Toh Chin Chye
Singapore
“--- And meet their friends. I do not know. How do we go about it? Supposing we have an impasse. We cannot find anyone who is willing to take on the job of the President. It is a lonely job, yes. I have no ambitions to be called "His Excellency".”
“28 also provides that if the Government is going to change the Constitution in order to modify the powers of the President, he must go and seek a mandate from the people twice (not once, but twice) - first,in a general election and win a two-thirds majority, come back to this House, change the Constitution, and then take the amendment bac…”
“The Minister has not made it quite clear what is tax avoidance, what are the examples of tax avoidance that he would like to close. The Comptroller of Income Tax no doubt has many cases on his hand. If the public, who are paying taxes, are given to know what is legitimate and what is illegitimate, then I think they would be more at ease.”
“It will be invidious for special legislation to be passed for companies that provide essential services so that Government control over them can be maintained.”
“For a whole family to lose their property just because of the act of one is unjust. It is similar to what happened during the days of the Emergency in Malaya when whole villages were resettled because a few were deemed to have collaborated with the Malayan Communist Party. It is exactly the same principle.”
“And, of course, on the HDB side, its accounts will show a deficit because it has to pay high interest, or vast amounts of money in terms of interest, back to the Government. Yesterday the Member for Rochore pointed out to this House the sum of $8.8 billion which was loaned by the Government to the HDB.”
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“--- And meet their friends. I do not know. How do we go about it? Supposing we have an impasse. We cannot find anyone who is willing to take on the job of the President. It is a lonely job, yes. I have no ambitions to be called "His Excellency". I feel that we are committing future generations to a plan which is very difficult to put into practice. How do we go about it? The details will have to be spelt out before we can fully understand the implications. An elected President is a good idea if we can make it quite clear or if we agree what his powers should be and the line of authority. There should not be any conflict between the civil service and the President, and the civil service and the Prime Minister. This is a major point which I would like to bring up, and since other Members have very usefully brought up their own ideas and views, I do not wish to enlarge upon what they already have said.”
“28 also provides that if the Government is going to change the Constitution in order to modify the powers of the President, he must go and seek a mandate from the people twice (not once, but twice) - first,in a general election and win a two-thirds majority, come back to this House, change the Constitution, and then take the amendment back to the people in a referendum. It is a very complex and messy piece of legislation if this ever becomes law either in the Constitution or by a separate enacting Bill. I would suggest indeed that this suggestion deserves our full attention. We should not hurry. We should not bulldoze this because we are committing future generations of Singapore to a scheme which may not be workable. I do not know how many Ministers have a great yen to be the President in future. They may not. They may want to leave the Istana and have a --- An hon. Member: An escapade.”
“I think the Presidency is such a serious affair that more weight and more thought should be given to this problem of how do we go about appointing a President who is above political party interests and who can represent to the Singapore people and to the world that he is a figure that is not caught in politicking. The important reason given for this elected President is that he will be able to control our reserves. My understanding of reserves is that if a company, Singapore incorporated, makes profits and these profits are not distributed as dividends, what is left over goes into reserves. Does this mean, let us say, the government of 1989 cannot spend the reserves of the government of 1984? And does it also follow that subsequently the government of 1994 cannot spend the reserves collected by the government of 1989? It is so inexact that it leaves us questioning whether this White Paper has been thoroughly gone into from its practical aspects. The most important part is missing. Obviously, to get the Financial Bill through, the President has got to give his assent. May I remind Members that it was the experience of the Labour Government in Australia - Gough Whitlam was then Prime Minister - what was fixed by the Governor-General, John Kerr, because the Governor-General refused to give his assent to the Financial Bill. The Labour Party had to go back to the people to seek a fresh mandate and it lost the elections. It lost. This is a precedent which the Australians have faced. Likewise down here, para.”
“Much has been said by Members yesterday and this morning on the powers of the President. I am in sympathy with the Government in finding a President. Having been a member of the Cabinet before, I know it is quite difficult for us to find someone who can be nominated as Presi- dent of Singapore and who can present an image of the people of Singapore that is non-partisan, above party politics, and Singapore does need a man. Because we are too small we need to have a person who is not divisive, a person who can integrate different communities, different people with different political views. We do not have a King. We are not exactly copying the American style of presidency. The American President has executive powers. The American Vice-President has executive powers. He is a member of the Cabinet. The President appoints his own Cabinet. But there is a check and balance. The check and balance is through the two Houses - the Upper House, the Senate, and the Lower House, the House of Representatives. As it stands in this White Paper, there is no check and balance. I think it is unwise indeed to suggest that a Vice-President can be a Member of Parliament or be a Minister. In effect, the Vice-President is extending the President's presence in Parliament, and if he were a Minister the Vice-President is extending the President's presence in the Cabinet. So the invisible hand of the President can be seen in Parliament and in Cabinet. I do not feel it dignified if an opposition Member were to attack a Member of Parliament who is also the Vice-President because he will feel that he is attacking the Presidency.”
“I would like to remind Members that from our own experience a referendum can produce results quite different from the results of a general election. In 1962, in a referendum on merger with Malaysia, we secured 71% of votes approving merger. One year later, in 1963, in the general elections, the PAP obtained only 46% of votes. I do not think that this Parliament is in a position to make a radical change to Singapore's Constitution or to commit future governments to a line which will hamstring that policy. And nowhere in the White Paper has it been clearly spelt out: what is the line of authority of the President to Permanent Secretaries, Chairmen of statutory bodies, to heads of financial institutions? There is a division. To whom will these civil servants be responsible? To the Prime Minister or the President? There will bound to be a conflict of views between the Prime Minister and the President. Not all of us are going to be here in the next Parliament. At least 20 of us are going to leave but we feel that it is our duty not to bind future generations of Singapore to something which is obscurum, not clearly defined, subject to multifarious interpretations. The White Paper is inexact and its inexactitude will lead to different legal interpretations. If there should be a referendum, it should not be on the White Paper as such. It is too complicated a paper for the layman to understand. The multifarious facets of this White Paper cannot be presented on a simple piece of referendum issue - vote "Yes" or "No". On the other hand, the White Paper should be broken down into separate parts and debated in Parliament. The terms of the referendum will have to be debated in Parliament before a referendum is carried out.”
