if you pay too much attention to financial performance, I think the quality of service will be affected. The Public Works Department, the PUB and other Government agencies have very good performance under monopolistic situations.”
“(b) To promote personal responsibility for one's health and avoid over-reliance on state welfare or medical insurance. (c) To provide good and affordable basic health services. (The Minister has already explained the meaning of basic health services.) (d) To rely on competition and market forces to provide health care service and to raise efficiency. (e) To intervene directly in the health care sector, when necessary, where the market fails to keep health care costs down. This shows the basic principles and the right direction of the Government to make everybody responsible for his own health. I think we should be very calm and try not to be emotional in drawing the wrong conclusions. I hope that after the debate in this House, people in Singapore will have a better and more comprehensive understanding of our health care system. On market forces, theoretically, free market and competition are closely related with the two following features: First, we have a lot of buyers and sellers in the market and the individual buying and selling are very small which cannot influence prices. Secondly, there is no restriction on buyers and sellers and they understand the market price and related matters. I think Dr Ow has already told me this. Nobody can monopolise the prices if there is a balance between supply and demand. President Kennedy of the United States said previously that the free market is not only a more efficient determinant than the best central planning agency, it is also a pillar of the US democratic system. If the free market system is that good, then there would not be so many economic problems in the US. There will not be a wide gap between the rich and the poor and there would not be any inflation in the US.”
“Not only the private hospitals have adjusted their fees upwards, Government and restructured hospitals have also increased their fees in order to meet the increasing costs and to prevent a brain drain. Some people feel that it is the responsibility of the Government to account for the rising cost of medical fees. But I think when people talk about this issue they are very emotional. They do not quite understand the circumstances that have led to this situation and they listen to hearsay and follow what others are complaining about and blame the Government. The other reason is that between 1984 and 1989 there were no fee adjustments in Government hospitals. In April 1989, there were adjustments in the ward charges, surgical fees and other fees. In August 1990, Alexandra, Kandang Kerbau, Tan Tock Seng and Toa Payoh Hospitals also adjusted their fees upwards and quite substantially. At that time, soon after the implementation of the restructured hospital scheme, to increase efficiency, to simplify administrative procedures and to enhance services, I think the intention was good. But before efficiency was raised, the new rates of fees were already applicable. So some people had the preliminary impression of restructured hospitals that before they could get the benefits, they had suffered from the disadvantages. Since 1990, the Government decided to adjust the fees annually in order to prevent substantial increases over a longer period. I think this is the correct way. In order to ensure that we have an affordable health care service, the Government has published this White Paper to deal with the various objectives, which are as follows: (a) To nurture a healthy nation by promoting good health.”
“We must learn to spend the money that we set aside for health care wisely. The Government undertakes to make a package of essential and effective treatment available to all, not for free, but at affordable prices. It will institute various measures to keep down national health care costs. But the responsibility rests on each of us, as individual Singaporeans, to do all that we can to stay healthy, to save to pay a share of the cost of treatment when we fall ill, and to spend these savings wisely. We have a good health care system. The proposals in the White Paper will improve it further. Singaporeans must be sensible about what they can expect from the health care system. Then the Government can manage the system rationally, and not dodge tough choices which are unavoidable. That way, we avoid the awful trauma that the developed countries are going through to reform their health care systems and make them affordable to society. Question proposed. Mr Lau Ping Sum (Ang Mo Kio GRC)( In Mandarin): Mr Speaker, Sir, I rise in support of the Minister for Trade and Industry's motion. Giving birth, getting old, falling sick and dying are the inevitable processes of life. A person who is healthy and full of energy will not only increase his productivity and competitiveness but also enjoy a fulfilling and meaningful life and, therefore, people are very concerned about their health and the cost of health care. The health of Singaporeans has made very remarkable progress in recent years. Based on the average life expectancy, infant mortality, control of infectious diseases, we are not far behind the standards of advanced countries, some of which we have overtaken. At the same time, many people still feel that medical costs seem to be mounting all the time.”
“We can also do more theoretical research, like that done in the Institute of Molecular and Cell Biology, which is significant research, but has no immediate impact on the demand for health care services. But we should be very careful in undertaking research in areas not within the basic health care package. For example, we should leave it to other countries with more resources to experiment in organ transplantations. The White Paper proposes the establishment of a National Medical Research Council which will approve, oversee and coordinate medical research which has clinical implications. The content and emphasis in medical education too must be in line with the national health policy. Undergraduate training must emphasise primary health care, not high-tech medicine. The aim must be to train students to be good family doctors. In postgraduate and specialist training, the aim should be to meet the service needs of the public sector hospitals. The National University of Singapore will work together with the Ministry of Health and the Singapore Medical Council to keep undergraduate curriculum current and relevant. The Ministry of Health, together with an Advisory Committee on Medical Specialists, will regulate the training of specialists. Mr Speaker, Sir, there was a time, not so long ago, when few Singaporeans dared to venture into a hospital. To be sent to hospital was considered by many to be a death sentence. A more educated and affluent people now know the value of early attention and treatment. Fears and inhibition about hospital treatment have diminished. People know more about the latest treatments and advances in medical technology, though often their knowledge is partial and even distorted. All these will raise the demand for health care.”
