Teh Cheang Wan
Singapore
“The Board does not propose to reinstitute the procedure for the resale of flats at the respective Area Offices in Ang Mo Kio New Town. As a pilot project, the Board has centralised the resale of Ang Mo Kio flats at Sales Section, Maxwell Road.”
“At the contract price or whatever it is, and this is due to the mistake made by the HDB, the HDB has been quite generous. If the mistake made by the HDB staff has been to sell the flat at lower than the posted price, then the owner has the benefit of this mistake.”
“The Member for Potong Pasir is asking a question which I have to check for an answer. I do not carry with me the millions of accounts of HDB flat-owners with me. So I cannot give him an immediate answer. But I can assure the Member for Potong Pasir that those people will be refunded.”
“Mr Speaker, Sir, since the announcement by HDB on 4th July 1986, 49 HUDC lessees appealed to the Board to buy their flats. All were unsuccessful. As at 20th September 1986, 27 HUDC flat owners had sold their flats in the open market. Twelve of them sold their flats above their original purchase prices.”
“Mr Speaker, Sir, since the implementation of the policy, HDB has resold 13 HUDC flats from among those flats HDB bought back from the HUDC owners. In addition, HDB has sold 44 new HUDC flats. The slow sale of HUDC flats is due mainly to the depressed property market.”
“Mr Speaker, Sir, I have no figures readily available as to how many of these 49 HUDC flat-owners who requested the Board to buy back the flats have committed themselves to buying other property.”
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“Flat buyers therefore have the choice of selecting prefab flats with floor finishes that are suitable for them or opting for conventionally built flats and carrying out their own floor finishes.”
“Mr Speaker, Sir, the HDB will continue its existing practice of providing floor finishes for the kitchens and bathrooms of newly-completed flats, but will not extend standard floor finishes to other rooms. Any standard floor finish provided is unlikely to satisfy the wide range of tastes of flat buyers. Most of them want to select finishes according to their individual preferences and budgets. The HDB's existing practice allows them this flexibility. The provision of standard floorings for kitchens and bathrooms is necessary to reduce damage to these wet areas, and hence minimise the possibility of water leakage. Even then, the HDB's experience shows that many owners hack up the standard kitchen flooring and retile them after the minimum 3-year period during which retiling is prohibited. Flat owners have to bear the cost of repairing any damages to the kitchen and toilet floors as a result of hacking. The HDB feels that owners are likely to replace standard floor finishes in other rooms if these are provided. This practice is a waste of both materials and labour. The provision of floor finishes in itself will not enable flat buyers to move in immediately, as there will be other renovation works required, like repainting of walls, installation of window grilles, etc. In contrast to conventionally built flats, HDB's prefab flats are completed with tiled flooring. This is because the industrialized method of construction requires floor finishes to be cast at the same time as the prefab floors. Owners of prefab flats are not allowed to hack up the floor for retiling, as this may cause damage to the joints resulting in possible water seepage.”
“Yes, it is in the newspapers but I said I do not know the details of the case. The First Deputy Prime Minister mentioned earlier that you should not believe everything that is published in the newspapers. He said this to the Member for Whampoa just now. I would like to repeat to the Member for Anson that he should not believe everything that is published in the newspapers.”
“People are now getting their flats very quickly. And Members of Parliament know that during their meet-the-people sessions the number of people requesting for allocation of flats has dropped substantially. The myth that the hon. Member for Anson tries to create that he has got this magical power is, in fact, totally untrue because I have not seen any foreign ambassador or any minister from other countries queuing up in his office to request him to go to their countries to solve their housing problem. On the point raised by the Member whether the HDB will throw out tenants who are in arrears of rent, the answer is no. HDB will not throw anybody out because of their arrears in rent. HDB will investigate into the case to see in what way HDB can assist them, ie whether their circumstances justify these rental arrears. And HDB usually tries to help them in any way it can. For example, if the tenants are eligible for social welfare assistance, then HDB will refer them to the Social Welfare Department for assistance. For those who are in arrears of rent and who ask that they pay the arrears by instalment because they cannot settle their arrears immediately, HDB allows them to pay their arrears by instalment. As regards the case which appeared in the newspapers that somebody has forgotten to fill a column in the application form and he has been asked to pay a very big sum of money, I do not know what exactly are the details of this particular case. But I can say that if anybody forgets to fill any part of his application form, he will not be penalized.”
“Mr Deputy Speaker, Sir, the hon. Member has mentioned many times in this House that as a result of the by-election which he won in Anson in October 1981, the HDB building programme has increased considerably - a sort of magical power which the Member has. If indeed the Member has this sort of magical power, I think he will be greatly sought after all over the world, by all the countries which have a serious housing shortage, ie the whole of Africa and Latin America. If the hon. Member has that sort of power, I think there will be a long queue of Ambassadors and Ministers from various countries at his door to invite him to their countries so that their housing programme can be substantially increased and their housing problem can be solved. I would like to tell the Member for Anson that it is not because of him. It is because of the organizational ability of the PAP Government and even then, there is a big number of applications for houses as a result of improvement in income, that we are able to meet the demand. The Prime Minister mentioned recently that more than half of the applicants for public housing are upgrading themselves. Tenants become home-owners. Those living in three-room flats are asking for four-room flats. Those living in four-room flats are asking for five-room flats. Why are they able to do so? Because their incomes have greatly improved and they are able to get better housing. Therefore, there is a big influx of applicants. And in spite of a building boom, in spite of a shortage of building materials and in spite of a shortage of construction workers, the PAP Government is able to organize the housing programme to meet the demands of these people. The number of applicants on the waiting list has come down.”