“Mr Deputy Speaker, Sir, I do not wish to cover ground that has already been laid by Members yesterday and this morning. I would like to bring to the attention of Members para. 28 of the White Paper. It states that if the President does not concur with the government on the use of reserves or assets, then the government in the event that it does not have a two-thirds majority will have to resign and make it an election issue. But at the same time it does not state what would happen if Parliament, not the government, by a two-thirds majority, passes the Finance Bill? Will the President then yield to Parliament? It is not stated clearly in para. 28. Here it stipulates it is the government that must have the two-thirds majority to change the Constitution. But according to our practice, Parliament in order to change the Constitution will have to have a majority of two-thirds. Assuming that an impasse takes place, there are three steps for the government to take. First, it must resign. Then it must win the elections and come back to Parliament with a two-thirds majority. Then having got the two-thirds majority, it proceeds to amend the Constitution to modify or remove the powers of the President and then subject that revised Constitution to a referendum. These are three steps that have to be taken. Logically then, if we are going to have this procedure of modifying the President's powers, it would appear that before we give the President such powers a referendum should be held. It should not be made an election issue. In a general election, there are multifarious issues that crop up. Speeches are made by candidates unrelated to the central point of whether or not we need an elected President, and if we do need an elected President, what should be his powers.”
“Sir, can the Minister be quite open and inform the House whether income earned abroad but not remitted to Singapore comes under the ambit of section 33?”
“The Minister has not made it quite clear what is tax avoidance, what are the examples of tax avoidance that he would like to close. The Comptroller of Income Tax no doubt has many cases on his hand. If the public, who are paying taxes, are given to know what is legitimate and what is illegitimate, then I think they would be more at ease. May I suggest that the Minister further clarify the scope and purpose of this amendment to section 33 or, better still, since we are in doubt, refer the Bill to a Select Committee where public representations can be made.”
“Is it the Government's intention to pave the way for global taxation? Under the amendment to section 33, it makes it possible to do so. We have reports of foreign contractors operating in Singapore for years, sometimes a decade, reporting losses and paying no tax. If the purpose of the amendment is to close a loophole such as this, then I am in sympathy with the Comptroller of Inland Revenue because it means that the Singapore contractor is indirectly subsidizing the foreign contractor. Interest earned on deposits in the POSB is tax avoidance, so also is income splitting between husband and wife. From time to time, like today, the Minister for Finance has given tax incentive rebates, pioneer status, tax holidays and other various incentives especially to financial institutions. They are all forms of tax avoidance but because they are announced by the Minister for Finance, they are legitimate. Section 33, after amendment, will generate disputes with the Comptroller of what is tax avoidance and what is not, what is artificial, what is natural, what is incidental, what is purposive. And the Minister has suggested that disputes or doubts can be raised with the Economic Development Board, the Monetary Authority of Singapore and in the last instance, as a matter of last resort, the Minister for Finance himself. I am afraid that this will throw all taxpayers into confusion. It is my experience writing for work permits for my constituents that they have been passed from the Ministry of Labour to the Immigration Department, from the Immigration Department to the Economic Development Board, and they end up in nothing. Likewise, I am fearful that no mechanism has been laid in place to resolve this dispute which will inevitably arise under section 33.”
“Mr Speaker, Sir, companies invest in new projects in Singapore on the basis of feasibility studies that include cash flow estimates, taking all liabilities, expenditure, including tax liability, into consideration. Taxation is part of the cost of doing business. Assumptions on costs of the project, such as capital expenditure, cost of labour and goods, can be predicated since current market prices are public information. Tax liability can be estimated under the existing Income Tax law. But what threatens the value of such studies and advice given to potential investors is the amendment to section 33 of the Income Tax Act. The wording of the amendment is so broad and loose that only the Comptroller of Inland Revenue can judge tax liability and the public is no wiser as to how the decision is arrived at. Tax consultants, be they lawyers or accountants, advise their clients how to minimize tax liability not to maximize tax, because taxation can mean a profit or loss at the bottom line. There is great uncertainty and anxiety as to the purpose of the amendment to section 33, notwithstanding what the Minister for Finance has stated this morning, whether off-shore income that is not remitted into Singapore comes under the ambit of the amendment. The Government has encouraged Singapore companies to spread their wings overseas and be more global in outlook. It makes sense for a company with overseas operations not to repatriate earnings but to use them for purchases of goods and services overseas and thereby resolve the problem of foreign exchange volatility. Or again, will Singapore residents with income earned from foreign investments be liable to tax on their overseas income even though it is not remitted? On these two points, the amendment to section 33 is vague and silent.”
“It will be invidious for special legislation to be passed for companies that provide essential services so that Government control over them can be maintained. In spite of cuts in employer's contribution to the CPF, Skills Development Fund, suspension of payroll tax, reduction of property tax and PUB charges, more companies have closed down voluntarily or through forced liquidation in 1986 than in 1985. The benefits from reduced operating costs will take time to work their way into the system. The Minister for Finance is wise in maintaining a holding position in this budget in spite of an anticipated deficit of $3.7 billion for 1987. 2.53 pm”
“And there can be no assurance that the Government will not intervene in the future. It has intervened by closing the Stock Exchange for three days in 1985. The temptation for future intervention is the greater as more Government companies become partially listed on the Exchange. Partial listing of Government companies on the Stock Exchange is not privatization. I would rather have them sold off altogether or keep them as private companies. I have not had the time to study the report of the Public Sector Divestment Committee which was delivered to me late Wednesday evening. But I have read the executive summary. There can be no quarrel with the rationale for privatizing Government companies but I have reservations for privatizing statutory boards such as the PUB and Telecoms. There are political overtones in the case of the PUB. As a listed company, the PUB will have to justify its existence through profits. Water is an essential commodity and Singapore as a captive market will have to pay a higher price for its raw water if it is seen that the PUB has gone into business. The development of Singapore has gone hand in hand with the growth of the PUB. Housing and industrial estates could not have sprung up without the PUB working as part of a total master plan. This may not be the case if the primary motive of the PUB is to exist as a company. Telecoms contributed $37.8 million to the Consolidated Fund in 1986 and is estimated to pay the Treasury $36 million in 1987. The budget is in deficit. It is necessary that the earnings of statutory boards such as the Telecoms which are monopolies be channelled into the Consolidated Fund. The Minister for Finance has already started the process and future governments should not be deprived of this source of revenue.”
