Toh Keng Kiat
Singapore
“Having said this, Sir, the Ministry, of course, is concerned that the IIS should also, in the public eye, be perceived to be doing its job well. Whilst we feel that the IIS should continue to be within the Police set-up, the Ministry has, in fact, begun the process of examining to see how it can be further strengthened.”
“I have two supplementary questions, Sir. The first one is whether the Minister will consider a rotational posting of good principals and teachers to all the neighbourhood schools to uplift the standards. And the second one is whether the Ministry of Education will proceed with the ranking of primary schools.”
“Sir, if I may ask the Senior Parliamentary Secretary, what have been the problems raised by people involved in this scheme? In particular, has there been any complaint about the adequacy of time given for completion of a project? I have spoken to one or two people involved in this and they said that ---”
“Yes, Sir. We have already heard that the aged in Singapore today have many facilities. But I would urge the Minister to consider seriously the setting up of a national agenda for the aged and to include in this: (1) recognition and constant review of the changing needs of the aged; (2) public education to increase awareness of these needs…”
“This would then shorten the travelling time and lessen congestion due to frequent filtering into and out of bus stop bays. The mini-bus service, on the other hand, should be as flexible as possible with regard to routes, drop-off and pick-up points within its area of operation.”
“It is a variation of the group experience used by psychologists for group therapy, and by political and religious groups to secure the commitment of members to their causes. Such techniques can be exploitative. Schools and members of the public should be aware of their possible dangers.”
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“And cost sharing requires the unions' sanction. Another concern of the employers is that the continued presence of older workers may not be well received by the younger colleagues, especially when the older workers' productivity falls and there is resistance to retraining and upgrading of skills. Some younger workers aspiring to rise in the company's corporate ladder may also view the older ones as obstacles to their progress. Companies, too, may be less ready to invest time, money and effort in upgrading the skills and retraining the older workers whose life span with the company is limited. It is like investing in a short-lease property. It is in these areas that unions can do much by persuading the older members to participate in skills upgrading programmes. They can also help to enlighten their members on the necessity for some seemingly painful and restrictive policies. The NTUC has already called on the Minister for consultations before the exemptions provided for in clause 10 of this Bill are made. The clause does not specify the type of workers to be included. Presumably, these are in the traditional uniformed services and occupations such as sea-faring, commercial aviation and highrise construction where physical demands are great, and anything less than 100% fitness may be a source of danger, not only to the worker himself but to others. I would like now to focus on some specifics in the Bill. Clause 4(1) states that the retirement age of an employee shall not be less than 60 years or such other age, up to 67 years. Initially, I thought the figure "67" was a typographical error. But, like Mr Goh Chee Wee, I think the Minister owes us an explanation on why "67", and not 68 or 66.”
“I am sure there must be some people who are 50 and above who are able and willing to serve when called upon to do so. We have seen how elderly men in their 60s and 70s in other countries, in China and the United States, for example, not only take on public office for the first time but continue to provide the leadership. At home, we have excellent examples in Senior Minister Lee who continues to dazzle the world with his statesmanship, Finance Minister, Dr Richard Hu, who took office only after his retirement from Shell and recently labelled as one of the three best Finance Ministers in the world; and former Deputy Prime Minister and Finance Minister, Dr Goh Keng Swee, whose economic expertise is much sought after by many countries. The PAP can set an example and help to change this mindset by putting up some mature candidates in the next general elections. Thirdly, Sir, is the employers' concern. When this Bill was first tabled, some have expressed worry about increasing costs and various problems. One is the lobby for CPF to be reduced. I was initially behind the labour movement in asking that CPF paid by employers should not be reduced. And I am pleasantly surprised that the Minister has announced a cut of 5% instead. Other concerns, however, are more genuine. And this is the rising cost of maintaining the workers' health, especially now when tax deductible expenditure on health has been kept at 2% of the total payroll. Advancing age is when catastrophic illnesses like cancer strike. It is also the time when sequelae of chronic illnesses like diabetes and hypertension surface. Even minor ailments become more common. Cost sharing and health insurance may be the answers to these problems, but the premiums can be expected to be high.”
