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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“It may be insolvent. It is a common practice for professional people to be appointed directors for such purposes, and in the course of business it is not always possible that rescue operations would always be guaranteed a success. Nobody can guarantee that companies that are in trouble can be successfully salvaged. But such persons, under section 125A, Will no longer be allowed to hold a directorship. I think this is a serious failing of this section in the Companies Act. It does not take cognizance of the permutations that are possible and which can be covered by the punishment meted out under section 125A. Directors too may not have equity, but they are also put at fault if the companies are liquidated. Now, liquidation can be due to many reasons. It is not just because of dishonesty. It can be because there is a slump. There are hundreds, if not thousands, of companies that have closed down in the United States during the last recession. I do not know whether the Minister for Law can provide the House with figures of how many companies, private companies as well as public companies, that have been liquidated? Companies encompass also private holding companies. What I am very concerned with is that, while the intention is to punish the evil-doer, to punish the black sheep, innocent directors are also equally punished. The Minister himself has said that the onus is on all the directors, but not all directors hold executive positions in companies. So I see no reason at all why the arguments that have been put forward so eloquently by Dr Pillai, the Singapore Chinese Chamber of Commerce and Industry and the Singapore Society of Accountants have not been taken into consideration, and section 125A has been incorporated into this Bill. Let us take another example.”
“Mr Speaker, Sir, I have sympathies with the arguments put forward by Dr Philip Pillai from the Faculty of Law at the University of Singapore, the Singapore Chinese Chamber of Commerce and Industry and the Singapore Society of Accountants. I wish to comment on clause 30 which introduces a new section 125A into the Companies Act. The clause as is so drafted is inexact, as the Minister himself has admitted. But the purpose of the law is to be exact, and if the Minister is incapable of drafting an accurate law which spells out to the evil-doer that only the evil-doer should be punished, then I propose that such a clause should not be passed into law. There are several circumstances which can be covered by section 125A in which directors find themselves incapable of holding a directorship of any other company for five years without appealing to the court. You may have a holding company and subsidiary companies. It is quite possible that a subsidiary company is so large that it becomes insolvent, goes into liquidation, ending with those who are holding directorships in the holding company being implicated under section 125A. So at one stroke the holding company and the subsidiary company are considered as two companies under the definition of section 125A. Secondly, the onus is placed on honest directors, who may be sleeping directors, who may have left the companies for three years and who may be ignorant of what was going on in these companies. But nonetheless, such persons are still held liable for the operations of the company which they have already left. It is also possible that there may be persons who will be appointed as directors to rescue a company. But if the rescue operation is a failure then, of course, the company will have to be liquidated.”
“I withdraw my amendment. Amendment, by leave, withdrawn.”
“Mr Speaker, Sir, I would just like to comment that having listened to the Minister of State for Education, I have come to the conclusion that perhaps since man graduates are less than useless and woman graduates are the transmitters of IQ, ought we not to have lady graduates as MPs or Ministers in this House? I for one, Mr Speaker, Sir, feel that I am very lucky that I have been born a man and not a lady in Singapore these days.”
“How many of those who have not been admitted had no Second Language pass at 'AO' level? How many students would the Education Ministry know have been admitted to universities overseas, either in the United States, the United Kingdom, Australia, Canada or New Zealand, but who have been rejected by the National University here? In addition to these questions, may I add one further. It arises because yesterday during Question Time the First Deputy Prime Minister and Minister of Education revealed that 2,000 males were qualified for pro-university but instead they chose to go to the polytechnics, namely the Singapore Polytechnic and the Ngee Ann Polytechnic. I would like to know what were the figures for previous years. If this is true, has the Ministry attempted to find out the reasons why? If you have such a large number of male students who are eligible for pre-university classes but do not wish to do so, it is to be expected that the number of students who are admitted into the National University will be largely female. Has the Ministry ever traced what these students do after they have left the polytechnics and completed their national service? Obviously these 2,000 or more males must have some purpose of action. If they are able to qualify to join the University, they will not go to the polytechnic. Has the Ministry found an answer to this phenomenon? It is a puzzling statement which we heard yesterday and I think it is useful to get a clarification.”
“Sir, I beg to move, That the sum to be allocated for Head L be reduced by $10 in respect of Subhead LA-01 of the Main Estimates. Sir, when we debated on the new education policy in 1979, it was proposed then that it would be necessary for students to obtain an 'AO' level in Second Language to be admitted into the University of Singapore as it was then known. During the debate I expressed my misgivings on this pre-qualification for a number of reasons. One major reason I explained was that you require different faculties to study English language and the Chinese language. One language depended solely on phonetics and the other language depended on patterns, on ideograms, and I brought forth clinical evidence from Japan to show that it was possible for patients who suffer from dyslexia to be able to recognize kanji but not katakana. Once the pre-qualification for an 'AO' level in the Second Language for the University was announced, it was expected that parents would want their children to do English and Chinese, or English and Malay, or English and Tamil, from primary to 'O' level at least, Almost five years have passed by since we debated on the education policy and we need to assess where the programme has succeeded, or where the programme has failed? This time last year I put forward a number of questions to the Minister of Education so that an assessment could be made. Sir, may I repeat again these questions and I hope he will give us an answer. How many students passed the 'O' level examination without a Second Language? How many students passed the 'A' level examination without a Second Language? How many students applied for admission into the National University of Singapore but have not been admitted?”