“They were profitable departments such as the Telecommunications Department and the Post Office, and were contributing directly to the Consolidated Fund. Listing Government companies on the Stock Exchange is not privatization. Privatization means washing its hands off business and ceasing to compete with the private sector. Listing a Government company on the Stock Exchange is certainly a clever idea of raising funds from the public to finance the operations of Government companies which otherwise would be in receipt either of subsidies or loans from the Government. But that is not privatization as most people believe it to be. The Government already plays a regulatory role in the operations of the Stock Exchange. But should it also lend itself to fears that with so many Government counters listed, it would also play in the market? This is not a rhetoric question. In 1984, there was the affair between Keppel, a Government company, and Jardine Fleming. The Government on that occasion bailed out Keppel and applied its clout on Jardine Fleming. Unlike private companies, Government companies have access to authorities, either direct access or through the old boy network when other private companies do not. With interest rates at an all time low and excess liquidity, surplus funds are moving not into productive enterprises but into the Stock Exchange. Price earning ratios are so high that they have no relationship with the actual performance of the companies themselves. Like stock exchanges around the world, Singapore's stock market has a life of its own, seemingly independent of the actual economy. The Government has intervened in the market through releasing CPF funds for purchases of trustee stocks which include, of course, Government companies' stocks.”
“It is dishonest to make ambivalent declarations raising false hopes but leading to nowhere. Every worker perceives what he takes back in take-home pay. If 25% of his pay is held back by his contribution to the CPF, the worker will scrutinize even more closely whether he should apply for a job as an operative in a factory or as a serviceman. Would it not be better to be self-employed as a hawker, legal or illegal, taxi-driver, legal or pirate? In real life in the market a bargain is struck up between employer and worker and it ends up with the employer compensating the worker through a higher wage, not because of the worker's skills or ability but because he needs labour that is in short supply. At management level, the same applies. Promotions are offered as an incentive not to leave the company and not because of merit. So incompetence is rewarded. It is not surprising then that in US dollar terms, Singapore pay for production workers are 75% higher than Korea, 35% higher than Hong Kong, 61% higher than Taiwan. Should there not be a re-examination of the employee's 25% contribution to the CPF and its impact on wage cost? Housewives form a large pool of under-employed labour. They can be drawn into part-time work provided they see it worth their while in take-home pay. I wish to repeat the proposal I made in 1985, exempt part-time work from compulsory contribution to the CPF. May I now come to the question of statutory boards and Government companies. The Minister has done the right thing to transfer the surpluses of statutory boards to the Consolidated Fund and subsequently to impose corporate tax on their operating surpluses. This should be so as some of these statutory boards were once upon a time Government departments.”
“When that happens, what solutions will the social engineers then prescribe? Demography is more than an academic problem in numbers. The quality of life associated with population can go up or can go down. There are limits to growth. But what the limits are is everybody's guess. May I turn to the Central Provident Fund? There is uncertainty about the employer's contributions to the CPF for 1988. There is greater concern that Malaysian workers who are traditional workers will now be regarded as non-traditional workers and employers will have to pay a levy. A levy of $140, assuming that the employer's CPF contribution remains at 10%, is equivalent to a wage of $1,400 per month. There are businesses in the services sector and small manufacturing companies which are finding difficulty in hiring Singapore citizens because these are jobs that Singaporeans will not want to work in. Two possibilities can arise: (1) Raise wages to attract Singapore citizens and therefore remain in the CPF scheme. (2) Such businesses become in due course unprofitable to operate and will eventually close down. The Minister for Finance has assured the work permit holders who acquire permanent residence status will be placed on the CPF scheme. This is a pie in the sky. I have appealed to the Ministry of Labour on several occasions for Singapore citizens to marry traditional work permit holders but these applications have been consistently rejected in spite of the fact that the work permit holders were given to believe that they could marry after five years of work- ing in Singapore. How then does the work permit holder acquire permanent residence? Which category of work permit holders can apply and be given permanent residence and what are the conditions? These should be spelt out now.”
“Singapore must have lost at least 250,000 people since the disincentives were applied, if one notes that the abortion rate is about 20,000 a year. Accouchement charges in Government hospitals are progressive. They are like demerit points. The more traffic offences you commit, you end up with an increasingly large number of demerit points. For the first child, accouchement charge in a third class ward is $100. It increases to $300 for the third child, $500 for the fourth child and $600 for the fifth child and above. For the B2 ward, the mother will have to pay for delivery of her first child $150, climbing up to $650 for more than five children. For the first class ward, the charge is $350 increasing to $550. These progressive increments in accouchement charges do not reflect a service. It does not prove that the nurse, the mid-wife or the doctor who delivers the baby is more productive or is better in delivering. These are obviously disincentives. I would suggest that if you really decide to use tax incentives to encourage larger families, then accouchement charges should be revised so that the charge is the same irrespective of the order of birth of the child. If one were to go to a private hospital to deliver a baby, the charge remains the same whether the child is the first or the third. No questions are, in fact, asked by the hospital administrator. But then we finally will have to come to the question: what is the optimum size of Singapore's population? Should it be 3 million or 5.4 million like Hong Kong's. Bearing in mind that Hong Kong is 72% larger than Singapore in surface area, the figure of 5 million will make crowding in Singapore intolerable. At some future date our population will reach a peak. It is inevitable.”