“The labour force participation figures have also been low for those aged 55-64. From 35.6% in 1988, it only rose marginally to 38.8% in 1991. Older Singaporeans will therefore have to be persuaded to remain in the workforce. Although they are economically active, many do not want to prolong their working life as employees. There are several reasons for this. Firstly, the attraction of being able to withdraw their entire CPF savings minus the minimum sum. This has dissuaded many workers to continue to be employed. A Singaporean earning $1,000-$1,500 per month for 10 years prior to retirement can accumulate a CPF saving of between $50,000 and $70,000, sufficient capital for a start in some small joint venture business. A solution to this would be to withhold the CPF withdrawal to 60 years of age. But I am not suggesting this because it will be a political decision with dire consequences. But what I would like to propose is that we do away with the employees' contribution altogether for those who are 55 years of age and above. Mr Goh Chee Wee has suggested that we give a half and half deduction of the 5% when this law is enacted. I do not see the rationale behind allowing a person to withdraw all his CPF on the one hand and requiring him to put in more money on the other, except perhaps when there is some topping-up to be done. Secondly, Sir, I have alluded to the present retirement age as a mindset. This is an attitudinal position to which we should see a change. In some ways, the Government, or rather the PAP, is partly responsible for the perpetuation of this mindset. In election after election, the PAP has only fielded young candidates in their early 30s or early 40s. It is common knowledge that those above 50 are given less than a cursory glint.”
“Mr Speaker, Sir, there are several reasons why this Bill is necessary. We have heard very cogent reasons put forward by the Minister for Labour as well as the two speakers before me. Like them, firstly, I would like to consider the demographic changes and shifts which necessitate this Bill. Like them, I also subscribe to the economic importance for having this Bill. But I would like to add that to retire a man at 55 today when he can live to 75 and beyond will be to condemn him to 20 years of fallow during which both his body and his mind decline. I regard this as wasteful and unacceptable. Secondly, the compulsory retirement age of 55 is a legacy which was handed down to us from past administrations, and it is a peculiar mindset which dictates that a man's productive economic life and usefulness ends and goes out together with the candles on his 55th birthday cake. Today, he is an asset, but tomorrow once past 55 he becomes a liability. Thirdly, the Economic Survey of Singapore 1992 has shown that 98-99% of Singaporeans above the age of 55 years are still economically active. In the 55-59 age group, 54,000 out of 54,800 or 98.5% remain so. And for those above 60, the figures are 52,000 out of 52,500 or 99%. In other words, the majority of Singaporeans are still employable. The Retirement Age Bill will provide for those who wish to remain employed beyond 55 years of age. But, Sir, taking a cow to water does not necessarily mean that the animal would drink. We have seen how this is with the female participation rate in the workforce. Despite incentives like enhanced child relief, double child relief and the foreign maid levy deductions, the female participation rate in the labour force still remains disappointingly low.”
“Sir, will the Paediatrics Department take on teaching activities as well?”
“I urge that this decision remain a permanent one. In the Third Schedule, item 10, provisions are made for foreign exchange rate differences. This is of relevance to the import of luxury items, like cars. Many dealers are known to have kept their vehicles in the yards to await an opportune time when the exchange rate works in their favour before they have them registered. As customs duties are dependent on this, and also the other consequential taxes, the timing for when a supply is made should be clearly defined. Finally, the implementation of GST appears to have very many rough corners that need to be smoothened. Most of us are pleased that adequate time has been given for this very important Bill to be discussed in the House during the budget debate, now and again at Select Committee level. But between now and April 1994, it is the onus of every responsible Member of this House to explode the myth that GST is a legislation that favours the rich and discriminates against the poor. Sir, I support this Bill.”