“Our research and development efforts in medicine and training of doctors must be consistent with and subordinate to the national health policy. Ever since the establishment of the Medical School in 1905 in Singapore, the medical profession has attracted the best minds in Singapore and the then Malaya. It is not surprising, therefore, that the quality of our medical service is the best in the region. It is also natural for the medical profession and for Singaporeans to expect us to be in the forefront when introducing or testing new medical procedures and drugs, and to be a leading centre for medical research and development. In the past, before the current explosion in experimental medical work, our society could bear the cost of such ambitions. The majority of the population was deeply suspicious of hospitals so that experimental work in hospitals did not result in an immediate demand for more services. The situation has, however, changed. Our population is now alert to the latest medical advances, however tentative, in the medical world. A short report in the newspapers of some new work results in immediate inquiries and demand for the same type of treatment, whether it is a new treatment for cancer, or a new surgical procedure for heart patients. Research with clinical implications, therefore, results in an immediate demand for more health services. If we want to maintain our excellent health care system and continue to attract some of our brightest students to study medicine, then we must carry on doing medical research and development. But we should focus more sharply on research with cost effective practical applications and research which can help improve the health care system. We must not be too ambitious to be at the cutting edge of medical technology.”
“This contributed to the overall rise in health costs. We, therefore, have to control private sector fees and charges when Medisave is used. We will work out schemes to limit balance billing of Medisave patients by private hospitals and doctors. This will be the private sector equivalent of the revenue cap system in the subsidised hospitals. There will be a limit on how much cash patients can be asked to pay over and above the payment from Medisave. 74% of the patients treated by private hospitals and doctors use Medisave to pay part of their bills. Income from Medisave patients constitutes 50% to 60% of private doctors' total earnings (I am talking about doctors who service hospitals, not the GPs who cannot draw on Medisave). Limits on balance billing should, therefore, be quite effective in keeping down fee and cost increases in the private medical sector. If the patient does not use Medisave and pays the entire bill in cash, the limit will not apply. But patients, we know, are more restrained when they have to pay in cash and will, therefore, resist high charges more strongly. We did not invent this idea of limits on balance billing. Germany and Japan have similar schemes to control private sector charges. We will take some time to develop a comprehensive system of limits on balance billing but a start will be made some time next year. Research and development. Our health policy emphasises primary health care, a good basic health package for all at the secondary and tertiary level at affordable prices and sustained cost control measures at all levels. Cost consciousness must become a deep part of the culture of our health care givers.”
“We can also introduce MediShield II for those who want increased daily reimbursement rates so that they can afford higher class wards. MediShield II will be a voluntary opt-in system, unlike the present MediShield which is an opt-out scheme. When the private sector insurance policies have the same safeguards as MediShield, we can allow people to use Medisave to pay the premiums of approved private insurance schemes. The White Paper also proposes that employers who provide medical benefits to their employees should contribute additional amounts to the employee's Medisave in lieu of part of the medical benefits in kind. We will encourage but not force them to do so. The Government, as the largest employer, will set the example. The Minister for Finance will present the medical benefits package for civil servants. Now, let me say something about Medisave in the private sector. Many patients in the private hospitals use Medisave to pay private hospital and specialist fees. We want the private sector to play an increasing role in health care though Government subsidised hospitals will be the dominant component in our health care system. This is why we are limiting A class beds in subsidised hospitals to 11% of the beds in these hospitals. Government will also encourage private sector hospital development by selling suitable sites for such purposes. But we need to have some control on the private sector charges as the private and public sector markets are interlinked. The public sector has had to increase the salaries of its doctors and other medical staff, partly because incomes in the private sector increased steadily, especially after Medisave was introduced and widened the gap between the earnings in the private and public sectors.”