“Mr Speaker, Sir, the Budget statement for this year is less controversial than it used to be. The Minister for Finance has devoted his time less in the emphasis on government book-keeping but more on incentives to increase Singapore's population. I will only note that only a few years ago the Government offered a gratuity of $10,000 to a woman who wished to be sterilized after the second child. This time there is a 180o turnabout in policy. The tax rebate of $20,000 means that a man or his wife need not pay income tax for four years if they were to produce a third child. The maximum benefit will be reaped by those who earn a salary of about $60,000 per year or a combined husband and wife income of $125,000 per year. I feel sorry for those who had ligated themselves for $10,000. It is like missing the bull market for babies. In 1977 the Ministry of Health produced a booklet called "Population and Trends". And it gave three projections for Singapore's population for the year 2030. The forecasts were 3.4 million, 3.1 million and 2.9 million. If couples are to adhere to the Two-is-enough policy, then zero population growth would be reached round about the year 2030. These were straightforward arithmetic guesses. Where the report went wrong was its failure to foresee how political policies affect behavioural patterns. The Abortion Bill passed in 1969 was to discourage "the irresponsible, the social delinquents from believing that all they have to do is to produce their children and the government then owes them and their children sufficient food, medicine, housing, education and jobs". Priorities in public housing were changed by not awarding more points for more children.”
“May I ask for a clarification, Mr Speaker? Let us assume that the tenant has been living on the 9th floor. He has bought the flat. Now you have evicted him and you are putting him on the ground floor in a rental flat. Are you going to return him his money?”
“Can I ask the Minister for clarification in view of his explanation he gave to the proposal to amend section 48A? He said just now that it is not the purpose of the HDB to evict a family but would offer an alternative accommodation to such a family if any member were convicted under the sections of the Penal Code mentioned in the Bill. If he were to refer to clause 7 of the Bill which amends section 41, it says: '(9) Without prejudice to any other rights, contractual or otherwise, which the Board may exercise, the Board may cancel an application to the Board, whether registered before or after the commencement of the Housing and Development (Amendment) Act 1986, for the purchase of a flat, house or other living accommodation where - (b) the applicant, his spouse or any person above the age of 14 years listed in his application as intending to reside in the premises applied for has been convicted of an offence under section 304A, 336, 337 or 338 ....' And in clause 7, new subsection (9) (d) says: (d) the applicant, his spouse or any person listed in his application as intending to reside in the premises applied for has been convicted of an offence under any written law relating to immigration for giving food or shelter to any person ...'. How do you reconcile?”
“So don't have this law! Mr Teh Cheang Wan: No, we must have this law to prevent people from harbouring illegal immigrants. I will explain why we need to have a stiff law against people who are harbouring illegal immigrants. When a person is an illegal immigrant, he cannot be employed anywhere. Then how is he going to earn a living? He can earn a living by robbing children in the void decks, by robbing or snatching jewellery from women in the lifts in housing estates, or by breaking into people's home to steal. I am quite sure the Member for Rochore reads the Chinese newspapers, he will know that a lot of countries, perhaps not too far from Singapore, are having problems with illegal immigrants. Their citizens have been found murdered by illegal immigrants, their women have been raped by illegal immigrants, their houses have been broken into by armed illegal immigrants. Do we like these things to happen in Singapore? Yes, perhaps the Member for Anson and the Member for Potong Pasir would like to see these things happen because they have a vested interest to see that when turmoil descends on Singapore, then ---”
“For a whole family to lose their property just because of the act of one is unjust. It is similar to what happened during the days of the Emergency in Malaya when whole villages were resettled because a few were deemed to have collaborated with the Malayan Communist Party. It is exactly the same principle. It is a threat mounted on families, not on individuals. So I would like to put this before the Minister: that these sections which I have mentioned, paragraphs (m) and (n), should be carefully deliberated. I find it hard to support this Bill as long as paragraphs (m) and (n) are so loosely spelt out in this Bill. I do not believe and I do not subscribe to the loss of property just because someone has thrown litter.”
“And you may well find you are caught on the principle that you are operating. This is dangerous. It should never be done. It is bad law. I am very concerned, of course, that the Government is efficient but I am more concerned that there must be equity, because government is by consensus. And unless people accept these pieces of law that are being presented in Parliament, I do not believe that you can enforce them. You cannot. So there has to be a certain amount of common sense in putting up a Bill. As I see it, that is missing. I do not concede to the principle of retroactive legislation nor do I believe that a person who throws out litter downstairs from his Housing Board flat should lose his property. You are evicting the whole family. Where are they going to? Under your argument any person who drives a car or who rides a motorcycle kills a pedestrian, which is not culpable homicide, should also lose his flat. It should really be so according to this Bill ? Because the whole idea is this: you are quoting here sections of the Penal Code where you do injury, not amounting to culpable homicide. If the Minister goes out of the National Development Building - of course, he has got a driver to drive his car, so he would not be worried about that - if by mischance, he should knock down a jaywalker, he comes under this Act. There is also the Traffic Ordinance. It just does not seem to me to make sense. I understand the purpose of this section. The purpose is a deterrent. Yes, you can govern through deterrents, condign punishment or through a carrot. This is no carrot at all. It is condign punishment, a threat. All governments operate in some way, subtly or openly, through some form of threat or punishment.”
“Property is the essence of why the PAP has been successful in nation building because we have been telling them, "You have a share in Singapore." What is the share? The share is the piece of HDB flat that we have sold them and it is their property. It is not the HDB's property. The HDB, by empowering itself through so many acts, is acting as an enormous landlord. It is taking us back to feudalistic days when landlords were in charge of fiefs and the tenants living on the landlord's land would have to perform and behave according to the landlord's wishes. This is exactly what it is. We have already got under the Housing and Development Board Act a whole list under section 48A. There are three pages of how the Board can compulsorily acquire a flat. Now you are adding more today. I do not think this is a good piece of legislation. I do not believe that it has been properly thought out. The legislation is very loose - for giving food. What happens if I give him drinks? Another obnoxious thing is retroactive legislation. Once you accede to the principle of retroactive legislation, it can be applied to any other Act. What was not punishable before can now become punishable through retroactive legislation. This should not be done. It worries me that this Bill will be retroactive to 1st March 1984, that is, 2(r) years ago. Can the Minister give us a good reason why it should be retroactive to 1st March 1984? I do not think, for good government, that the Government should make laws retroactive because you can apply this practice to any law, either to the Penal Code or to taxation. The danger is this: once we accede or concede to the principle of retroactive legislation, future governments (I am not talking just of this Government) will use that as a precedent.”