“At this point, may I suggest that the inordinately generous cut-off point of a million dollars be reduced to $500,000 instead. When the New Zealand GST was implemented, the exemption level was set at NZ$24,000. Earlier on, we heard the Minister, Mr Dhanabalan, report that by exempting a lot of goods from GST, the essential goods, such as food, clothing and medicine, we are benefitting the rich. By having a high cut-off point, we also have the same effect because a high cut-off point means that there will be many more items, although these are not specified, which will be free of the GST. Already, the Income Tax Act has stipulated that businesses, which do more than $18,000 annually, or services more than $12,000, are required to give properly serialised receipts and to keep proper books. Surely, it is not too much trouble to add on the 3% to the calculations. To those who are opposed to this argument by saying that the GST will now adversely affect the low-income group, I would request them to read again the White Paper on GST which stipulates very clearly that tax exemption from the GST does not mean that they do not have to be tax liable for their inputs. In other words, the additional tax that they pay for their prices of the inputs will now have to be passed on to the consumers so that any additional change in price under the GST, where there is the additional tax on the outputs, will only affect the prices marginally. There are also, at this point, a lot of non-GST measures which have been introduced to neutralise the effects of the GST. In clause 34, we are told of special provisions for what Mr Dhanabalan has described as the "sinning" activities - betting, gambling, lotteries and the like. The Minister for Finance has announced that this will not be GST exempt.”
“Perhaps, this matter should be looked at with closer scrutiny. In clause 12(1) and (8), there is a provision for a time when a supply is to be made. I would like to enquire whether deposits made on goods which are being let out on approval or consignment would also be affected by liability for GST. This should also involve goods which are being sold on instalment or leasing basis. Further in the Bill, we are told that there are provisions for bad debts as well as for insolvency. But on the leasing of goods, there is no provision being made. Defaulters in a lease are subject to repossession and repossessed goods are often being sold at a depreciated price. Perhaps, this loss or depreciation should also earn a tax credit. In clause 17(3), we are informed that there will be valuation made for market pricing of supplies for which the consideration is not entirely monetary. This clause appears to be an endorsement of some form of barter trading and may open the door to a black economy. Clause 19(4) allows for apportionment for goods and services and imports which are partly consumed for non-business and other purposes. But it does not spell out what this non-business and other purposes are and also the methods for apportionment. In clause 20, there is indication of the amount of input tax that is allowable. Sir, this is determined by the source from which the inputs come. As a GST exempt establishment is not free to issue tax invoices, it may be disadvantaged. Taxable persons will be inclined to get the inputs only from GST taxable sources. In this respect, I would expect more tax exempt organisations and persons to want to opt into the GST rather than opt out by virtue of having turnovers less than a million dollars annually.”
“The Minister for Trade and Industry, Mr Dhanabalan, has alluded to this by saying that we should not zero-rate or exempt some of these items. And I think the Government has been very wise to resist the temptation of yielding to very politically attractive options of putting a lot of things under exemption or zero-rating. We have been told of what happened to the British VAT system and I have read the same article in the Economist that Mr Dhanabalan spoke about. To have many items exempted and zero-rated will mean that we will be bogged down in the same kind of problems that Britain has. In fact, their problem is so bad that the Institute for Fiscal Studies is now busy trying to evaluate how the removal of items from exemption to be put back into the VAT will affect the British economy. Having said that, I would like to devote the next part of my speech to some of the nuts and bolts nexus in the Goods and Services Tax Bill. I know the Minister for Finance has committed this Bill to a Select Committee but I think there are some salient points which we should now address. In clause 3 of this Bill, we are told the definition of what a business is and included in this are the clubs, organisations, societies and other bodies which have similar activities. Looking at the Straits Times' Classified Section today, under the sale of club memberships, we notice that there are no less than 30 to 40 club memberships up for sale, and 25 of them involve transferable club memberships in Singapore. There are country clubs and golf clubs where membership is transacted at very high prices. For those who have posted a price, the total to-date adds up to more than a million dollars. If we exempt the transfer and membership fees from GST, then there will be a lot of loss of revenue.”