“The disadvantage of relying exclusively on savings to meet health care costs is that individuals will need to save more for their medical expenses than they are likely to spend because they must be prepared for unexpected contingencies. High Medisave also increases the temptation for patients to draw more on these balances than they absolutely need to. As I pointed out just now, patients are more prepared to spend their Medisave than if they were to pay cash although the Medisave balances are their own money. This is why our Medisave system has an insurance component in MediShield. It is catastrophic health insurance incorporating deductibles and co-payments, ie, deductibles in that the insurance cover starts only after the patient has spent a certain amount, and co-payment in that even after the insurance cover becomes effective, the patient has to share part of the cost. For those who have exhausted their Medisave and MediShield or for some good reason cannot even pay C Class rates, Medifund provides a safety net. Medisave, MediShield and Medifund, together with the Government subsidies, ensure that no Singaporean is deprived of medical care. Private medical insurance policies generally do not provide for deductibles and co-payments. They also do not restrict what health care providers can charge. Fortunately, the market in private medical insurance is small. But it is growing rapidly. We should act now to guide the growth of the market in the right direction. In the meantime, we can improve our MediShield system in various ways. We can extend the benefits package of MediShield to provide more cover for Class B2 and C treatment by reducing somewhat the deductible amounts.”
“The hospital's revenue, comprising subsidies and the charge to patients, cannot exceed this cap. If it does, the Government will recover the excess. This will encourage hospitals to keep their charges down without restricting too tightly how much they can charge individual patients. Hospitals which reduce their costs can keep their savings and improve their services. Those hospitals which cut costs and reduce service or quality to unacceptable levels will lose patients and will earn less fees as well as less subsidies. But those which strike the right balance between cost control and service will attract more patients and earn more fees and subsidies. Let me now come to financing. How patients pay for health care is an important part of any health care system. Note that the operative term is how, not who pays. Who pays is quite clear. As I have explained earlier, no matter who pays for health care in the first instance, the burden is ultimately borne by the people. The real issue is not who pays, but how and when the payment is made. We must have a system that encourages people to use health care economically and encourages health care providers to minimise inefficiency, minimise costs and prevent over-servicing. Under Medisave, individual savings form the core of the system. Government subsidies and catastrophic insurance, that is, MediShield, play supporting roles. Patients pay part of the costs at point of consumption. This applies even to the heavily subsidised C Class wards. Patients who demand higher levels of service must pay more. This ensures that they use medical services only when they really need to. We thus avoid the danger of unlimited demand for "free" medical services.”
“The second alternative, that is, providing everyone with all the medical treatment that he or she wants, will bankrupt us. Where do we draw the line? Should hospital in-patients receive four-star hotel treatment? Can every routine operation be done by the top surgeon? Should every patient who complains of a headache be given a CT scan? The list is endless and unaffordable. In every other area of life, people accept that there is a difference between the essentials and the extras and luxuries. There is a big difference between a healthy square meal and a gourmet dinner. People accept that only the well-to-do can afford a gourmet dinner. There is a difference between a 3-room HDB flat and an Executive flat. People accept that only those who are better off can afford an Executive flat. Medical services cannot escape the same logic. We need to also ensure that subsidised hospitals keep their costs, and hence their charges, down. Under normal market conditions, we can, after determining the subsidies to the hospital, leave it to competition to keep prices down. But as I explained just now, such self-regulation by market forces does not work because of market failure. Even with Medisave, which is the patient's own savings, patients are more ready to spend their Medisave balances than if they had to pay cash. Hospitals can, therefore, pass higher costs to patients by prescribing more tests and treatments than necessary, or by simply raising charges without losing patients. The Ministry of Health will therefore control the revenue per patient day by class of ward, by specialties (for example, oncology cases will have a higher cap than paediatric cases), and by type of hospitals (tertiary hospitals will have higher caps than secondary hospitals).”
“We will not make other Singaporeans better off by preventing a well-off patient from getting extra or better treatment. If a patient wants more nursing attention, a private room of his own instead of an open ward, or additional medical tests to confirm a diagnosis which is not really in doubt, and he is prepared to pay for it in full, who is the Government to say no? Even granted this, some may still question whether the extra service should be provided in Government and restructured hospitals. If it is not provided in these hospitals, patients can go to private hospitals. If we disallow Singapore hospitals or private hospitals in Singapore from providing such services, patients can travel abroad for treatment. From the point of view of the C and B2 Class patients, it is better in fact for the Government and restructured hospitals to have A Class patients because A Class patients provide a check on the quality of the doctors and the quality of the hospital. These patients are prepared to pay the full cost in the hospital, even though they can afford alternatives like going to a private hospital. If only subsidised patients go to the Government or restructured hospital for treatment, we do not know whether they are going there because the service is good, or because there is no alternative. But if some patients want to be admitted to these hospitals for non-subsidised treatment, then we can be more confident that the hospitals, specialists and staff are competent, and that the hospital is providing good service. We still need to make sure that these specialists and staff are not neglecting the subsidised patients in favour of the non-subsidised patients, but that is a management problem which we can solve.”