Hansard, 1981-03-17

On behalf of hon. Members, I would like to welcome the Honourable Gerald Ford who is present in our gallery, accompanied by Mrs Betty Ford. [Applause]

In accordance with the provisions of paragraph (7) of Standing Order 87 and paragraph (5) of Standing Order 88, I have fixed the times for the conclusion of consideration of the heads of expenditure in the Main and Development Estimates of Expenditure for FY 81 in the Committee of supply. These times have been notified to honourable Members and will appear in the Official Report.(Cols. 777 - 780) Committee of Supply - MAIN AND DEVELOPMENT ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1981 TO 31ST MARCH, 1982 (Cols. 777 - 780)

asked the Minister for Communications and Minister for Labour (a) whether the Ministry of Labour intends to ask the various existing teachers' unions to de-register themselves in the light of the views expressed by the First Deputy Prime Minister recently; and (b) whether the Ministry will disallow teachers from forming unions after they have been accorded professional status similar to that of other professionals such as lawyers, accountants, etc.

Mr Speaker, Sir, the view expressed by the First Deputy Prime Minister recently is a matter for the five teachers' unions to consider. There is no need for the Ministry to ask the unions to de-register themselves. Some hon. Members: Hear, hear!

The question of whether the Ministry would disallow teachers from forming unions after they have been accorded professional status does not arise at this juncture. In any case, registration of a union is considered on its own merit and in accordance with the Trade Unions Act.

asked the Minister for National Development if he will introduce legislation to merge the Housing and Development Board and the Housing and Urban Development Company into one public housing authority in view of the fact that (i) the larger flats of the HDB are not different from those of the HUDC; (ii) future HUDC flats are expected to be built within HDB estates in order to promote better social mix among dwellers of different types of flats: and (iii) members of the public have frequently requested that the income ceiling of applicants for HDB flats be raised.

Mr Speaker, Sir, we are now studying a proposal to have only one national housing authority. A decision will be made whether to merge HUDC with the HDB when all the implications have been evaluated.

Mr Speaker, Sir, the House would be grateful if the Hon. Minister could indicate when can a decision on this matter be taken. The Minister is just being very vague, Sir.

Mr Speaker, Sir, I hope within this year.

2.35 p.m.

Mr Speaker, Sir, before my colleague, the Minister for Finance, moves the Second and Third Readings of the Judges' Remuneration (Amendment) Bill, allow me to explain to the House why Judges' salaries are being revised, and also those of the Attorney-General, the Chairman, Public Service Commission, and the Ministers. In February, the PSC promoted three members of the Administrative Service from Superscale 'A' to Staff Grade I. I have circulated, with your kind permission, Sir, to all Members the table marked Annex 1 (Cols. 781 - 790) for easy reference. It shows the consolidated salaries, the 1978, 1979, and 1980 National Wages Council awards, and the total wages for each Superscale and Staff Grade. Annex 1 - REVISION OF SALARIES OF MINISTERS, CHIEF JUSTICE, ATTORNEY-GENERAL, CHAIRMAN PSC, JUDGES AND MEMBERS OF PARLIAMENT, AVERAGE EARNINGS OF TOP THREE IN VARIOUS COMPANIES AND PROFESSIONS IN 1979, LOCAL LAW GRADUATES, PSC LOCAL LAW SCHOLARS, PSC OVERSEAS LAW SCHOLARS (Cols. 781 - 790) Since January last year, Legal Service officers have been paid a professional allowance. The maximum for the Solicitor-General is $2,000. This allowance became necessary to redress the wide disparity between salaries in the Legal Service and rewards in private practice. It has, to some extent, checked the brains drain to the private sector. The professional allowance is not paid to the Judges or the Attorney-General. Judges' salaries are fixed by statute. Not unnaturally, the Judges felt that it was incongruous that their pay should be less than the Solicitor-General's with this $2,000 professional allowance. To have allowed the professional allowance to be paid to the Judges would have breached the principle that those in the upper brackets of the protocol hierarchy should not have their salaries augmented by professional allowances, which, in any case, should become unnecessary when the supply of able lawyers increases. To maintain "relativities", a word used by Establishment officers to mean differences or differentials between the pay of different categories of officers, in this case between Staff Grade I officers and the Solicitor-General with his professional allowance, I have also adjusted the salaries of the Attorney-General, Chairman, Public Service Commission, and Ministers. The Chief Justice will now be placed on Staff Grade II, a consolidated salary of $13,000 a month. Judges will go from Superscale 'B' to Superscale 'A'. The Attorney-General will go from Super-scale 'A' to Staff Grade I. So will the Chairman PSC. Ministers will have their consolidated pay increased from $10,095 to $11,500, i.e. $500 above Staff Grade I. In other words, the Minister for Law, for example, will be paid $500 more than the Attorney-General. The Second Deputy Prime Minister will be paid $13,000 consolidated, Staff Grade II, on par with the Chief Justice. The First Deputy Prime Minister will be paid $14,250 consolidated. The Prime Minister will be paid $16,500 consolidated. The relativities between the posts have been roughly maintained for a further period. I must emphasize once again that the Government considers the Administrative Service to be the premier service, more important than the Legal or Judicial Service. In future, Legal and Judicial officers must reconcile themselves to having outstanding Administrative officers going over them and widening the disparity to Staff Grade II and Staff Grade III. Of course, outstanding Legal Service officers are eligible for admission to the Staff Grades of the Administrative Service as Administrative officers. Salaries of Senior Parliamentary Secretaries, Parliamentary Secretaries, and Political Secretaries are amended as in the table in Annex I: Senior Parliamentary Secretaries from Grade F to E, Parliamentary Secretaries from Grade G to F, and Political Secretaries to Grade G. The revision of Senior Ministers of State and Ministers of State salaries will be made later, probably mid-year. The Cabinet has also recommended to the House an increase in the allowances given to Members of Parliament, at present $1,340, to $2,000 consolidated at 1977 wages. This increase will enable Members to employ a part-time clerk/secretary to help them in their constituencies. [Applause] With a more educated and more articulate electorate, Members need help to attend to their constituency work more efficiently and diligently. The Commissioner of Inland Revenue, wearing another hat as Director, Research and Statistics Unit, is conducting a longitudinal study of what graduates of com- parable age, ability and qualifications earn in the public and private sectors. Longitudinal study is a statistical term, meaning a study that extends with the career of the graduate year by year - graduation day plus one year, plus two years, and so on. It will take six months for all returns to be received and analysed. The public sector has been slow to react to changes in market conditions. The Government has, therefore, decided that there will be an annual Survey of Employment of Graduates on the movement of wages and other perks for professionals and managers to keep wages of public sector graduates comparable with those in the private sector. Fifteen years ago, the public sector was the largest employer of graduates, and therefore set the norms or standards of pay and remuneration. This is no longer so. It is now the private sector, particularly foreign banks and multinationals, who set the pace. If the Government does not respond sensitively and speedily, the public service will be stripped of talent. At this stage, may I draw Members' attention to Annex II, which I have circulated, on the average income of various categories of professionals and managers in the private sector. This list has been compiled by the Commissioner of Inland Revenue. If Members will run their eye down the first column showing what the number one man is earning in the various categories of banks, oil companies, multinational manufacturing, local manufacturing, car dealers, transport, ship building, supermarkets, lawyers, accountants, doctors, surgeons, architects, engineers and stockbrokers, they will see how the public sector has been unrealistic in its rewards. It is simply not possible for the Government to pay what top men are being paid in the banks, or what lawyers, or medical practitioners, let alone what top share-brokers are earning. Nevertheless, the Government has taken cognizance of the changed circumstances under which it is competing for top-ranking talent for the public sector, especially for the political leadership. This is by way of illustration. In fact, it is one of a chain of circumstances which led to this Table being compiled and to a revision being made. In 1978, I had to persuade Dr Tony Tan to give up his position as General Manager of the Overseas-Chinese Banking Corporation which would, in the natural course of events, have taken him to the top of the banking ladder. Members will see in column 4 that the highest paid banker in Singapore earns $950,000 a year. He became a Senior Minister of State in February 1979, suffering a considerable loss in his salary and perks which included a car with driver. Even as a Cabinet Minister, his Ministerial remuneration does not equal the total remuneration and perks he would have enjoyed as a banker. Several other Cabinet Ministers, including Mr Ong Teng Cheong who gave up his practice as an architect, have made similar sacrifices. May I pause here and say that the fact that a top architect is shown in Inland Revenue returns to have earned $200,000 a year does not necessarily mean that architects are generally worse off than, say, dental surgeons or accountants. There is a foot note there (Annex II) which the Commissioner of Inland Revenue has made, in which he has reminded us that: '. . . these are minimal and the true benefits often total 15% or more of quantified earnings [which are not shown in the returns.] Adjustments, where known, have also been made to earnings diverted to personal or family holding companies. The table therefore shows proven, minimum earnings.' In other words, lawyers are among the highest earners shown in the list of professions, not because they are virtuous but because their clients will register in their books payments made to them, unlike patients who do not necessarily register what they have paid their doctors. So speaking from personal experience, I do not necessarily believe that a lawyer is twice well-off as a doctor. I think he is twice well-off as far as Inland Revenue is concerned. The problem with ministerial office is that the reward is the unquantifiable satisfaction of having transformed Singapore and having improved both the standards of living and the quality of life for all Singaporeans. Those who take up public office must make some sacrifices. Loss of privacy is probably more keenly felt than the loss of many invisible perks like tax-free car and driver, expense account, entertainment and travel, housing loans, and end-of-year bonuses. As the private sector further develops, and we are confident it will, I fear it will become more difficult to recruit the really talented into the political leadership if we make the taking up of political office such a sharp sacrifice. Not to pay political leaders a wage comparable with the private sector is to restrict our recruitment to the less able and the not-so-successful. Compared to the 1950's and 1960's, we are already severely restricted in our catchment or our pool of talent. But then, our choice of Ministers ranged over the whole of Singapore and Malaya. Now, our selection is confined only to Singaporeans. This makes it all the more crucial that some 6-10 of the best in the professions, from banking, and from industry, be recruited into the political leadership. Otherwise the Cabinet will simply not be equal to the more complex tasks of government. However enterprising and talented our entrepreneurs, managers, and engineers in the private sector may be, if Ministers in charge of government policies are less able than the best, the country as a whole must suffer. Among our new Members of Parliament are several Members who, when they take up office as Ministers of State, will suffer significant cuts in their total incomes. I cannot assure them that if they make the grade as Cabinet Ministers they will earn as much as what they would have in the private sector. I can, however, assure them, and their families, that they will not be unduly penalized. Regular surveys of rewards in the private sector will make sure that adjustments are made in good time. Now a word, Sir, about the difficulty of appointing High Court Judges. Since 1973, I have, in accordance with the Constitution, regularly discussed the appointment of Judges from the Bar with the Chief Justice. The number of lawyers qualified, both intellectually and in other respects, for appointment to the Bench can be counted on the fingers of less than two hands. It is because in the last 20 years very few students with top points, in other words, those with three or four distinctions in their 'A' levels, have read Law. Of the 1,725 students admitted to the Law Faculty in the last 21 years, only 36 had 60-64 points, or could be considered potential firsts. (There is a table in Annex III.) The University's Law Faculty has actually produced only six first-class Honours graduates since it was founded in 1959. Two of them were Malaysians. Only 114 had Upper Seconds. PSC records show no scholars who took first-class Honours either in the University of Singapore or abroad. (They are in Annexes IV and V.) Almost all our first-class students have chosen to be engineers and doctors. The number of lawyers in Singapore with first-class Honours from British universities or the Bar are among the older generation of scholars and they can be counted on the fingers of one hand. Top lawyers earn between $650,000 and $900,000 a year. Not surprisingly, those the Chief Justice and I agree are worthy of appointment to the Bench have asked to be excused until some future date. Fortunately, a few top scholars have taken up Law in recent years and will eventually be able to man the higher reaches of the Legal and Judicial Service. I do not, however, see an immediate solution to the problem of getting good lawyers with wide experience in courtcraft to be judges, other than to appoint them from abroad. The Chief Justice has his reservations. So has my colleague, the Minister for Law, and so has the Attorney-General. The Chief Justice considers it inappropriate to appoint expatriate lawyers to our High Court Bench at this stage. Although I agree that they would not have experience of and understanding for the manners and mores of Singaporeans, it is not an insurmountable handicap, especially for able men. If, in the next few years, I am not able to get men of quality to be judges, I shall, after consulting the Chief Justice, exercise my right to advise the President to appoint non-Singaporeans to the High Court Bench. The disadvantage of no previous experience of life in Singapore can be overcome in one to two years. Sir, I am ready to answer questions Members may wish to put.