“Mr Speaker, Sir, the 1993 Budget has been characterised by some very important tax reforms, not least of which is the introduction of the Goods and Services Tax. Several speakers have spoken about the whys and wherefores of having GST in the two days' debate following the Budget Statement. Because of its importance, there is some impact of the GST on life in Singapore which bears repeating. This would be the impact on tax collection, business conduct as well as consumer behaviour and pattern. On the collection of tax, first of all, I would envisage a reduction in the loss of revenue from tax dodging or tax evasion. After the implementation of the GST, the IRAS will now have a very large number of surrogate tax collectors. And people, because of self-interest, will now want to protect themselves and make sure that their accounting is properly done, and not only that, they will ensure that there will be accurate invoicing as well as receipting. On the conduct of business, we may see the evolution of a situation of business being done on a zero inventory basis. The GST taxes inputs as well as outputs and because of this, there will be people who will be reluctant to keep stocks. On consumer pattern and behaviour, there will be a change in the attitude of spending, especially on luxuries and non-essential goods. But after the refractory period is over, I think the old habits will return. I am sure Dr Soin will see a return to the old social life that she laments may be affected adversely by the GST. After it was announced, the GST invoked a lot of pleas by several quarters to have what is called the essential items to be exempted from it.”
“Sir, I understand that some doctors who are required to sit in audit committees to look into the activities of their colleagues are not prepared to do so for fear of litigation and other action. Will the Ministry extend some kind of immunity to these doctors who sit in audit committees?”
“Sir, does the Minister envisage an improvement of the deficit situation now that there will be a revision of the Consultation Fee Scheme?”
“I understand that not many people want to be involved in teaching, especially our young people. Parents today no longer give encouragement to their children to be teachers. What is more saddening is that many of our teachers themselves do not encourage their children to become teachers. My concern is that when teaching becomes no longer an attractive vocation, we will not be able to attract capable teachers. The shortage of teachers is an important problem which all of us must give our attention to. Singapore will not be able to attain the desired economic achievement if future generations do not gain proper education. Without qualified teachers, this will affect our teaching system in future. A good teaching system will be jeopardised if teachers in schools are unable to perform their job well. I would like to urge the Ministry of Education to continue its efforts to improve the image of teachers in schools. Educating the parents should also be done so that parents will encourage their children to go into teaching. Measures should also be taken to draw more young people to appreciate the teaching profession.”
“I am just wondering what kind of long-term planning policy the Ministry has on manpower development in education, in particular, in certain areas since we are going to embark on a new school system, the autonomous schools. Are we going to have only graduate teachers in the secondary schools and, if so, how has the progress of the Bachelor of Education programme been? Secondly, on the shortfall in the number of teachers, is it due to attrition from resignations, retirement or lack of replacement? Thirdly, what plans have been proposed to accelerate and to bring about a more effective recruitment programme? Sir, I want now to touch on another topic on manpower, ie, on the newly established school psychological scheme. 12 posts have been created for this. Are they all for the engagement of psychologists and, if so, what is their role and function? Are they going to be part of the pastoral care team or will they be mainly in the Gifted Education Programme? If they are to be in this programme, then will they also be engaged in identifying the intelligent under-achievers and how receptive is the Ministry to a flexible system of education to be tailored according to the individual needs of these children? Sir, people are not gifted equally in all fields. There are some who may be good in numeracy and others in literary skills. Some of these children may not fit into the normal school with a structured syllabus. Encik Umar Abdul Hamid (Ang Mo Kio GRC)( In Malay): Sir, in recent years, the Ministry of Education has carried out a number of efforts to draw more people to become teachers. I would like to ask the Minister for Education whether we are facing a shortage of teachers in schools. If the answer is yes, is the Ministry having any measures to overcome the problem?”
