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.”
The complete record
Every one of 319 lines we hold for Wong Kwei Cheong, in date order, each linked to its source. Free to read, in full, without an account. Page 2 of 7.
“Mr Speaker, Sir, I rise to support the motion standing in the name of Mr Loh Meng See, thanking the President for his Address delivered on behalf of the Government. In his Address, the President emphasised on the long-term policies of the Government to position Singaporeans for the next stage of nation building. In the area of economics, the major thrust of the Government is to encourage Singaporeans to venture abroad, to develop trade and investment links with neighbouring countries, and tap the vitality and opportunities in a fast growing region. As stated in the Addendum on the Ministry of Trade and Industry, Singapore will step up its regionalisation thrust. The Regional Business Forum will be established for exchanging dialogue with the private sector, and Government regulations and financial assistance will be streamlined to facilitate overseas business operations. Currently, the Government has developed more than 60 assistance schemes and programmes that have benefited many companies. For example, from 1987 to 1992, over 57,000 Skills Development Fund cases, and $73 million in grants were approved for worker training. Since 1976, over $2.5 billion in loans have been extended to local enterprises to fund more than 12,000 projects under the Local Enterprise Finance Scheme. In addition, over $60 million in grants have been committed to support more than 3,000 projects under the Local Enterprise Technical Assistance Scheme. These are impressive records. However, these assistance schemes were designed from the 70s and 80s where the emphasis was on the development of local entrepreneurs who can build up supporting industries for the many multi-national corporations operating in Singapore.”
“Referring once again to the 1990 Year Book of Statistics, Singapore, there are 262,700 economically inactive persons who are over 55 years old. In order to attract more of these senior citizens to join the workforce, can the Minister consider exempting this group of senior citizens from making any CPF contributions? This will effectively reduce the salary cost for employers and increase the take-home pay of these senior citizens and will certainly encourage more of them to be gainfully employed.”
“Sir, according to the 1992 Economic Survey of Singapore, the unemployment rate rose from 1.9% in June 1991 to 2.7% in June 1992. This easing in the labour market is, however, a reflection of slower growth experienced both at home and abroad and does not mean that the labour shortage problem in Singapore has been resolved. For our economic growth to be maintained, we need growth in labour productivity as well as in labour supply. In Singapore, the labour shortage problem will dampen our economic growth if adequate measures are not taken to resolve this issue. However, according to the 1990 Year Book of Statistics, Singapore, our economy is manned by 1,516,000 economically active persons aged 15 and above. At the same time, there are 819,400 economically inactive persons of the same age group, but who were not working, did not have a job to return to and were not looking for a job during the reference period. We can increase the labour supply by encouraging more of these economically inactive persons to work. I would like to ask the Minister (a) has the Government made any research through a survey of the economically inactive persons and find out why they are not working? (b) what measures can the Government take to encourage more of these economically inactive persons to work? May I suggest the following: (a) According to the 1992 Economic Survey of Singapore, for June 1992, the male participation rate increased by 0.1 percentage point to 79.9%, while the female participation rate rose by 0.8 percentage point to 51.3%. It is obvious that our female participation rate is still low compared to other developed countries. I would like to ask the Minister how the Government proposes to encourage more females to join the workforce.”
“Second, when granting additional subsidies to the town councils, the Government need not demand that the town councils raise their conservancy charges by at least 5%, that is to say, the town councils themselves shall be at liberty to decide whether they want to raise their conservancy charges or not, or they could even decide to raise the conservancy charges by a smaller margin, depending on their respective situations. So long as the town councils need not raise their conservancy charges, they should try their best not to raise them. Every town council should keep expenditure within the limits of income so as not to increase the burden of its residents. Under the new measures, nearly all the town councils are required to raise their conservancy charges. Some town councils which may not need to raise their conservancy charges this year are now forced to change their mind. Although the Ministry of National Development is saying that each town council has a right to decide whether it wants to raise its conservancy charges or not, with the increase in the minimum contribution to the sinking fund, the town councils are left with no choice but to raise their conservancy charges. For the genuine interest of the residents, I feel that the Minister should review the above-mentioned new measures. Finally, I would like to ask the Minister one question, that is, before these new measures were announced, how many town councils had indicated that they had to raise their conservancy charges, and who are they?”
“However, I feel that the minimum amount of sinking fund should not be raised, but should be retained at the existing rate of 25% because the use of sinking fund is restricted. Moreover, as and when the sinking fund is found to be inadequate, we can always top it up with our operational surplus. But, on the other hand, when the operational cost is inadequate, the town council concerned will be in trouble. Under the Town Councils Act, the town councils can apply to raise their conservancy charges. Those town councils which are unable to make their ends meet can make separate applications to the Government to raise their conservancy charges. If the Government finds the application to be reasonable, then it will allow the town council to raise its conservancy charges. Presently, under the old rules, it is not necessary for every town council to raise its conservancy charges. From my understanding, at least, the four town councils run by the Opposition parties do not need to raise their conservancy charges. However, under the new regulations, because the town councils have to transfer large sums of money into their sinking fund, their operational funds are greatly depleted. As a result, the operational fund is not enough to meet the day-to-day expenses. If the conservancy charges are not increased, then even with good operational surpluses from the past it will last at most 1 to 2 years. Thereafter, the conservancy charges will have to be raised substantially again. Therefore, I hereby suggest to the Minister for National Development the following: First, maintain the minimum contribution to sinking fund at the present rate of 25%.”