Mr Speaker, Sir, I just wish to seek clarification from the Hon. Prime Minister. As regards Annex I, having seen the proposed salary scales and bearing in mind what the Prime Minister has just said, that is, the gross disparity in wage earnings between the top earners in the private sector and the political leadership, including the Judiciary, my question is: how does the Prime Minister come to the conclusion for this amount, considering the fact that Annex 11 shows a gross disparity in spite of the fact that there has been a decrease.

Mr Speaker, Sir, I cannot relate Annex I to Annex II. If I were to meet market conditions, then I would have to tear up the protocol list. So I have taken the line of least resistance, namely, to make the minimal changes to official salaries in order to make the pain and misery bearable all round, at least for the next couple of years until the full survey has been completed when more fundamental adjustments can be made. I have done no more than tinker with the salary scales. We were faced with the problem of lawyers leaving the Government service for the private sector, because they were going to earn anywhere between eight and 12 times more than what they were paid. To solve that problem, a stop-gap measure of a professional allowance was given only to lawyers. As I have shown from the tables, lawyers are the least able of our students. The able students have done their calculations and have chosen to do medicine and engineering because, as the Member for Punggol knows, after the collapse in Vietnam parents and students in Singapore did a quick re-think of what were universally saleable skills. If you are a sick man, you do not ask the doctor whether he qualified at the Sorbonne, in London or in Singapore. The question is: can he cure you? If you are building a bridge, you do not worry whether he took his engineering degree from Todai in Tokyo, or from Waseda, or from Melbourne, London, MIT, or what have you. "Will the bridge stand the stresses and strains?" If you are a lawyer, you are linked to the political system. It depends on the constitutional setup. It depends on the language of the administration. Therefore, this minimal adjustment to tie this all up. By this minimal adjustment, I have thrown out of gear the protocol lists. All I have done now is to make minimal changes so that everybody on the protocol list is more or less re-adjusted. It is like a platoon asked to dress themselves again, and they all put their left arms out and reshuffle from the point-man at the end. I have no other explanation.

Mr Speaker, Sir, with your kind indulgence, my other question is this. The Hon. Prime Minister just now mentioned that as regards the whole Civil Service, i.e. the public sector, the increases given to this protocol list will affect those who are not on the protocol list. How much time will be needed to look into the ramifications, and probably the dissatisfaction. The Administrative Officers at the lower salary scales might say, "The officers at the top have got such big increases. What about us?" I hope the Prime Minister can comment on that.

I said that a longitudinal study is being made. The preliminary results should be available by mid-year. This will enable us to compare what, say, a first-class graduate in Engineering would be getting five years after graduation, six years after graduation and so on, say, in the Public Utilities Board, as against, say, Hewlett Packard, Mitsubishi or Jurong Shipyard. It is a rough test but, by and large, it will give us a shrewd idea of relative rewards. This adjustment does not affect people in the lower reaches. So far as we can make out, the Government pays the best salaries for "green" graduates. So, for the first two to three years, the Government provides practical training for all "green" graduates. They leave from about the third year when the private sector finds them with usable skills, apart from theoretical training. The career curve based on figures obtained four years ago shows a very gradual disparity between the public sector and the private sector in the first seven to eight years of a graduate's career, and then a steep take-off by the high flyers in the private sector after the seventh or eighth year. It is like a Concorde taking off. In the private sector, you start low. Usually, the bright graduates join the Government service for two to three years and then join the private sector after that. And those who do well, and they are based purely on performance, not on paper qualifications, they rise rapidly. The Government's problem is to match or to react quickly to market conditions because with each passing year, after the seventh year, the disparity widens. The answer has been to advise the Public Service Commission to abandon practices which have been ingrained over the last 30 years, when inflation was low and the public sector, including the Government, was the largest single employer of highly-trained manpower. Two factors have entered into it: inflation plus an ever-expanding private sector. Banks, multinationals, offshore financial houses pay the rate for the job. This has presented us with a new problem. The only answer is rapid annual promotions for the talented. It may be that perhaps in certain areas, such as the Engineering Service, we should abandon the idea of life-time service and pensions and go on to CPF, so that the Government hires and fires just like the private sector. As it is, we are saddled with all the mediocrities who remain whilst all the high flyers leave. The inevitable consequence is that whenever there is a major project to be executed, we have to hire expertise from the private sector. If that has to be, then perhaps we should ask ourselves whether we should not abandon British practices which we have continued, but instead hire and fire and pay the rate for the job; and perhaps we should do that with Ministers too! [Laughter]

Mr Speaker, Sir, I merely want to seek a point of clarification from the Hon. Prime Minister. Are these Annexes and Tables put before this House to justify the upward revision of the Ministers' and the MPs' allowances? If that is so, I would say that there is no need because not only Singapore but the whole world knows that the PAP Ministers and MPs are underpaid.

I have not put those figures as justification for the minimal adjustments that I have made. I have put the figures in order that the House can take a deep breath and Members should ask themselves, "How long will we stay relevant?" A generation that was recruited under revolutionary conditions in the 1950s and 1960s had carried on with the system that is completely out of touch with present-day realities. We will carry on out of habit. Old soldiers just soldier on. But recruiting new talent, something which I have assiduously pursued in the last few years, presents grave difficulties. I am not saying that it is not possible to get more bankers like the Member for Sembawang. I am wondering if it is a sensible way of ordering our political life. My mind went back when I looked through these tables to an occasion in 1956 when I hired the Organising Secretary for the PAP by getting the Minister for the Environment, then having been transferred from Singapore to Kuala Lumpur, to give up his job and come down to Singapore for half his salary which was what my Assemblyman's allowance then was. But the circumstances which brought out that response have gone. Those were tumultuous times. Asia was in ferment: the shape of our lives was being altered irrevocably. In that revolutionary ferment, any man with any courage, with any fire in him, would respond to the challenge. The future was anybody's guess. The Chinese Communists looked invincible. The Vietnamese said they were invincible. Many people believed that. In that situation, no one bothers about salary scales and pension schemes. It is a question of life and death, a question of your convictions. Now, barring accidents like a catastrophic collapse of will in the United States, or a desire for peace at any price in Western Europe, for detente in Western Europe, whatever may happen in parts of the Third World, the Communist wave of the future has been revealed to be what it was - a lot of froth, a load of propaganda. It was a psychological blitz, and we nearly became victims of that blitz. The world knows that the Communist system does not work, that the Poles cannot feed themselves, and the industrial system just cannot produce. We know that China has decided to get down to earth and stop pretending that it is a great success. It is not. It has got to learn simple things about how to motivate workers from firms in Hong Kong, setting up an industrial estate in Sum Chun across the border. In these calmer times, minds wander on to career paths and pension schemes, on what happens when a person is retired at the age of 65, what post-retirement benefits there are when they are 75 or 85. I am suggesting to the House and to members of the media that Singapore has to step back and take a look at how we are to order our rewards. I am not suggesting that political leaders should have the rewards of top stockbrokers who earn $21/2 million a year, or top bankers who earn nearly $1 million a year, or lawyers who earn $900,000, or doctors and surgeons who earn $650,000. Even top car dealers earn $1/2 million I It does not make sense to makebelieve that we can continue with no fundamental changes in rewards in the relatively tranquil situation that we now enjoy, contingent of course on the Vietnamese being held down to good behaviour, both by the international community and by the Khmer patriotic resistance. In these changed circumstances, we have to make a fundamental reappraisal of how we pay Members of Parliament, pay our top administrators, pay our top men. Perhaps wherever and whenever convenient, we should move away from pensionable terms to the CPF and pay the rate for the job. In other words, engineers can leave the public service if they wish, rejoin it when they feel that the private sector has gone stale and public building is on the up. I suggest the figures provoke us to rethink our position.