“Assuming that he is found guilty, HDB says that all the members of the family will have to leave the flat. I do not see any equity at all in that. The punishment provided for in the Penal Code relates to terms of imprisonment. But there is no loss of property. If a person were to commit wilful murder, which is worse than any of these offences spelt out under these sections in the Penal Code, the family retains the flat. It is a ludicrous piece of legislation. Clause 9(e)(n) reads like this: 'if the owner thereof, his spouse or any authorised occupier has been convicted of any offence under any written law relating to immigration for giving food ... or stayed in Singapore in contravention of any written law relating to immigration ...' the family too loses their flat. Supposing I live in an HDB flat. I have a friend who is a foreigner but I would not know whether his immigration visa has expired or not. I take him to the hawker centre downstairs and give him food. Does that mean I am guilty under this Act? How do you go round about with such loose legislation? I can give him food in the common corridor. It is these loose pieces of legislation which have been coming up before Parliament that worry me. Take the Companies Act. The revised edition of the Companies Act appeared last year. I remember buying a copy last year. This year, in less than one year, we have got 72 amendments to the Act. Then you have the Securites Industry Act which has not yet been enforced. Hasty pieces of legislation, and this one is so loose - "for giving food." How? If I were living in Toa Payoh and I give him food in Jurong, I lose my flat. It does not make sense. There is already punishment under the Immigration Act for anybody who harbours an illegal immigrant. It is already provided for.”
“Mr Speaker, Sir, I wish to speak on clause 9(e), paragraphs (m) and (n) of the Bill. The clause relates to acquisition of the flat for offences as spelt out in the Penal Code. The sections are 304A, 336, 337 and 338. Section 304A is a list of punishments relating to an act that causes death through rashness or negligence. Section 336 relates to punishments for an act which endangers life or the personal safety of others. Section 337 relates to causing hurt by an act which endangers life or the personal safety of others, and section 338 spells out the punishment for causing grievous hurt by an act which endangers life or the personal safety of others. These sections under the Penal Code spell out the amount of punishment that should be dealt out by a Judge. We are adding another type of punishment in addition to the punishments already spelt out under the Penal Code. We are now saying that the person, who is found guilty of contravening any of these sections, and his family will lose their property. We are compounding the punishment on offences which are deemed to be against the safety of a third person. However, if a tenant of an HDB flat were to be found convicted of murder, the family does not lose their flat. I do not see the logic at all. Here, a person who is aged 14 and above, if convicted under these sections of the Penal Code imperils the loss of property of the whole family even if the offence is minor compared to murder. In other words, for the act of a single person, you are punishing the whole family. The Police must first find the man who committed the offence, takes him to court, proves that he is the person who threw out the litter, whether it kills or does not kill. In fact, it is not culpable homicide.”
“And, of course, on the HDB side, its accounts will show a deficit because it has to pay high interest, or vast amounts of money in terms of interest, back to the Government. Yesterday the Member for Rochore pointed out to this House the sum of $8.8 billion which was loaned by the Government to the HDB.”
“Yes. Mr Chiam See Tong: Which would amount to $0.5 billion, the CPF Board would have then paid out all its collections. There would then be no money for the Government to use. Now you see why the Government cannot afford to cut the employee's CPF rate. The figures were recorded in the Economic Report. If the Government ever cuts the employee's CPF rate by more than 5% point, then there would be a net outflow of funds from the CPF Board to its members. The other matter which I questioned the credibility of the Government is in its new accounting system of the HDB. The main purpose of adopting the new accounting system was for the HDB to reflect the cost of construction, including land cost, of one unit of flat. The new accounting system is now in operation, but we still do not know what it actually costs the HDB to build one unit of flat because we do not know at what price the Government paid for the land when it compulsorily acquired it. The Government compulsorily acquires land at 1973 prices and sells it to the HDB at an inflated price. But this price is still below the so-called market value. The Government then unashamedly claims that it has given a subsidy to the HDB. The so-called subsidy is the difference between the market value, the so-called market value, and the price which the Government sells the land to the HDB, which is still well above the acquisition price. Now, we can all see very clearly for ourselves that the Government is surely not playing the role of Robin Hood. It takes land from the rich, or not-so-rich land owners, cheaply at 1973 values and sells to the HDB at a much higher price, and pockets the profit. But, of course, it loans out to the HDB huge sums of money so that it can pay for the land.”
“You do not need 6% of the CPF locked in Medisave in these difficult times. The alternative for the lower income group is to go to the pawnshops. And all the statistical data we have shown that pawnshops are running out of capital because they are too prosperous. Households have lost income through retrenchment or pay cuts of some members of the family. Take home pay becomes important as bills have to be paid, marketing has still to be done, and bus or taxi fares have to be paid in cash. Hopefully, the continuing fall in the price of oil will also mean that there will be no great increase in the cost of living and the Consumer Price Index will not exceed 1% to 2%. Even if this is so, it will not be easy for low income families that have growing children or families that have additions to cope with a wage freeze and a consumption tax. The Budget is seen as no more than a holding position for this year and the next, until the Government can thoroughly digest the input it has received through the different Economic Sub-committees. May I end with a note of thanks to the Minister for Finance that this year's Economic Survey has been more readable than in past years, and that by incorporating two reports into one, the Budget has been more easily understood than previous year. Thank you. 3.20 pm”
“For the working class families to survive these days they need at least two members to work. The professionals need not do so. The revision of income tax for Year of Assessment 1987 is regressive. It brings out inequities. The weight of the tax burden is shifted to the lower and middle income groups. I shall not go through the entire list of groups who are subject to income tax, except to pick out two groups - those whose chargeable incomes vary from $5,000 to $25,000and the other group whose chargeable incomes vary from $100,000 to $400,000. For the group whose chargeable income is $5,000 to $25,000, the savings in tax vary from $32 to $494, ie, 0.64% to 1.98% of chargeable income. For the professionals who are already very highly paid and whose chargeable incomes are from $100,000 to $400,000, their tax savings are $4,144 to $21,644 ie, 4.14% to 5.41% of chargeable income. The reduction in income tax will not offset a wage freeze for two years, as recommended by the Government. The wage freeze is really being paid for by the Government through a loss in income tax collection but that will be recouped through a future broader based consumption tax. A saving of $32 to $494 in income tax is equivalent to a tax- free wage rise of $2.67 to $41.17 per month. For the higher income bracket, it is equivalent to $345 to $1,803 per month. So where is the wage freeze? As it can be seen it is the lower income group that is bearing the wage freeze, not the professionals. I would, at this stage, urge a 5% reduction in the employee's contribution to the CPF. This will mean a 6% increase in take home pay without any additional increase in the wage bill and without the Government suffering any losses in tax collection.”