“In fact, in raising the sinking fund, the Government did not take into consideration whether those town councils which had less 3-room, 2-room and 1-room flats would be adversely affected. These town councils would not be getting as much benefits in terms of additional subsidies, yet they have to transfer more money to the sinking fund. As a result, the operational fund available to them would be greatly reduced, even to the extent of not having enough to meet their day-to-day expenses. Sir, the day-to-day expenses of town councils cannot be slashed drastically, otherwise the town councils would be compelled to raise their conservancy charges. As such, I do not understand why the Ministry of National Development should, on one hand, increase its annual subsidies to town councils for their 3-room, 2-room and 1-room flats and, on the other hand, require the town councils to raise their conservancy charges by at least 5%. Furthermore, it requires all the town councils to increase their contributions to the sinking fund to 35% or 40% of the conservancy charges collected. When the Government announced that it was increasing its annual subsidies to the town councils for their 3-room, 2-room and 1-room flats, it did not mention that it was simultaneously reducing its subsidies to the bigger flats. This reduction will affect the operational cost of the town councils, resulting in the town councils' income being reduced. From what I have just explained, it can be seen that there is a need to review these new measures. I welcome the Government's increase in its subsidies to the 3-room, 2-room and 1-room flats.”
“I hope that the Ministry of National Development would look into this matter, and if any town council is found to have misuksed its funds, the Ministry should reduce its subsidy to the town council concerned in order not to waste public funds, and to prevent the lower-income families from being deprived of the benefits due to them. Mr Cheo Chai Chen (Nee Soon Central)( In Mandarin): Sir, I wish to talk about the grant of subsidies to the town councils and the Government's recent instructions to town councils to transfer more money from the conservancy charges collected to the sinking fund. Last month, the Ministry of National Development wrote to the town councils saying that some town councils had intended to raise their conservancy charges because the operational costs had been going up all the time. These town councils had also requested the Government to provide more annual subsidies to them. It was stated in the same letter that the Government had agreed to increase its annual subsidies for the 3-room, 2-room and 1-room HDB flats, and to grant additional subsidies to the town councils for their 3-room, 2-room and 1-room flats for 1992 and 1993. However, there are conditions attached, that is, the town councils must raise the conservancy charges of various types of flats by at least 5%. In addition, with effect from 1st April, this year, the minimum amount for the sinking fund shall be increased from 25% to 35% or 40%, depending on the types of flats. Now, I would like to express my views on these new measures: First, I feel that these new measures are being implemented too hastily. The Ministry of National Development did not discuss the matter with the various town councils to understand their respective situations, before introducing these new measures.”
“First, what is the long-term policy in providing land for building residential landed property? Second, the amount of land tendered out is quite substantial compared with the previous supply. So what would be the anticipated impact on landed property price in the next few years? Third, since land is scarce in Singapore, should the Government be more stringent in granting approval for permanent residents to own landed properties in Singapore? Mr Peh Chin Hua( In Mandarin): Sir, from what I know the subsidies given to Town Councils come mainly from the Ministry of National Development's annual grant ranging from $600,000 to $4 million. These subsidies are left entirely at the disposal of the Town Councils, mainly to help pay the conservancy charges for the lower-income families living in the 1, 2 or 3-room HDB flats. We should commend the Ministry of National Development for being so thoughtful in looking after the lower-income families. However, in the management of this fund, I feel that the Ministry of National Development should have a very good monitoring system so that the funds will not be misused. I understand that some town councils allow their offices to be used for the activities of political parties, particularly during the general elections and bye-elections. Furthermore, some activities organised by the town council for their residents were being advertised on banners bearing the logo of a political party. This is inappropriate because these activities were funded by the town council.”
“Sir, I would like to ask the Minister how much land will be released and how much commercial space will be developed over the next three years. In view of the present glut in commercial space, what measures does the Government take to prevent another collapse in our commercial property market. I would also like to ask the Minister on the Government's policy in the sale of land for private housing development. In view of the current shortage of landed properties, will the Government consider releasing more land, especially land at Marina South, for landed housing development? I understand the Bukit Turf Club at Bukit Timah will, eventually, be relocated. I would appreciate it if the Minister can explain the Government's plans for this piece of valuable real estate. Assoc. Prof. Low Seow Chay: Sir, Singapore is a land scarce nation. Almost all the population live in high-rise apartments. Fortunately, there are only 3% of our people who have the opportunity to still own landed residential property. The number of landed residential property in Singapore at the moment is about 21,000 units. The growth last year alone was only about 5.5%, that means, only about 1,100 new units were added to the market. Last year, I understand that the Government had tendered out land for the development of 600 units of private landed property. And it was just announced that in the next three years, each year land will be tendered out for the development of another 1,000 units of private residential property. Sir, this is quite a substantial amount of land which is being tendered out by the Government in aid of the development of private landed property. Of course, this is one of the very good news for the potential landed property buyers. So I would like to ask the Minister a few questions.”
“Sir, as Dr Tan has covered the points that I want to make in this cut, may I go on to the next cut?”
“Fourth, since the posted price of a 3-room flat is far below the actual transacted price in the current market, it causes some problems to the resale flat purchasers who could only afford a 3-room flat and have a limited amount of cash. The problem lies in insufficient HDB mortgage loan and also the limited withdrawal of CPF funds. I would like to ask the Minister what plans the Government has in terms of financing and the use of CPF funds to help this group of people.”
“The number of applications declined actually from 1987 to 1991, but increased sharply in 1992. One reason for this increase must be the sharp rise in prices of flats in 1991 and 1992, because many people suddenly realise that if they do not buy a flat now, they may not be able to afford one later. From 1987 to 1992, according to HDB Annual Reports, the demand for rental flats increased steadily by three to four times. This again is an indication that there are more Singaporeans who want to buy flats but cannot afford to do so. Perhaps the HDB should review its pricing policy. The expectation of an average Singaporean family is at least a 4-room flat. To maintain the affordability of HDB flats, Government should make sure that the price of a 4-room flat should not increase more than the average income of a family. 3.45 pm Assoc. Prof. Low Seow Chay (Chua Chu Kang): Sir, I notice that the prices of HDB new flats have increased quite rapidly in the past few years. In Chua Chu Kang Estate, the 4-room flat was about $70,000 three years ago. Today, the price could be as high as $120,000. A similar trend was also registered for the 5-room flats. Watching the trend of price changes, one wonders whether it would be priced beyond the affordability of our people in the near future. I would like to ask the Minister the following questions: First, why did HDB flat price increase so rapidly in the past few years? Second, if the trend in price increase should continue, will HDB flats eventually be priced beyond the affordability of our people? Third, for the low-income earners, does the Government have any plan to build smaller flats?”