Mr Speaker, Sir, I am a little confused. The Hon. Prime Minister has raised the question of hiring and firing. If I was a Prime Minister - but I do not think I will be - I would not take the risk of being hired and fired at a cost of $1/4 million, that is (if you do a quick calculation), on $21,000 a month. But if I was in a bank, or maybe a share broker, I would take the risk of $21/2 million and get hired and fired. Another matter is that the Hon. Prime Minister is now speaking of hiring and firing at a time when we are talking of the Japanese management-labour relationship. I am a bit confused, and so can I ask the Prime Minister to clarify?

The salary scales worked out for the public sector all rested upon the premise of a life-long service and a pension thereafter. They were worked out by British Establishment experts some 30 years ago and modified by our own Establishment officers over the years. But they accepted the premise that when you join the Government service and serve it faithfully, you cannot be sacked unless you have done something seriously wrong; and a pension is there waiting for you when you retire at the age of 55 and ever after. We have abandoned that system for Divisions III and IV. Am I right?

Yes.

In 1975 the Minister for Finance tried to persuade me to abandon it even for Divisions I and II, I resisted for very practical reasons as I thought that we would just lose too many good men, I still believe that for certain key jobs, like the Administrative Officers, people who formulate policies or help Ministers formulate alternatives, it is not practical to hire and fire. One needs years of experience, data and expertise of the various Ministries, to know that if you make alterations to policies, years later there are consequences to be felt in other sectors. Therefore, for such persons a pensionable service is the only kind of service. We have to hold their loyalty by regular adjustments and a decent pension, and also the possibility of a derivative pension. In other words, a pension to the wife and children in the event of their death either during service or after retirement if their children are still under-age. But for other categories of purely professional expertise, like the Engineering Service where one does not have to acquire in-depth knowledge of the inter-relationships between Ministries and the consequences of changes in policies and their impact on other Ministries, I would accede to the proposal of the Minister for Finance that we move away from pensionable service and go on to CPF. Then we are able to recruit new talent when we lose them. I do not wish to confuse the Member for Mountbatten. We are not Japanese. That is part of our problem. But we admire and indeed we aspire to do what they have achieved. I believe there are large segments of their cooperative relationship between management and workers and between workers and workers, which can be transferred or incorporated into the Singapore social context. I hope the Member for Mountbatten has read the article, which was published recently, explaining how the Member for Cairnhill had his own management doctrines changed as a result of seven years working with Japanese management. He started off in Atlas Electronics with a Hong Kong management doctrine. I inspired that article, I have spent long years pondering over this. It is best, of course, if there can be this life-long fealty of Samurai for his Daiymo or his Lord, of the fealty of the farmers and the peasants to the Daiymo. They transferred that fealty to the Zaibatsu's Chief Executives. The samurais have, I suppose, become the directors of various sections, and the loyal peasants have become the workers. If we do not learn from the Japanese, I see a great danger of Singapore stagnating. The 1980s is a period of slow sluggish growth. There is no magic wand which can suddenly bring back the 1960s - with oil at US$1.20 a barrel instead of US$38 a barrel: world trade galloping away at 10 to 12% increase per annum; new products, new technology. It was the beginning of the transistor era, the transistor radio, the television set, and so on. There is no going back to those favourable conditions. Growth is going to be sluggish and slow, and we have got impatient Singaporeans. We can teach them patience, to learn this secret of team spirit in getting a job done well, to work with and not be against management. If you can achieve this, then despite slow growth worldwide, we will make that next quantum leap into middle technology. We will get out of those products which face protectionist barriers. I suggest to the Member for Mountbatten that if we can get the right men, by the end of the 1980s, with sound recruitment of MPs, of Ministers of State, of Ministers, in other words we have got not only people with a sense of commitment but also ability, drive, a sense of imagination, qualities of leadership, we shall make the grade. If we can recruit political leaders able to help create this climate of cooperative endeavour, then despite our different conditions from those of the Japanese, despite our absence of life-long employment, we can successfully adopt large segments of what has made Japanese industries so formidable and so successful. I commend the Member for Mountbatten to spend some time on this. He is a serious-minded person. So is the Member for Cairnhill. My own interest in this subject was first aroused when I visited IHI (Ishikawajima Harima Industries) shipyard in Yokohama in April, 1967, 14 years ago. I was taken through the shipyard by Dr Shinto, now retired, one of Japan's leading shipbuilders. That September, five months later I was at Newcastle-on-Tyne where I was taken through a British shipyard, Swan Hunter, by Sir John Hunter. I had induced him to come out to take over the British Naval Base and convert it into a civilian dockyard. The contrast between the two shipyards was so vivid that it was etched in my memory. One was a leisurely graceful way of working, a way of living. There was no hustle, no flurry, no bustle. Sir John sent his beautifully carpeted Rolls to fetch me from the Gosforth Hotel which was conveniently sited by the golf course, took me to the shipyard with a leisurely workforce. He told me that I should not misjudge their productivity; he had computerised machine tools that could automatically bend large beams of steel to the right shape for the purposes required. I did not tell him that the Japanese also had these automated and computerised equipment plus what Dr Shinto explained in subsequent conversations: the differences between the way Japanese shipyards were run and British shipyards were run. This was before the collapse of the British shipbuilding industry later in the 1960s, and was being wiped out in the 1970s. He said, "Well, we Japanese make no difference between management and workers. I, Dr Shinto, put on my gum boots and my helmet and I go to my shipyard regularly. It takes me about half an hour at least, but I must see for myself how conditions are, and the workers must see me that I am interested in them, and how they are working." So do other senior executives right down the line. Spend some time with the Member for Cairnhill. He had this lesson administered by Aiwa Electronics. As a result of our wage policy, Atlas was pushed against the wall. To rescue Atlas, Aiwa, a subsidiary of Sony, was brought in, seven years ago, I have spent hours discussing this with him. It is fascinating because it is an object lesson of what we can do. While he was running Aiwa on Hong Kong doctrine, he distrusted even his directors because the Hong Kong directors were not only designing for Atlas, they were also designing for themselves and offering their products at a cheaper price to the same customers. That is Hong Kong doctrine: I mean diamond cuts diamond. So his time is spent not only on supervising them on the job, he has also to check what they were doing in their spare time. When he had Japanese from Aiwa, they re-educated him gradually, as he puts it, "by stealth". I asked him what he meant "by stealth". He said, "Well, we used to ship out orders. Although we knew that there were a few defective boxes, we did a rough estimation of the reaction of the customer. If he is a fussy customer, and will cause us great mischief, and great outrage will follow, then we will remove the defective boxes. But if he looks a reasonable man, one or two per cent defects would be acceptable. But when the Japanese were in charge, they literally disobeyed him and refused to ship; they changed the defective boxes. Long sessions followed. They told him that Aiwa was a name that they would never allow to be sullied by exporting any article which was defective; and their customers came back despite price hikes as a result of increases in oil price or costs of Components. He was not convinced. But they insisted and changed the defective boxes. Price hikes followed oil prices. Aiwa-Atlas customers came back, Gradually he was swung round. And he was no longer worried about what they were doing in their spare time. They were thinking up new ways to improve productivity. When he went off on travels to sell Aiwa, they would be at the airport to send him off. And when he returned, they would be at the airport to receive the glad tidings of his success, or to commiserate with him when he had failed. I see no contradiction in what we are trying to do, selectively culling those parts of Japanese management-labour relations which are applicable to a more or less similar culture - a Confucianist society. I think much will take root here. But where it is not necessary to have life-long or pensionable service, like technical services, engineers, architects, and the other technical professions, we can let them come and go, in and out of Government service, without loss to themselves. They can take their CPF. There is no pension. And they can rejoin the Government service after having acquired experience outside. I hope I have not left the Member for Mountbatten more confused than when I started. I can assure him that in my mind there is no contradiction.

Mr Speaker, Sir, we have heard the Hon. Prime Minister indicating that if in a few years' time he is unable to persuade potential candidates from Singapore to take up the office of judgeship he will exercise his right of advising the President to appoint judges from abroad. I hope that statement will persuade those who were approached but declined, to reconsider and to accept judgeship as a contribution to the administration of justice in Singapore for if, as pointed out, several of the Cabinet Ministers have taken rather steep cuts in their salaries to contribute to the nation in the Legislature, it may not be unreasonable to ask persons in the legal profession to do likewise in contributing to the Judiciary. But I think it must be a measure of last resort because, Mr Speaker, while I can see that an expatriate judge can perform ably in deciding cases in most categories, I wonder whether an expatriate judge would have that sense of appreciation of the policy underpinnings of certain laws which he might have to administer in cases appearing before him. I am thinking particularly of cases like Constitutional Law cases where this may impinge on important national interests and the judge ought to have an awareness of the social and political underpinnings of the laws. Having said that, may I ask a question of the Hon. Prime Minister and, that is, whether some of the problems we are encountering could be solved in the long run by focusing on the younger practising lawyers. Traditionally, it seems that we have focused on lawyers from Government legal service who are in their fifties. I can see the reluctance in approaching younger lawyers because under the scheme in our Constitution there is security of tenure and, once appointed, judges cannot be removed except by very complicated procedures. But the Consti- tution was amended recently to provide for the office of Judicial Commissioner. I wonder whether it would be possible for the Government and the Hon. Prime Minister to think in terms of using the device of Judicial Commissioner to enable short-term appointments of the younger able practitioners so that they would not have to completely abandon their careers but, at the same time, they could have a taste of the judicial function and would also enable the Senior Judges and the Chief Justice to appraise the judicial performance of the Judicial Commissioner.