“Less than 50% of students last year obtained five 'O' levels. Something must be very wrong indeed. I was astounded that through that the First Deputy Prime Minister and Minister of Education has come to the conclusion that graduate fathers are useless, do not deserve reliefs, but graduate mothers do. So from statistics obtained from the Ministry of Education, he has come to the important biological conclusion that IQ rests in the Y-chromosome and is not connected with the X-chromosome. I think they deserve the Nobel prize for this. I have come to the conclusion that the Education Ministry is spending more and more on less and less. Either the purpose of education has gone off-beam or is distorted. Or children born in Singapore are becoming dullards and therefore more money for the Education Ministry is needed, or it appears that we have reached the point of diminishing returns. The questions posed by the Member for Ayer Rajah were very pertinent indeed. I think it is right that the Ministry of Education should submit a statistical report to the House on the achievements of the Ministry since the revision of the education policy in 1979. We are not school principals who attend meetings organized by the Ministry of Education. At these meetings principals are told what to do. But we want a report simply stating what this policy has achieved. Is there any justification for pouring thousands of millions of dollars into education? I support the Minister on two points that he made: (1) His intention to cut down Government expenditure which has doubled from $5,170 million to $10,150 million in the last three years. (2) To control the intrusion of Government agencies and companies into the private sector economy and let the private sector take the initiative. 4.10 pm”
“Once upon a time the Adult Education Board was set up, so many years ago, in order to provide continuing education that the Minister talks about so eloquently. It could have conducted BEST classes or other classes to suit the new requirements of a changing economy. Workers may continue their education. But what has happened? The Adult Education Board has been abolished, closed down. It would not have cost much to run the Adult Education Board. The Finance Minister is instead pouring $1,879 million into the Education Ministry when the numbers of school-going children are declining. If we are to judge by 'O' level results, then the Ministry of Education is a singular failure.”
“(2) The Inland Revenue Department is assured of its share because the bank or finance company will automatically deduct and pay to the Department. There will be no suspicion by the Income Tax Department that taxpayers are evading income tax on money that has been squirrelled away. Hong Kong had, once upon a time, a with-holding tax but it has now abolished it. On manpower development, none will contradict the idea that manpower development is a key factor among other factors in economic development. The Minister praises the increasing numbers of workers attending BEST classes where workers are taught English and Mathematics. So in addition he is providing increased tax relief for children whose mothers have acquired at least five 'O' levels. I am concerned about the obsession with passing academic examinations, much of which will be forgotten in the real working world. In Singapore, a child's future is virtually decided at Primary 3 where streaming takes place, at PSLE and at 'O' level. The Member for Ayer Rajah has eloquently raised this at Question time. It takes many types to make the world go round and I am not sure whether girls with five 'O' levels will make better mothers than others. It is arbitrary to set an achievement of five 'O' levels for additional child relief. It is as good as saying that children whose mothers have less than five 'O' levels are less acceptable by the State. It is too bad that they chose the wrong mothers. There are mothers with two, three or four 'O' levels. Think of it. They just did not clear that little hurdle of five 'O' levels. So should we not send these mothers back to school in order that they can acquire the extra 'O' levels to make up to the magic figure of five?”
“Some hotels are advertising a 40% discount and some retail departments are selling off at half price. This package will cost the Ministry approximately $96 million less. in inland revenue. But the Minister for Finance has to balance his losses. It is give and take, and it is the fundamental principle by which Finance Ministers make others happy and himself happy too. So he takes back $107 million by increasing duties on cigarettes, tobacco, beer, stout and betting. Smoking, drinking and betting are bad habits, and they will stay. So the Minister is assured that the grumbling will not last long. After all, smokers, drinkers and bettors have been promised deductions in income tax this year. So should they not spend their extra disposable income in a little more smoking, drinking and betting? Again, $89 million will be given back to income taxpayers in 1985 arising from the revised rates of tax. However, I would advise taxpayers not to spend that on credit. Wait till next year and find out how much they have to pay back. Interest on savings in commercial banks is currently taxed under income. This does not encourage savings if the tax payable on chargeable income is 20% and above. For example, if interest on time deposit is 7.5%, in reality receipts after tax can be less than 6%. If the purpose of the Government is to encourage savings to help the capital market and to help Government borrowings, will the Minister consider the alternative of imposing a with-holding tax of, say, 10% on interest? Two objectives are achieved by with-holding tax: (1) The saver knows exactly his return on savings. He does not have to remember what his savings have earned in interest when filing his income tax return.”
“So we have to ask ourselves not whether we are working doubly hard or we should do so this year, but is there a special reason why tourists will want to absorb our costs, especially when the Singapore dollar is appreciating against currencies of those countries from which we draw our markets? Last year I suggested to the Minister for Finance that there should be a report summing up the performance of statutory bodies and Government companies. What is their contribution to public revenue, particularly when these statutory bodies and companies are receiving either grants or loans out of public funds? I regret this has not been done. If the Budget Book reports that the Monetary Authority of Singapore and the Currency Board pay dividends to the Consolidated Fund, should it also not publish what payments have been made by other statutory bodies and Government companies? Do they exist in isolation? Surely they must be accountable to the public, to the Minister for Finance who in turn should report it to the House. I would have dwelt longer on the role of Government companies, except that the Member for Jalan Kayu has made an excellent speech on this, when he pointed out the monopoly and the connections which statutory bodies and Government companies have with Authority. It is because of this that the private sector is feeling that it is being crowded out. Taxpayers everywhere are grateful and kow-tow three times to the Minister for Finance for the little give-aways. We are no different. In fact, we are euphoric, absolutely so. (1) The Minister for Finance has increased the exemption of estate duty up to $3 million in respect of residential houses; and (2) he is giving a discount of 10% off income tax this year. It is the trend, Mr Speaker.”