“Sir, I would like to ask the Minister on the pricing policy for HDB flats. In view of increasing cost, how does the Government ensure that HDB flats are affordable to the average income households, especially to households earning less than $700 per month? I would also like to ask the Minister how does Government intend to help low in come families to own their HDB flats. Dr Koh Lip Lin (Nee Soon South): Sir, Singaporeans are most concerned about the rapid increase of prices of HDB flats over the past few years. Government has always maintained that HDB flats are priced so that they are affordable to average Singaporeans. The question is whether the price increase has made the flat less affordable. From 1987 to 1992, the average income of Singapore has gone up by 53%, according to the statistics of CPF. The prices of HDB flats have also gone up. From the price ranges of the flats quoted in the HDB Annual Report, it can be noted that, other than 3-room flats at Woodlands, prices for most types of flats have gone up by more than 53%. This means that, compared to 1987, larger flats are now less affordable to Singaporeans. Of course, the quality of the new flats today are better than those built in 1987. A 4-room flat today is better than a 4-room flat of 1987. But, then, do not forget that the expectation of Singaporeans has also gone up, as shown by the decline in the demand of 3-room flats. In fact, we were told that HDB has stopped building 3-room flats. Therefore, when we define affordability, we should also take into account the higher standard of living and the rising expectation. HDB has often linked the affordability to the demand of flats, that is, the number of applications to purchase flats.”
“Sir, I withdraw my 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 WE 3100. Sir, the local enterprise sector continues to contribute significantly to the national economy. According to the 1992 Economic Survey of Singapore, the value added of local small and medium sized enterprises in the manufacturing sector grew at an annual rate of 15%, from $2.7 billion in 1987 to $4.8 billion in 1991. In 1990, local enterprises in the manufacturing, commerce and services sectors contributed 53% to the total value added and employed 65% of the workforce in the three sectors. The Government has played a major role in helping to improve the performance of the local enterprise sector. I would like to ask the Minister for a progress report of the programmes set up to promote the local enterprise sector such as the (a) Local Enterprise Finance Scheme; (b) Local Industry Upgrading Programme; and (c) Local Enterprise Finance Scheme for Overseas Development. Since the emphasis in this year's Budget Statement by the Finance Minister is to promote an external economy, I would also like to ask the Minister whether the Government has any other programmes to help local entrepreneurs expand their business activities overseas.”
“In this year's budget, the Finance Minister has paid particular attention to the needs of the lower-income groups, especially those staying in smaller HDB flats, and he has given rebates on rentals and service and conservancy charges in order to offset the impact of the GST. However, the GST will certainly increase the cost of upgrading old HDB estates which the Government has started in several constituencies. Marine Parade GRC, for example, has started a pilot HDB Upgrading Programme, and the cost paid by each household through the CPF is about $4,000 which is about 10% of the total cost. This is quite affordable. May I ask the Finance Minister what effect will GST have on the cost of the HDB Upgrading Programme, and how much will residents have to pay for future upgrading programmes? Sir, I support the motion.”
“I hope the Finance Minister can assure our exporters that the Government will make extra efforts to minimise the negative effects in terms of time and money on our exports. (b) Local entrepreneurship. According to the Government White Paper on GST, firms with a turnover of less than $1 million will not need to account for GST on their taxable supplies of goods and services. This threshold will exempt nearly all provision and retail shops, hawkers, HDB shopkeepers and taxi drivers from the GST. It will also exempt many local entrepreneurs who have set up businesses to supply goods and services to larger companies, especially the export-oriented multinational corporations. In order to further promote local entrepreneurship, may I suggest that the Finance Minister use $1 million as the threshold for companies to be taxed at a lower rate. Local entrepreneurs do not have the resources to compete with the big MNCs for export incentives, pioneer status and other tax benefits. The Finance Minister in his reply during the 1991 budget debate (Hansard, Vol. 57, col. 383) rejected a similar proposal because companies may be tempted to reduce their overall tax burden by hiving off parts of their operations to subsidiaries. The Government must have certainly considered such issues when deciding on $1 million as the threshold for GST. I would therefore like to request the Finance Minister to consider once more a two-tier progressive corporate tax system whereby smaller companies will enjoy a lower tax rate. (c) HDB upgrading.”
“It is at a low rate of 3% and is guaranteed to stay that way for five years at least. The GST has enabled the Finance Minister to lower corporate and personal income taxes in order to promote enterprise and growth and be more competitive internationally. In order to help the lower-income groups, the Finance Minister has increased education and health subsidies and he has given rebates on property tax, rebates on rentals and service and conservancy charges for smaller HDB flats, and higher public assistance to needy families. All these measures are aimed to smooth over any initial difficulties and inconveniences caused by such major changes in our tax system. Since my Parliamentary colleagues have made many useful comments and proposals on the GST, I would like to highlight the following: (a) Exports. According to the White Paper on GST, all exports will be relieved of GST by zero-rating. The exporter does not collect GST on his exports, but he is able to claim credit for the GST that he has paid on his inputs. This will cause great inconvenience and cost to the exporter as he has to file claims for all the GST that has been paid by the suppliers. He may also have to wait for months before he can get his money back from the Government. Unlike domestic sales, the exporter has to compete in the international markets. He cannot add the cost of the GST to his customers. Unless the Government sets up a very efficient GST refund system, our exporters will lose out in the international markets. According to the 1992 Economic Survey of Singapore, exports in 1992 grew by a modest 1.4% to reach $103 billion, compared with a 7% increase in 1991. The GST may further reduce the growth of our export trade.”