The suggestion has been made to me. It is most attractive to the young advocate. It increases his stature at the Bar. Having done a stint of 18 months to two years, I do not see him taking on a judge-ship. His earning capacity at the Bar would have correspondingly increased. It is similar to the problem of holding doctors in professorships in our hospitals. They work hard in order to become the professor, and having become the professor they serve out a reasonable length of tenure - sufficient so that nobody can doubt their qualities as a professor - they then leave. As Members can see from the Table in Annex II, fifth item from the bottom, doctors and surgeons earn a maximum of $650,000 declared income for tax. We are a fast growing society. I hope we will continue to do so because it makes life so much easier for everybody. As long as more ordinary workers are buying colour television sets and video tape recorders and so on, Members in this Chamber will lead lives which are more regular, even tranquil. Given that scenario, I do not see young lawyers taking on judgeships after a stint as judicial commissioners. An advocate's earning capacity is at his peak between the ages of 40 and 58. At 60 when he begins to lose steam, he may decide it is too hard and too demanding a life. Two years as a Judicial Commissioner increases his earning capacity. He is unlikely to take up a judgeship. When he has lost steam, after the age of 58, he may want to be considered.

With the consent of Mr Speaker and the general assent of Members present, Question put, and agreed to. Resolved, "That, notwithstanding the Standing Orders, Item 2 on the Order Paper be taken before Item 1." - [Mr Chua Sian Chin].

Order for Second Reading read. 3.41 p.m.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." As befitting the status and independence of the Judiciary, the remuneration of the Chief Justice and Judges of the Supreme Court is provided for, separately from the rest of the public service, in the Judges' Remuneration Act (Chapter 7 of the Revised Edition). Substantive salary changes for the Chief Justice and the Judges require to be reflected in the Act. The salaries of the Chief Justice and Judges were revised in March 1973, when Government raised the salaries for Superscale officers in order to keep salaries of the senior grades in the civil service in line with those in the private sector. It was revised again in 1979 on the consolidation of the NWC allowances with their then basic salaries. More recently, Government has made further changes to the salary structures of the Administrative and Professional services. As one result, improvements to the salary structure of the Administrative Service were made by the introduction of three Staff Grades. In the case of the Medical Service, medical and dental specialists are now paid enhanced specialist allowances. A special allowance was also introduced for officers in the Legal Service. The Prime Minister, in his Ministerial Statement just now, has explained that to bring the salaries of the Judiciary in line with changes in the rest of the public service, the Chief Justice's salary has to be increased to the equivalent of Staff Grade 11 and the salaries of Judges of the Supreme Court to the equivalent of Superscale 'A'. This Bill proposes to give legal effect to the changes from 1st April, 1981. As a result, the pensionable salary of the Chief Justice, now $10,815 p.m. will then become $13,000 p.m. and the pensionable salaries of the other Judges, now $8,650 p.m. and $7,930 p.m. will become $9,370 p.m. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Hon Sui Sen]. Bill considered in Committee: reported without amendment: read a Third time and passed.

Order read for Resumption of Debate on Question [6th March, 1981], "That Parliament approves the financial policy of the Government for the financial year 1st April, 1981 to 31st March, 1982.". - [Mr Goh Chok Tong]. Question again proposed. 3.46 p.m.

Mr Speaker, Sir, may I make a most unusual request? I know I am supposed to be the first to speak today, but the Prime Minister has successfully pre-empted my speech by touching on my own subject and in a much better way. So I will require some time to think of something else to say.

Mr Speaker, Sir, I make this statement with some trepidation and reluctance as I know there are, in this House, many other colleagues who have expertise, knowledge and acumen on economic and financial matters. Like other colleagues who have preceded me in the Budget debate, I too want to congratulate the Minister for Trade and Industry and Minister for Health for his statement. But why do I congratulate him? Is it for what the Straits Times of 7th March called, in bold headlines, "Chok Tong's goodies"? No. Let me not be misunderstood. Like others I also welcome the package of tax reliefs, incentives and concessions. In my view, congratulations are due to the Minister for three reasons. First, for presenting a clear and coherent statement of the economic issues as seen by the Government of the problems that lie ahead, of our targets and of the strategies to achieve the targets. Appendix I to his speech, "Highlights of Singapore's Economic Development Plan for the Eighties" is an extremely important document outlining the scenarios for the decade, setting out the internal and external factors which will shape our destiny. I have noted the five broad targets and the five bold strategies to achieve the targets. We are told that there will be five pillars of growth in the 80's (manufacturing, trade, tourism, transport and communications, and, brain services), although I think the term "brain services" is not the most apt of terms to describe what we have in mind. The second reason to congratulate the Minister is that his Budget Statement on economic and financial matters has not been in isolation but has been linked to the overall vision of the future of Singapore. And as he pointed out, 'Economic growth, desirable as it is, is not an end in itself. It is the moons which enables us to forge the kind of society we want.' The third reason why I would like to congratulate him is that he has announced his intention to hold consultations on economic policies with the private sector. This is the second time in the past few weeks that the Government has decided on systematic consultations (the earlier instance being the consultation through the vehicle of the Schools Council). This measure is laudable and will ensure that the Government has proper feedback. As regards public reaction to the Budget Speech, I think the consensus is that the public reaction has been good. However, the public reaction seems to focus on the short term tax concessions and tax reliefs. This worries me to some extent for I fear that certain important aspects of the Budget Speech did not get proportionate attention, I refer to the less attractive points, the warning notes spelt out by the Minister of the difficult times ahead. The Minister pointed out that in 1980 the prospects for the world economy were not good, but that in 1981 it will be a difficult year, and in 1982 it will be even more so. In the last paragraph of his Budget Speech, he pointed out that "we face difficult times. It is an uncertain world." Mr Speaker, Sir, these sombre, serious notes deserve some repetition because in our euphoria over the tax concessions and tax reliefs we may forget that rough waters lie ahead. I noted that the Minister in his Budget speech has rightly pointed out that the key to the long-term success of our economic restructuring is not high wages or fiscal incentives but manpower development. But the phrase "manpower development" is attractive, yet deceptive. If we approach the concept of manpower development in terms of getting the requisite number of people for the job, to train them, to endow them with skills and the necessary training, it may not be sufficient. We may have the best university, we may give the best training and we may provide adequate wages and incentives. But will that ensure that our working population will effectively join hands with the Government in forging ahead with our economic objectives? When we talk of higher productivity in our manufacturing and industrial sectors, when we talk of correct work attitudes from pilots right down to factory workers, when we urge employees not to job-hop, how can we achieve this? It seems to me that everything boils down to one important ingredient, that is, commitment to the country, pride in the nation and loyalty. This is very important. Whatever number of persons we train, whatever wages and tax concessions we may provide, we may not generate the correct work attitude unless a worker feels that deep sense of commitment. In order to bring this about, I think we must look far ahead and look to the children in our schools. Our school children must from an early age have the basic facts about Singapore: how is it that we became independent, where are we, how is it that despite our smallness of size and population, we have succeeded; the problems that the founding fathers faced [and, here, I am not referring to Stamford Raffles but the founding fathers of modern independent Singapore]; why we cannot take the future for granted. Our children must be inculcated in these key points. I commend the Ministry of Education for having made a start in this direction in the books put out for primary school children. However, when I look at the contents of these books, I think that even more can be done by giving more substantial grounding and knowledge of our country and our people. In this way, our children will grow up having a sense of pride in our country and maybe the future generations of workforce in Singapore will have a better motivation to keep the system going. As regards taxation policy, Mr Speaker, I am no expert on tax policies, but it is clear that our taxation policy is becoming more and more sophisticated and imaginative. Taxation is not regarded as an end in itself but is used as a vehicle to advance our societal interests and promote certain values. As the Minister has pointed out, the objective is: 'to encourage, not to smother, individual drive and enterprise . . . Singaporeans must be encouraged to aspire to higher incomes, through acquisition of higher skills and more knowledge.' Apart from the objective of encouraging the urge to improve and excel, our tax policy promotes the value of filial piety in the reliefs for dependent parents, grandparents, etc. It promotes the value of concern for handicapped brothers and sisters. The increase in relief for handicapped persons, announced by the Minister, not only promotes recognition of the problems of the disabled but also encourages them to actively participate in our working population. And sometime ago, to promote the objective of the greening of Singapore, reliefs were given for the upkeep of gardens. In this vein, I hope that the Government will consider whether there are other ways, other possibilities, where tax policies can encourage and further other important societal goals. I have in mind two broad areas. The first is the promotion of culture and art. Yesterday, the Member for Henderson made some important points about the need for a cultural ballast and called for a review of taxes which cultural organizations sometimes have to pay. I support his point. As the Minister for Trade and Industry said, "economic growth is not an end in itself, and is the means to forge the kind of society we want." This raises the question: what kind of society do we want? We do not want, surely, a highly materialistic society. There are many who complain of the "rat race." There are many who bemoan the fact that Singapore is inadequate in cultural aspects, interests or opportunities for music, drama, dance and art. I am not sure if they are absolutely correct. But certainly there is room for improvement. Here again, I think the answer must lie in our schools and our school children. We must encourage our children to acquire talent, skills in music, dance and art. But then if we ask the parents, they will tell us that there is enough pressure as it is in school work, and it must be very enterprising parents, and brave children who want to take up music, dance, etc. I should be grateful if the Minister of Education (and in time to come, the Minister for Trade and Industry-designate) can consider the possibility and desirability of allowing parents a deduction or relief for expenses incurred in the instruction of their children in music, dance and art. In this way, Government will be officially giving encouragement to parents to arouse interest among children in art and culture. Mr Speaker, Sir, we in Singapore have inherited the music, drama and art of three Asian cultures and we also have exposure to the West. We must harness this rich potential. The second point which I would like to bring up for consideration concerns the bringing about of knowledgeable, educated young Singaporeans. I would suggest that thought be given to how tax policies can further the important objective of bringing about knowledgeable young educated Singaporeans. It is said that Singaporeans hardly read. Our leaders have stressed the need for Singaporeans to be educated persons. How do we promote this? Here again, we must do it with our children. They must be encouraged to read and read widely, beyond their school textbooks. Every parent knows that when children reach a certain age they are voracious readers. If we go to the bookshops, we will find children sitting on floors, in between bookshelves reading. And it is not trash they are reading. We must encourage this. We must encourage parents to purchase books and fill the bookshelves at home. But books are expensive. Some thought should be given to the feasibility or desirability of providing deductions or reliefs for expenses incurred in purchasing books outside the school curriculum. In making these proposals, I hope I have not committed a sacrilege of principles held dear by economists and experts on fiscal policy. Let me now turn to the question of property prices and speculation which is a subject of discussion in Parliament as well as outside Parliament. It seems to be commonly accepted that there is a great deal of speculation in the property market with both big-time speculators as well as small-time speculators. The fundamental question is whether the Government should curb this speculation by one or more measures. The Minister for National Development said in this House on 20th February, 1981, that "some speculative activity in the property market is not harmful. However, excessive speculation should be discouraged." The question, therefore, is whether speculation has reached such alarming proportions that warrants the Government to step in with one or more measures. Perhaps a detailed answer to this question can best be made by economists and experts. But there does seem to be emerging a strong school of thought that speculation has reached rather disturbing proportions. If the Government is to step in and do something about speculation, we must be clear in our minds as to why it should do so. Is there anything wrong in people wanting to make money fast, especially since they take considerable risks? If there is nothing wrong in people wanting to make money, then why curb speculation? The answer seems to rest on two grounds. First, the speculative activity has made property prices soar to incredible heights. This has hit the middle-income potential home buyers, especially the younger professionals, who find these prices beyond their reach. I have not seen any figures of how many people are involved. Even if the number is not very large, these professionals, let us remind ourselves, are the very persons whom we will have to count on in the Government's efforts to provide "brain services" which is one of the five pillars of growth in the 80's according to the 10-year plan. I have not forgotten that the Minister for National Development has told us that more than 99% of the population qualify under the income ceiling to apply for HDB and HUDC flats. However, for them, this may not be of much consolation for the question is not qualifying but the prospect of having a flat soon, and if the wait is too long, frustration sets in. The second reason why it may be necessary for the Government to step in is that there is a serious danger that if the matter gets out of proportion, then the value of the work ethic and all that we have been trying to do concerning correct work attitudes may be undermined. If the Government is to do something about speculation, many different measures have been aired publicly or privately. First, it has been said that the Government should restrict foreign ownership of property, presumably on the premise that most of the big-time speculators are foreigners. To this, the Minister for National Development replied stating that the majority of the buyers are Singaporeans. According to him, statistics as at December 1980 showed that 77.5% of the purchasers of new housing units are Singaporeans. He also added that foreigners could, in any case, buy through Singaporeans. Do such statistics conclusively rebut the argument that foreigners are engaged in speculation? With respect, I think not necessarily. It depends whether further and better figures and statistics can be produced to show whether these Singaporeans subsequently sold the property and whether they sold them to foreigners. The argument that foreigners could always buy through Singaporeans, I respectfully submit, is not persuasive for there are risks involved in buying in someone else's name. Secondly, it has been suggested that the re-sale of property should not be allowed until the sale has been completed and a variation of this proposal is that there should be a time limit before a sale is permitted. The question here is whether it will effectively curb speculation or whether it would hit only the small-time speculators. Also, if a person sells a property later, rather than sooner, does this convert him from a speculator to an investor? Thirdly, some have even talked about a capital gains tax. But I understand that this can be undermined by under-the-counter deals. Fourthly, I noted in today's papers that certain additional measures are being taken with regard to information that lawyers have to supply to the authorities. Perhaps, in this context, thought should also be given to requiring lawyers and others engaged in sale transactions to supply the Income Tax authorities with names of sellers of property. For, if I am not mistaken, repetitive and frequent buying and selling of property may constitute trading, which is subject to income tax. Of course, this list of measures is not exhaustive. Whatever measures Government wishes to take, if it decides to take action, it is necessary to be careful that the cure is not worse than the disease. That is to say, we must bear in mind the overall economy of our country. Although I am not an expert on economic matters, it seems clear that the building and construction sector has a vital impact on our economy, with subsequent effects in other areas such as supply of goods and materials, banking, professional services, etc. Therefore, any measures which are to be taken should be proportionate to the problem without seriously causing other problems. In the final analysis, whatever measures that are taken, I suspect, it will never be effective unless the Government rapidly builds more flats. I should add that the frequent changes of policies have not helped and have increased the frustrations among those who have applied and are on the waiting list. I respectfully suggest that the Minister for National Development and the HUDC, instead of ad hoc frequent announcements of policies, come out with clearly spelt out criteria and guidelines on all key matters, income ceiling limits, age limit, marital status, and should also spell out the policies concerning queuing up and when, if any, circumstances will queue-jumping be permitted. We heard yesterday the Minister for National Development, with regard to the HDB, stating categorically that there would be no queue-jumping. With regard to the HUDC, however, considerable confusion has arisen by announcement of priorities for certain categories, and I think the sooner this is cleared up, the better. I might also say that it would be desirable to take a more reasonable policy on single person applicants. I can understand that if there is a large percentage of applicants who are single persons, then on the surface there is cause for concern with regard to our objective of promoting close family ties. But does it follow that, because the applicants are singles, they will remain single upon purchasing HUDC flats? Not necessarily. In fact, it is reasonable to assume to the contrary, that because there is a long waiting period a person will wait to get married until he is sure of his allocation of flat. It can be said that it is unreasonable to expect him to get married when he would not know how many years he would have to wait for the allocation of a flat. Finally, Mr Speaker, Sir, I would respectfully suggest that the cooperation of the press be also sought. For I have noticed that the press sometimes carry articles of impending changes and impending policy requirements which are not then followed up by confirmation by the Government. This also exacerbates the problem and brings about uncertainty. Sir, I beg to support the motion. 4.09 p.m.