“Mr Deputy Speaker, Sir, I beg to move. That Parliament do now adjourn. Question proposed. 6.33 pm HOUSING AND DEVELOPMENT BOARD (Powers over Occupiers and Purchasers of HDB Apartments)”
“Yes. Land acquired by the Government has to be zoned for various purposes. That particular piece of land may be zoned for a petrol station. The land is still owned by the HDB because it is leased to the operator of the petrol station for a period of 30 years. After 30 years, this piece of land will revert to the State. The oil company actually has to pay a high premium for the use of the land for 30 years. It is not because of the land itself that has any significance; as I have said earlier, it is because of the HDB's development. There is a housing estate there. There are cars there and therefore an oil company is willing to pay the so-called exorbitant price for the use of the land as a petrol station for a certain period of time. 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. - [Mr Teh Cheang Wan). Bill considered in Committee; reported without amendment; read a Third time and passed. ADMINISTRATION OF MUSLIM LAW (AMENDMENT) BILL Order for Second Reading read. 5.45 pm”
“Mr Deputy Speaker, Sir, I think the hon. Member for Anson is trying to evade the point which I raised. But since he has raised this point, I will take on his point. In the planning of the land use of the area -”
“In other words, the HDB is not recovering the full cost. From commercial development, the HDB is recovering some money by building shops, factory premises and petrol stations. The hon. Member for Anson gives the impression that he is really pro-landowner. I was under the impression that the hon. Member is a socialist. I did not realize that the hon. Member, in fact, is a very conservative capitalist. Where there is money to be made, the landowner should make the money. Where money has to be spent, the Government should spend the money. That is what he is advocating. As regards the piece of land which can be developed for a petrol station, why is it suitable for a petrol station? It is because the HDB brings the population into that area. The HDB develops the new town. The HDB develops the roads and therefore that piece of land can be suitable for a petrol station. Without the HDB spending all the money to bring the population into the new town, that piece of land is totally unsuitable for a petrol station because without the population, there are no cars. The hon. Member is suggesting that after the HDB has put in all these efforts, the landowner should be the one to benefit and not the HDB. I am very surprised.”
“You know that! I am very surprised. I thought that you did not know. Basically, the land is acquired by the HDB for various purposes. If we follow the theory of the hon. Member for Anson, then what he is saying is that if the acquired private land is meant for commercial development - HDB has commercial development - it should be returned to the private landowners so that they can make a lot of money. For the land earmarked for the development of a swimming pool, do we return it to the private landowner and tell him, "Look here, please spend $12 million to build a swimming pool"? I suppose he will say that it is the Government which should spend the money to build the swimming pool. For the construction of roads, we have to spend millions of dollars. Who is to pay for this? Basically, the accounting for HDB is very simple. The HDB is spending money for the construction of roads for which there is no return. The HDB is spending money for the construction of facilities like swimming pools and each swimming pool costs more than $10 million. The HDB is building children's playgrounds. There are no returns for all these facilities. There is no economic return for a swimming pool. In fact, the gate admission of 40 cents per entry is not sufficient even to maintain the pool. The HDB is building, for example, town gardens in various new towns. The HDB is spending millions of dollars for town gardens and admittance to town gardens is free. So what the HDB is doing is that it is acquiring all the land for development. There are certain projects for public benefit, public recreation like swimming pools, town gardens, roads, children's playgrounds. The HDB is spending money for all these facilities. The HDB builds flats for sale which again is subsidized.”
“Mr Deputy Speaker, Sir, I am very surprised that the hon. Member for Anson does not even have an elementary knowledge of how the Housing Board develops a new town. He is the Member for Anson and most of his constituents are staying in HDB estates. I presume that he should know something about his own constituency. When the HDB develops either a big housing estate or a new town, the HDB has to acquire all the private lands within the area for development. In fact, I want to emphasize that most of the HDB new towns were built on HDB's own land; that means the land was inherited from the former Singapore Improvement Trust. Some may be State land and some may be private land. It is a mixture. In certain cases, there may be more State land and in other cases, there may be more HDB land or there may be more private land. After the HDB gets all the land together, the HDB proceeds with the development. First of all, of course, we have to clear all the squatters and any encumbrances on the land. When the people have moved out, development takes place. We start earth works to level the place. Then we start the construction of the roads and we start the building of HDB flats. Then we start the development of swimming pools, the recreation areas. We build car parks. We build parks. We build children's playgrounds. We build shopping centres. We build all the other facilities.”
“Yes, that is correct. The second point is about planning permission. The Board will obtain planning permission prior to the sale of the land. If the Board sells the land for the development of a petrol station, the Board must obtain planning approval before it can sell the land. Otherwise, if we sell the land for the development of a petrol station and the person applies for planning permission and his plan is disapproved, then the sale would be abortive. It will be a waste of time.”
“Mr Deputy Speaker, Sir, the acquired land was not originally owned by the Board and was acquired either from a private land owner or acquired by private purchase or by private treaty.”
“Clauses 5 and 9 make consequential amendments respectively to section 52(1) and section 60(1) of the Housing and Development Act, as a result of the amendment to section 59 to abolish the Housing and Development Fund. The amendment to section 55(2) of the Act as stated in clause 6 of the Bill is to enable the accounts of the Board to be kept by the Chief Financial Officer instead of a Financial Officer. The HDB has all along had a Chief Financial Officer and this amendment serves only to clarify and reflect the actual situation. To provide greater administrative flexibility, clause 7 seeks to empower the Chairman and the Chief Financial Officer or the Chairman and another authorized officer of the Board to sign the audited statements of the Board. Sir, I beg to move. Question proposed.”