“Mr Speaker, Sir, I support the Budget Statement announced by the Finance Minister. This is a pro-business, growth oriented budget and will benefit everyone. My comments are as follows: (1) CPF increases. To enhance international competitiveness, taxes will be cut 3%, with a likely further reduction of 2% next year. Companies will have a 0.5% hike to their share of CPF payments to 18.5%, while the employee's contribution will be reduced by 0.5 percentage point to 21.5%, making a total of 40%. Companies can expect a further hike of 1.5% in 1994 to 20% and the employee's contribution will be reduced to 20%. The total CPF contribution will be maintained at 40%. However, this shift in CPF payments will effectively increase the total wage cost of the employers and will be harmful to our economic growth as our real wage growth of 5.5% in 1992 remained higher than the labour productivity growth of 3.1%, as shown in Chart 4.5 of the 1992 Economic Survey of Singapore. This is the fourth successive year of wage increases exceeding productivity increases since the 1985 recession. We must bear in mind that one of the main causes of the 1985 recession was the fact that annual wage increases exceeded productivity increases for several years prior to 1985 and seemingly, we are now repeating the same mistake. Mr Speaker, Sir, may I once more appeal to the Finance Minister to review this policy of maintaining a total CPF contribution rate of 40%. This is simply too high. And the Finance Minister should seriously consider reducing the total CPF contribution rate in his next budget statement so that productivity increases can once again catch up with our wage increases. (2) Goods and Services Tax (GST). The proposed GST is simple.”
“Sir, does the Government have any plan for the empty stalls in the wet market at Cuppage Centre and Cambridge Road market?”
“In order to encourage more Singaporeans to buy HDB flats, can the Government reduce the current deposit of 20% to 5%? This is because after selection the buyer has to wait two to three years before the new flat is ready and the 20% deposit is a lot of cash tied down.”
“Sir, I would like to ask the Minister about the upgrading of older existing housing estates. It was recently announced that the Government has set aside $400 million for the upgrading of the six precincts which form the Demonstration Phase of the upgrading programme. Six thousand families living in estates which average about 15 years old - Marine Parade, Kim Keat, Lorong Lew Lian, Ang Mo Kio, Clementi and Telok Blangah - will enjoy the new upgraded facilities. The cost works out to about $65,000 per family, with each family having to pay only about $4,500 for the basic upgrading. In Cairnhill Constituency, there are also many HDB estates that are more than 15 years old, for example, at Race Course Road and at Winstedt Drive. May I ask the Minister when will the upgrading programme be extended to Cairnhill Constituency? A more serious question for the Minister is the funding for the total upgrading programme. Based on the $400 million announced for the Demonstration Phase, the Government will have to subsidise the residents more than $300 million. May I ask the Minister what is the budget, and the time span, for the full upgrading programme? In view of the upgrading programme, does it mean that HDB will slow down the building of new estates? In this connection, can the Minister inform us of the number of 3-, 4-, and 5-room HDB flats built over the last five years, the number of 3-, 4-, and 5-room HDB flats currently available, and the number of 3-, 4-, and 5-room HDB flats to be built over the next five years. I understand that Woodlands and Yishun still have the highest number of unoccupied flats. For these flats, would the Minister consider waiving the requirement that a single person need to be above 35 years to apply for HDB flat?”
“The Government should encourage more of the economically inactive females to join the workforce by making foreign maids affordable. This levy increase will make it less attractive for women in the lower-income group to work, thereby aggravating the shortage of production workers, and clerical and related workers. Rising costs Finally, the problems relating to rising Telecom cost, rising utilities cost, rising transport cost and rising rental cost. These are perennial problems. No one can question the Government's desire to recover all operational costs. What about excessive profits? I hope the Minister can inform this House the additional profits made by Telecom as a result of the new system of charging telephone calls according to usage. The bulk of this profit will be contributed by business houses, as there is a limit to the extent of control over their telephone usage. If Telecom has made excessive profits, as we all suspected, will the Government be prepared to review its telephone charges? In conclusion, Mr Speaker, Sir, I must congratulate the Minister for introducing another "painless budget". However, all the blood-letting has been done outside the budget. Increases in foreign workers levy, foreign maid levy and Telecom charges are good examples. Such practices are disruptive and businessmen cannot do proper costings if cost changes are made frequently. May I request the Minister to consider including all such levies and charges into the Annual Budget Statement? Otherwise, if the present practice is continued, the Budget Day will be a non-event. Sir, on this note and with these comments and suggestions, I support the motion.”
“Our relative competitiveness declined further in 1991. There is a danger, Sir, that we are repeating the same mistakes that were made in the early 1980s which led to the recession of 1985. According to the 1992 SMA survey, two out of five manufacturers have either moved or intended to relocate part of their business to neighbouring countries to cope with rising costs. Mr Speaker, Sir, the message is clear. We are rapidly losing our competitiveness. I hope the Government is fully aware of the problems faced by our manufacturers and businessmen as a result of rising labour costs and an appreciating Singapore dollar. The Budget did not address these issues. I hope the Minister can explain to this House what measures the Government is taking to help restore our competitiveness. Labour shortage The next problem highlighted by the 1992 SMA survey concerns the shortage of labour, involving skilled and unskilled production workers, technicians, clerical and related workers. This is not a new problem. The unemployment rate, as at June 1991, was 1.9%, showing that we continued to have full employment. However, according to the 1992 Singapore Yearbook of Statistics, for persons aged 15 years and above, there were about 1,516,000 economically active persons and 819,400 economically inactive persons, of whom 244,000 were males and 574,900 were females. I must admit I have not made any in-depth study of these economically inactive persons, but can I request the Minister to form a task force and study how this large group of economically inactive persons can be drawn into the labour force and help alleviate the huge labour shortage problem? What I fail to understand, Mr Speaker, Sir, are the reasons for the recent increase in the foreign maid levy from $250 to $300.”