Mr Speaker, Sir, the Hon. Prime Minister in his reply to the Member for Mountbatten stated that the Government aspires to achieve certain values and goals of the Japanese society. For those of us who have been to international conferences, we are aware that Singapore has been referred to as either a newly industrializing society or a mini-Japan. This label has been given to us because of our success in industrialization, good rates of growth, high per capita income, full employment, and so on. Some of us may resent this label, others may not. Our Government wants us to learn from the Japanese certain positive aspects of their way of life - among these are good management-labour relations and their cultural values. But more than anything else, the Government wants to achieve the Japanese level of economic growth. Mr Speaker, Sir, on pages 10 and 11 of the document "Highlights of Singapore's Economic Development Plan for the Eighties", the targets for Singapore are stated as follows: (a) real GDP growth of 8-10% per annum to reach present Japanese per capita GNP by 1990. (b) productivity increase of 6-8% per annum. (c) full and better paid, higher skill employment. (d) lower than world inflation. (e) healthy balance of payment. The document states briefly the scenario of the 1980s, the strategies to be adopted and the resources required to fulfil these targets. It is hoped that by the 1990s, Singapore will be a highly industrialized and technological society, providing full employment, high wages and a better material life for all. There is, however, a major omission in that document, a point which has already been made by some Members who spoke before me, Mr Speaker, Sir, there is no mention at all of the social and cultural objectives of the Development Plan. This is all the more surprising because all our Ministers are aware that economic objectives must accompany social and cultural objectives which enhance the quality of life. The Hon. Minister for Trade and Industry himself has stated in the Budget, a quotation which has already been made by the Member who spoke just before me. 'Economic growth, desirable as it is, is not an end in itself. It is the means which enables us to forge the kind of society we want.' In my view, this is the motivating force as well as the final goal behind all these revenue and tax changes. Members who spoke before me have suggested various activities which can be organized to enhance the quality of our lives. I think it is time that the Government gave serious thought to this subject, a question which has already been raised: what kind of society do we want? Toward this end, may I humbly suggest that the decision-makers give as much time, energy, thought and resources to the formulation of a long-term plan for our social and cultural development, a plan which may be called "Singapore's Social-Cultural Development Plan for the Eighties." This plan must be formulated and implemented side by side with the Economic Plan. May I suggest that foremost among the goals of this Social-Cultural Development Plan could be the following: (a) real growth of the national identity; (b) physical expansion of the social and cultural facilities; (c) full development of the individual's potential and creativity; (d) lower crime rates, juvenile delinquency, drug addiction, etc.; and (e) healthy balance of Government censorship and individual freedom. Mr Speaker, Sir, we are a multi-racial, multi-lingual, multi-religious and multi-cultural society. We have to preserve our multi-racial harmony, tolerance and understanding. We must preserve our diversity in our way of life. We must promote common areas of social and cultural activity. We need an awareness of our history, for without it, we cannot have an identity. We need to have a cooperative relationship between people and people, and between people and Government. There must be a role for all in the kind of society we want. Towards the formulation and implementation of the Social-Cultural Development Plan in order to fulfil the social and cultural goals and thereby enhance our quality of life, the Government should involve the various community organizations like the Citizens' Consultative Committees, the Community Centre Management Committees, the Residents' Committees, the communal and cultural groups, the leading personalities in our literary circles and performing arts, the mass media and other individuals. It should be an involvement of as many Singaporeans as possible so that this kind of society envisaged in the Social-Cultural Development Plan has the support of all, if not most, Singaporeans. Mr Speaker, Sir, this is a debate on the Budget statement and economic policy of the Government and so, to be relevant, I shall deal with a few points concerning them. Mr Speaker, Sir, I have two matters to raise with the Hon. Minister concerning his statement on Singapore's economy in 1980. I would like to question the Minister on the trade deficit which has been increasing year by year. In 1976, the trade deficit was $6.5 billion and in 1980 it was $9.9 billion. The trade deficit in 1980 was 34% above that of 1979 which was $7.4 billion. The trade deficit must be a matter of considerable concern not only in terms of the ever-growing gap between the value of exports and imports, but also the difficulty of checking this tendency; it would seem that the various steps taken to promote exports have not been very successful. According to the Minister's forecast of uncertain economic and political problems in the world, the trade deficit is likely to grow larger in the 1980s. The recession, inflation and unemployment in the industrial countries and the world political problems, particularly in the Gulf area, will certainly aggravate the problems connected with international trade. Further, the Minister mentioned that the two contributory factors for the trade deficit in 1980 were, firstly, the increased cost of imported oil and, secondly, the larger import of machinery and equipment. Both these items - import of oil and machinery and equipment - are likely to increase, and this will further enlarge our trade imbalance. It would seem that various efforts on the part of the Ministry to improve the situation have not been very successful. I would like to ask the Minister what he proposes to do to narrow the trade gap. In particular, I am interested in the Ministry's efforts to improve our trade balance with our major trading partners, viz, Japan, the United States, the EEC, Saudi Arabia and Malaysia. The Minister has suggested that a long-term solution to the problem would lie in the restructuring of our industries and the production of higher value-added commodities. In his view, such items would be less vulnerable to protectionism. May I ask the Minister what assurances he can give to our manufacturers that higher tariffs and import quotas would not be imposed on these items in the future, when they become competitive against those of the industrial countries and threaten the employment of the industrial workers of these countries? The Ministry has attempted to assist our manufacturers to promote their exports by encouraging them to participate in overseas trade fairs, trade missions, and to establish promotional offices in overseas markets. But, again, they do not seem to have been very successful and, therefore, much more should be done to promote our exports. In this connection, I would like to know whether the Trade Development Advisory Committee has taken up seriously the suggestions of the private sector to improve the package of trade incentives. Mr Speaker, Sir, another matter I would like to raise with the Minister concerns the formulation of the energy policy, which is the responsibility of his Ministry. During the course of last year, the oil price was raised four times, to US$32 per barrel - the last price was 35% higher than the price in January. The tendency of OPEC to raise the oil price periodically and the political problems in the Gulf area, including the war between Iran and Iraq, are likely t6 push the oil price higher. It is, therefore, urgent for the Ministry to reduce our dependency on oil by conserving energy and diversifying our energy sources. In this connection, I am happy to note that the Ministry has set up the Inter-Ministry Coordinating Committee to ensure that policies on energy conservation are pursued in all sectors of the economy and that it is looking into the feasibility of coal to supplement oil to generate electricity. The question I would like to raise is whether the Minister could give information concerning the various measures which the Government departments and statutory boards should implement to conserve energy. Maybe, this is the responsibility of the Ministry of National Development, which has established the Inter-Ministry Committee to study ways of the efficient use of power and encourage energy conservation in the public sector. Mr Speaker, Sir, needless to say, the various revenue and tax changes announced by the Minister have been well received by most Singaporeans. In the present economic situation, in which the industrial countries are suffering from recession, inflation and unemployment and in which the developing countries are facing serious problems related to their basic needs, these concessions have been very bold indeed. These concessions are but the result of the mutually satisfying relationship between Government and people, one which has seen the country through many difficult times and ensure the progress and prosperity of the people. I have, however, one complaint against the Minister and that is, he has not granted any concession to our senior citizens, including the pensioners. In his concluding remark, he stated, "For our society to remain durable, the old must take care of the young, and the young the old." Unfortunately, Sir, I regret that the Minister has not lived up to his words in the Budget statement. I cannot fully support his statement. In material terms, I am not sure that the old need to look after the young; in fact, I think the young know very well how to take care of themselves. But certainly, Sir, there is need, increasing need, for the young to take care of the old. Specifically, Sir, there are likely to be increases in cinema charges and bus fares. These will follow higher duties on entertainment and petrol. The issue of bus fare concession to senior citizens has already been well discussed in public, but I would like to suggest a concession in cinema charges for senior citizens. I hope the Minister will look into the possibility of providing such concessions and I am sure that if he is willing he can look for more concessions for the senior citizens elsewhere. 4.27 p.m.

