Wong Kwei Cheong
Singapore
“Sir, I beg to move, That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SJ 1500. My cut is on job placement and labour market information services. According to the 1995 Economic Survey of Singapore, the unemployment rate in June 1995 was 2.7%, slightly higher than the 2.6% a year ago.”
“Sir, my amendment is on conciliation services. According to the 1995 Economic Survey of Singapore, about 8,800 workers were retrenched in 1995 compared to 9,444 in 1994. Most of them were retrenched from the manufacturing sector, mainly the electronic products and textile and wearing apparel industries.”
“Sir, to help low-income families own 3-room HDB flats, the Government has raised the income ceiling from $1,000 to $1,200 in January 1996. Can the Minister give a report on the number of low-income families that have benefited from this revision? HDB has also bought back 3-room HDB flats from the open market for resale to HDB applicants.”
“Sir, the Minister has announced that with effect from 28th August 1995, the CPF Housing Grant Scheme has been revised as follows: $40,000 grant to be given to first-time buyers to buy a 2-room or larger resale flat. Those married children buying near their parents' home can apply for $50,000 grant.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Main Estimates be reduced by $10 in respect of Code WK 3100. Sir, I am speaking on the strengthening of international trade. According to the 1995 Economic Survey of Singapore, exports in 1995 rose by 14% to $168 billion compared to 23% in the previous year.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Development Estimates be reduced by $10 in respect of Code WH 5200. According to the 1995 Economic Survey of Singapore, Singapore's gross expenditure on research and development in 1994 amounted to $1,175 million, up 18% from 1993.”
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“Sir, can the Minister commit to this House that the current levy of $330 will not be further increased?”
“Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SJ 1500. My cut is on job placement and labour market information services. According to the 1995 Economic Survey of Singapore, the unemployment rate in June 1995 was 2.7%, slightly higher than the 2.6% a year ago. On the other hand, employment in 1995 rose by 105,900 compared with the 72,000 increase in 1994. In view of our current tight labour market, may I ask the Minister for a description of the job placement and labour market information services which the Ministry of Labour provides in order to help employers recruit suitable employees.”
“Sir, my amendment is on conciliation services. According to the 1995 Economic Survey of Singapore, about 8,800 workers were retrenched in 1995 compared to 9,444 in 1994. Most of them were retrenched from the manufacturing sector, mainly the electronic products and textile and wearing apparel industries. May I ask the Minister whether his Ministry would provide conciliation services to the retrenched workers if the employers fail to provide them with sufficient retrenchment benefits? What other conciliation services are provided by the Ministry of Labour to ensure better labour-management relationship in the manufacturing industry?”
“And as far as I know, only 20% will be sold to the public. In other words, there are only 200 units available to the public next year. This number is too insignificant compared with the private sector's supply of about 10,000 units per year. I hope the Minister will gauge the response from the first few launches of the Executive Condominiums and consider increasing the supply accordingly. Due to the insignificant number of units offered to the public, it is therefore not surprising that many people have commented that the Executive Condominium project will not affect the prices of private property. Sir, in my view, the Executive Condominium project has another role to play, that is, playing a moderating role in terms of the price escalation of private property. First, the price of an Executive Condominium is generally lower than the market price. Therefore, first of all, it will siphon away some potential buyers from the existing private property market. Secondly, the price of an Executive Condominium will then form a kind of reference for the private property developer. Therefore, they could not peg their price too high in order to make their property saleable. But in order to play this price moderation role under the Executive Condominium Housing Scheme, the number of units to be supplied to the market must be significant. I would like to ask the Minister two questions: First, what is the projected number of units to be built in the next few years? Second, in what way does the Government perceive the role of Executive Condominiums in affecting the prices of private property?”
“Sir, in August 1995, the Executive Condominium Housing Scheme was announced and the Executive flat queue was closed. The success of the Executive Condominium Housing Scheme depends on the price of the land sold by HDB through the nominated developers such as Pidemco, NTUC, and Singapore Technologies. I fail to understand why HDB cannot open the Executive Condominium Scheme to all private developers in order to secure the best price and product for the aspiring house owners. Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, I am glad to note that the Government will build Executive Condominiums through the Government-linked companies to provide affordable condominiums to meet the demands of Singaporeans. From what it was announced, I realise that they will be subsidised on land cost and also it will give the first-time applicants $40,000 discount for acquiring an Executive condominium. Judging from the various figures that I have, for an Executive condominium of the size of about 1,300 sq ft, the discount will be in the order of about $150,000. This amount, compared with the current market price of an equivalent size of condominium which costs about $800,000 to $900,000, is about 17% to 19% discount. In other words, it is cheaper than an equivalent size of condominium if an applicant should purchase it from the private developer. Based on this substantial discount, I can certainly imagine that the response of potential buyers will be quite overwhelming. There is no reason why people do not want to buy an Executive Condominium but prefer to buy a private property, unless they do not want to be bound by the terms set under the Executive Condominium Housing Scheme. Sir, unfortunately, from what was recently announced, only 1,000 units will be built.”