“The existing section 48C(1) empowers the Board to pay into Court any compensation payable for t"e compulsory acquisition of an HDB dwelling when any party refuses to accept the amount of compensation or where there is a dispute between interested parties on the proportion of compensation they are entitled to. Clause 4 of the Bill seeks to amend section 48C(l) to enable the HDB to also pay into Court the compensation for any acquired dwellings in cases where the persons entitled to receive the compensation cannot be found with reasonable diligence. The amendment, like clauses 2 and 3, will provide greater flexibility and enable the HDB to carry out its functions more effectively. The other important aspect of the Bill pertains to amendments to the financial provisions of the Housing and Development Act. Since the HDB's inception, its annual accounts have been prepared on a "Double Account" system. This system was designed to reflect the results of the HDB's original objective of providing public housing for rental. With the HDB's major activity being shifted from rental to sale of flats, a new accounting system is now needed for the Board. Mr Deputy Speaker, Sir, hon. Members are aware that the HDB is currently designing a new accounting system. Certain amendments have to be made to the Act to pave the way for the HDB to implement the new accounting system. In this respect, clause 8 of the Bill seeks to amend section 59 of the Act by abolishing the "Housing and Development Fund" comprising a Capital Account and a Housing Account, as these are inherent features of the "Double Account" system which will be replaced.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." At present, the Housing and Development Board is empowered under the Housing and Development Act to provide loans with the approval of the Minister to enable persons to purchase developed land upon a mortgage of that land. Clause 2 of the Bill extends the HDB's power to include the granting of loans for the purchase of vacant land belonging to the Board. A case in point would be the granting of loans to lessees of HDB sites for the development of petrol stations. As the Act now stands, no trust in any form can be created in respect of an HDB dwelling or property. The original intention of this provision was to prevent abuse by persons not eligible for HDB flats from purchasing a flat in the name of nominees. Over the years, however, there has been increasing need for the HDB to permit the creation of trusts for legitimate reasons. For example, it is necessary to empower trustees to hold flats in trust for minor children who are citizens in the event of death of the lessee parent, and where the surviving parent is neither a citizen nor a permanent resident and therefore not eligible to assume ownership of the flat. Similarly, in some cases of legal separation or divorce, flats have to be held in trust for minor children until they reach the age of 21 years. Clause 3 of this Amendment Bill, therefore, seeks to allow a trust to be created in respect of an HDB dwelling provided such trust is approved by the Board. The HDB may compulsorily acquire sold property under the circumstances prescribed in section 48A of the Act.”
“HOUSING AND DEVELOPMENT (AMENDMENT) BILL Order for Second Reading read. 5.17 pm”
“It seeks to prevent money in a Project Account from becoming the property of the developer in the event of bankruptcy or liquidation. The money in the Project Account will vest in the official receiver, trustee in bankruptcy or liquidator, to be applied for the completion of the project. Any money left after discharging the developer's obligations and liabilities under the sale and purchase agreement in respect of the project will be money belonging to the developer to be applied in accordance with the law relating to bankruptcy or liquidation. Any developer who contravenes or fails to comply with the requirements of the Project Account Scheme is liable on convic- tion to a fine not exceeding $10,000 or imprisonment for a term not exceeding one year or to both. The Project Account Scheme will not apply to: (i) any building project where the units are not for sale before the completion of the project; (ii) any URA building project which is governed by a similar scheme imposed by URA in its sales agreements; or (iii) any building project for which the developer has furnished to the Controller of Housing a banker's guarantee of an amount not less than 140% of the total cost of construction as certified by the architect in charge of the project. The Bill also empowers the Minister to appoint an auditor to investigate the books, accounts and transactions of a Project Account and to make rules relating to the Project Account Scheme. 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. - [Mr Teh Cheang Wan] Bill considered in Committee; reported without amendment; read a Third time and passed.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The existing Housing Developers (Control and Licensing) Act protects purchasers of residential properties by empowering the Controller of Housing to license only developers with a minimum paid-up capital of $100,000 and who are not undischarged bankrupts and to investigate the affairs of a licensed developer. There is no provision, however, to protect the interest of a purchaser in a housing project should the developer go bankrupt or face liquidation. To offer greater protection to purchasers, my Ministry has introduced a Project Account Scheme since August 1981. Under the Scheme, a developer has to open a Project Account with a bank or a finance company for each housing project undertaken by him. All the progress payments by purchasers up to the issue of a Temporary Occupation Licence are paid into the account. The bank or finance company will allow withdrawals from the account only for the servicing or redemption of mortgage loans, and for payment of the project's construction cost upon certification by the quantity surveyor or the architect of the project. After the issue of the Temporary Occupation Licence, all surplus money not required to complete the project will be released back to the developer. If the property is mortgaged, partial discharge will be executed for individual purchasers upon issue of the Temporary Occupation Licence. The Scheme makes sure that progress payments made by purchasers are used only for the construction of the project and safeguards against purchasers' funds being unscrupulously channelled elsewhere for other uses. The Bill will give the Project Account Scheme legal status.”