Mr Speaker, Sir, I rise in support of the Motion standing in the name of the Hon. Minister for Trade and Industry and Minister for Health. Sir, it is comforting to note that Singapore has done well in practically all sectors, achieving a double-digit rate of growth of over 10%. The high wage policy has helped to accelerate the pace of automation and mechanization. Labour productivity has increased by 5%, double that of 1979. I agree with the Hon. Minister's observation that our efforts to prepare workers, employers and managers for the difficult task of economic restructuring will have to include the inculcation of proper work and management attitudes. So far, we have concentrated on worker's attitudes, or rather, we have highlighted the negative work attitudes of our workers. We should also examine and analyse the strengths and weaknesses of our managers. This will provide case studies and opportunity to seek improvement. Sir, in enunciating the tax policy, the Hon. Minister made a welcome announcement of a 10% tax rebate to all resident taxpayers. While I welcome the tax cut as an incentive for our citizens to strive and to excel, I feel that the tax burden would be fairer to most taxpayers, especially the lower wage earners, if, instead of, or in addition to the 10% across-the-board reduction, the amount of reliefs deductible for income tax purposes can be increased. I still believe that the current tax reliefs for a wife $1,000, for a child $750, and for a parent $750, are all grossly inadequate. While it is acknowledged that increasing such reliefs will shrink the tax net and thus reduce Government revenue, the schedule can always be structured in such a way that it results in only a predetermined amount of reduction of revenue for the Government. Such a measure will then allow greater relief to the taxpayers who shoulder a greater family burden, compared to those who have a lesser burden. I am also aware of the argument that such a measure will result in a reduction of the number of taxpayers. But the people who fall out of the tax net because of this exercise are the ones who can virtually be described as poor by Singapore standards, and I do not see the reason why the Government should insist on taxing them. We are no doubt in full support of the Government's plan to develop Singapore into a modern industrial economy based on science, technology, skills and knowledge, and to build a society that encourages and rewards excellence. However, actions and intentions do not seem to be in consonance with the Income Tax Department's evident handling of claims for tax deduction against an individual's expenditure to upgrade his skill or improve his knowledge. Currently, fees spent on course works, whether for long or short courses, diploma or extra-curriculum, institutional or by correspondence, definitely do not qualify for tax deduction. If we want to be assertive in encouraging our population to upgrade their skills and improve their knowledge, we should spare no effort to give them due recognition and rewards by offering that little incentive in the form of tax relief for fees paid to training institutions. That the taxpayer is willing to exert his own time after a full day's work, at his own expense, to further extend his skill and knowledge to make him an added asset to his employer and the nation as a whole is worthy of consideration of indirect support, such as through a form of partial reimbursement through tax relief. In many western societies, such tax deductions are allowable. I would even suggest that purchase of texts and references should be tax deductible. This is one form of encouraging the reading habit amongst our population. Though the Skills Development Fund may reimburse the employer certain types of training and educational expenses, we are here talking about the wage earner using his hard-earned money and sparing evening hours to improve his skill and knowledge. The situation certainly deserves a careful re-appraisal if our prime objective is to encourage self-development, to step up skills training, and to develop brain services. Sir, I would now move on to offer my suggestion on the use of Central Provident Fund savings for the development of local entrepreneurship. The 10-year Economic Development Plan highlighted the need to encourage our local entrepreneurs to invest in supporting industries which can find a ready market in the multinational corporations operating in Singapore. I would say that, amongst other factors, one reason why there is a dearth of local industrial entrepreneurs is the lack of capital. Many of our middle-level managers working in multi-national companies will want to consider venturing out on their own after several years of stint in a manufacturing environment. Many have established contacts, accumulated expertise, plus management know-how. They will want to pool expertise and resources to start their life-dream of being the owner and manager of their own business. However, the high cost of starting and running a business, such as a supporting industry with its inherent risks, will deter many a would-be entrepreneur. In the end, many will prefer the relative stability of remaining a paid employee, much to the disadvantage and at the expense of the development of local industrial entrepreneurs. We must not forget that the US and Japanese economies, both industrial world giants, are heavily dependent on the existence of the small supporting industries. The Central Provident Fund is now made available to its contributors for the purchase of HDB and HUDC flats, SBS shares, and very soon a second property for rental income. All these speak well of the Government to look after the interest of the contributors by preventing a rapid erosion of their savings. It would be a worthy cause if the Government could give serious thought to the possibility of devising a scheme under which would-be entrepreneurs, who have the professional skill and knowledge and who are prepared to leave the security of paid employment to venture into an approved line of business such as a supporting industry, to utilize part of their CPF savings for such ventures. After all, it is the contributors' money and the cause is one in which Government is even willing to provide loans and other forms of support. Sir, in the Budget statement, the Hon. Minister has dwelt at great length on the critical need to train enough manpower for the higher skill industries and the brain services that we want to promote in the Eighties. When fully implemented, the plans will result in a significant expansion of the University, the Polytechnic, Ngee Ann, VITB and EDB's training centres. I am glad to note that our manpower development programmes will also cover the training needs of existing workers, and that the VITB is working out an operational plan to step up continuing education to re-train existing workers to meet the higher skills needed by the industries. However, I understand that currently, and in recent years, the number of applicants for technician training far exceed the intakes of our various technical institutions. This is most unfortunate as many of our young boys and girls who have the ability and will to pursue further studies and acquire skills are denied the chance to do so. Worse still, we are not developing and exploiting the full potential of our scarce human resources. Perhaps some short-term remedial action should be taken as soon as possible. Sir, I shall now touch on the issue of energy conservation. In his speech, the Hon. Minister for Trade and Industry stated that energy conservation will be pursued through campaigns and a system of incentives to encourage energy saving. The Public Utilities Board will set up an Energy Conservation Centre to provide technical advice to industry, commerce and households on how to cut energy wastage and to use electricity more efficiently. I would like to suggest that Government consider the introduction of an energy-labelling scheme, requiring the manufacturers of electrical appliances to label the power consumption and energy efficiency on their products. The public and consumers will then be able to compare the power consumption of various brands of appliances, and they should be encouraged to purchase energy-efficient appliances. Such a labelling scheme has already been introduced in many European countries and in North America. Our nation-wide effort to conserve energy is, however, being countered by the energy wastage campaign proposed by the Registry of Vehicles which requires motorists to switch on headlights in broad daylight. In requiring motorists to switch on their headlights at 6.30 p.m., irrespective of the time of the year and weather conditions, ROV has failed to take into consideration the daylight hours in Singapore and the necessity to conserve fuel and energy. I would suggest ROV carry out a thorough survey and observation before implementing the regulation. Sir, I beg to support the Motion. 4.38 p.m.