“The Minister is right that the lowering of oil prices and the strong Singapore dollar have made imported consumer goods cheaper. He is even more correct - he earns a 100% mark, when he concluded that our inflation was due to domestic factors. Yes, it is the Government's fiscal policies - that is the major domestic factor. The Minister waxes optimistic over the tourist industry. But those who are in the tourist business do not share the same optimism as the Minister. There were 50% more conventions and exhibitions last year than in 1982. In spite of this, visitor arrivals fell by 4% and they stayed for a shorter time. Publicly-listed hotels have reported not only a drop in occupancy rates but also a decline in revenue, So I do not understand how the Ministry of Trade has calculated that earnings from tourism increased by 3%. Supply does not necessarily create demand. Increasing the number of hotel rooms does not necessarily bring in more tourists. And it is not low hotel rates alone that attract tourists. Hotel rates cannot go too low as otherwise hotels will go under. It is worth repeating what I said last year - that Payroll Tax, Skills Development Fund and CPF payments are directly proportionate to wages, and if the Consumer Price Index goes up, there will be a demand for more wages. Operating costs will go up and they will be added to room rates. To this, add entertainment duty and a 3% cess proportionate to the amount spent. We were told last year that Payroll Tax was a relic we inherited from Malaysia. But I understand that Payroll Tax has been abolished in Malaysia.”
“Registration fees on motor vehicles will increase by 19.2% and road tax on motor vehicles by 25.9%. All in all, a revenUe of $1,205 million will be raised, not because of the sale of goods or services which one would expect of a company but this will be realized simply because of prohibition on consumption. The additional cost of petrol is against the trend of lower oil prices. When Singapore raised its pump price by 20 cents per litre, Hong Kong lowered theirs the same week. Modern economies, I need not remind the House, revolve around petrol. We are no longer living in a country where goods are still transported by bullock carts and we go to work on bicycles as they do in the Maldives. Oil is the great determinant on prices of other goods. We learnt that lesson in 1973. Any increase in the retail price of petrol means an increase in the operating costs of businesses, big and small, from corporations to hawkers. Additional costs are eventually passed down the line to the last consumer. Nobody believes that the cost of living rose by 1.2% in 1983; that if the basket of goods and services were bought at $100 in December 1983, the same basket cost $101.20 in January 1984. The Minister for Finance is also the Minister for Trade and Industry. They sleep in the same bed. One is dreaming, the other is having a nightmare. I cannot convince the Minister for Finance but housewives would like the Minister for Trade to know that prices are going up, goods and services cost more or they are getting less goods for their money. It is significant that between October of last year and January this year, the annualized rate of increase in the Consumer Price Index rose by 11.2%.”
“Mr Speaker, Sir, this time last year I warned the House that the Minister for Finance was presenting a strip-tease budget and sure enough the Minister bared it all by the end of last year. For taxpayers, it was quite a painful experience. Having done his act, we do not expect him to cover up this year because he has nothing more to hide. This is the reason why this year we welcome his Budget presentation. The Minister for Finance deserves support for his objective of restraining increases in Government spending. In three years, from 1980 to 1984, Government expenditure increased by 96.3%. Development fund expenditure in the same period increased by 290%. Only 25.6% of the development expenditure for the financial year 84 is incurred directly by ministries while the remaining 74.4% are disbursed by loans and capital grants to statutory bodies and Government companies. The question which we would ask of the Minister is: how much of the development fund expenditure should come from taxes, direct and indirect? How much should come from public borrowings and how much income from investments? The increased taxation, whether direct or indirect, falls on the public, corporations, companies as well as individuals and have wide implications on their operating costs, profitability and cost of living of the individual. Generating revenue for economic expansion or infrastructure development can be understood but when the Minister uses taxation policy as a regulatory measure to bring in more revenue, he confuses us. The outstanding example is the use of fiscal policy to control the motor car population last year. This year, revenue from locally refined petroleum products is expected to increase by 55.4%. Revenue from imported petroleum products will increase by 60.8%.”
“Mr Deputy Speaker, Sir, it was my past experience to announce the Ministry of Health's increases and charges, but I would like perhaps to assist the Minister for Health by asking him a few pertinent questions. Can he inform us what proportion of the Ministry of Health's revenue will arise from patients after the revision from taxes paid into the consolidated fund, what is the estimate in percentage increase in revenue after the revision and the percentage increase in MOH expenditure? If I calculated correctly, he said it was estimated to be 14.7% in 1984. Could his Ministry, perhaps from the point of good housekeeping and accounting as well, inform the House whether bills would be itemized according to bed charge, meals, professional fee, prescriptions, laboratory fees, X-ray fees, operation fees, radiotherapy, physiotherapy? Would he also indicate the percentage increases in expenditure for maintaining wards, for maintaining dietary services, prescriptions, laboratory and X-ray services, operating services, radiotherapy and physiotherapy services? In this way we have a clearer idea whether the increases in fees in these different items are proportionate to increases in expenditure.”
“The Blue Paper is not binding on the Minister for Labour, or even a future Minister for Health or a future Minister for Labour. The Minister for Labour is responsible for the Central Provident Fund, not the Minister for Health. The resolution that he has set out before the House does not spell out limits. It is a blank cheque. As far as the Minister is concerned, he gets his 6%. My confidence, Mr Speaker, in resolutions has not been strengthened, particularly when a resolution moved by the Minister for Education in 1979 in this Chamber has not been honoured. I shall abstain from the voting in the resolution. 5.52 p.m.”
“She was given a half-cut discarded plastic bottle which was so small that the vomitus spilled all over the bedsheet; and that was a discarded plastic bottle, in a first class ward. What are we doing with the revenue collected? It will be profitable if the two Ministers were to take time off and inspect the wards. But I question, and I do not agree with the Minister for Health just now when he extrapolated or tried to extrapolate European and American cost of health care into the Singapore situation. I do not agree with him. I have read all the literature. Behind the statistics that he produced just now, there are many pressures, vested interests, interest of pharmaceutical departments, manufacturers of hospital equipment, which have pushed up health care costs in the West completely out of proportion to the rate of inflation. And I worry still that we will soon have an Audit department in the Ministry of Health that may well do nothing but spend its time trying to do an audit on the costs in our own hospitals. I would suggest to the Minister for Health that it will be profitable for him and his staff to study all these underlying causes in the West so that we avoid them in Singapore. The Blue Paper that has been presented to us this afternoon is out of date. It is said in the Blue Paper down there that contribution to the CPF is 45%. It is 46% now. If it is so out of date so soon, I am alarmed whether in five years' time the 50% rate of contribution to CPF would not also be out of date. Together with contributions to payroll tax, skills development fund, any additional payments to the CPF, particularly from small businesses and partnerships, the increases in payroll tax cost will be a real deterrence.”