“Approval may be withdrawn in certain circumstances by the Authority, though an aggrieved financial institution has a right to appeal against a withdrawal to the Minister. Additionally, the Authority will be empowered to issue directions, guidelines and conditions of operations to approved financial institutions in relation to such matters as the activities they may engage in or the range of service that they may provide. An additional new section 24D allows the Authority to levy fees on such financial institutions. The only other clause in the Bill that is worthy of special mention is clause 17. This clause would confer a qualified immunity upon the Authority from defamation actions. Such an immunity is considered necessary if the Authority is to properly discharge its supervisory functions over financial institutions. This kind of provision is not new in our law for a similar immunity has been conferred on the Securities Industry Council in recent amendments made to the Companies Act. Sir, I beg to move. Question proposed. 2.58 pm”
“They would empower the Authority amongst other things: (a) to pay at its discretion interest on deposits; (b) to accept deposits from companies in which the Government has substantial interests; and (c) to act as agent in respect of companies in which the Government has a substantial interest. Clauses 9 and 14 so provide. The aim of the amendment so described is to furnish such Government companies in which the Government has a substantial interest an alternative avenue to place surplus funds at their discretion, as the funds of these companies are essentially public funds. Also, it will be noted that the Authority will assume additional responsibilities in respect of the Insurance Act and the Securities Industry Act (clause 7). Moving on to another matter which also concerns the powers of the Authority, I draw attention to clause 13. The purpose of clause 13 is to provide a regulatory framework for the increasing number of other financial institutions that do not fall entirely within either the Banking or the Finance Companies Acts. These institutions such as merchant banks, discount houses and credit card companies have come to exert a significant impact on monetary and credit conditions in the country in recent years. A new section 24C is accordingly inserted which empowers the Authority to require financial institutions whose operations are considered to affect: (a) monetary stability and credit and exchange conditions in Singapore; or (b) the development of Singapore as a financial centre; or (c) the financial situation in Singapore generally, to be approved by the Authority for the purpose of carrying on business in Singapore.”
“With reference to the amendments dealing with the Authority in relation to employment of its staff, it should be mentioned that since October 1981 the Public Service Commission has granted autonomy on personnel matters to all statutory boards. Moreover, consequent to its reorganization, a personnel policy was adopted to attract and retain able staff, bearing in mind the competition from the well-paid banking sector is quite severe. To reflect this policy, section 17 of the Act has been repealed and re-enacted in clause 6 to confer upon the Authority powers to appoint employees, determine their remuneration and terms and conditions of their employment, to appoint advisors, and to make rules for these purposes. In addition, opportunity has been taken to revise certain other provisions of the Act which affect existing, future and former employees of the Authority. As regards former employees of the Authority, the obligation to preserve secrecy in relation to the affairs of the Authority has been extended to them (clause 5). In relation to existing and future employees, protection is conferred upon them in clause 8 from personal liability in relation to acts done in good faith in the course of the discharge of their duties under the Act. Further, since the Authority can only grant housing and vehicle loans to employees, there is a need to extend this power to grant loans for other purposes approved by the Authority, for example, the purchase of micro-computers for personal use. Clause 16 confers such a power upon the Authority. The next group of amendments seek to widen the scope of the Authority's functions to embrace changes that have occurred in the financial operations of the Government.”
“Over this period, the number of commercial banks have increased from 44 in 1972 to 125. Also, the number of merchant banks have increased, from five to 51. In addition, there are currently four discount houses, sight international money brokers and five credit card companies. Furthermore, in recent years there have been structural changes in the financial operations of the Government and an increasingly significant portion of the Government's activities are being carried out through statutory boards and government-related companies. Since one of the objects of the Authority is to act as banker and financial agent to the Government, the Authority's powers in this regard should be extended so as to take into account these changes. With these introductory comments, I will now deal with the main provisions in the Bill. The proposals in the Bill, in general terms, will: (a) provide greater autonomy upon the Authority in relation to employment of its staff and make changes to the organizational structure of the Authority; and (b) widen the scope of the Authority's functions and duties to enable it better to perform its role as regulator of the financial system and as, well as banker and advisor to the Government, having regard to the changes that have occurred in the financial environment. The principal amendment affecting the structUre of the Authority appears in clause 3. These amendments would enable the President to have greater flexibility than at present in the appointment of directors to the board of directors of the Authority as well as the deputy chairman of the board.”
“Under the principles of supervision laid down in the 1983 Concordat, the supervision of solvency of foreign banking branches is defined as the primary responsibility of parent authorities while that of subsidiaries as the joint responsibility of the parent and host authorities. The supervision of liquidity for both foreign banking branches and subsidiaries is stated as the primary responsibility of the host authorities. These matters are of importance to Singapore as an international financial centre. We are members of an entity called "The Off-shore Supervisors Group" formed in 1980 representing 14 countries which offer host facilities to off-shore financial institutions. The group conducts periodic discussions with the Cooke Committee. In one of these discussions, members of the Group and the Cooke Committee agreed that they would discourage their banks from establishing in financial centres where there are no proper and adequate systems of supervision. I draw attention to these matters, even though they do not directly concern the Bill, to show that the supervision of banks in their international activities is a complex and delicate business and that comprehensive, binding and clearly defined principles have yet to be established. It could well be that central banking can never be reduced to vigorously defined rules and we must learn to live with uncertainty. The subject is of concern to Singapore and the well-informed Singaporean should keep abreast of events. A revision of the MAS Act is now timely. The Act was introduced in 1970 and amended once in 1972. Since 1972, however, there have been substantial changes in the structure of the financial market, together with a proliferation of different types of financial institutions.”