“Sir, the Minister has announced that with effect from 28th August 1995, the CPF Housing Grant Scheme has been revised as follows: $40,000 grant to be given to first-time buyers to buy a 2-room or larger resale flat. Those married children buying near their parents' home can apply for $50,000 grant. Can I ask the Minister what is the response to this revised CPF Housing Grant Scheme? The Minister has also mentioned that the Scheme will continue to be modified and refined. Can I ask if any further modifications and refinements have been made? Sir, can I move on to my next cut?”
“Sir, to help low-income families own 3-room HDB flats, the Government has raised the income ceiling from $1,000 to $1,200 in January 1996. Can the Minister give a report on the number of low-income families that have benefited from this revision? HDB has also bought back 3-room HDB flats from the open market for resale to HDB applicants. Can the Minister give a report on the number of such 3-room HDB flats bought by the HDB, the total number of units sold to HDB applicants and the average subsidy for each 3-room HDB flat sold? I also hope that the Minister can give us an update on the other measures to help low income families to own HDB flats. 5.30 pm”
“Sir, our population profile is an aging one. For the past two to three years, the Government has been intensively building geriatric centres, nursing homes, and senior citizens' health care centres, rehabilitation centres and day care centres for senile dementia. Presently, there are 20 voluntary homes providing 2,316 beds and 25 commercial homes providing 1,302 beds. Another eight voluntary nursing homes are in the process of being built. There are seven senior citizens' health care centres, five day care rehabilitation centres and two day care centres for senile dementia. It is most heartening to see that the Ministry has given a lot of thought to the aging population and is providing towards their needs. I would like to ask the following questions: (a) What is the total cost spent in the setting up of the above facilities? How much of our national health care expenditure has been allocated for the building of these community projects? (b) Are the above services available to all the senior citizens? Or is there a criterion for the elderly sick to make use of these services? What is the cost of these services for the senior citizens?; and (c) What is the occupancy rate of the nursing homes and health care centres? Is there currently a shortage of beds? Would the Ministry be able to produce projections of the needs for the next five years and their plans?”
“Sir, the Ministry of Health's mission is to build a healthy nation and to provide a comprehensive, modern and efficient health care service through the planning and development of the public and private health sectors to ensure a high standard of medical care for all Singaporeans. This is a very praiseworthy mission and in this connection I would like to ask the Minister the following questions: (a) What was the national health care expenditure in 1993, 1994 and 1995 and as a percentage of Gross Domestic Product (GDP), how does this expenditure compare to that of countries, like Japan, Taiwan, Hong Kong and Malaysia? (b) Can our national health care expenditure as a percentage of GDP be increased so that we can provide better and cheaper health care services to our citizens? (c) What incentives are we providing to the private sector to develop private hospitals like Mount Elizabeth Hospital? (d) Do we have enough medical specialists in Singapore to cater to the needs of Singaporeans as well as patients from the neighbouring countries? (e) Will the Singapore Government recognise doctors who obtain higher qualifications, like the MRCP, or FRCS in UK, as specialists, when they return to Singapore?”
“Sir, I beg to withdraw the amendment. Amendment, by leave, withdrawn. The sum of $270,789,640 for Head W ordered to stand part of the Main Estimates. The sum of $1,133,485,600 for Head W ordered to stand part of the Development Estimates.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Main Estimates be reduced by $10 in respect of Code WK 3100. Sir, I am speaking on the strengthening of international trade. According to the 1995 Economic Survey of Singapore, exports in 1995 rose by 14% to $168 billion compared to 23% in the previous year. As our economy is very dependent on international trade, it is important that the Government continues to promote Singapore's exports of goods and services abroad, and develop Singapore into a premier international trading hub. May I ask the Minister for an update on the efforts made by the Ministry of Trade and Industry in promoting economic cooperation with various countries, and the incentives and assistance schemes provided to local entrepreneurs in their efforts to expand their international trade.”
“Sir, I beg to withdraw the amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Main Estimates be reduced by $10 in respect of Code WI 3100. According to the 1995 Economic Survey of Singapore, real wage growth in 1995 was at 4.1% compared to the productivity growth of 3.7%. In order to maintain our economic growth, it is important that our productivity growth exceeds that of our real wage growth. May I ask the Minister if he will review the Productivity Movement that was launched in 1981 to make it more relevant and effective in improving our productivity growth for the next few years?”
“Sir, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Development Estimates be reduced by $10 in respect of Code WH 5200. According to the 1995 Economic Survey of Singapore, Singapore's gross expenditure on research and development in 1994 amounted to $1,175 million, up 18% from 1993. This is a healthy growth and should be supported with tax incentives and research and development grants. May I ask the Minister for an update of the Government's programmes to promote economically relevant research and development and innovation in Singapore. In particular, how many companies have benefited from the $50 million Technology Development Fund that was launched in September 1995 to promote technology-based start-up companies?”