“Sir, the estimates on manpower for FY 93 in the Ministry of Education reveal that there will be a reduction of 477 posts in the Government and Government-aided schools for this year. The estimates also indicate that for FY 92, out of 16,513 vacancies only 15,013 were filled. The budget for this year is the same as last year. But following the present trend, I am sure that the same shortfall of 10% will also be seen again. As these are all substantive posts in the Education Service, the decision to reduce the number of teachers and to cut back on manpower is incomprehensible. The reason that has been given is that there is a decrease in student intake. This roller-coaster kind of approach to curing the hiccups in our manpower needs in the Education Ministry is at best expedient and will not be adequate to solve the big burps that are to come. Sir, a look at the demographic figures will perhaps be best to illustrate what I mean. I have here a table of births from 1931 to 1991 given by the Registrar of Births and Deaths. If we concentrate on the last decade, we find that in 1986, at 38,379 births, that was the lowest for the whole of the last 10 years. That was the year of birth of the present cohort of students in primary 1. If we move further to 1988, we find that births had risen by leaps and bounds to 52,957 and has remained at about that level in the last few years. Sir, in a very short time, the Ministry of Education will be faced with an acute shortage of teachers. We have already heard from Mr Abdullah Tarmugi yesterday the banes and the problems of teachers and also the difficulty in recruiting them.”
“The top 25% of these schools will each receive a scholarship of $24,000 per year for four years. As far as the Government and Government-aided schools are concerned, only the top 10% of their students will each receive a scholarship of between $300 and $500 per year. My question is: What about the autonomous schools which come in between the independent schools and the Government or Government-aided schools? How many students will be awarded scholarships and what will be the quantum of these scholarships? Will the teachers in the autonomous schools remain as civil servants and enjoy the same privileges and benefits as those teachers in the Government or Government-aided schools? If teachers of these schools are not under the payroll of MOE, will the schools be able to raise enough funds to pay the teachers without having to increase the burden of the parents? Nowadays, many schools have fund-raising activities every year. Is this not a kind of transfer of educational cost to the parents? In recent years, the Government grant to independent schools has kept increasing, as Dr Toh explained in detail a while ago. For example, in 1991, it was $28 million and in 1992, it was increased to $34 million. For 1993, the budget is $40 million. In spite of all these increases in grant, the independent schools still have to increase their fees. How is the Government going to ensure that, in future, the autonomous schools will not follow the footsteps of the independent schools by increasing their miscellaneous fees again and again?”
“Its only qualification for entry was academic performance, and not one's affiliation with a religion, not one's socio-economic background or the size of one's parent's bank account. Of course, I am referring to Raffles Institution. Sir, I am not alone when I voice disappointment that Raffles Institution went independent. I would like to plead with the Minister that instead of starting an autonomous school system, we should explore the possibility of reverting RI to its pre-independent status. Mr Low Thia Khiang( In Mandarin): Sir, last year, the Prime Minister said that four to six schools will be converted to autonomous schools in two years' time. I would like to ask the Minister what is the progress in respect of this project and what will be the criteria in selecting schools to be made autonomous. What will be the criteria for admission of students to these schools? What sort of assistance will the Ministry of Education give to these autonomous schools to improve the quality of their teaching staff and facilities? My concern is that autonomous schools will be given the liberty to make their own adjustments to the miscellaneous fees to be collected from the students. Therefore, will the cost of improving these facilities be transferred to the parents of students through the increase of miscellaneous fees? The schools to be made autonomous schools may well be the best among the neighbourhood schools. Most of their students come from HDB estates. If the autonomous schools raise their fees, then for those poor families who will be facing the impact of the goods and services tax to be implemented next year they will have to face even heavier burden. Under the Edusave system, the independent schools are most favoured by the Government.”