“Off-shore banking business in Singapore is an off-shoot of the Euro-currency market. One feature of the Euro-market is relative freedom from regulation by the Central Bank of the host country. Indeed it is freedom from regulation that is the raison d'etre of off-shore banking. No Central Bank wants to be too fussy about off-shore banking for fear that the banks will move elsewhere. However, the banking failures in 1974 of the Herstan Bank and the Franklin National Bank forcefully reminded members of the rich countries' Central Banks club, the Bank for International Settlements at Basle, how vulnerable a totally unregulated market could be. This led to the formation in 1975 of the Basle Committee, also known as the Cooke Committee, which laid down guidelines on Central Banks supervisory roles. These guidelines became grandly known as the Basle Concordat. The 1975 Concordat was revised in 1983 in the light of developments in banking practices, banking supervisory techniques and experience in applying the Concordat. The 1983 Concordat clarifies that it does not address itself to lender of last resort aspects of the role of central banks. The 1975 Concordat was misunderstood by the media to include this aspect, ie lender of last resort, when Banco Ambrosiano of Luxembourg collapsed in 1982 under scandalous circumstances. In addition, the 1983 Concordat incorporates the principle of consolidated supervision to enable parent authorities to monitor the overall risk exposures and capital adequacy of banking groups.”
“This is done by buying or selling foreign currencies against the Singapore dollar or by swap operations. The intervention currency is usually the US dollar, as is the practice with nearly all Central Banks. That is why Mr Paul Volcker is such an important person. Because the public sector is in a state of chronic surplus, funds regularly flow from the banks into the MAS because Government accounts, other than for petty cash, are kept with the MAS. If these funds are not re-circulated back to the banks, the system will soon seize up. Funds are returned to banks when the - MAS buys foreign currencies. Such purchases also serve the purpose of keeping the Singapore dollar from appreciating too much. It works beautifully guided by Adam Smith's gentle, invisible hand. So long as we continue to work diligently and skilfully, so long as we spend carefully, and so long as we do not lend Singapore dollars to foreigners, it will continue to work beautifully - unless some calamity overtakes the world banking system. Do not bother about the horrendous deficit in our balance of trade. That will look after itself. The free enterprise system rewards those great Victorian virtues of industry and thrift. But alas these human traits are unfashionable in the contemporary world. As a result, the services of economists are in great demand everywhere to find out what has gone wrong and how to put it right. Unfortunately, the profession gives conflicting advice on both diagnosis and prescription. Let me now turn to the other function of a Central Bank, the regulation of banks. Banks in Singapore conduct business in our currency as well as in foreign currencies. The latter business is conducted mostly by large international banks who have established branches hers.”
“From time to time, academics perform clever statistical exercises to trace the relationship of these numbers with others, the Consumer Price Index, for instance. Why do we ignore our Ms? For the very reason Western Central Banks have to watch theirs. Their public sector accounts are in a state of chronic deficit; ours are in a state of chronic surplus. We are in a state of chronic surplus because employees have 50% of their pay packets sequestered into the Central Provident Fund. Further, the Finance Ministry does not pan easily with the revenues harvested by its assiduous tax collectors. So the MAS is probably the only Central Bank that does not have to watch the Ms. What then does it watch? It watches the foreign exchange rates. The collapse of the Bretton Woods system was due to the improvident nature of elected governments, under constant pressure from voters to live beyond their means. This event, ie the collapse of the Bretton Woods system, is much to be regretted for, in a world of gyrating foreign exchange rates, it is not a comfortable one for Central Banks of small countries. Let me explain how the MAS works the system of floating rates. We create what is called a basket of currencies. Anybody can create his own basket. Ours is based on the value of trade with major trading partners. We - that is the Ministry of Finance, the Ministry of Trade and Industry in consultation with the MAS - decide the future worth of this basket. In other words, the value of the Singapore dollar in terms of the US dollar, the Japanese yen, the Deutschmark, Pound Sterling, etc. Upper and lower limits are then set and the MAS is given authority to manage the float within these limits.”
“There are two reasons why Central Banks have to control the money supply. First, people are fed up with inflation. Second, people also do not want to pay the price of fighting inflation in the only sensible way, that is, for the Government to balance the budget and for the country to live within its means. Under the system of one-man-one-vote, governments are elected to deliver the good things of life. However, the voters are not easily persuaded that these must be paid for by taxes. Taxes are unpopular everywhere, with or without representation. The result is predictable - huge budget deficits which have to be financed by government borrowing. Where savings are high, as in Japan, budget deficits can be easily absorbed; where savings are low, as in the United States, these deficits have to be financed in three ways:- savings of Americans, savings of foreigners and credit creation by the Central Bank. Since the last option is closed by anti-inflation policy, the US budget deficit, now running at record highs, is financed by the first two means, ie savings of Americans and savings of foreigners. The Federal Reserve, by keeping money supply under control in the face of large budget deficits, has caused US real rates of interest to rise to unprecedented heights, thereby drawing in large amounts of foreign capital. In effect, a good part of the US government budget deficit is financed by foreign loans. Only a rich and powerful country like America can conduct this kind of fiscal policy without attracting the stern gaze of the International Monetary Fund. In Singapore, which of the monetary aggregates does the MAS Watch, M1, M2 or M3? The answer is none. This does not prevent the Government from regularly publishing data on our M1, M2 and M3.”
“Central Banks, whether of the classical mould or in its modern variety, perform two essential functions: (i) They regulate the supply of money; (ii) They regulate banks. A third function has been added since the collapse in 1971 of the Bretton Woods system of fixed exchange rate parities. Central Banks look after the external value of their nations' money by active intervention or benign neglect or, in some unhappy instances, by desperate improvisation. The Monetary Authority of Singapore (MAS) is Singapore's Central Bank. However, because of the unique feature of Singapore's economy, the way it works is quite different from the practices of the Bank of England or the Federal Reserve System. This is not because we are perverse by nature. It is because the structure of our economy and the manner Government manages the public sector introduces a novel situation probably without parallel elsewhere. Let me explain this by reference to the three Central Banking functions. Every economics freshman knows that Central Banks of industrial countries keep a close watch on money supply in an effort to counter inflation which got out of hand in the late 1970s and early 1980s. The Federal Reserve System tracks three measures of money supply called M1, M2, and M3. I will not explain what these Ms mean except to say that their definitions vary from time to time, as they must when major financial innovations take place. What is important to note is that the Federal Reserve System aims to keep the growth of these monetary aggregates within publicly stated limits; in the case of M1, the current limits are between 4% and 8% annual rates of growth. The Federal Reserve System is not alone among Western Central Banks in having to check the growth of money supply.”