“Sir, may I ask the Minister for a progress report of our drive to develop an external economy from the regionalisation programme launched three years ago? According to the 1995 Economic Survey of Singapore, in 1995, 381 regional projects were facilitated by the Economic Development Board, comprising 187 local enterprises and 123 multi-national corporations. I hope the Minister can elaborate on the incentive schemes and facilities provided to these 187 local enterprises in 1995.”
“In view of such healthy budget surpluses, I hope the Minister will delay the floating of SP for a few more years so that electricity tariff rates can be maintained at its current affordable rates. Although this year's budget has been most generous, the Minister has left out budget considerations for a very important segment of our population, ie, our local entrepreneurs who need to look overseas for business opportunities. In the 1995 budget, the Minister announced that the pool of venture capital funds to help local small and medium sized entrepreneurs (SMEs) to venture overseas increased by 33% from $2.6 billion in 1993 to an estimated $3.5 billion in 1994. According to the 1995 Economic Survey of Singapore, the pool of venture funds under management in Singapore as at January 1995 was $5.3 billion. May I ask the Minister for the number of SMEs that has benefited from such venture capital funds and the amount of money disbursed to such SMEs. I hope for the next Budget, the Minister will provide incentives specially to our SMEs so as to enable them to grow to become Singapore multi-nationals. Sir, I support the motion.”
“Mr Deputy Speaker, Sir, I support the Budget Statement announced by the Minister for Finance. It is indeed a generous Budget, a hongbao Budget for all Singaporeans. It is also pro-growth, where the business sector is concerned. There are cuts in personal, corporate and property taxes, a series of CPF top-ups, rebates on HDB rentals and utility bills, cuts in estate and stamp duties, personal relief for National Servicemen and even for their parents and spouses. For businessmen concerned about rising operating costs and the reduced competitiveness of the economy, the Government has introduced a series of tax-cutting measures aimed at maintaining the conduciveness of the business environment. However, there are areas where the Finance Minister might have done more. For example, the one percentage point cut in the corporate tax rate is half what it could have been. A two percentage point cut in corporate taxes will be better for the entire corporate sector, in view of rising operating costs, particularly with the pending increases of electricity bills, a most fundamental element of operating cost. The Minister in his Budget speech has mentioned that Singapore Power's (SP) electricity tariffs are too low, and that the Government will raise them gradually over several years to enable SP to earn adequate returns on its capital. I have discussed this issue with our grassroots and with several local entrepreneurs. They are of the opinion that SP is already making adequate returns on its current capital employed and the Government should not increase electricity tariff rates just to float SP on the stock exchange. Moreover, the Minister, through his prudent policies, has been able to maintain budget surplus averaging 4.4% of GDP over the last eight years.”
“I have brought this up several times. There is only one bus service No. 131 serving a large area of Farrer Park. Of course, the question of profitability is always there, but I hope the LTA could address this problem and help our residents. Sometimes they have to wait up to an hour for the next bus, and would like to have a better bus service along this route.”
“May I suggest that the LTA take up this challenge of being a developer and develop these stations either on their own or in joint venture with one of our developers and set the example and show our developers how such stations can be developed in a manner that can ensure the safety of our trains. The next point which I want to bring up is that the LTA in designing new lines, especially the North-East line, should make a proper study of the location of MRT stations. I have also discussed this with my residents in Cairnhill, especially my Residents' Committees at the Tekka Market, and they strongly suggest that the MRT stations should be located somewhere near Tekka Market for the simple reason that every weekend the Tekka Market has a big problem with the foreign workers and one way to solve this problem is to keep these foreign workers, if possible, in the air-conditioned comfort of the MRT station rather than around Tekka Market. I hope the LTA would take these into consideration when they are planning their new MRT stations along the North-East line. Another point which I want to bring up is the bus service. At the moment, the bus commuters wait for long periods of time at certain bus stops. As in Tokyo, when we come out of the Narita Airport to take the airport bus, we always know exactly when the next bus is coming because there is always a clear time indication of the next bus going to which destination and I hope the LTA can use this as an example to have a clear time indicator at all the bus stops, especially the key bus stops along Orchard Road. Finally, the LTA, with all its efficiency, could perhaps spend some time immediately to solve some of the transport problems that are causing a lot of concern to our residents, especially along Dorset Road.”