“Mr Speaker, Sir, I rise in support of the motion standing in the name of the Finance Minister. Sir, while I support the Budget as a whole, I would like to draw the attention of the Minister for Finance to a number of concerns that have been expressed by many people, both in public and in private. For example, the Singapore Manufacturers' Association (SMA) has just released the results of a survey conducted over January this year, showing that the manufacturers' main concerns are as follows: (1) rising labour costs; (2) low profit margin; (3) strong Singapore dollar; (4) keen competition in the foreign market; (5) keen competition in the local market; (6) shortage of skilled workers; (7) shortage of production workers; (8) difficulties in penetrating new markets; (9) rising Telecom cost; (10) meeting required quality standards; (11) shortage of technicians; (12) rising utilities cost; (13) rising transport cost; (14) shortage of clerical and related workers; and (15) rising rental cost. Of the 15 points listed above, Mr Speaker, Sir, ten are concerns that can be directly linked to policies and/or measures adopted by the Government. These concerns are also expressed by other businessmen, besides manufacturers. Hence, we need to look at them in greater detail. Rising labour cost and the strong Singapore dollar According to the Economic Survey of Singapore 1991, real wage growth for 1991 was 7.6% compared with 5.9% in 1990. With labour productivity growing by only 1.5% in 1991, this marked the third year in a row where real wage increases have exceeded productivity gains. In addition to rising labour costs, the Singapore dollar appreciated against the currencies of the three Asian NIEs, namely, Hong Kong, Taiwan and South Korea, about 4% to 9%.”
“The Minister has only quoted examples in the United States. How could he see that the same will apply in Singapore?”
“Sir, the Minister has given only a qualitative statement. Can he come out with figures to show that an increase in the number of doctors will actually lead to an increase in the cost of health care? Mr Yeo Cheow Tong: Sir, one should learn carefully from the experience of others. In the US, this same philosophy was widely espoused in the 60s and this led to a tremendous increase in the number of doctors in the US. In a period of 17 years in the US, the number of doctors increased by a quarter million. Plenty of free market competition. Did it result in a reduction in health care cost? On the contrary, Sir, health care cost in the US increased very, very rapidly. And as a percentage of the GDP, total health care expenditure in 1970 was only 7.6%. In 1987, it increased to 11.2% and today it is in excess of 12% of the GDP.”
“Sir, can the Minister not subscribe to the basic economic principle that the more doctors we produce the lower will be the medical cost?”
“Do the "assistants" also include cooks who are not involved in harassing customers?”
“Sir, does this mean that they can operate in private food centres?”
“Sir, I would like to ask the Minister for a progress report regarding the restructuring of hospitals. In addition to the issues raised by the Member for Ang Mo Kio on restructured hospitals, I hope the Minister can also enlighten us on the improvements made in the infrastructure such as the education and training of staff, in the service provided to patients, in the upgraded physical environment, and in new services provided. Although patients in Class C and B2 wards are subsidised by the Government, there are concerns that admissions to such wards are more difficult and, even when admitted, patients are receiving a lower level of care in terms of medical attention and service of staff. I hope the Minister will carry out a full investigation if such concerns are justified. Finally, may I ask the Minister what financial assistance can the Government provide to patients who cannot even afford to pay for the Class C and B2 wards or for the high cost of the medicine provided. For example, will the restructured hospitals be prepared to accept payments by instalments when so requested by the patients, or for a complete waiver of hospital charges for those who are unable to pay?”
“Thirdly, do we have enough medical personnel to support our hospitals? Can the Minister inform us of the shortfall in nurses, physiotherapists, occupational therapists and doctors in the Government hospitals, including the restructured hospitals? What measures have the Ministry undertaken to address this shortfall problem? If Singapore is to develop into a medical centre of excellence, then we must have enough trained medical personnel, not only for Government hospitals but also for our private hospitals. For example, the doctor to population ratio in Singapore is about 1:791. In comparison, the ratios for West Germany, the United Kingdom and Japan are 1:400, 1:700 and 1:667 respectively. May I ask the Minister what plans the Ministry has to improve the doctor to population ratio so as to provide better medical services to Singaporeans and help Singapore to develop into a medical centre of excellence?”
“Sir, I have three issues for the Minister to consider. Firstly, the best way of reducing expenditure on health care is through a programme of preventive health care and health education. The Government should continuously educate the people on good dietary habits, regular exercises and other activities that help to improve their health. May I ask the Minister what budget his Ministry has allocated for this preventive health care and health education programme and if he can reveal to us some features of the programme and how his Ministry would carry this out? May I suggest that the Government should have more publicity on television and through the mass media on our health care programmes for children, mothers and old people so that they know what services are available to our people and what services are free or at low fees. The Government should also give full support and recognition to charitable organisations that provide free medical services. The Lions, for example, conduct free medical check ups once a year at the Pek Kio Community Centre in Cairnhill Constituency and this service is very well appreciated by the local residents. Secondly, I would like to join our GPC Chairman, Dr Hong Hai, in requesting the Minister to work harder and try to get his budget increase to more than 1% of GDP for purposes of health. I do not have the exact figure. Perhaps the Minister can enlighten me. But I understand that even our neighbour, Malaysia, spends about 2.5% of GDP on health. According to the statistics just circulated by Dr Hong Hai, Japan and Britain spend about 4.8% and 5.3% respectively. Surely, the Government needs healthy Singaporeans to run the next lap together and certainly Singaporeans deserve more than 1% of GDP to look after their health.”
“1% of establishments, but generated 84.2% of direct exports, 72.9% of output, 65.1% of value added, 67.2% of capital expenditure and 54.6% of employment. Similarly, in the commerce and services sectors, foreigners played important roles. We should not begrudge the economic contributions made by foreigners, especially MNCs, that have invested so heavily in Singapore. But is it not time that the Government paid more attention to the problems faced by local entrepreneurs? For example, all companies in Singapore face an acute labour shortage problem. I am not asking the Government to consider giving double tax relief for the foreign workers' levy paid by local companies. What I am requesting is that the Government should consider more leniently applications by local companies for foreign workers. Of course, some tax incentives would be useful. For a start, I hope the Finance Minister will review the proposal made last year by Mr Chandra Das, MP for Cheng San GRC, that the earnings of local companies of less than a quarter million dollars be taxed at a lower rate. Finally, Mr Speaker, Sir, I still hope that the Government will seriously consider setting up a separate agency to look after the interests of our local entrepreneurs. The EDB has done a good job in the economic development of Singapore, but their primary concern is with the MNCs. A separate statutory board will go a long way in dealing with the problems faced by our local entrepreneurs. I hope that the Government will review this issue. Mr Speaker, Sir, I support the motion.”