“As such, why are we then now wanting to evolve another system of education? Are we admitting that independent schools are not working well? Why do we need to cut our nose in order to spite the face? I think the answer lies in the figures of expenditure for the independent school system which I would now like to refer to. For FY 1993, all items of expenditure for independent schools in all sectors far outstrip the expenditure for the whole of the Ministry of Education in terms of percentage points. In other words, the independent schools are becoming too expensive, not only for the State but also for the individual students. In terms of total expenditure, the MOE's increase over FY 92 is 19.9%. For independent schools, it is 35.2%. For development alone, the Ministry of Education is 48.2% and in the independent schools, it is 54.4%. When it comes to grants-in-aid, MOE, 9.9%, independent schools, 19.9%. For operating expenditure, MOE, 11.7%, and independent schools, 20.2%. In terms of dollars, the expenditure for independent schools is $220 million. Sir, compared to this, the $4.1 million allowed for the autonomous schools is a drop in the ocean. 4.15 pm As for student fees, this had started at $25 and doubled almost annually to $200 now. Unfortunately, Sir, one of the best schools in the country had decided to go independent. It has all the ingredients to become the ideal prototype autonomous school. It had a long history, almost as long as that of Singapore, a founding father who is synonymous to Singapore's name and a very strong Old Boys' Association, many of whose illustrious members are sitting in this House today.”
“Sir, like Mr Lew, I am fully in favour of giving more autonomy to schools, especially in the direction of administrative affairs. I think it is out of this that we can see the evolution of the autonomous schools of the genre that the Prime Minister spoke about when he opened Raffles Institution in July last year and again during the National Day Rally. The autonomous school has been proposed as an alternative system to high quality education which is now available in the independent schools. However, I have some reservations about the success of the autonomous school system. Autonomous schools have been proposed, as I said, to give the students in Singapore quality education. But to implement the autonomous school is like trying to reinvent the wheel. The reason for this is that independent schools are institutions with a long history, tradition and character. Some of them are associated with missions which are dedicated to education. A lot of them have got very strong alumni, most of which are also very wealthy. For the autonomous school to evolve to this level of development, it will take several years and a lot of relearning. Autonomous schools have also been pitched against the independent schools in the quality of education that they can give. In this respect, the autonomous school will be at a disadvantage when compared to the independent school. The independent school has a lot of resources, mostly financial, and also the freedom to hire and fire so that they can recruit the best teachers, not only from the local pool of teachers available but go overseas to get the best here. In this respect, autonomous schools will suffer a lot because they are still restrained by the Ministry of Education.”
“They may even end up with a competitive edge over other businessmen who have been graciously full of scruples but foolishly short of ingenuity. Sir, the monitoring must begin now. Finally, I plead on behalf of those needing financial assistance and the pensioners that the grants be further increased. The Minister has promised that the GST will remain at 3% for five years. But he has not promised that those now paying little or no tax will continue to do so in the future. The GST must immutably rise with time. And when it does, hopefully, the number of people requiring aid and subsidies will be negligible. From its past performance, they can rest assured that when help is needed, the Government will not be found wanting. Taking into consideration the pluses and the minuses, I support the GST.”
“Hitherto, the mindset of the Government is to rely heavily on direct income taxation for operating revenue. In Singapore, our income tax revenue this year will reach $7.2 billion, enough to cover 75% of the operating expenditure. In order not to continue punishing the successful, the tax burden will be spread to a broader base. But the GST will only lighten a finite term of direct income taxation to commute it into a lifelong sentence of indirect taxation on consumption. Nay, Sir, I must say, the taxation goes beyond that, from the womb to the tomb, for antenatal medical fees for the unborn child and the funeral paraphernalia and rites for the dead will not be GST exempt. The GST has been perceived as a tax policy that favours the high income earner and business, especially by those who now pay little or no income tax. Nothing is further from the truth. The generous package of tax rebates and non-tax allowances has resulted in those with a chargeable income of up to nearly $30,000 having to pay little or no income tax. Low income households, pensioners and those on financial aid have not been neglected. On the GST as a possible cause of inflation, the Government has stated that it should be no greater than a once only 3% rise. Like Dr Beng, I beg to disagree. An operating cost of the GST must be factored in plus the habit of rounding off, or should I say, rounding up, prices. The Government has declared war on profiteering, but this is hard to police and to prove. Sir, man is often long in ingenuity, though sadly short of scruples. The enterprising will before its imposition insidiously raise the prices to cushion against the 3% GST, and when it strikes will, with magnanimity, declare that they have absorbed the 3% and would not be increasing their prices.”