Mr Speaker, Sir, I would like to make some comments on the highly satisfactory performance of the Singapore economy in 1 980. The double-digit rate of growth of over 10%, the first since the oil crisis of 1973-74, is due in no small measure to the wise policies of the Government and the support and cooperation of the unions and workers. To have achieved such a high growth rate in the face of a world economic recession and inflation, high fuel prices, and restrictive trade practices, speaks well of the Government's policy to shift the economy into higher gear by a judicious mix of higher wages and fiscal incentives. This has resulted in a rationalization of business enterprises, statutory boards and the Civil Service. Higher wages, tax incentives and streamlining of organizations - all these have achieved the desired objective of higher labour productivity - a growth of 5% which is double that for the previous year. However, the long-term objective of a restructured economy in which science and technology will be employed in the manufacture of sophisticated high value-added products has, as its premise, the upgrading of skills - technical, managerial and professional, together with the concomitant upgrading of wage and salary levels. Thus the improvement of skills will be the hallmark of Singapore's development strategy for the next 10 years. Singapore is now poised for the launching of its economy into the select group of industrial nations in the West and Japan, and all the necessary conditions for this economic take-off are present - a newly re-elected Government enjoying the full support of the people, cooperation between Government, unions and the public and private sectors, and an intelligent and hardworking people. Sir, I now wish to pay tribute to the Hon. Minister for Trade and Industry for having taken pains to formulate a relatively painless budget. May I commend him on his wise and humane decision to increase the earned income relief for handicapped persons from $1,000 to $2,000. As we grow into a more actively caring and sharing society, any step taken in the interests of the aged and handicapped is most welcome. With Singapore's growing affluence, the Government and people of Singapore should concentrate more effort on making this society a more livable place for the disadvantaged. The Hon. Minister's decision to raise the exemption ceiling for estate duty on residential properties from $200,000 to $600,000 is a timely one. The escalating cost of housing development in Singapore due to the rising costs of labour and materials has grossly inflated the value of residential houses. If the inheritors of owner-occupied houses purchased years ago at much lower prices have no intention to sell their residences and move house, they will not enjoy any benefit despite the astronomical values of property existing today. To them, their property is a home to live in and not a source of income or profit. As such, the higher ceiling for exemption of estate duty is a relief to them as they may then not be faced with the dilemma of having to sell their house to pay the estate duty. The Hon. Minister is to be commended for showing concern over the tax burden shouldered especially by salaried workers. His proposal to revise the tax rates in 1982 and to provide for a tax rebate of 10% in the current Year of Assessment is welcomed by many taxpayers who have all along provided the Government with a large part of its revenue for the provision of public services. The Hon. Minister reported in his Budget Statement that the Inland Revenue Department is studying the possibility of presumptive taxation for all those who do not keep proper accounts. Now, while this may be an effective measure to draw tax evaders into the income tax net, there is the possibility that many small-time hawkers may be taxed beyond their means to pay. I suggest that the IRD look into this very carefully to avoid doing injustice to those whose incomes fall below the average for their category. The Hon. Minister for Trade and Industry should seriously consider increasing the income tax relief for aged parents in the light of the Government's stated policy of encouraging people to take care of their old folk by providing, at the very least, accommodation in their own homes. This tax relief will alleviate the financial burden of those who fulfil the basic filial and social obligation to look after their own parents. The present tax relief of $750 for each parent is hardly sufficient in these times of high prices. Tied up with this, the tax relief for children should also be increased as today the expenses incurred in raising children have reached the level where many people are faced with the prospect of having to make sacrifices even to the extent of neglecting their own parents' welfare. Since Singaporeans have been successful in planning their families and keeping them small, the Government should provide more assistance to those who are struggling to bring up a better-fed, betterhoused, better-educated and better-looked-after generation of young Singaporeans by increasing substantially the tax relief for the first two children. As the Hon. Minister of Education will be presenting the next Budget, I trust that he will take into consideration the high cost of providing schooling, transportation and other expenses incurred in raising children. I fully endorse what the Member for Nee Soon said in his speech yesterday concerning the payment of the second-tier wage increase. In the first place, there is doubt about the effectiveness of the basic NWC payment as this has led to a general increase in the price of basic commodities and services, such as hawker food and transportation. The second-tier has, as its stated objective, the raising of morale of above-average workers. It does not seem to have the intended effect. On the contrary, it may even demoralize the better workers for two reasons: first, employers have difficulty in accurately assessing employees for the second-tier payment and, secondly, the better workers are not sufficiently rewarded because even mediocre employees are given the same payment. I am firmly of the opinion that employers can award the best performers with better monetary incentives such as merit increments and bonuses. Sir, I support the Budget. 4.47 p.m.

Mr Speaker, Sir, I rise to congratulate the Hon. Minister for Trade and Industry and Minister for Health for presenting a most excellent Budget on behalf of the Government. Over the past years, while economic experts debate endlessly on the latest economic theories, the Western world continued in its lethargic state of low growth and high inflation. In the meantime, Singapore has been quietly practising its own special version of supply-side economics. Income tax rates have decreased while income of our workers has increased. This makes for a potent combination, with incentives for both workers and investors to upgrade and achieve higher levels of productivity and profitability. The Budget recently presented by the Hon. Minister is a testimony to the continuing success of our economic policies. Our success demonstrates beyond any doubt the basic intelligence of man in his response to incentives and his avoidance of disincentives. Implicit in the Hon. Minister's Budget Speech is the emphasis on the need for constant alertness to respond appropriately to the changing circumstances in the world around us. As such, nothing is static; nor is any view or policy sacrosanct, should totally unforeseen circumstances demand its modification or even reversal. The last 20 years in Singapore has been marked by an unprecedented pace of change. Initially, we sought to survive; now we seek to progress in a world that is spasmodically buffeted by major turbulent disruptive forces beyond our control. We have agilely adapted to all these changing circumstances. On many occasions, we have successfully anticipated major trends and events and have made preparation for the appropriate responses with obvious benefits. Some countries prefer to put their heads in the sand and wish the changing circumstances away. As a result, their outmoded economic and social policies have caused unprecedented unemployment with untold human hardship and misery. The price of unwillingness or inability to adapt to change can indeed be high. In the industrial world, the motor-car industry in the United States and the motor-cycle industry in the United Kingdom are sombre reminders of this high price. In the future, the pace of change is not going to be any slower. It is, therefore, imperative that we learn to live with change. The greater our ability to manage change, the greater our progress. It is on this undercurrent aspect of the progress projected in our Budget statement that I wish to touch on, and not on the financial or economic aspects which have already been amply debated by Members in this House. Mr Speaker, Sir, as we gear up for the challenges of the 80's outlined by the Hon. Minister, major government policies must be understood by our people. These policies have affected and will continue to affect every family in Singapore. Economic restructuring, high productivity, skill development, management-union cooperation, bilingualism, educational streaming - these are but a few of the many keywords introduced over the past two or three years. These keywords did not exist in the vocabulary of Singaporeans until recently. They embody deep and difficult concepts with profound repercussions for our present and future success. In many cases, positive response and support on the part of our people is expected. In other cases, major decisions concerning careers and futures have to be made. These keywords have been bandied about with increasing frequency and familiarity. What is uncertain is the degree of understanding of the underlying concepts by our people at the grassroots and community level. . Ministries have always done their best to explain policies immediately after decisions have been taken and announced. The press also has always risen to the challenge on every occasion, to explain the profound in simple language and to ensure that the message is properly transmitted. Again, what is not known is the level of reception. How much of what is written is read? How much of what is read is registered? How much of what is registered is understood? Finally, and most important of all, how much of what is understood goes on to form the basis for subsequent action and decision? Just as useful is the answer to how our people acquire their knowledge and understanding of Government policies. The grapevine obviously plays an important role. However, ignorance of facts has seldom been a barrier or hindrance to the expression of opinion in the coffee shops, hawker centres and office canteens. Misunderstanding propagates as easily as proper understanding, indeed more so, if the number of people who misunderstands exceeds the number who understands. Mr Speaker, Sir, I do not know the answers to these questions. I do not know if many do. I raise them because I am convinced that the better informed and more knowledgeable our people are with regard to Government policies, the greater will be the effort forthcoming from our people in our progress upwards together. The complaints that the PUB is raising rates and that the SBS is raising fares in the midst of hefty profits are but symptoms of misunderstanding of the realities of the situation. So too is the belief that children streamed into the Normal course are being hindered rather than helped in their school career and their future. Explanations in response to these and other complaints go some distance in enlightening the public. But the existence of complaints is an indication of the need for greater dissemination of facts and figures before misunderstanding occurs. Public relations departments in Ministries and statutory bodies are to be commended for doing an excellent job in responding to complaints and enquiries. Can they extend the scope of their work to anticipate potential problems and misunderstanding prior to policy implementation? In matters of widespread public concern and interest, can they prepare the public via discussion of background information, historical perspectives and practical examples? Can they follow up on policy implementation with surveys and feedbacks to ascertain the level of understanding and acceptance of policies? For until and unless understanding and acceptance occurs, all efforts will come to nought. The SBC also has a vital role to play. It has the monopoly of what is undoubtedly the most potent of the mass media, namely, the television, with its large audience night after night. Indeed, this premier medium should spearhead the communication of Government policies and educate the public on their impacts, capitalizing fully on the powerful illustrative characteristics of the medium. The few occasions in the recent past, when SBC undertook programmes of topical public interest, have been unqualified successes. Can we be assured of more with increased frequency? Just as we continually re-think our response to external changes around us, as the Hon. Prime Minister's statement to this House this afternoon amply demonstrated, so too must we continually re-think our channels of keeping our people informed and knowledgeable. In this connection, may I commend the Hon. Minister for Trade and Industry and Minister for Health for his courage and imagination in responding so gallantly to the invitation of the Residents Committee of Ang Mo Kio to discuss the Budget. He must indeed be one of the very few Ministers, either in Singapore or elsewhere, who dared to enter the lions' den to come face to face with taxpayers so shortly after his presentation of the Budget. Such new attempts in face-to-face communication augur well for us in Singapore. For to expect our population at large to continue to take the active role of seeking out information, mainly through conscientious reading or even studying of the newspapers, may be asking too much if the pace of change were to accelerate in future. Readers might just become shell-shocked by the incessant bombardment of information and switch off. Sir, I firmly believe that adequate communication with the grassroots is essential for the Government if we are to forge the kind of society we want, the kind of society envisaged in our Budget statement. Communication gaps that exist must be filled and filled immediately, lest they degenerate and become credibility gaps. Sir, I support the Motion. 5.02 p.m.