“If the Temple Management Committee is unhappy with the terms of the TOL, the HDB is prepared to consider clearing the Temple. The Temple would then be eligible for allocation of a new site with two or more other temples similarly affected by clearance. BILLS INTRODUCED 2.35 pm FINANCE COMPANIES (AMENDMENT) BILL "to amend the Finance Companies Act (Chapter 191 of the Revised Edition)", presented by the First Deputy Prime Minister and Minister of Education (Dr Goh Keng Swee); read the First time; to be read a Second time on the next available sifting of Parliament, and to be printed. ECONOMIC EXPANSION INCENTIVES (RELIEF FROM INCOME TAX) (AMENDMENT) BILL "to amend the Economic Expansion Incentives (Relief from Income Tax) Act (Chapter 135 of the Revised Edition)", recommendation of President signified; presented by the Minister for Finance and Minister for Trade and Industry (Dr Tony Tan Keng Yam); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. MONETARY AUTHORITY OF SINGAPORE (AMENDMENT) BILL Order for Second Reading read. The First Deputy Prime Minister and Minister of Education (Dr Goh Keng Swee): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." I wish to take this opportunity to explain to Members some aspects of the arcane art of Central Banking as practised in industrial countries and in Singapore. The classical model of a Central Bank is the Bank of England in Victorian England. Today it is the Federal Reserve System of the United States which carries most weight in the world's financial system, far in excess of the proportion of the world's GNP generated in the US.”
“Mr Deputy Speaker, Sir, the question as it is framed is misleading. I will explain why. Hong San Temple is located in what was previously known as the Perseverance Estate. The site was acquired by the Housing and Development Board in June 1973 together with, other surrounding land for industrial development. While the site was under clearance action, the Temple paid rental to HDB based on rentals charged by the previous landowners. Under normal circumstances, the Temple would have been cleared and jointly re-allocated a new site with two or more other temples similarly affected by clearance. As it happens occasionally, the existing use on an acquired site is compatible with the surrounding areas being redeveloped by the Board. The existing user may be permitted to remain on the site subject to the issue of a new TOL and revision of the TOL fee. Hong San Temple fell into this category. The Temple Management Committee chose to remain on the site. In accordance with the prevailing practice, the TOL fee was revised. The revised TOL fee of $785 per month paid by the Temple, in fact, represents a substantial concession by the HDB. The TOL fee which other users would be charged for the same site would have been $2.90 per square metre or $2,820 a month. The Temple is therefore paying less than one-third of the ground rent which other users would have been charged. The claim that Hong San Temple originally occupied an area of 50,000 square feet is not accurate. Before the acquisition, the site boundary of the Temple premises was not clearly demarcated. The present area of 10,000 square feet which the Temple now occupies is based on the request of the Temple Management Committee.”
“Mr Deputy Speaker, Sir, the Public Works Department will be constructing a flyover to link Upper Thomson Road to Lornie Road to relieve the peak-hour traffic congestion along the Upper Thomson Corridor. The design of the flyover is currently in progress.”
“Mr Speaker, Sir, I said earlier that I do not have the information. I only have the gross figure. So I think to conduct a survey is a sheer waste of time. After the Bill is enacted, if the HUDC flat owners want assistance, the HDB will, offer whatever assistance to help them to set up the body corporate. After that, they will be managing their own estates and then we will see what happens. As I said earlier, we should not come to the conclusion that they are not happy about managing their own estates. 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. - [Mr Teh Cheang Wan]. Bill considered in Committee; reported without amendment; read a Third time and passed. INCOME TAX (AMENDMENT) BILL Order for Second Reading read. 6.00 pm”
“It would be a mistake to prejudge and come to that wrong conclusion.”
“I said earlier in my speech on the Second Reading that, other than this Bill, the HDB will not ask the owners to do more than what is in the original contract. In the beginning, the body corporate, ie the management organization organized by the HUDC flat owners, may run into some problems. But I would like to give the assurance that the HDB Area Office and the HDB will offer every assistance to this body corporate to help them to operate their own management. Also, under this Bill, in the unlikely event that the management organization collapses, they cannot manage and for various reasons they quarrel among themselves and garbage is not collected, lifts break down and the whole estate runs into disrepair, in this event, the Bill provides for the Minister to step in and the Minister may direct the HDB to take over the management or the Minister may appoint someone else to take over the management. So I would like to give the assurance that I will not allow the HUDC estates to run into disrepair and to cause serious inconvenience to the residents. I will just give an example. Previously, the HDB managed Neptune Court along East Coast Parkway on behalf of the civil servants. Eventually, the civil servants said that because the HDB was charging them a certain fee, they would like to manage themselves in order that they could provide better service and be able to do things their own way, not the HDB way. The HDB agreed. The Neptune Court residents have been doing their own management for many years. Up to today, everybody is happy. The HDB is happy because it does not have to carry this additional responsibility and the Neptune Court residents are happy because they are doing their own management. So let us not treat this Bill as being detrimental to HUDC flat owners.”