“The allocation of money from the Skills Development Fund is left to the judgment of the bureaucracy who is biased by policy decisions or directions. Companies that have been enjoying pioneer status collect an additional windfall when they apply to the Skills Development Fund. In reality, many small businesses that have been paying to the Skills Development Fund since its inception have no chance of smelling at the Fund at all. They are being taxed to support companies that have the resources to train their own staff. A surplus of $102 million in the Skills Development Fund no longer justifies continued imposition of the 1% tax. It should be abolished. Any claim for tax exemption on expenditure used for training skills should be made to the Inland Revenue Department just as claims for tax exemption on R & D expenses have to be justified before the Inland Revenue Department. May I end with a note on the proposition to revise income tax and the wage freeze. Mr Speaker, I have requested the Clerk to circulate a Table to Members of the House so that they will be able to follow the argument which I am putting forward. [Copies of table distributed to hon. Members]. Each time there is an income tax revision, the ideological basis for the change is to favour the professionals. It will encourage them to work harder, says successive Ministers for Finance. It is equivalent to saying that the working class does not need to work harder and they ought to carry a greater share of the tax burden. The professionals, doctors, architects, lawyers, brokers and bankers do not need to be urged to work harder. They are already the highest income earners, as has been pointed out in this House and they have amassed fortunes.”
“The alternative is for him to raise his US dollar price. By doing so, he may become uncompetitive and loses his share of the market. We cannot expect the Minister for Finance to talk the dollar down. It should be left to market forces, so says the Economic Committee's Report. It can be taken to mean that the MAS is also in the market, a point that the Member for Alexandra drew attention to recently. So when the Minister for Finance denied that MAS had intervened again, following the opening of Parliament, I am afraid the market has not been receptive to his answer. Traders have to hedge forward to protect their export or import earnings but they will be at the losing end each time when fundamentals move the market but the MAS perceives speculators as the moving force and intervenes causing interest rates to rise. May I come to Research and Development and the Skills Development Fund. I support the Minister for Finance's tax exemption on R&D. That is fine, particularly in the light that we are spending more money on planting trees and chopping them down than on research. Buying a weighing machine, a microscope and a dozen test tubes and employing a white coated technician is not research when it really is quality control. Hong Kong has no R&D or Skills Development Fund incentives but it went on from exporting wigs to plastic flowers, toys to fashion dresses, watches to electrical and electronic goods. Hong Kong industry has never been preconceived in a master plan. It is the flexibility of the Hong Kong worker and the imagination and ingenuity of the entrepreneur that has made Hong Kong. So unless the Inland Revenue Department understands what is research and what is development, R&D incentive can offer a tax loophole.”
“It is a tax on labour in Singapore as in other countries which have social security systems. It is a tax for the social security that we have and the amount is dictated by the Government. Businesses go wherever they perceive a cost advantage or price advantage. In Hong Kong, there is no social security tax equivalent to the CPF. Nor is there one in South Korea. As for Taiwan, there is labour insurance in which the employer contributes 5.6% and the employee 1.4% of gross monthly wages. A repetitive note that has been made in the Presidential Address and in the Budget speech is the need for Singapore to be internationally competitive and competing in the world market means price. And price is related to the cost of doing business in Singapore as well as the foreign exchange rate of the Singapore dollar. It may be useful to note how the currencies of the four newly industrialized countries have fluctuated against the United States dollar last year when the G-5 talked the dollar down. The percentage changes against the United States dollar from the first quarter of 1985 to December 1985 has resulted in the South Korean Won having depreciated 5.75%, the Taiwan NT dollar depreciated 1.28%, Hong Kong dollar has not changed because it is pegged to the US dollar, the Singapore dollar on the contrary appreciated 5.71%. In other words, the Singapore dollar was more expensive than the Korean Won by 11.5%, the Taiwan NT by 7% and the Hong Kong dollar by 5.7%. That helps Korea, Taiwan and Hong Kong to be more price-competitive than Singapore in exports and the tourist industry. An over-valued currency is deflationary as the Japanese have found with an over-valued Yen. The exporter will be getting less Singapore dollars for his US dollars.”
“I understand that Singapore Pools (Pte) Limited will be working with the NTUC to sell 4-D and Toto tickets that previously have been farmed out to private individuals. The NTUC and Singapore Pools are, of course, operating under cover of Government legislation. Does the NTUC really need the commission? Given that civil servants sit on the board of Government companies, they have the pull and the clout that private companies do not have. Private businesses that are outside the pale of Government patronage and protection will not be able to compete. It does create cynicism indeed when the Economic Committee advocates greater dependence on the private sector to pull the economy out of this trough, but the contrary is seen as economic power remains centralized. Will the fiscal measures bring a turnaround of the recession? The measures are seen in the market as a stop- loss operation. Those companies that have been chased out of Singapore by past Government policies are in no hurry to come back. New investors are unable to make any feasibility studies for their operation or new investment in Singapore when there is uncertainty at the end of two years. Two years is the magic number. Two years for the reduction in employer's contribution to the CPF. Two years for the reduction to the Skills Development Fund. The 15% cut in employer's contribution is correct but it becomes counter- productive to qualify that this will only last for that short span of time. I do not know. It may be a political gambit to placate the NTUC. But it was foolish to create the impression all along that the employer's contribution is part of their pay. It is not. It is unearned income, not for work done and it has never been negotiable.”