“Thank you, Mr Speaker, Sir, for giving me this opportunity to speak. May I, first of all, congratulate the Land Transport Authority (LTA) for coming out with this very comprehensive report in spite of the fact that it has only been set up in September last year, and in three months, it was able to do this wonderful job. I am sure that under the management of LTA we can achieve our objective of having a world class transport system within the next 10-15 years. As my parliamentary colleagues yesterday have already covered a lot of the points, I would like just to cover a few points to complement what has been said yesterday. First and foremost on improving the service in MRT stations. Those Members who have travelled in London, Tokyo, and use the Metro stations and MRT stations, will find it very convenient because at every station there is a time indicating when the next train will be coming. I believe in Singapore this is something that can be introduced to all the MRT stations as a first step for the LTA to improve their services. The second point I want to bring up is the use of MRT stations for development purposes. In the Cairnhill Constituency, for example, we have three very good MRT stations at Dhoby Ghaut, Somerset and Orchard Road. Unfortunately, these MRT stations have not been developed. From what I understand, it is because of the stringent conditions laid down by the LTA when it comes to bidding for development purposes. For example, developers may be required to give warranties of up to 30 years that the MRT station will not be damaged. This kind of stringent conditions have discouraged many developers from coming to make their bids and develop these stations.”
“Sir, I understand that the HDB's upgrading programme is progressing smoothly and hope the Minister can give this House an update of the latest development such as: (a) When will the five demonstration precincts in Marine Parade, Telok Blangah, Ang Mo Kio, Lorong Lew Lian and Clementi be completed? How many HDB flats in these precincts have been upgraded and how much the Government has spent in upgrading these HDB flats? (b) Which are the constituencies that have been selected for upgrading and when will HDB flats in Kampong Glam GRC (Cairnhill) be upgraded? (c) How many HDB flats will benefit from the Interim Upgrading Programme and when can this programme be extended to Kampong Glam GRC (Cairnhill)?”
“Thank you. Sir, the number of vehicles on our roads will increase with greater affluence of our people. Hence, travel demand towards and within the city is expected to increase considerably. May I ask the Minister (a) the plans for additional road capacity to cater for the projected traffic growth in the city in view of land constraints; and (b) the feasibility of building road tunnels in the city. I understand that the Government is considering to build a ring tunnel network referred to as the Singapore Underground Road System (SURS). Can the Minister give us more details of the SURS network, the estimated cost of construction and when construction work will start? Next, on the HDB building programme. Sir, I would like to ask the Minister about the HDB's building programme from 1994 to 1996, in particular: (a) the number of HDB flats built in 1994 and planned to be built in 1995 and 1996; (b) the number of HDB flat applicants in 1994 and the number of HDB applicants expected for 1995 and 1996; and (c) in order to meet the increasing demand for HDB flats, will the Government consider building more flats to meet this demand?”
“Sir, before I speak on HDB Building Programme, can I have your permission to speak on Roads Development Programme that I missed just now?”
“Sir, although I am not very happy with the reply, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“Sir, is the Government prepared to make a study of the impact of the strengthening Singapore dollar on our MNCs and SMEs?”
“The strong Japanese Yen has forced many Japanese manufacturers to move their factories out of Japan, thus creating unemployment and economic recession. May I suggest that the Government make an urgent study of the impact that the strengthening Singapore dollar has on our MNCs and SMEs, and take appropriate action to reduce the effect that the strengthening Singapore dollar has on our exports.”
“Sir, I beg to move, That the sum to be allocated for Head W of the Main Estimates be reduced by $10 in respect of Code WE 3100. Sir, according to the Economic Survey of Singapore 1994, local small and medium enterprises, or SMEs, have made good progress in their development. The value added grew from $5.3 billion in 1992 to $5.4 billion in 1993. Their productivity, as measured by the census value added per worker, increased by 6% from $41,600 in 1992 to $44,100 in 1993. However, no matter how hard our local entrepreneurs work, their productivity increases are eroded away by the increasing strength of the Singapore dollar. Last year, the Singapore dollar appreciated by 10% against the US dollar. For this year alone, the Singapore dollar has appreciated from $1.46 to $1.41 per US dollar, an increase of about 3.5% in just a matter of two and a half months. At this rate of appreciation, if nothing is done to slow down its strength, the Singapore dollar would have appreciated by another 10% against the US dollar for this year. And this, I must say, will be very bad for our export industries. Many of our SMEs have to sell their products to the MNCs in Singapore in US dollars, and buy their products from local suppliers in Singapore dollars. Their profit margins are constantly reduced. Their future prospects are indeed bleak. The Minister for Finance has strongly defended the strong Singapore dollar as it neutralised imported inflation and alleviated over-heating in the economy and the labour market. However, if the Government continues to ignore the strong appreciation of the Singapore dollar, it is a matter of time before our MNCs have to drastically reduce their operations and Singapore will suffer the same fate that Japan is now going through.”