“Mr Speaker, Sir, on the question asked by the hon. Member for Telok Blangah, the HDB has given me statistics. After the HDB took over the HUDC Phase I and Phase 11 estates, the HDB received a total of 4,215 complaints from the 2,700 units of flats. As I mentioned earlier, the HDB is managing 469,000 units of HDB flats. Just imagine these 469,000 people making the same proportion of complaints! It could be well over a million complaints! If the HDB were to attend to the complaints - imagine more than a million complaints - the whole HDB machinery would come to a halt. The HDB would not be able to build flats. It would be swamped by the complaints. That is why I mentioned earlier that the number of complaints is out of proportion to the number of HUDC flats. There are only 2,700 units of flats. These HUDC Phase I and Phase 11 flat owners are not happy and they have made such a large number of complaints. These housing estates are isolated. They are not part of the HDB new towns and not part of the HDB estates. For these two reasons, the HUDC flat owners under this Bill will be asked to manage their own estates. This may eventually be to the satisfaction of all the parties concerned because some of the HUDC flat owners may feel that they would like to have better facilities. Just for argument's sake, they may like to have security guards, they may like to have lift attendants and they are prepared to pay more. The HDB will not allow them to do that. So it is not something which will work out to be detrimental to the HUDC flat owners. It may eventually turn out that they are very happy with the new arrangement. If they are willing to pay more, they will got better service.”
“However, a body corporate which wishes to make modifications to the common property may do so, provided it obtains the prior consent of the HDB. The rights which the HDB and which the flat owners may have apart from the Bill are preserved under clause 36. Clause 40 provides that disputes between the Board and a body corporate about the common property shall be referred to an arbitrator appointed by the Minister. The Minister is empowered to make rules for the purposes of the Bill and to amend the Schedules. Sir, I beg to move. Question proposed.”
“body corporate to carry out works required by any public authority to any flat when the owner fails to do so and to enter the flat to carry out certain works; (vi) requiring the keeping of a register of the names and addresses of owners and mortgagees of the flats; (vii) obliging the body corporate to supply information and certificates to prospective owners and mortgagees of the flats; (viii) empowering the body corporate to appoint a managing agent and obliging flat owners to give notices to the body corporate on the happening of certain events; (ix) relating to the keeping of records and the auditing of annual accounts; (x) generally relating to the constitution, duties and powers of the management committee of a body corporate; (xi) imposing certain duties and obligations on flat owners and occupiers and stipulating by-laws to regulate the estate. The Second Schedule contains the by-laws for regulating a housing estate in respect of which a body corporate has been constituted. The Third Schedule deals with the proceedings of the management committees and the Fourth Schedule governs the holding of general meetings of bodies corporate. Clause 30 of the Bill empowers the Minister to appoint the HDB or any other person to take over the management and functions of any body corporate which is unwilling or incapable of carrying out its functions satisfactorily. A body corporate which commits a breach of any of the provisions of Part 11 of the Bill is liable on conviction to a penalty prescribed under clause 38. Notwithstanding the constitution of bodies corporate, the HDB remains the legal owner of the land on which the flats are erected and of the common property. The Government has no intention to coerce any body corporate to make improvements to the common property.”
“At this juncture, Mr Speaker, Sir; it would be appropriate for me to clarify that the Bill does not force the lessees to accept more than what they had originally contracted to take on concerning the maintenance of the common property. The maintenance of the common property, according to common law, includes not only the proper upkeep but also the renewal, repair and replacement of any fixtures or finings comprised in the common property or parts thereof. The lessees at present pay a maintenance fee to the HDB from which it meets the cost of upkeep, repair and replacement. In future, they will pay this fee to the body corporate and the proceeds will be used to defray the cost of upkeep, repair and renewal of the common property. The Bill makes provision in clauses 6 to 29 on the powers, duties and functions of such bodies corporate to be constituted, including provisions:- (i) for the holding of general meetings; (ii) empowering the body corporate to levy contributions for the maintenance of the estate; (iii) for the recovery of arrears of maintenance contributions by the sale of a flat; (iv) imposing on the flat owners the liability to pay the body corporate's debts, and general provisions on insurance; (v) empowering the.”
“For these reasons, it appears to the Government that it would be in the best interest of all concerned to transfer the responsibility for management and maintenance of the HUDC estates to the residents themselves. After careful consideration, the Government has therefore decided that HUDC residents in the estates should be given the opportunity to manage and maintain their own estates. The residents in each estate should have the right to decide what level of maintenance they wish to keep, the speed they want to solve problems and how much they should spend on the maintenance of their estate. They will then be collectively responsible for the well-being of their estate, and be freed from having to deal with a bureaucracy like the HDB on matters concerning day-to-day running and maintenance. The HUDC Housing Estates Bill seeks to give effect to this proposal. The Bill enables the Minister to constitute bodies corporate to take over from the HDB the control and management of HUDC housing estates described in the First Schedule. The Minister is empowered by clause 3 of the Bill to constitute a body corporate comprising the owners of all the flats in any particular housing estate described in the First Schedule to maintain and manage that estate. The Bill further seeks to impose on the flat owners a legal obligation to pay contributions to the bodies corporate for the maintenance and upkeep of their housing estates. This is a statutory obligation. The bodies corporate do not have to rely on the terms and conditions in the original lease agreements to collect such contributions. They will be empowered to do so by law when the Bill is enacted.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." On 1st May, 1982, the Housing and Development Board assumed responsibility for the development and management of housing for middle-income earners, known as HUDC housing. This function was previously undertaken by a Government-owned company which, prior to the take-over by the HDB, had sold over 2,700 units of HUDC apartments erected in what are popularly known as HUDC Phases I and 11 estates. The Company in the past, and the HDB since 1982, have received numerous complaints from HUDC residents about alleged inadequate standards of maintenance and tardy responses in solving maintenance problems. Such grouses have been similarly addressed in petitions to Ministers, letters to MPs and memos to myself. A typical example is the petition sent by the Chancery Court Residents' Association to my colleague, Mr Ong Teng Cheong, Minister without Portfolio, when he recently toured Cairnhill Constituency. The petition listed various problems which the residents demanded that the HDB should rectify fast. The impression gathered by the Government from these is that HUDC residents are very unhappy and discontented with the services given, previously by the Company and presently by the HDB. A number of residents were even unhappy to pay monthly conservancy charges. The complaints generated by the HUDC residents living in the 2,700 flats are totally out of proportion to their number compared with that of the population residing in the 469,000 units of public housing. The HUDC Phases I and 11 estates are isolated developments apart from HDB's developments in new towns and housing estates.”