“And this will have an escalating effect on the cost of living and demand for more wages, and more contribution to CPF. I know for sure there was one businessman who preferred to leave Italy to start a restaurant in Saudi Arabia, for the simple reason that he just could not afford to pay the social security cost imposed on him by the government. I asked the Minister for Finance earlier this afternoon to find out what revenue Government companies and statutory bodies were contributing to his Consolidated Fund. The Minister was a bit quick in the reply. I was not sure of the figures I jotted down but, if my additions were correct, their contribution was more than the recurrent expenditure of the Ministry of Health. So why have more contributions to the CPF? Has the Minister for Health, who was in the Ministry of Trade and Industry, who was in cahoots with the Minister for Finance, taken the trouble to investigate how he is going to get the money to run his Ministry? The first responsibility of the Minister for Health is to ensure the availability of health care services. That is his first responsibility, that he must go round and nag at the Minister for Finance for the money. But he is taking on the job of the Minister for Finance. I totally disagree with the approach of Medisave. However, as a former Minister for Health, I share with these two Ministers for Health their concern for preserving the existing standard of health care; preserving - I am not saying improving, the emphasis is "preserving". I happened to visit a patient in a Class A Ward in Kandang Kerbau Hospital, paying full charges. The patient asked for a receptacle so that she could throw out her vomitus.”
“And if, of course, a part of this CPF money is invested overseas where interest is higher than the 6 1/2% we earn, perhaps that additional interest will help to pay the cost of hospitalization. But contributors earn only 6 1/2%. No firm can afford to have two parallel medical welfare schemes. The trade unions want Medisave and of course they want the existing scheme under the general collective agreement they have made with the employers. The Minister for Health, since he is not the Minister for Labour, has of course ignored all this. The buck is passed on to the employers. Believe me, I have not turned capitalist. I am not speaking on behalf of employers. There are big employers. There are small employers. There are small businesses who hire two persons, maybe even three persons. They have to contribute to all the taxes imposed by the Minister for Finance, including CPF, the Skills Development Fund and Payroll Tax. And these small businesses which pay Skills Development Fund do not see anything coming out of the Skills Development Fund. A barber shop applies for a Skills Development Fund. How can he develop the skills of his barbers? It is the small businesses that are subsidizing the big businesses. So also is this Scheme. It is a taxation, and it is a recessive tax for the simple reason that those who are at the lower income level, because their CPF contributions are lower, will have to pay the full amount, whereas those with higher incomes do not pay the full percentage of their income towards the CPF because there is a ceiling. It is recessive. I feel that all this is a very short-sighted myopic view. As payroll costs rise, so also prices must increase.”
“The proposal behind Medisave is that patients will now make their payments not directly to the hospitals but through their CPF accounts. It is like the check-off system that we have in the trade unions. Now we are being checked-off out of the CPF account. The snag of this scheme is that employers would be asked to contribute to Medisave in spite of the fact that they already have their own private health scheme for their employees. And, in effect, this would mean increasing their Payroll Tax by 3%, even though this contribution does not directly go to the Consolidated Fund but into the employee's CPF account. I am concerned that in presenting Medisave, the Minister has given no consideration to fundamental points. First, in what direction can the Ministry of Health reduce costs? The Member for Ayer Rajah has very eloquently explained that demand is not generated by patients, and I believe him, particularly patients in 'C' class wards. It's the doctors who create demand as he has explained. Can the Minister, a political appointee, control his doctors? Point No. 2. What is the projection of future revenue that will be collected by the Ministry of Health? In other words, in what direction is he anticipating the rate of increase in the cost of running the Ministry and therefore the increase in charges that he must pronounce periodically, next year or the following year? Point No. 3. Can shortfalls be made up from the Consolidated Fund without calling for further contributions to the CPF which is now at 46%? Point No. 4. Can part of ,the interest earned on CPF accounts be credited to the cost of hospitalization? In 1982, the interest credited to members' accounts was $846 million which is $187 million more than in 1981. The more CPF you pay the more interest you earn.”
“Let us assume that the operating cost of 'C' class beds is 70% of the total expenditure, which is a generous assumption. This means that 'C' class wards cost $180 million. The revenue received by the Ministry of Health in that year, 1981, was $62 million, leaving a deficit of $118 million which was met out of the Consolidated Fund. However, Payroll Tax collected was $106 million in 1981, a sum sufficient to meet the deficit for operating 'C' class wards. Let me take the House to 1982. The Ministry of Health expenditure was $321 million. And again assuming that 'C' class wards cost 60%, the sum would be $192 million. Payroll Tax collection alone was $161 million, leaving a deficit of $31 million which was more than covered from revenue collected by the Ministry. What we are faced with, therefore, is the problem of apportioning of responsibility and cost. The propaganda put out by the two Ministers for Health is that medicine is a commodity that is consumed. I think it is a very dangerous assumption to believe that persons love to fall ill, that they go around shopping for sicknesses in the supermarkets, or that they like to spend their weekend in a hospital as if the hospital is a hotel. Or that the food served in the hospital is a la carte or buffet. That is perverse propaganda. And, therefore, Medisave is now being treated as a consumption tax. This makes it difficult for one to support the arguments that have been put forward for Medisave. I do not know why the Member for Ayer Rajah was sold over so easily that he has already expressed his support without first listening to the rest of us. What percentage of the cost of running 'C' class wards can be equitably borne by direct taxation such as Payroll Tax? What percentage of payments is made directly by patients?”