“May I suggest that in order to keep our tourism industry on a competitive basis, the tourism cess should be kept at 3% for a few more years. (3) Local Entrepreneurship Once again, the Finance Minister has ignored the plight of local entrepreneurs in their struggle for survival in Singapore's foreign dominated and very competitive business environment. The tax incentives for companies announced this year will benefit mainly the bigger and more established companies, many of which are Government owned, directly or indirectly. How many local companies, for example, can benefit from the tax exemption on dividends paid out of foreign income? Generous tax incentives were also given to banks, trust companies, securities companies and shipping companies. May I suggest that the Government seriously consider granting some tax incentives for the promotion and development of local entrepreneurship in Singapore. The 1990 Economic Survey of Singapore seems to indicate that local enterprises are performing well, stating that local enterprises account for 94% of establishments, 71% of total employment and 59% of total value added in the manufacturing, commerce and services sectors. Unfortunately, the Government choose to define local enterprises as companies with more than 30% local equity. Using the more conventional definition of local enterprises as companies with more than 50% local equity, the picture is not so rosy. In fact, Lawrence B. Krause, Koh Ai Tee and Lee (Tsao) Yuan in their book "The Singapore Economy Reconsidered" have shown that foreign enterprises, which is defined as enterprises with more than 50% foreign equity, dominate the Singapore economy. In the manufacturing sector, for example, over the years 1975 to 1984, foreign manufacturing enterprises comprised only 23.”
“Singapore's competitiveness and Singapore's future depend very much on our ability to keep our productivity increases above our wage increases as shown so clearly by our economic performance of 1986, 1987 and 1988. This is impossible to achieve if we continue to maintain a total CPF contribution rate of 40%. This is simply too high. Mr Speaker, Sir, may I request the Finance Minister to seriously consider reducing the total CPF contribution rate in his next Budget statement before he is forced to do so by another recession. (2) Entertainments Duty and Tourism Cess The proposal to reduce the duty on entertainments from 10% of the payment for admission to 5% will be strongly welcomed by the travel industry. Tourist arrivals have slowed down as a result of the Gulf War, and occupancy rates of many hotels have been reduced to as low as 50%. With this reduction in entertainments duty, more shows can be organised, leading to a more vibrant, cultural and entertainment scene in Singapore. We can expect to see more big-time entertainers, better quality international sports competitions such as wrestling, boxing and golf, and improved cinemas. This will definitely benefit Singaporeans as well as helping to increase tourist arrivals. Hotel managers will cheer. What is more important for the travel industry is the reduction of the tourism cess from 4% to 3%. According to Table 8.3 of the Economic Survey of Singapore 1990, the tourism cess for 1990 was estimated to be about $89 million, an increase of 60.4% over that collected in 1989. This is a hefty increase and has partly led to the increase in the cost of having a holiday in Singapore. The Finance Minister has stated that the tourism cess reduction will only be implemented for a year from 1st April 1991.”
“Mr Speaker, Sir, I support the Budget Statement announced by the Finance Minister. It is an excellent Budget and will benefit almost everyone. I would like to comment on the following: (1) CPF Increases As announced by the Finance Minister, with effect from 1st July 1991, the employers' CPF contribution rate will be increased by 1 percentage point to 17 1/2 per cent. The employees' rate will be reduced by half a percentage point, from 23% to 22 1/2%. The total CPF contribution rate will therefore increase by half a percentage point, to 40%. This CPF rate increase of 1/2 percentage point is small compared to the 9.4% increase in average monthly earnings over last year. However, this 1/2% increase is large compared to the 1990 overall labour productivity increase of 3.4%, as reported in the Economic Survey of Singapore 1990. In 1989, the average monthly earnings increased by 9.8% compared to a productivity increase of 4.8%. 1990 was the second successive year of wage increases exceeding productivity increases since the 1985 recession. As shown so clearly by Chart 4.6 of the 1990 Economic Survey of Singapore, one of the main causes of the 1985 recession was the fact that annual wage increases exceeded productivity increases for several years prior to 1985. I am afraid, Mr Speaker, Sir, we are now repeating the same mistake. If our wage increases continue to exceed productivity increases for a few more years, Singapore's competitiveness vis-a-vis the other Newly Industrialised Economies (NIEs) will be completely eroded. Singapore will be hit by another recession. It is not too late to reverse this trend, Mr Speaker, Sir.”
“If we force this kind of so-called integrated culture upon our people, then when foreigners look at this integrated culture of ours, they will feel that this is ridiculous. Sir, I support this motion. ADJOURNMENT OF DEBATE With the consent of Mr Deputy Speaker and the general assent of Members present, Question put and agreed to. Resolved, That the debate be now adjourned. - [Mr Wong Kan Seng].”
“But this is not a job that can be done by just a few educationists or a few Chinese radicals or those who do not even know Chinese. So Chinese must be learnt from various angles. It cannot be learnt just as a language. We must make sure that Chinese becomes a subject that the students will like. We should also review the list of vocabulary for Chinese. We must also institute vocabulary control and the application of the Chinese vocabulary in a simple way so that the materials can be made more readable and easier to learn in simple language through which we can inculcate oriental values. This is in fact the main objective of learning Chinese. Sir, I would like to refer to the remarks made by the Member for Serangoon Gardens. He already launched a "Scud Missile" of a composite culture in this House. He suggested that the Government should integrate the various cultures together. I think I have to use a "Patriot Missile" to hit his composite Scud missile. The kind of culture that he has proposed is the Lau Teik Soon culture. For our three meals everyday, do we need to have one with Malay food, one with Chinese food and the third with Indian food, or do we have a mixture of all the three kinds of food? How are we going to integrate the various cultures? Will they turn out to be non-Malay, non-Indian and non-Chinese? What about our language, our habit, our dress, and our attire? Must we wear a songkok on our head, a Chinese long gown and a "pottu" between our eye-brow? The argument put forward by Dr Lau Teik Soon has caused me to lament over the loss of our cultural roots. The only things that remain behind are the colour of our skin and our names.”