“Sir, the other major change resulting from Budget 1993 is the Goods and Services Tax (GST). This shifts taxation from income to consumption. High personal and corporate taxes, together with a greying population and a change in the dependency ratio, have made this more equitable form of taxation necessary. As 1993 is "vintage" budget, the GST is Finance Minister Hu's legacy. Sir, I am not for any moment suggesting that the good Minister would do a Mulroney on us. He need not. For he has been prudent enough to introduce pari passu with the GST a generous package of cushioning measures which will leave no one out of pocket, but the Government itself. I am sure Mr Chiam will not agree with me on this. The Government will therefore not be as incisive in the implementation of GST as it has been decisive about adopting it. Business style should change after 1994. Initially, a 3% GST will be imposed, offset by a similar percentage cut in the corporate tax to 27%. The ultimate is to reduce this to 25%. But whilst the GST is set to remain at 3% for 5 years, there is no time-table or indication as to when this 25% corporate taxation would be reached. Sir, with the GST, taxation will also take on a new mien in Singapore. By an Act of Parliament, the Inland Revenue Authority will have at its disposal, when the GST is in place, an army of surrogate tax collectors. From being a "cat and mouse" game, revenue collection will now become one of passing the musical parcel, the last man has the forfeit. Vested interest, however, will dictate more accurate invoicing and truthful accounting, and tax revenue loss from avoidance and evasion should be reduced. Whilst the corporate taxation is on profits, the GST is on inputs as well. A situation of zero inventory in business may arise.”
“And costs must rise with time, though they may not escalate. Perhaps an annual adjustment, according to the Consumer Price Index, should be considered. On this, Sir, I hope the Minister will not remain silent. The Government has announced measures to plug a loophole in the offset of losses against profits on a dollar-to-dollar basis by introducing an adjustment factor related to the tax differential. This is long overdue and will correct the anomaly and reduce the occasion for tax avoidance. This disincentive may upset foreign business but, I think, it should not be a deterrent as any potential loss is more than made up by gains in other areas. In tandem with this, a requirement by local firms for each overseas investment to go through a Singapore Incorporated company has been removed. To further facilitate overseas ventures, the loss and profit offsetting should be extended to local firms, especially those with related business activities. The tax concession on foreign income should also not be based on a case-by-case basis. Budget 1993 will result in wide-ranging changes to Singapore life and business styles. To promote ourselves as an international art centre, the Government has unveiled tax concessions for dealers in art. Donations to the local museums will also earn tax credits. May I suggest that gifts of a million dollars or more should qualify the foreign donor to permanent residency status. Coupled with the museum development programme which should now be accelerated with the setting up of a National Heritage Board, this should entice more collectors from Hong Kong to move here before 1997. Together with the suspension of some entertainment duties, the cultural life of Singaporeans will be enhanced.”