“The Ministry of Health cannot avoid revising medical and hospital rates. The CPF account is a convenient means to collect hospital charges. For that, the Minister for Health has to be congratulated. I know there are bad debts incurred by the hospitals. These bad debts will now disappear. But for that matter if hospital cost will have to be paid from savings, why not allow patients to pay the cost of hospitalization from their savings accounts in the POSB? And there are over two million accounts. The provision of health care facilities must be accepted as a social responsibility. It is not that an individual who has the misfortune to be inflicted with some particular disease is solely responsible for searching the facilities to cure his illness. This is a social responsibility which is accepted by governments all over the world. This is part and parcel of the organization of individuals into societies. It is a measure of the degree of civilization. The problem which we are faced with is the cost of financing. Who is to pay? I believe it is wrong to say that the Government is paying for the cost of medical care. The costs of government are borne by taxpayers, us, either through direct taxation, like income tax, or indirect taxation. So the problem really is reduced to finding an equitable distribution of revenue in the Consolidated Fund to meet different objectives and purposes of the Government. Medisave calls for direct payments by patients to the cost of running 'C' class beds. The recurrent expenditure of the entire Ministry of Health, i.e. the cost of administration, the cost of outpatient departments, the cost of all first, second and third class wards in all hospitals, was $257 million in 1981.”
“Mr Speaker, Sir, I will not go over ground which has been so admirably covered by the Member for Ayer Rajah. I share with him on the desire to have to push or reinforce preventive medicine. But I also would like to remind the Member for Ayer Rajah that we are human beings made of flesh, and flesh has its weaknesses. The Member for Ayer Rajah is a professional. Therefore, I would not argue with him over those professional points that he has raised. Instead, I will cover the financial aspects of Medisave. I feel that Medisave is being treated in isolation. Medisave is, as I pointed out in the Budget debate, a part of the Government budget and our budgets have been in surplus every year. It is misleading of the Minister for Health to go around the country and create the impression that we are encountering problems like the United States which face running deficits because of expenditure on social security programmes and defence. In fact, the only social security programme we have in Singapore is health. It is wrong to forget that even now patients make direct payments for medical treatment and hospitalization. It is wrong to create the impression that we are distributing health care for free. Payments made by patients constituted 24% of the recurrent expenditure of the Ministry of Health in 1981. I know it is politically unpleasant to announce periodically increases in hospital charges. It was my job at that time and I can recollect the castigation that I received in the newspapers each time I raised the rates. But this is unavoidable. Costs are bound to go up with each year if for no other reason than because of annual increases in wages. And this applies not just to the Ministry of Health but equally to all other Government bodies and departments.”
“Is the Minister for Finance aware that the PIE made history last year by flying in 1,500 breeding pigs by Jumbo jet? Will private farmers be allowed to do the same thing?”
“May I ask the Minister for Finance, for example, whether INTRACO is a Government company and PIE is a Government company?”
“Mr Speaker, Sir, the Minister for Finance has missed the point. If Government companies have the authority of Government behind them, therefore they have an advantage -”
“Put in simple words, Sir, is it the policy of the Government to allow companies owned by the Government crowding out private companies?”
“Mr Speaker, Sir, I am gratified that the companies which are owned by the Government, including the statutory bodies mentioned by the Minister for Finance, are not losing money and are not being subsidized. But may I inquire of the Minister for Finance whether he will in future include dividends from these companies in the Budget Statement so that we will be able to fathom out how the revenue which the Government collects comes from. Secondly, may I inquire of the Minister whether it is the policy of the Government to have Government companies muscling into the private sector at all?”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“I will wind up by reiterating that we should consider very carefully whether there is any need at all for further contributions to the CPF.”
“If we were to assume that C Class beds were 80% of the total number of beds in the acute hospitals, it works out to 2.7% of the CPF balance in 1978 and 1.6% in 1982. Therefore, the need really to ask members to contribute more to the CPF does not really arise. There is money in the balance to pay for the budget of the Ministry of Health.”
“I think this is most unrealistic. I go to another page to explain why the budget of the Ministry has got to be scrutinized carefully and that we should not be taken by barn-storming. Here it is. This deals with patients who are in C class wards. It says: 'There are 70% of beds that are C Class in acute hospitals. Patients are increasingly opting for the more private Class A or B wards. There will not be enough Class A or B beds to meet patients' demand'. That means Singapore is becoming more affluent and we will not be having Class C patients. But in the next paragraph, it says: 'in two or three years' time the Ministry intends to introduce a means test to restrict admissions to Class C wards.' Patients who can clearly afford Class A facilities will not be admitted to the subsidized Class C wards. Mr Speaker, I have seen patients whose income allowed them to be admitted to Class A wards but not in Class C wards. The credibility of the Ministry is stretched when I see two contradictory paragraphs. Now, let us go back to how he proposes to finance the expenditure of the Ministry of Health by using the Central Provident Fund contributions. Let us take the CPF collections. In 1978, the balance to the credit of contributing members was $5,981 million. The expenditure of the Ministry of Health was $202 million. So if we divide the expenditure of the Ministry of Health by the CPF balance, it is equal to 3.4%. In 1982, the CPF balance was $15,655 million. The Ministry of Health's expenditure was $321 million, that is 2.1%. In other words, there is more than enough money in the CPF balance to pay for the annual expenditure of the entire Ministry of Health, not to talk of calculating the cost of C Class beds only.”