“It is the very nature of the business. However, for other products which are in the earlier phases of the product cycle, profit margins are higher. In other words, industry trends can account for some of the pressures that the business community in Singapore are facing today. I have no data but I suspect that for labour intensive manufacturing product processes, profitability is higher in other countries which have lower labour and land costs, and that for the same processes, profit margins in Singapore have fallen over time. In contrast, profit margins for capital and skill intensive industries remain high in Singapore, and that is why foreign investors still come here to invest. 4.45 pm I mention this for two reasons. First, to ask the Minister whether my assessment of the current economic situation is correct, as the Ministry has access to more information than I do. Second, I mention this in order to move the current debate in Singapore on the economic policy environment forward. Business costs are important. The Government should help alleviate the cost pressures to which businesses in Singapore are increasingly subject to. In addition to this, it is important that businesses continually search for new product niches, new ways of doing the same thing which result in better quality products at cheaper cost, establish brand names as an alternative to continuing with OEM sub-contracting, engage in more R&D, and so on. The key question in my mind therefore is: how can both business and Government join hands in a collaborative effort to move into new growth areas, new markets, and in this way sustain our growth momentum into the next century?”
“But the 10% growth was, in general, broad based and should be an occasion of celebration, with most people laughing all the way to the bank. However, the fact is that quite a number of people are not laughing. Instead, they are feeling the pressures of doing business in Singapore. I would like to add another dimension as to the reasons why. Industries go through product cycles. The mature phase of the product cycle is typically characterised by more standardised technologies, more suppliers in the market and more intense competition. Profit margins are lower than in the early phase when high entry cost means fewer players. Some of Singapore's major industries are in the mature phase of the product cycle. The electronics sector, for example, from disk drives and other computer peripherals to consumer electronics is under tremendous pressure to cut costs and innovate as profit margins are thin. Similarly, traditional banking is also experiencing reduced profit margins. The new high margin area is in trading and fee-based banking. What is more, learning curves are getting shorter. It is easier for new players to enter the market than in the past. The emergence of new regional players is also an integral part of this overall picture. This is further exacerbated by the fact that when profit margins are low, companies can survive if volumes are high. But the small size of the Singapore market does not often allow for a high volume of sales. Companies often have to look outside of Singapore in order to expand and penetrating foreign markets is often more difficult than doing business in the home market. What I am trying to suggest is that for products in the mature phase of the product cycle, it is inevitable that pressures will be intense and profit margins reduced.”
“Sir, according to the Minister for Finance in the Budget debate on Tuesday, 14th March, and as reported in the Straits Times on 15th March, the pool of venture capital funds to help local SMEs to venture overseas increased by 33%, from $2.6 billion in 1993 to an estimated $3.5 billion in 1994. I believe this amount was spent by public as well as private venture capital funds. However, according to the budget of the Ministry of Trade and Industry, as stated in page 651 of the Government Budget book for FY95/96, the total sum allocated to EDB to assist SMEs is only about $369.3 million, namely, $200 million for the Cluster Development Fund, $67.7 million venture capital fund, $59.5 million for the Economic Development Assistance Scheme and $42.3 million to EDB Investments (Pte) Ltd for equity participation and venture capital investments. I hope the Minister for Trade and Industry or the Minister for Finance can explain why the Government is only allocating $369.5 million while the total sum from public and private venture capital funds used to assist local SMEs in 1994 to venture overseas was about $3.5 billion. In view of the large Government budget surpluses and the importance of regionalisation, may I suggest that the Government allocate a greater portion of this budget surplus to assist SMEs to venture overseas. Dr Lee Tsao Yuan (Nominated Member): Sir, economic growth in the last two years at 10% has been nothing short of the spectacular. Typical boom conditions prevailed such as the tight labour market and high productivity growth. Yes, there were a few industries that have not done well such as the retail and petroleum refining industries.”
“Since the Chinese clan associations are actively promoting bursary and scholarship schemes, I think it is playing the same role as the Edusave scheme. The Government should allow them to enjoy tax exemption. I hope the Minister will consider this seriously. On that note, I support the Budget statement by the Minister for Finance. 2.23 pm”
“At least, give them loans of 30% to 50% of their total overseas investments so that the SMEs would be able to develop properly in their overseas ventures. Secondly, consider the use of CPF savings for certain selected investment scheme overseas so that the SMEs will be able to have a share in the regionalization programme. Thirdly, provide the avoidance of double taxation and simplify the procedure for the benefit of the SMEs. Give them more information so that these people will be able to send their money back to Singapore. Finally, with regard to male citizens who go out to work outside Singapore, if they bring their wife and children with them, they should be able to enjoy higher tax rebates and other tax incentives so as to enhance family cohesion which is the tradition of our people, and that will prevent the establishment of second homes outside. Sir, the Government is going to allocate $500 million to Edusave Fund. This will enhance the opportunities for our people to receive training and retraining to maximise their potential. Our students will be able to get scholarship from the Edusave fund. But there is one thing which I fail to understand, that is, why is it that our clan associations, which provide scholarship and bursaries to the students, cannot be granted any tax incentive from the Government. If the Minister is concerned that these clan associations cannot manage their finances properly, then if the school principals can certify to the effect that scholarship and bursaries are being given, we should allow the clan associations to receive tax exemption on their bursary and scholarship funds. I believe that the able ones should help the less able ones. I think this is one of our core values.”