“They should change their attitude because some of these people appear to be over-enthusiastic in contributing or raising funds for the construction of infrastructure, like bridges and roads in foreign countries with which they have ancestral ties. As such, I suggest that the Government should also encourage civic organisations or clan associations to participate in the construction of infrastructure like building of roads and bridges here. For example, if we allow the Chinese Chamber of Commerce and Industry, or the clan association to pay for the construction of a bridge, we can name the bridge after them. For example, the "Wee Cho Yaw Bridge" or "Tan Eng Joo Bridge" or the "Chinese Chamber of Commerce and Industry Park" if they contribute to their construction. If other associations like the Chin Kang Huay Kuan or the Tung Ann District Guild contribute financially to the construction of some roads, then the roads can also be named after them. This will enhance the sense of pride of our people. In the Presidential Address, it is also stressed that every Singaporean should know two languages - their mother tongue and English. The President also indicates that the Government will improve the teaching of Chinese to help those Chinese students who have difficulty in learning Chinese and to lighten their pressure so that they will be able to attain a certain standard in Chinese. I would suggest that the Government set up a special committee on the improvement of teaching of Chinese. The committee can consist of specialists, educationists, teachers and also Members of the GPC on Education, Chinese newspaper editors and so on, so that it will help to make the learning and teaching of Chinese more interesting.”
“As far as possible, the loan repayment instalment should be as close to their rental as possible. I would also propose that consideration be given to a "two-generation relay" scheme of repayment for their housing loan over a period of 30 years. This will lighten their financial burden. So when their children are young, the parents can pay for their housing loan over a period of 30 years. After they have retired, and their children have started working, then their children will be able to pay for the rest of the loan in five to 15 years. In other words, the instalments are spread over two generations. In this way, we will be able to inculcate, among the children, the sense of responsibility for them to look after their parents when they are old. This will enhance the sense of cohesion of the family which is the basic unit of our society. In his Speech, the President also stressed the sense of collective ownership and responsibility to turn Singapore into a better place to live in. The President has also pointed out that we should change the attitude of our people. We must enhance the sense of pride among our people to make sure that every citizen of Singapore will regard Singapore as his own home. To achieve this objective, if we only widen participation in decision making, we only increase our investment in our citizens and enhance our public and private assets. This is not enough. I feel that the Government should also change the attitude of some people. Many people regard the construction of infrastructure as a government matter and has nothing to do with them.”
“' This policy is echoed by the Minister for National Development in the Addendum to the Presidential Address and I quote: 'MND will improve the quality of housing, roads, infrastructure and recreational facilities in Singapore. This will require judicious planning and fresh ideas for using our limited land resources.' This is a good policy and will be welcomed by all Singaporeans, as they can look forward to better homes to go to and a better Singapore to live in. Singaporeans will work hard to build a better tomorrow and join the Government to run the next lap together as proud Singaporeans. Mr Peh Chin Hua (Jalan Besar GRC)( In Mandarin): Sir, I rise in support of the motion standing in the name of the Member for Toa Payoh GRC, Mr Davinder Singh. It may be said that the Presidential Address reflects the hopes and aspirations of the future of all the leaders and Singaporeans. It also enables us to complete the next lap and find the next goal so that all the people in Singapore will confidently be able to build Singapore into a more excellent international city and a more caring society. In the Presidential Address, it was mentioned that the Government proposed to set up a new scheme to enable the poorer families to own their own homes before the age of 45. I welcome this proposal. This commitment of the Government will enable the people in the lower income group who have worked and saved for a long time to have a new hope of owning their own home. I would appeal to the Government that in implementing this new scheme, consideration will be given to granting lower interest rate for the housing loans for these people so that they will be able to bear the commitment for housing without affecting their already simple life.”
“This is continual education and training (CET), and the Government should continue to encourage our workers to participate in CET programmes through proper CET facilities and financial grants. At present, we have the Skills Development Fund (SDF), but this is insufficient as indicated by the Minister for Trade and Industry in the Addendum to the Presidential Address and I quote: 'People are our key resource. We will develop a culture for quality in our workers. We will encourage companies to increase spending on training to 4% of payroll with the help of the Skills Development Fund. The NPB will create more training opportunities for our people to continually upgrade their knowledge and capabilities.' Most companies provide training to their employees, but not many can afford to spend up to 4% of payroll on training. The Government must take up some of the financial burdens of training, as a highly trained workforce is not just an asset to the company but to the whole nation. May I suggest that the Government extend the Edusave Scheme for school children to workers. Each worker can also have an Edusave account, and each year the accounts can receive money from an Endowment Fund. Workers can then use Edusave for part of their CET expenses. If such a scheme can be developed, workers will be strongly motivated to upgrade themselves through relevant CET programmes and join the Government to run the next lap together as highly qualified and trained workers. (c) Increasing Assets The policy to increase the physical assets of Singaporeans is very clear. The President in his Address said, and I quote: 'My Government will work to increase the assets of Singaporeans. The best way is to generate economic growth and invest in our infrastructure.”
“In order to widen participation in the economic development of Singapore, I would like to appeal once again to the Government to seriously consider setting up a statutory board for the promotion and development of local enterprises and encourage more Singaporeans to join the Government to run the next lap together as local entrepreneurs and not just as employees of Government Ministries, Government-related companies or as employees of multi-national corporations. (b) Investing more in Singaporeans The President in his Address indicated that the Government will improve on educational facilities and devote a larger percentage of our GDP to education. This is reflected in the Addendum to the Presidential Address by the Minister for Education and I quote: 'These improvements require more investment by Government in education. We will raise the percentage of GDP devoted to education from the present 4% to 5%.' This is heartening news. With better financial resources, we will have more schools and more trained teachers. Our children will be able to attend single-session secondary or even single-session primary schools. What is more important is the emphasis on tertiary education, and I quote from the Presidential Address: 'We will invest in tertiary education. Eventually, 40% of each age group should qualify for university or polytechnic, without compromising academic standards.' With such a highly educated population, we will have a highly productive workforce. However, the quality and productivity of our workforce depends not just on the education they receive in their youth, but also on the education that they receive while they are still working.”