“Recently the Chancellor of the Exchequer, Mr Howe, reduced it to 1%. Now, if we were to examine the payroll tax collection from 1978 to 1982, we find that in 1978 the payroll tax was $75 million. In 1982 it was $161 million. The expenditure of the Ministry of Health in 1978 was $202 million. In 1982 it was $321 million. If we divide the payroll tax collection by the expenditure of the Ministry of Health, we find that in 1978 it was 37.1%. In 1982, it was 50.2%. What does that mean? It means that the payroll tax has grown faster than the expenditure incurred by the Ministry of Health. Until 1982 half of the expenditure incurred by the Ministry can be budgetted for from the payroll tax collections. Now, the Minister has assured us that we will be having a debate on Medisave. I will not go into the details of the national health plan of Medisave. But there are certain points which are related to this Budget and I think they should be taken up now, not three months later. First, let us take the idea that the expenditure of the Ministry of Health will have to be paid out of the Central Provident Fund contributions, that is, 6%, in other words, CPF contributions will be raised to a total of 50%, of which the employer will pay 25% and the employee will pay 25%. The example used in the Blue Book is a three-tier family, an extended nuclear family of two parents at 60 years old and a couple with a household income of $500 per month with two children below 10 years of age. If the working couple were to have their take-home pay reduced by 25% out of $500, they are going to take back $375. I wonder whether the Minister has seriously considered whether two parents, wife and husband, and two children can live on $375. In Hokkien they will say, Tionh lau see.”
“Sir, I beg to move, That the sum to be allocated for Head P be reduced by $10 in respect of Subhead PA-01 of the Main Estimates. Sir, I was going to question the Minister for Health about the invasion of his Ministry by the Minister for Labour, but as this has been ably taken up by the Member for Ayer Rajah, I will confine myself to the budget specifics of the Ministry of Health, except for the Central Provident Fund and what can be used with the contributions. Singapore has really no social security system as complex as what we have seen in advanced industrialized countries where they have pensions, unemployment allowance, free medical care, sickness allowance, food allowances, cost-of-living allowance for children, and so on. I think it is a mistake to try to examine the expenditure of the Ministry of Health against the practice of social security in the OECD countries. On the contrary, I suggest that it must be seen against its share of the budget for social and community services. In 1982, the Ministry of the Environment's share of the total budget was 1.7%; in 1983 it is 3.4%. The Ministry of Education's share in 1982 was 10.8%; in 1983 it has grown to 12.1%. The Ministry of Health's share was 3.5% in 1982; it is 3.4% for 1983. Therefore, I am not feeling particularly alarmed about the amount that is to be spent by the Ministry of Health, not excited, as the Minister for Health would have us believe. Except for the down and out, there is no free medical care in Singapore as they have in the industrialized countries. In Singapore, the patient pays a certain percentage. The taxpayers pay the remaining percentage. In the United Kingdom, the National Health Service is paid for out of the payroll tax of 1.5%.”
“Sir, just a last point for the Minister to note. I suggested in the debate four years ago that perhaps the Ministry of Education could copy 2,500 characters which are most frequently used in the Chinese newspapers in China for the teaching of Chinese, and so make the teaching of Chinese much easier, more acceptable, and therefore more agreeable with parents' understanding of children's aptitude and ability. With this last note, I would like to thank the Minister for his explanation on this amendment, and on behalf of my other colleagues I would like to withdraw.”
“If Members of Parliament do just sit back silently, then they deserve the insult. Since no report has been submitted, I would like to pose a few questions to the Minister of Education and I hope they will be answered. First, how many students passed the 'O' level examination without a second language? How many students passed the 'A' level examination without a second language? How many students applied for admission into the National University of Singapore but have not been admitted? How many of those who have not been admitted had no second language pass at 'AO' level? Is the Ministry or the Public Service Commission aware of the number of Singapore students who have not been admitted into the National University of Singapore but have been admitted to universities either in the United States, the United Kingdom, Australia, Canada or even New Zealand? Lastly, how many students are in the Monolingual stream in English, Chinese, Malay or Tamil? In the light of what the Member for Moulmein and the Member for Ayer Rajah have said, I think it is not just desirable but urgent that the public be informed of the results of the restructuring of the education system that we have in Singapore. If the Minister cannot provide the answers to these questions today, I hope he would do so at some future date.”
“Mr Speaker, I will be brief as you have warned us that there are several other speakers who wish to speak on the amendments to the Ministry of Education's budget. In the debate in March 1979, I warned the House and explained very clearly to the Minister of Education at that time that there were distinct differences in the learning of languages, one was the recognition of phonetics and the other the recognition and recalling of patterns. And that was why we should not try to equate student ability with the ability to be fluent in both English and Chinese because these two languages were vastly different and unrelated to each other. We do not have to go too far to learn from the experience of the Japanese. There are 116 million Japanese, and we can ask ourselves how many of them do speak or use English as fluently as they do Japanese. Likewise in Taiwan, how many Taiwanese have we met who can speak and write English as fluently as they can in Chinese? And there are one billion Chinese. They do find problems learning English. The problems of Education today have arisen from the fundamental disability of the Ministry of Education to dissect education from politics. The idea of being bilingual is being imposed upon a student population, which is a small population. It is a pity that the political desire to make everybody bilingual, because we are living in a multi-lingual society, has distorted our education system. Now we did ask for a report from the Ministry of Education so that we would be able to identify whether progress has been made or what difficulties have been encountered in implementing the restructuring of the education policy. No report has been submitted to Parliament which, I think, is not just disgraceful but an insult to Parliament.”
“Chandra Das and Dr Augustine H. H. Tan:- (1) That the sum to be allocated for Head U be reduced by $10 in respect of Subhead UA-01 of the Main Estimates.”