“Especially in the 1950s and 1960s, when ex-ministers, ex-MPs and ex-civil servants retired, they did not have the benefit of NWC recommendations or CPF savings. All they received was just a miserable sum of pension. These people who had made contributions to Singapore in the past cannot depend on the small pensions computed then for the living in the 1990s. Many of the ex-MPs who retired told me that when they retired they received only a pension based on the then MPs' allowance of $500. They had made valuable contributions to the country and the Party but they are left with almost nothing. I hope that the Government can consider the contributions made by these people, and make appropriate adjustments to their pension. I believe that the number of such people is very small and it would not add on to the burden of the present and future taxpayers. Maybe we can use another method, ie, to use the surpluses from the budget to look after them. I hope the Minister for Finance will consider this suggestion sympathetically. Sir, the Minister for Finance also said that through its fiscal policy the Government will make Singapore's economy more competitive, such as reducing the tax burden of the businessmen to the minimum, and providing for relatively tax-free repatriation of their funds. I welcome the statement from the Minister for Finance, but I hope that he would also consider helping the small and medium enterprises (SMEs) in their overseas ventures by giving all of them the necessary assistance. First, I would like to declare my interest. I am a businessman. The Government should consider setting up a development bank to provide loans for the SMEs in the establishment and building of factories and plants overseas and thereby using such factories as mortgage thereof.”
“" Some young people even said "What a disappointment, only a small pittance." Therefore, I feel that if the Government were to continue sharing the economic fruits among the people, it must first understand the mentality of the young people on this kind of handouts before implementing it, so that this benefit sharing will not be wrongly considered as a kind of welfare scheme. Mr Speaker, Sir, I heard the proposal of Mr Ling How Doong about giving more of this and more of that. I think maybe the motive and intention are good but it is certainly not realistic. He quoted Malaysia as an example. We cannot compare Singapore to Malaysia. Malaysia is a large country with lots of natural resources like rubber, tin, palm oil, etc. But in Singapore, we have none. We do not have any natural resources, not even water. Our land area is very small. The circumstances are different between the two countries. We cannot even use Hong Kong as a comparison. Hong Kong is not a sovereign state. It does not need to spend on defence and foreign affairs. Hong Kong saves a lot of money on these two areas. I feel that we should be more realistic. Mr Speaker, Sir, another point I like to raise is on the respect for the old and the aged. I think this is a traditional virtue of Singaporeans. However, there seems to be no provision in this Budget for the pensioners. I feel that the pensioners need to be looked after. At a time when our national economy has performed well, we should not forget that there are many people who retired in the 1950s and 1960s who had made considerable contributions to the society and the country. These are the older Singaporeans.”
“Mr Peh Chin Hua (Jalan Besar GRC)( In Mandarin): Mr Speaker, Sir, the Finance Minister's Budget Statement this year seeks to adjust our tax system in order to strengthen the long-term competitiveness of Singapore. This is indeed praiseworthy. This year, the Minister is giving a 10% rebate on our personal income tax, and rebates on service and conservancy charges and rentals for residents of HDB flats. A sum of $500 million will be credited to the Edusave Fund, and another sum of $1 billion into the Medifund. $380,000 will be spent on a second round of CPF top-up for all Singapore citizens above the age of 21. About 71% of the people of Singapore will not have to pay any income tax. The Government is, in fact, paying back its budget surpluses to the people of Singapore, especially those in the lower income group, so that they can have a share in the benefits of our economic prosperity. I think these measures are very important and this Budget is an important one too. I do not agree with Mr Ling How Doong. From the political and economic point of view, the Government has begun to implement the scheme of sharing the fruits of our economic development with the people. This is a very humane touch on the part of the Government. But I am beginning to worry that the good intention of the Government to share the benefits of economic development with the people may result in the younger Singaporeans forming the wrong impression that such handouts are to be taken for granted and thus forgetting about the vulnerability of Singapore and the increasing competition from the region. I am raising this point because after the announcement of the Budget Statement, a lot of young people said, "Very good, we too have some hong baos to collect!”
“Although the manufacturing sector registered strong productivity growth of 11%, for the rest of the economy, productivity growth was lower, and wage growth higher in 1994 compared to 1993. This resulted in unit labour cost for the overall economy rising by 1.9%, in contrast to the slight decline of 0.2% in 1993. In addition to rising labour costs, the Singapore dollar appreciated against the currencies of the NIEs, namely, Hong Kong, Taiwan and South Korea, by a range of 8-10%. It strengthened against the Malaysian Ringgit by 4.3%, the Thai Baht by 8.4%, and the Indonesian Rupiah by 15%. It registered a stronger 10% appreciation against the US dollar and closed the year at S$1.46 per US dollar. Mr Speaker, Sir, we are rapidly losing our competitiveness and I hope the Government is fully aware of the problems faced by our manufacturers and exporters as a result of rising labour costs and an appreciating Singapore dollar. The Budget did not address these issues and I hope the Minister can provide some means to help restore our competitiveness. Finally, Sir, the Minister has stated in the Budget Statement that funds have been allocated to the Economic Development Board for venture capital funds to assist local SMEs to take advantage of regional opportunities. Funds have also been made available for EDB to make strategic investments and to assist local SMEs through various economic development schemes. May I ask the Minister to give more details of the funds allocated, and a progress report of the schemes set up to assist local entrepreneurs to expand into the region. Sir, on this note and with these comments and suggestions, I support the motion.”