“The Government should therefore extend this concept of widening participation in policy making, not just to speaking out at Feedback Unit forums, Select Committee meetings, advisory committee meetings of Government Ministries, or even at Town Council meetings. This concept of widening participation by Singaporeans should extend to all aspects of life, from the social to the economic, in order that Singaporeans would treat Singapore as he would treat his own home. Singaporeans should be encouraged to make greater contributions to the economic development of Singapore. In the 1989/90 Annual Report of the Economic Development Board, it was reported that local enterprises play an important role in the Singapore economy and account for over 50% of our value-added and over 70% of employment. However, the EDB defined "local enterprises" as companies with more than 30% local equity. If we use the more conventional definition of local enterprises as companies with more than 50% local equity, then the role played by local enterprises in the Singapore economy will be significantly reduced. In the book "The Singapore Economy Reconsidered" by Lawrence B. Krause, Koh Ai Tee and Lee Tsao Yuan and published in 1987 by the Institute of South East Asian Studies, it was shown that Singapore's economic growth over the last 20 years has been dependent very much on foreigners playing an important role on the growth front. For example, in Singapore's manufacturing sector, foreign owned companies, ie, more than 50% foreign equity owned, in the years 1975 to 1984 contributed on average 65.1% to the value-added and 54.6% to the number of workers.”
“Sir, I rise to fully support the motion moved by Mr Davinder Singh, Member for Toa Payoh GRC. The President in his opening remarks emphasised on long-term plans to secure Singapore's future as described in proposals contained in the book "The Next Lap" which is attached to the Presidential Address. I would like to comment on some of these proposals. As explained in the Presidential Address, in the next lap we must strengthen the sense of common ownership and collective responsibility among Singaporeans. We should instil into every Singaporean the concept that he should treat Singapore as he would treat his own home. In order to achieve this objective, the Government will (a) widen participation in policy making; (b) invest more in Singaporeans; and (c) increase the public and private assets of Singaporeans. These are realistic policies. To a certain extent, these policies have begun to be implemented. Let me comment on some of the progress made. (a) Widening Participation The Government has promoted greater public consultation through Feedback Unit forums and Select Committee hearings. Government Ministries have also formed many advisory groups with selected citizens participating as members. Town Councils are good examples of concerned citizens taking over functions previously performed by HDB officials. Ever since the introduction of Town Councils, many HDB estates have been improved as a result of recommendations made by Town Councillors, who are mainly representatives of the Constituency Consultative Committees, the Community Centre Management Commit- tees and the Residents Committees. Town Councils show that Singaporeans are able to perform and to take on responsibilities if given the right motivation.”
“This presumption clause is open to abuse by enforcement officers from the Ministry of Labour, and may even discourage our employers from inviting foreign customers into their premises. Our trade will, therefore, suffer. For small local entrepreneurs, clause 6 of this Bill may spell their doomsday. In spite of the liberalisation in the work permit policy, many small local entrepreneurs still find it difficult to obtain work permits for their foreign workers. They will be living in constant fear of raids by enforcement officers from the Ministry of Labour. May I appeal to the Minister to look into their plight and review the work permit policy, especially for small local entrepreneurs, before enforcing the provisions of this Bill.”
“Mr Speaker, Sir, I speak in support of the Bill. In recent years, our economy continues to grow at a steady rate in spite of a tight labour market. It was because our employers have responded to the Government's call to increase productivity through automation and mechanisation, and to transfer labour-intensive operations to other countries where labour is cheap and in abundant supply. As the need for workers continues to increase, the Government has, since March this year, tried to ease the labour market by gradually liberalising the foreign worker policy for those sectors which hitherto were not allowed to employ foreign workers. In spite of this liberalisation, some employers continue to employ foreign workers illegally without work permits. Such illegal employment undermines our economic strategy and I support this Bill as it enables the Government to deal more effectively with the problem of illegal foreign workers. However, I would like to appeal to the Minister to review certain clauses of this Bill, especially clause 6, as emphasised by my colleague, the Member for Sembawang GRC, as it will put the onus of proof on an occupier who will be presumed to have employed a foreign worker found working in his premises until he proves the contrary. This has far-reaching consequences as we may have large companies employing hundreds or even thousands of workers. Employers of such companies will live in constant fear of fines and/or imprisonment, as clause 6 of this Bill states that any person found in possession of any tool or implement or engaged in any activity which may give rise to the inference that he is doing any work is presumed to be employed.”
“This provision will enable future changes to be made quickly in order to keep pace with changes in salary levels of workers. However, I hope that the Minister will also try to make sure that changes in compensation rates will not be followed by corresponding increases in insurance premium rates. Sir, I support the Bill.”
“Mr Deputy Speaker, Sir, I speak in support of the Bill. This Bill is very necessary as the Minister has just said that adjustments in the workmen's compensation rates were last revised in 1980, whereas the median wage of worker has increased by some 73% since 1980. Moreover, in spite of the regular factory inspections made by the Ministry of Labour, industrial accidents have remained on the high side. According to the Ministry of Labour 1988 report, in 1988, 15,197 accidents were reported to the Workmen's Compensation Department. These accidents were for workmen who were injured, killed or afflicted in the course of work. 13,615 workmen were awarded compensation amounting to $28.8 million and $3.9 million was paid out to the families of 93 workmen who died in the course of employment. The Minister for Labour has emphasized in March this year that rate increases this round are balanced out by rate reductions for thumb, finger and toe injuries to correct anomalies. I am therefore surprised to learn that an insurance association has advised its members to increase the workmen's compensation premium by 10% arising from the changes in the workmen's compensation rates. I wonder if this increase in premium is justified, and hope that the Minister will look into this matter and discourage insurance companies from making such cost increases. A more positive approach will be to encourage insurance companies to work closely with employers in improving industrial health and safety measures so as to reduce the number of industrial accidents. I also fully support the new provision of clause 7 which was included to empower the Minister to vary the maximum or minimum amount of compensation payable for death and permanent incapacity.”