“Mr Speaker, Sir, I thank the Leader of the House for his kind explanation on your behalf. In fact, he has taken the wind out of my sails. I agree with the Leader of the House that it is very unlikely that Members of Parliament will be spending their time holding hands to admire babbling brooks in a Japanese garden or watch the traffic along the Singapore River. But there is an urgent need indeed for Members who attend meetings of Parliament to find a car park. Every time there is a full meeting of the House, we find that cars are double parked, against all traffic regulations that we ourselves institute in this House. So it might be useful, Mr Speaker, Sir, to take up the suggestion of the Leader of the House that some serious thought be given to the reconstruction of Parliament for the future. You will note too that this Chamber, as the Leader of the House has pointed out, has reached a stage of overflow. In fact, according to the Estimates of Expenditure, Paper Cmd. 2 of 1983, the political appointments for 1983 total 63 whereas in 1982 there were 62. So obviously we are going to face a traffic jam in the Government Benches. If the Registry of Vehicles can find better quarters for its offices, I expect, Mr Speaker, Sir, you will be able to persuade the Minister for Finance likewise to give more space to Parliament which is an institution in our Constitution. Perhaps the Leader of the House could head a Committee to assist you to look into this matter. Sir, I beg to withdraw my amendment. Amendment by leave, withdrawn, The sum of $6,436,550 for Head F ordered to stand part of the Main Estimates. The sum of $160,000 for Head F ordered to stand part of the Development Estimates. 3.30 p.m. Head U - The following amendment stood in the names of Mr S.”
“Sir, I beg to move, That the sum to be allocated for Head F be reduced by $10 in respect of Subhead FA-03 of the Development Estimates. Mr Speaker, Sir, I have been wondering when coming to Parliament about the works that have been going on just outside this House. And I would like the Leader of the House to explain to the Members here the purpose of these works.”
“This levy begun several years ago was quite correctly to collect money to promote tourism. Over the years, the catchment for this levy has increased enormously by the increase in the number of hotels, restaurants, boarding houses and so on. The Singapore Tourist Promotion Board finds that it has a surplus and excess funds but from the point of view of the operator of a restaurant or cafeteria, his prices are marked up. So all this adds up to making Singapore less competitive in the export market, whether in the export of goods or in the export of services. I would like indeed the Government, the Minister for Finance in particular, to examine some of these taxes that we have been collecting so far. In the early years, in the 1960s when we were hard-up for cash, when a surplus of $10 million or even $100 million was considered a windfall, these taxes were appropriate. Now we have a surplus of $2 billion, so are we not over-collecting? I think this is a point worth examining or looking into. Mr Speaker, Sir, I have some questions to put to the Minister for Trade and Industry, and I would like him to clarify. What is the impact on Singapore's economy if the price of oil falls down to US$29 per barrel? What effect will it have on Government revenue, particularly on excise duty, because, as I understand it, tax is collected ad valorem. Will consumers of electricity and motorists benefit from the drop in the price of oil? What is the future of the Petrochemical Complex to which the Govern- ment has committed a billion dollars? These are questions which occupy our minds but which have not been touched upon by the Minister for Trade and Industry. 4.31 p.m.”
“In a recession year, I think there should be a little more flexibility on the part of the Government in alleviating levies or taxes that they collect from companies. Because if companies go down, then of course the workers will be out in the streets. The Minister for Trade and Industry cannot deplore the drift of labour from manufacturing into the trade sector, simply because if we were to automate or mechanize the manufacturing industry, which is quite relatively easy to do, surplus labour must move off into the trade sector which is labour-intensive. If we calculate productivity or added value per dollar salary, instead of added value per worker, and if the added value remains constant, we will find that with increasing salaries productivity must come down. If there is no gross operating profit that a company can make, there will be no added value at all. So productivity must be zero. In other words, it might be useful for the Government to consider setting up a committee to examine the impact of its proportionate taxes. They are proportionate to income - the higher the income, the higher the levies that are made on CPF, payroll tax, Skills Development Fund and so on. I casually mentioned to the Minister of State for National Development that there was this levy of 3% on live entertainment. It is discouraging to the tourist to find that he has got to pay to be entertained in Singapore. What is it that the tourist comes to Singapore for? Has he come here to admire the flats in Toa Payoh? I do not believe that any of us in our adventures abroad goes around to admire high-rise buildings! There is another unfair levy, a 3% levy which is payable to the Singapore Tourist Promotion Board.”
“And the Minister for Trade and Industry is absolutely correct when he said that economic growth and full employment will depend on the corporate sector remaining strong and vigorous. I would like to give my point of view on how we can make the corporate sector strong and vigorous so that we can ensure full employment. I go back to a passage during Question Time last week when I pointed out to the Minister for Finance the increasing cost of labour incurred by companies contributing to the Central Provident Fund, payroll tax and Skills Deve- lopment Fund. It is proposed under the Medisave Scheme that the CPF contributions will be increased to a total of 50%; 25% will be paid by the worker, 25% by the employer. From the point of view of the employee, it must mean that his take-home pay will be one quarter less. The starting point of wage negotiations or collective agreements with unions is the take-home pay. So when workers' take-home pay is reduced by one quarter, they will ask their employers to top it up. So you have a spiralling increase in wages. For the employer he is paying proportionately 25% in CPF contributions, a payroll tax of 2% on income, a skills development tax of 4%, again, on income. That adds up to a total of 31% on income. Even before he starts business, he will have to examine the cost of labour. On top of that, what are his dues in terms of property tax? Over four years from 1978 to 1982, property tax collections have increased by 108%. For this year, I am told that some companies have received notices increasing their property tax by 150% to 250%. The argument behind these increases has not been spelt out. And I know from my own personal experience that although you have the right to appeal you are never heard at all.”