“Through the statutory boards and the companies it operates, the Government is so dominant in the economy that Singapore has become so much smaller for the entrepreneur and private enterprises. This position is magnified by Singapore's small economy. Equity in Raffles City Hotel is controlled by the DBS, Temasek Holdings, SIA, PSA and the Singapore Tourist Promotion Board, all of which are statutory bodies or Government companies. The managers of this conglomerate have a degree of freedom that a private hotel management does not, mainly because of its backing by Government. The 3% cess on food and beverages consumed in restaurants and the 3% cess on hotel rooms is paid to finance the STPB to promote tourism in general. It is not intended that this cess should become capital for STPB to invest in a hotel. Surely, there must be a conflict between the STPB's interest in a Government hotel and its efforts to promote competing hotels. Last year, during the Budget debate, I strongly advocated greater accountability of statutory boards and Government companies as it is in the interest of the Singapore body politic to understand how taxpayers' money or public money is spent to oil the Government economic machine. No action seems to have been taken. Neither has the Public Accounts Committee been offered documentation of Government enterprises. Memories are short. We have forgotten about the purchase of Granite House by the Singapore Government. So I feel compelled again to ask the Minister for Finance for a written answer on the profits and losses of Government companies. The temptation of Government companies to collaborate with each other or with bodies close to the Government is to be expected. This is being done to the prejudice of private sector enterprises.”
“Even when the prime rate at its high was 13.6%, the CPF was lending to the Government at 6�%. Now that the prime rate has fallen to 7.2%, CPF contributors have been forewarned that interest on their balances will be at market rates which currently are 5�% for POSB accounts and 4 % to 5% for savings accounts in commercial banks. It still means that borrowings from the CPF will be below the prime rate. So we had the Blue Paper in 1984 which sought to extend the withdrawal age for CPF contributions, from 55 years to 60 years. Likewise, Medisave guarantees that there will be money in the CPF kitty as a contributor cannot withdraw this account even after retirement. In fact, he may not even be able to withdraw all of it after he is dead. CPF funds are still available for Government borrowing. The proposed consumer tax will be the new milch cow. It will be a free gift to the Government who will lend it to the HDB who will repay the Government at some future time, 20 years for loans for constructing flats for sale and 60 years for loans for properties for rent. It is not only the HDB that borrows from the Government. Other statutory bodies and Government companies are also supplicants for loans. That ought to make us worry. The vacancy rate for HDB factories is 40% and 27% for JTC factories. The vacancy rate for HDB warehouses is 23%, 43% for JTC and 42% for PSA warehouses. The Government cannot on the one hand pronounce that there has been a misallocation of resources, too much money locked in property and on the other acquiesce to the HDB's escalating building loans. We are, of course, interested in the question whether the fiscal measures that have been pronounced inside and outside Parliament will turn the economy around. The Government is now seen as the pacesetter.”
“56 times bigger for factory space; 2.2 times more for hotel rooms. In other words, Singapore needs that many times more workers to utilize the same area of office and factory space as efficiently as Hong Kong. To stimulate more building under present circumstances is an economic waste, a wrongful use of money on non-performing assets that will lead to non-performing loans. The HDB will have to spell out the purpose of the $8,814 million loan it is asking. And in this budget we have not been presented even a note on the nature of the spending. How will the money be spent, when already 84% of the population are living in HDB flats? There will be no market left for the private sector. Indeed, housing is Singapore's biggest achievement. But there has always been a price to it and I would prefer to let the people know how cheap housing has been paid for. Housing in many developed countries does not necessarily mean home ownership. It can be cheaper to rent than to buy, particularly for those who are mobile. We had a mix of rented HDB flats and purchased flats. That mix has been changed for political reasons. The loan to the HDB for financial year 1986 is almost twice that for financial year 1985. Just imagine, a private developer going to his bankers for a loan of that size. The bankers will fall off their seats! I would advise the Minister for National Development, if he were here, not to do everything in his life-time. Leave some work for future generations of architects, engineers and contractors. Let the future generation earn the money. We have already on our hands the most expensive social security system in the world, paid for through high CPF rates. That has landed us in the jam that we are in today. The CPF is a cheap source of borrowing for the Government.”
“There is no reason why the loan it requires for development should not be taken out as public bond issues and not through taxes. If this were done, the deficit will disappear and instead there will be a surplus of $5,460 million in the Budget. Over and above the problems that have been related in this House and in the Economic Committee's Report is the property overhang. In a recession a government normally falls on the building and construction industry to pull the economy out, but this recourse is not possible given the excess capacity of residential units, offices, shops, warehouses, factories and hotels. This under-utilization of property will remain for the next four years and may even continue beyond 1990 if occupancy rates remain low. When a 5-star hotel in Singapore sells at 3-star rates, when an international hotel management that used to sell rooms at $200 a day now sells rooms in a new 5-star hotel at $70 a day, it goes to show the parlous state we are in. There has been an increase of hotel rooms by 85% in five years during which tourist arrivals increased by only 18%. Supply does not create demand. Statistics put up by the Property Consultative Committee are startling when they are compared to those of Hong Kong. Singapore has more office space, more factory space, more warehouse space, more hotel rooms per sq. km land area than Hong Kong. The ratio of Singapore built-up space to Hong Kong is that Singapore has 1.14 times more office space, 1.2 times more factory space; 2.07 times more warehouse space; and 1.8 times more hotel rooms. Where are the people to fill our offices, factories and hotels? There are more sq. metres per person in Singapore than in Hong Kong. Built-up space per person: for office space it is 1.4 times bigger than for Hong Kong; 1.”