“Mr Speaker, Sir, I rise to support the motion standing in the name of the Minister for Finance. Much has been said on this year's Budget Statement, both in public and in private. Many people have described the Budget as prudent, cautious and forward looking. The Budget has addressed short-term and long-term objectives. The immediate short-term concern is that there should not be overheating of the economy. The long-term objectives are the competitive challenges coming from the emerging nations, and internally, the problems of coping with rising middle class aspirations. Some people have also described the Budget as an election budget, with rebates for the people, a 10% tax rebate, a CPF top-up of $500, and for those who do not pay tax, the Government has give-aways in terms of S&C charges and rentals. 1995 could indeed be an election year! Mr Speaker, Sir, I now have a few personal observations of my own to make on this year's Budget Statement. Firstly, the Government should consider reducing the personal income tax to the level of the corporate tax. The 10% tax rebate on individual income tax is equivalent to a 3 percentage proportional cut in tax rates. Sir, may I propose that the Government consider making this 3 percentage cut in individual tax rates a permanent feature for the Budget Statement of 1996. After all, it must be remembered that the ordinary individual taxpayer has no recourse to tax planning or other devices. Sir, my second point concerns the rising labour cost and the strong Singapore dollar. According to the Economic Survey of Singapore 1994, real wage growth increased from 1.4% in 1993 to 5.2% in 1994.”
“Sir, I just would like to add to what Mr Chin has said about high-rise buildings. I would like to ask the Minister what measures the Government has initiated to prevent the collapse of any of our high-rise buildings as has happened to a high-rise building in Kuala Lumpur, the Highland Tower, which collapsed due to slope failure. In particular, what are the controls under the building regulations to ensure the safety of building development and how such controls are monitored?”
“Sir, I would like to ask the Minister how much money has been collected and how much land has the Government sold for private residential development and for private commercial development over the past two years, and the Government's land sales programme over the next two years. In view of the glut in commercial space, what measures will the Government take to prevent another collapse in our commercial property market? 3.15 pm”
“Sir, I would like to ask the Minister for a progress report of the upgrading programme, especially in the following areas: (a) The total number of HDB flats being upgraded. (b) The total cost so far incurred by the HDB in its upgrading programme. (c) The difference in cost and in the facilities upgraded between the Interim Upgrading Programme (IUP) and the Main Upgrading Programme (MUP). (d) When will HDB flats in Cairnhill Constituency be upgraded either under the IUP or under the MUP?”
“Sir, I would like to ask the Minister what measures the Government has implemented or will implement to help low income families to own their flats, and to elaborate especially on the following schemes: (a) 4A2 budget flats How many 4A2 budget flats have been built, their price range, and will such flats be built in Cairnhill Constituency? (b) Sale of flats to sitting tenants I believe HDB will sell more 2- and 3-room rental flats to sitting tenants. How many such rental flats will be sold and at what price range? Will HDB consider selling the rental flats in Cairnhill Constituency at Winstedt Drive and at Race Course Road?”
“Sir, I would like to ask the Minister for a progress report on the proposed second crossing of the Johore Straits, particularly as follows: (a) How long is the bridge and when will construction begin? (b) What is the estimated cost for the construction of the bridge? (c) When is the bridge scheduled to be completed? (d) How will Singapore benefit from this capital investment?”
“(b) Government as a partner in overseas ventures One of the important recommendations made by the Committee to Promote Enterprises Overseas is that Government and its agencies should partner the private sector in overseas ventures. May I ask the Minister how many such partnerships have been formed by the Government and how have such partnerships benefited Singapore? According to the 1993 Economic Survey of Singapore, the Government plans to build promising local companies into Singapore MNCs. May I ask the Minister how many such local companies the Government has identified and how the Government plans to build these companies into Singapore MNCs?”