“Will the Minister for Finance assure us that the activities of the Government Investment Corporation and its balance sheet will be included in the next annual report of the Monetary Authority of Singapore and submitted to Parliament? I think it is of considerable concern to all of us who have savings in the Central Provident Fund. Others would like to know how did these surpluses accumulate. After all, the MAS is not only the central banker for the Government but is also the financial agency of the Government. So I presume that it also handles all surplus funds, including the $2 billion surplus for FY 83. It is not that we do not trust the Monetary Authority, but when we hear or read that it is an unusual practice for a central bank to form subsidiary companies, then it would be more comfortable if we could hear from the Monetary Authority itself about its investments and how profitable it has been. I need not remind Members of the House that there was the case of Granite House which was discussed by the Public Accounts Committee in 1976. I think the Government bought Granite House for o22 million. Then when the property market in the United Kingdom collapsed, it was worth very much less than o22 million. If we had bought property in Queensland or Brisbane, it would have been that much less by 10%. So as a public body that is accountable, it is the right of Parliament to be kept fully informed by a report from the Monetary Authority. "Governments do not and cannot create wealth but they can create the environment that will make it either more or less likely that the productive sector of society will, in fact, create wealth." I did not say that, Mr Speaker, Sir. This is a quotation from Mr Donald Regan, Secretary of the United States Treasury.”
“But I think it is very unfair indeed for households and businesses to be caught in the middle of their own fiscal year with new rates, new levies. It is a serious point that I am presenting, namely, that a comprehensive budget be given to the House so that there will be a frank and honest assessment of what it is going to cost the taxpayer. Recently, there has been a hiving off of Government departments into statutory bodies. Obviously, statutory bodies are public bodies. They must be accountable to the public and we would like to know which Ministries are responsible for these statutory bodies. What is the contribution of these statutory bodies to Government revenue? What is the contribution of Government companies, of which there are quite a number, to Government revenue? Can their contributions help to alleviate income tax collections or other levies which are made on fixed charges? Let us take the Monetary Authority of Singapore. Over the last few years it has consistently been giving the Government a handsome dividend of $100 million. And it is estimated to provide another $100 million for FY 83. I am very pleased indeed that with assets of $8.3 billion as of 31st March 1982, the Monetary Authority is able to provide a consistent dividend of $100 million. Of course, I am more pleased to learn that its assets have now grown to $31.3 billion but it made me ask, from its holdings of gold and foreign exchange, how did $8.3 billion suddenly increase to $31.3 billion? I find it irksome indeed, Mr Speaker, Sir, that I should read all this in Fortune when all this should really be reported to the taxpayers in Singapore, to Parliament, because the Act which governs the operations of the MAS spells out that the MAS should present annually a report to Parliament.”
“Although the Minister for Trade and Industry has warned that there may be a reduction in income tax, I do not see this happening because Class I taxes, i.e. direct and indirect taxes, will increase by 42% over the figures for 1980. It is an increase over a three-year period. Class 11 revenue, which comes from the sales of goods and services, will increase by 118% a kid Class 3 revenue, which comes from interest and dividends, will increase by a modest 5%. So the deficit, which the Minister for Trade and Industry predicted would happen in the financial year 1983, will probably not come about. He has given personal deductions or reliefs amounting to $3.8 million, and deductions for companies, $6.2 million, a total of $10 million, but the tax increase for 1983 on tobacco and liquor will yield altogether $54 million and he has assured us that there will be a $2 billion surplus. I would like very much, indeed, if those who frame the Budget policy will return to the old practice of presenting a comprehensive budget so that the taxpayer and the company that has to invest and to prepare its own budget, will be in a better position to know that their liabilities are. On the other hand, it has been the practice in recent years to adopt a "striptease" budget - show a little, but not too much. The painful part of paying for what you have seen will come sometime in the middle of the year. So I have scrutinised [Laughter] not the Hon. Minister for Trade and Industry, but his Budget. I notice, Mr Speaker, Sir, that there will be a 24% increase in revenue from the Ministry of Health and its hospitals. And there will be a 34% increase in revenue from the Registry of Vehicles. I have no idea what other new levies or new rates will be imposed during the coming fiscal year.”
“Mr Speaker, Sir, I have a sympathy for Ministers for Finance who have to balance the Budget, but this year's Budget could be aptly called "The Battle of the Bulge". The bulge I am referring to is the astounding and unprecedented Budget surplus of nearly $2 billion, $2,000 million, for 1983. This is a surplus arising out an estimated revenue of $8.8 billion that will be collected for the next financial year. The ratio of surplus to revenue is 22%. You can call that ratio a very handsome profit, assuming that the Singapore Government is behaving like an incorporated company. This, of course, leads to two questions, namely, how did this surplus come about? Does the Minister for Trade and Industry budget for a surplus, budget for a deficit, or have a balanced budget? I would just like to speak briefly on two points, one from the point of view of the taxpayer, the household and the company, and secondly, from the point of view of assisting industry, particularly in a recession year. First, listening to the speakers yesterday, it would seem to me that there have been, quite correctly, allegations of over-budgetting by Government Ministries, and this over-budgetting tends to stimulate the collection of excessive revenue or taxes. I can give three examples where there has been a gross over-budgetting of development expenditure for FY 81-82. Take the Ministry of Finance. It over-estimated by $707 million; the Ministry of National Development over-estimated by $68 million, and the Ministry of Trade and Industry by $91 million. These are the Economic Ministries which have over-budgetted very grossly indeed and have stimulated a greater collection of taxes.”
“Mr Speaker, Sir, the Ministry of National Development is not involved in tourist economics, but perhaps it can be a help to the industry which contributed $4 billion to the balance of payments in 1982. The industry is hobbled by taxes that do not promote the industry, one of which is the live entertainment tax of 3% on gross takings. Will the Minister liaise with his colleague, the Minister for Finance, to remove this live entertainment tax to promote tourism?”
“Mr Speaker, Sir, may I ask whether the Ministry believes in a straight-line extrapolation that with the existing number of hotel rooms - we have two million visitors to Singapore - and in the next five years, if we increase the number of rooms by 18,000, the number of visitors will be doubled.”
“Mr Speaker, Sir, before I ask the Minister to answer, may I inform the House that I do not speak on behalf of any particular hotel. I am raising the Question in the interest of the tourist industry in particular and in the public interest in general. Question No. 11.”