“Many see the ARF no longer necessary as a measure to curb car growth for this can be effectively controlled now by the Government through the COE scheme. Its continued levy at such high levels can only be construed as its use as an instrument for generating income. The CPF contributed by employers will be raised by half a percentage point in July. There is a possibility that this may go up by one-and-a-half percent next year. Sir, the CPF account of our members is flushed with cash. As at December 1991, there were $46 billion in its coffers. And there were suggestions that Singaporeans should withdraw the excessive CPF savings to venture overseas for higher returns. May I suggest that the employer's contribution be gradually allowed to increase to the 40% level on a half-and-half basis, rather than by a one-and-a-half percentage point next year. Sir, I want to declare my interest now as a practising doctor before I take up the next point. The Minister has announced a cap on medical benefits to 2% of the total remuneration for companies from next year. This is to discourage excessive use of the health service and also to prevent escalation of medical fees. It followed the survey of 325 companies, of which 85% were found to be not spending more than 2% on health care. We are not told the nature or the business activity of the small percentage going beyond 2%. For them, this could have been a necessity and, as Dr Beng has alluded to it, statutory requirements. The decision to cap them could cause problems. Already the NTUC has warned employers not to cut back on the employees' health benefits. On the other hand, some of the 85% may be agitated to urge the unions to negotiate for more medical benefits, especially when costs rise.”
“Mr Speaker, Sir, 1993 will go down on record as a "vintage" year for the Singapore budget. A wide range of tax concessions, rebates and non-tax benefits, which were announced on Budget day by the Finance Minister, has made this a budget for everyone, except the smokers. While some of these changes are needed to cushion the effect of a shift from direct income to indirect consumption tax, and others to encourage local entrepreneurs to go overseas, it is the gradual erosion of Singapore's competitiveness that has made them essential. There are already some ominous signs. Competition by emerging economies in the region for foreign capital and the scramble by multi-nationals for the regional markets have put increasing pressure on us. The rising strength of the Singapore dollar has also not helped. In 1992, after three consecutive rises, our RULC (or Relative Unit Labour Cost) against the other NIEs rose to 146.2, not far from the 1985 high of 153.3. We had a recession then. Whilst we cannot force others to re-align their currencies with the US unit, we can certainly adopt measures to reduce our RULC vis-a-vis the other NIEs. Apart from the dollar's strength, high corporate and personal income taxes, other fees, levies and charges have been cited as business disincentives. The saving grace has always been our work ethos and efficiency. Some still bemoan the high foreign levy for workers, the ARF, and the CPF. Like Dr Arthur Beng, I would like to suggest that we review the foreign workers levy and perhaps reduce or waive it for workers with special skills not available here. The additional registration fee for cars was introduced as a fiscal measure to control vehicle growth. It indirectly affected the cost of doing business.”
“Sir, as some students have dropped out because they cannot fit into the usual school system because of a structured syllabus, will the Ministry consider a special programme like tutelage to bring these children back to school?”
“Sir, not too long ago, there were press reports locally that the employment of illegal workers was still rampant. And one report quoted a foreign labour official as saying that "of 12,000 workers from his country in Singapore, 50% were doing so without legal work permits". Sir, is this still a prevalent problem? Would the Minister be able to tell this House how many, if any, illegal immigrant workers have been prosecuted under the amended Immigration Act, 1989?”
“Sir, there were recent instances of drug-related misdemeanours occurring at construction work sites involving foreign workers. Does his Ministry feel that it is timely now for the Government to consider providing dormitory or hostel-type accommodation for guest workers as this will serve two purposes? Firstly, it will solve the recurring problem of adequate housing for foreign workers and, secondly, it will allow closer surveillance for anti-social activities.”
“Sir, is there any formal Court of Appeal for any party which is dissatisfied with a ruling of the IAC besides making public statements in the press?”
“Would the Minister please reconsider my proposal because I have found that recent prices in the open tender system have resulted in bids which have gone beyond $1 million for a mere 100 square metres of shop space in an HDB estate?”
“No, I am going to ask a supplementary question.”
“Sir, contrary to popular perception, I think the rentals which the doctors have to pay for their shop premises do play a major part in the costing of the medical bills for the patients. I have here a report of an economic survey on the medical health services - Mr Speaker: Dr Toh, are you making a speech?”