“According to the 1993 Economic Survey of Singapore, local enterprises in the manufacturing, commerce and services sectors in 1991 accounted for 57% of the total value added and 70% of employment in these three sectors. The value-added of local small and medium-sized enterprises (SMEs) in the manufacturing sector grew by 11%, from $4.8 billion in 1991 to $5.3 billion in 1992. The local enterprises sector therefore contributed significantly to the growth of our economy. Local enterprises were able to do well because they expanded their activities to take advantage of new markets and business opportunities emerging in the booming Asia-Pacific region, particularly in countries like China, Indonesia and Vietnam. The Government has set up a Committee to Promote Enterprises Overseas under the Chairmanship of the Minister of State for Finance, Cdre Teo Chee Hean. This Committee published an interim report in May 1993 and a final report in August 1993. May I ask the Minister for a progress report on the follow-up of recommendations made in both these reports, particularly in the following areas: (a) Government financing assistance for companies venturing overseas The Government recently announced a $150 million fund to help firms go abroad. Can the Minister explain how the fund will be used to help local entrepreneurs expand overseas? I understand that the Local Enterprises Finance Scheme has been expanded to include financing for approved overseas projects. Can the Minister report on the number of projects and amount of loans that have been disbursed under this scheme?”
“Sir, can I take both (e) and (g) together?”
“Many retailers fear that sales may drop even further after March, when the GST is introduced and the full impact of the ALS will be felt. Mr Speaker, Sir, I certainly hope that the Government will study the survey report that the Singapore Retailers Association intends to submit and, hopefully, to lift the ALS, especially on Saturdays, so that people can shop after working. While the 1993 Budget was a "corporate Budget", the 1994 Budget is a "people's Budget". There will be a 5% individual income tax rebate. There will also be another topping up of the Central Provident Fund accounts for buying shares, and rebates on service and conservancy and rental charges for all HDB dwellers. The Budget also proposes to pay high interest rates for some of the balances with the Central Provident Fund so as to make adequate provision for old age. Singapore has a rapidly ageing population and the Budget proposal represents a move in the right direction. Finally, the Budget also addresses a key challenge facing the Singapore economy and, that is, how to develop the external wing as the economy matures. In addition to tax incentive measures announced in last year's Budget, the 1994 Budget provides some additional incentives for individuals to venture abroad. The Government has also set up a Cluster Development Fund of $1 billion to encourage Singapore companies to invest regionally. As these companies go regional, many local entrepreneurs will have to follow as they provide the supporting services and products. Many of them lack the financial resources to set up offices and factories overseas. May I suggest that the Government allocate a portion of this Cluster Development Fund to our local entrepreneurs and assist them to go regional. Sir, I support the motion.”
“Mr Speaker, Sir, I support the Budget Statement announced by the Finance Minister. It is a prudent Budget, cautious and conservative. It consolidates past schemes and addresses future challenges. The Budget is confident that the economic strategies followed by Singapore for more than 25 years are the right ones for the 1990s. We have had better than expected economic growth of 9.9% in 1993 compared to 6% in 1992. However, 1994 is full of uncertainties, such as the US-Japan trade friction and prospects of rising real interest rates. And we may not achieve our projected growth rate of 4% to 5% this year. In view of such uncertainties, many businessmen felt that the 1994 Budget is too prudent, too cautious and too conservative. They have been looking forward to a one to two points cut in the corporate tax rate on top of the three-point cut announced last year to help defray the cost of implementing the Goods and Services Tax (GST). However, the Budget provides no tax cuts and no allowances to offset the cost of implementing the tax. Most businessmen were disappointed. To add to their disappointment, the 1.5 point hike in CPF contribution by employers will increase business cost and put a further squeeze on already small margins. This 1.5% hike was higher than expected as most businessmen expected a half point, or, at worst, a one point hike. To add to their woes, the Budget was silent on the effect of the full-day Area Licensing Scheme on the retail business in Singapore. The Singapore Retailers Association has recently sent out survey questionnaires to its 300 members, and initial responses indicated that, on average, both shopper traffic and sales turnover have decreased by about 30% since the introduction of the full-day Area Licensing Scheme on 3rd January this year.”
“Since 1993, the Government has decided that Singaporeans should also be encouraged to venture abroad. The Government should, therefore, introduce more assistance schemes and programmes to help local entrepreneurs to go offshore. In view of the high production costs in Singapore, many local entrepreneurs are transferring their production facilities to lower production cost centres, like Indonesia, China or Vietnam and retaining their product development and marketing activities in Singapore. Is the Government prepared to give financial assistance to a local entrepreneur to set up a factory in China? Under current rules for the Local Enterprise Finance Scheme, the answer is no. Can these rules be reviewed? Mr Speaker, Sir, as the Government encourages companies in Singapore to build up an external wing by going offshore, we must not forget the plight of our local entrepreneurs as they will be forced to move overseas with the principal customers. They will need funds to set up their factories and machinery financing for the production equipment. They will need short-term loans to finance their materials for production in their overseas factories. These are just some examples of the many problems that local entrepreneurs will have to face when they go regional. As the President has said, "Fast growth in the region means more opportunities but also formidable challenges." The Government has successfully developed a range of assistance schemes and programmes to support local entrepreneurs for their domestic growth. The challenge for the Government is to revise these assistance schemes and programmes and to introduce new schemes to support local entrepreneurs for their regional expansion. Mr Speaker, Sir, with that, I support the motion.”