“Mr Speaker, Sir, I think my Senior Parliamentary Secretary's letter is quite clear. But if the hon. Member is of the view that it is not clear, I can send another letter to clarify.”
“Mr Speaker, Sir, I thought that I have already done so. I have, in fact, given permission to the hon. Member for Paya Lebar to forward a copy of my Senior Parliamentary Secretary's letter to the developer and a copy to the temple. The letter is quite clear. But if the Member wants me to send a copy of the letter to the developer and the temple, I will do so.”
“Mr Speaker, Sir, my earlier explanation should be quite clear. The developer has surrendered a piece of land to the Government for the construction of a school. There is a temple on this piece of land surrendered to the Government. So the payment of more than $86,000 for the clearance of the temple is to clear the temple on the State land which the developer surrendered to the Government. And this should not be mixed up with any private agreement that may have been entered into between the developer and the temple. That is a separate issue altogether.”
“Mr Speaker, Sir, any private agreement that may have been made between the developer and the temple has nothing to do with the Government. The Government is not a party to such agreement. The Government cannot absolve any party of any obligation under any private agreement. It does not have the power to do so. If there is a dispute arising from the private agreement, it is up to the party involved to seek legal redress on the matter. As far as the Government is concerned, it is the responsibility of the developer to bear the clearance cost for the land surrendered to the Government. This should not be confused with any private agreement that may exist between the developer and the temple. The hon. Member for Paya Lebar has previously brought this matter up and my Senior Parliamentary Secretary has given him a detailed reply. I have given permission to the hon. Member to forward a copy of this reply to the developer and the temple to clarify Government's position on this matter.”
“70; (b) an administrative charge of $1,382.59; (c) an agency fee amounting to $622.16; and (d) an indirect cost of $50,000 for the relocation of the temple.”
“Mr Speaker, Sir, in housing developments, developers are sometimes required under the Planning Act to surrender land without encum- brances to the Government for public amenities such as roads, open spaces and schools. Developers are thus responsible for the clearance of any squatters on such land. However, it is not uncommon for developers to face clearance difficulties which hold up the surrender of the land, and thus delay the development of public amenities. The Government therefore introduced a new policy in 1980 allowing developers the option of surrendering encumbered land to the Government provided they pay five times the direct clearance cost as well as other indirect costs. In the case brought up by the hon. Member for Paya Lebar, the site proposed for housing development had originally been approved for a temple and two detached houses. Subsequently, the developer submitted a fresh proposal in 1978 for six terrace houses. However, it was established that a Chinese temple had been moved into a piece of land which he had surrendered to the State for a school. The Government therefore imposed a condition that the temple must be cleared before his proposal could be considered. The developer subsequently exercised his option to request the Government to clear the temple at his expense. The Government then undertook the clearance of the temple and charged the developer accordingly. Consequently, the developer's application, amended to two pairs of semi-detached houses, was approved in 1983 as he had already discharged his obligation to clear the temple from the land he had surrendered to the Government. The cost of $86,569.45 charged to the developer is the sum of the following items: (a) five times the direct clearance cost amounting to $34,564.”
“59. PLANNING APPROVAL FOR HOUSING DEVELOPMENT (Obligation for Clearance) 2. Mr Sia Kah Hui asked the Minister for National Development whether he is aware that planning approval for the construction of two semi-detached bungalows was given to a developer after he was asked to pay and paid $86,569.45 to Government for expenses to resite a temple on state land; what was the rationale for this; and how was the sum arrived at.”
“Mr Speaker, Sir, 202 factories were built by the HDB and 59 factories by the private sector in Defu Industrial Estate. As at 1st June 1984, 36 factories built by the HDB at Defu Industrial Estate have never been occupied. Of these, 16 have been offered to resettlement cases and are due for occupation soon. The remaining 20 are being held vacant to meet the demand from future resettlement cases. Two factories were occupied but later returned.”
“Sir, 31 lessees in Defu Industrial Estate were in arrears of ground rent amounting to $217,849.55 as at 31st May 1984. The period of arrears ranges from one to nine months. 25 out of the 31 lessees are in arrears for three months or less, ie 17 cases for two months, seven cases for three months and one case for a month. 38 factories are vacant, of which 34 have been vacant for 15 months, two for less than a year and the remaining two for three years. 16 of these factories have been offered to resettlement cases and 22 are being kept vacant to meet the demand from future resettlement cases. ANSON COMMUNITY CENTRE (Allegation of corrupt use of public funds) 12. Mr J.B. Jeyaretnam asked the Prime Minister if he does not think it is a corrupt use of public funds that the Anson Community Centre is used to promote the prospects of the People's Action Party and its candidate in Anson in the forthcoming general elections.”