“So further Government spending to stimulate the economy can turn out to be an exercise in waste. It will not justify further taxation to replenish Government coffers. Four thousand years ago, all the resources in Egypt were concentrated in the hands of the Pharoahs. They built pyramids, stimulated the construction industry and created work for artisans and peasants. If the Pharoahs had established national accounts at that time, Egypt would have recorded double digit growth in GDP. But the immense resources in material and manpower needed to build these monuments to the Pharoahs impoverished the country. There are no pyramids in Singapore, but take a drive down the East Coast Parkway onto Benjamin Sheares bridge towards Keppel. One can have a grand view of Singapore's landscape outlined by the CPF building, the Treasury building and the MAS building standing side by side, half empty monuments to the ego of the bureaucracy. Construction costs were $474 million, and if land costs were imputed at 50%, total costs would be close to $711 million. The Finance Minister's estimate of a $3,217 million deficit for financial year 1986 is accounted for by spending on development. Under the Development Estimates the Ministry of National Development will be spending $10,073 million, but of this amount $8,814 million will be lent to the HDB. If it is a loan, it will be recovered with interest payment at some future date and will have to be accounted for as receipt in future revenue estimates. What it really means is that taxpayers are asked to pay for a Government loan to the HDB which will be repaid eventually through sales and rental of flats, shops, factories and warehouses. The HDB is the largest property developer in Singapore. It should have gone public on the Stock Exchange.”
“The danger of total trust and absolute reliance on statistical data for policy making is to ignore the human factor which can make economic predictions less reliable than forecasting the weather, which at least is in the hands of God. So it is not surprising that the idea of the consumption tax is being raised solely in terms of covering up Government revenue that will be lost through income tax rebates. Equally, it is not surprising that quick reaction has been evoked among the public and backbenchers. A consumption tax is not new, as the Member for Kebun Baru said this morning. But to be successful it has to be broad based, like the Government levy on Telecoms bills, PUB bills, 3% cess on food and beverage consumed in restaurants. If excise duty is another way of calling a consumption tax, then there are consumption taxes on tobacco, liquor and petrol. But when the Minister for Finance tells us that a machinery will be set up this year to collect a consumption tax, that tax sounds like a new tax. And we have to accept that the Government has made up its mind, regardless of public opinion. Take heed: if the consumption tax, whatever from it takes, is to control private spending, imposing it this year or the next can only lead Singapore to a downward spiralling depression. May I ask, is more taxation necessary? Singapore's infrastructure in the port, in roads, sewerage, communications, factories, warehouses and housing, has almost completely been developed. Outside the MRT and the second terminal for the Airport, there will be little scope for public expenditure in capital works in the next few years. There is already under-utilization of existing capacity in every part of the property sector.”
“Foreign firms have either pulled out or cut down the scale of their operations and sent their expatriate staff home. Economics does not concern itself with citizenship. What it means is that there is less private spending in the retail sector and a drop in the demand for rented accommodation. The problem of businesses today is how to survive this year, and the fear of workers is whether they will keep their jobs or have their pay cut in the next six months. If they cannot survive through 1986, no glorious vision of 1999 will inspire them. My constituents are not great economic thinkers but they see the ebb and flow of the economy through retail shops, restaurants, bars, coffee shops and hawker stalls. They understand turnover. Without private spending, there is no turnover, and without turnover, business is dead. When the Stock Exchange index was reaching a new high each month, it was the brokers and the speculators who passed the boom to the retail trade. Today, the stock market is limping along. Those who are sanctimonious about speculation and gambling may not understand that in Hong Kong, horse racing is held three times a week. The bookies, the punters and the hangers-on are patrons of night clubs, bars and restaurants. It is they, not the directors of Singapore Pools (Pte) Ltd, who spend. In Singapore, even as unlicensed bookies are zealously pursued by police, bars, coffee shops and restaurants see a further downturn in business. The Government can dismiss the contribution of this grey fringe of the economy to Singapore's GDP, just as the Minister for Finance, in justifying the recent closure of the Stock Exchange for three days, belittles the role of the Exchange in Singapore's economy with his statistics.”
“Mr Speaker, Sir, this year's Budget statement has been more responsive, conciliatory and less aggressive than those presented in previous years. The Minister for Finance is new. He is not contentious. He is not like the Parliamentary Secretary to the Minister for Defence who sounds like Caspar Weinberger. He has my sympathy, although he is not here, for having to reap the wild oats that others have sown. Eleven studies with recommendations have been submitted by various sectors of business and industry to the Government. Each sector has spelt out its problems loud and clear. So there is not much more that we in this House can add and I do not wish to go over old ground that has been covered in the debate on the President's Address. Commodity prices have been falling since 1983. But it has taken the Government a long time to understand the implications for Singapore. Property prices have also fallen. The value of shares in the stock market has fallen. The value of collateral on loans held by banks and finance companies has fallen with the result that mortgages and other loans have become non-performing. The result is distress sales not only of property but also liquidation of industrial and construction equipment. Liquidity is tight as shown in the declining annual growth rate in the money supply since 1981. For this, we have to thank the high CPF rates and successive Government budget surpluses that soaked money out of the system. Against this background of deflation, a strong Singapore dollar hides what is really a weak economy that has seen a record number of winding up of companies and businesses and loss of jobs. The problem that we face today is that 100,000 jobs have been lost.”
“I wish to thank the Minister for the data he has given. May I ask him if a publicly listed company other than SIA had its share price pushed up from $4 to $6.90 in the space of two months, will the Minister ask the SES or the SIC to make inquiries?”
“May I suggest to the Minister that his Ministry takes a certain positive action on manpower planning and not leave it to the Ministry of Trade and Industry?”
“Sorry, I have not made myself clear. Let me phrase it in another way. Does the Ministry of Labour have a manpower planning programme?”
“Can the Minister for Labour tell the House whether his manpower planning targets are on keel? Mr Lee Yock Suan: Mr Speaker, Sir, could I ask the Member to repeat his question?”
“Mr Speaker, is it true that those with higher education have been discouraged from registering with the Labour Employment Services Department?”
“Mr Speaker, Sir, is there a coordination of effort between the Labour Employment Services Department and other Government departments and statutory boards in helping the unemployed to look for work?”
“How many jobs have been found for those who have been registered through the Department?”
“Mr Speaker, can the Minister tell us what is the number of persons who are now registered with the Labour Employment Services Department?”
“Mr Speaker, Sir, may I ask whether the Minister has received my question in which I asked for a breakdown of jobs lost among holders of work permits and holders of professional visit passes?”