Mr Speaker, Sir, the Hon. Minister for Trade and Industry on behalf of the Hon. Minister for Finance has presented a good Budget which very few can quarrel with. However, like the few speakers before me, I would like to compliment him for this good Budget. Nevertheless, I have reservations on some issues which the Hon. Minister concerned has not taken up. One of them is the question of tax on CPF contributions. With rising incomes, many CPF contributors have to pay to the CPF more than $5,000 per year and the maximum tax relief allowed on both CPF contributions and life insurance premiums is only $5,000. In other words, in addition to contributing the more than $5,000 to CPF for old age, this group of contributors have to pay income tax on the CPF contributions in excess of this figure. In one way, this limitation discourages them from buying a life insurance policy - I am not here to advocate the sale of life insurance policies - as they would not benefit from any tax relief. This is one area which I hope the Hon. Minister concerned will look into. Another matter which I want to touch on is the question of payroll tax which was introduced when Singapore was a part of Malaysia. Here I would like to refer to what the previous Minister for Labour, who is the hon. Member for Queenstown, said when he explained why Government did not intend to stop the collection of payroll tax. I refer to Hansard of 16th December 1965, Vol. 24, Col. 205 in which the then Minister said: 'Instead, we intend to use it (payroll tax) solely for the benefit of the workers. We intend to set aside the revenue collected under this head to form a fund for the social security of the workers. We will set up a committee to put up recommendations for the implementation of the scheme. As what we have done in our major labour legislation and policies, the NTUC will be the first we would approach for their views and suggestions on the scheme.' Mr Speaker, Sir, I do not recall having seen any recommendations for the setting up of such a scheme. Nonetheless, there appears to have been a change of policy with regard to the utilization of payroll tax. As can be seen in the Budget Statement of 8th March 1971, the Hon. Minister for Finance, who is not here, in Hansard Vol. 30, Col. 589, said: 'The revenue estimate for payroll tax is $17 million. Here I have news which employers should welcome. The proceeds of the payroll tax will be used to lighten the burden of employers in two areas. Firstly, the proceeds will be used to compensate employers for the "make-up" pay when national servicemen are called up for their annual training exercises with the Singapore Armed Forces and they do not work in their factories and offices. Secondly, it is proposed to allow reimbursements to industrialists for approved training or apprenticeship schemes in skills, of which there is a critical shortage in the Republic. Details of the approved schemes will be worked out by the Economic Development Board and the Ministry of Education.' Sir, I believe that employers have made use of the make-up pay for their employees who are doing national service through the use of payroll tax as such. When I say there appears to be a change of policy in this respect, I would again refer to the reply of the Hon. Minister for Finance on 24th March, 1980 in Hansard, Vol. 39, col. 1293, when he was asked whether he would consider waiving the collection of the payroll tax. He said: 'The Payroll Tax is an important source of Government revenue and it is needed to defray increasing Government expenditure. Payroll Tax will, therefore, continue to be levied.' Collectively, the contributions have the effect of raising the cost of labour to employers. This should force employers to economise in their use of labour and to upgrade their operation through mechanization. Labour is now a scarce resource and it is important that it is used efficiently. Waiving Payroll Tax will hinder us in this objective.' Therefore, Mr Speaker, Sir, there is a change of policy with regard to the utilization of payroll tax. What I wish to ask of the Hon. Minister concerned is that, with the introduction of the Skills Development Fund Act, contributions to the Fund have resulted in millions of dollars being collected but use of this Fund has not been, as far as I am able to gather, good enough towards achieving its purpose and meaning, that is to say, upgrading of skills. It is estimated that payroll tax collections for the financial year 1981 - 82, would be in the region of $130 million and, of course, I do not wish to question the wisdom of the Hon. Minister for Finance as to the continued collection of it. But what I do like to seek elucidation is the application and reimbursement of the collection of the Skills Development Fund for the purpose of upgrading of skills so that it will not eventually become another source of revenue. Talking of meritocracy, I think we should be more than clear enough as to what meritocracy means. Personally, I do not wish to see a small cohort of the younger high flyers, as they are called, forget those below them and think only of themselves as being the most able and, therefore, command high incomes. They should be made to realize and understand the virtue of team work, for without team work they alone are unable to become supermen. Whilst reaching to the top, they must pull others, their lesser peers, along with them so that a harmonious relationship and concept of team work can be achieved. This cohort must accept the virtue of patience and tolerance as well as an understanding of the total team spirit and team work that spur Singapore onwards to progress and prosperity. Sir, here I would like to illustrate my concern as to why some of these high flyers, or technocrats as one may call them, think of themselves. I had one occasion to give a talk on the Parliamentary System of Singapore to a small group of overseas merit scholars who were undergoing an intensive course conducted by the Civil Service Institute. That was sometime last year. One of them asked me a personal question as to how I felt with more and more of the younger technocrats taking up politics and rising up so fast. Of course, Sir, I said that the ablest and most capable deserved to play a bigger role in government for the better well-being of the people and country. However, I feel that this question bears out an indication of conceit as well as an impatience to reach the top, forgetting the hard reality that however brilliant a person may be and who is fresh and "green" from the University, ["green" graduates which the Hon. Prime Minister mentioned just now! needs some time to fully grasp what it means to reach to the top. Because under him or her, there will be lesser peers whose cooperation is equally and vitally important to keep him at the top, that is to say, alone he cannot carry out the policies and plans. However good they are, the structure of government is such that everyone is required to work closely together and in this respect team work is essential. I can only hope that we do not have too many of the likes of such impatient high flyers in the public sector. As for the private sector, I think they can take care of themselves. I welcome the Hon. Minister's hand-out on increasing the ceiling of exemption of estate duty from $200,000 to $600,000, but I must add that such exemption will particularly benefit those who own HUDC flats, terrace houses and semi-detached houses. Therefore, if it is Government's declared policy and intention to encourage home ownership, Government should see that a family unit is not displaced upon the death of the head of the household who owns a residential property valued in excess of $600,000: as otherwise the family may have to sell the property in order to pay estate duty and may thus be unable to purchase alternate accommodation. I think it is time we changed the rules and, if I may be allowed to suggest, we should consider granting exemption of estate duty to a single residential property or a family house. In other words, if the owner of a residential property has only one such property, then upon his untimely demise his family will not be displaced just because his property is valued to be in excess of $600,000 or whatever figures set down. Of course, there will be a small group of very well-to-do people, living in residential properties costing very much more, but the question at issue is that the majority of our people should benefit. After all the very well-to-do constitute a very small number and percentage, and they certainly know how to take care of themselves. I need not elaborate on this. I now wish to raise two more points, one on Pensions and the other Tax Relief for maintenance of aged parents. Although these have been touched upon by the Members for Telok Blangah and Henderson and just now by the hon. Member for Changi, I believe that repetition of appeals can help to drive home to the Minister the importance of these issues and cause him to re-think, and hopefully touch some soft spot in him which I am sure he is not without any, because he must also realize that it is only a matter of time before he himself would be a pensioner and an aged parent. To give one instance of the value of repetition, the Hon. Minister for National Development suggested recently that the SBS should consider giving concessionary fares to the aged or senior citizens during off-peak hours. The immediate reply of SBS was a flat "No". But when the matter was further debated in Parliament, the Minister for Communications gave some hope when he said that he would look into the matter. At this stage, however, I am not calling for an endless repetition of bread and butter issues but rather, with an enlarged Parliament and with the addition of new blood, I ask the younger MPs now to look into a problem from all different angles so as to reveal the importance or gravity of the issue raised. This matter of tax relief for aged parents is a good example. When I first broached the subject in 1969 and asked for tax relief for the maintenance of dependent and aged parents, I was shot down. Let me quote the then Minister for Finance, now the First Deputy Prime Minister, in Hansard, Vol.29 Col. 85 of 15th October, 1969: 'Mr Speaker, Sir, in Asian societies, the support of aged parents is an acknowledged responsibility of all decent citizens. Indeed, Confucius has elevated this into a basic ethical principle, and Chinese classical literature is replete with examples of outstanding acts of filial piety. In these circumstances, it would be unworthy of us to introduce mercenary considerations such as relief from income tax.' But "over a period of time", the Hon. Minister for Finance relented and in the 1973 Budget he said: [Hansard Vol. 32 Col. 476] Last year, many Members suggested that reliefs should be given for the maintenance of aged parents . . . I am therefore prepared to give some tax relief as an encouragement to taxpayers who look after their parents and grandparents . . .'. Therefore, Mr Speaker, Sir, whilst I appreciate that the Government has given a tax relief for such maintenance, I do feel that the time has come for Government to review the quantum of tax relief which now stands at $750 per parent. This is only equivalent to the maintenance of each of the taxpayer's first two children. When there is so much talk of filial piety and emphasis on the need of grown-up children to maintain and live with the aged parents, surely this encouragement must be manifested and, therefore, Govern- ment should set the example. Hence I maintain the need for a review of such tax relief. Next I would like to turn to the question of pensions. This has also been mentioned by other speakers. The Hon. Minister for Trade and Industry in his annual Budget Statement of 17th March, 1980 dealt with the question of pensions in Hansard Vol. 39, Col. 1027. He said: '. . . the quantum for the New Singapore allowance has been increased with effect from the 1st January of this year. Circulars have been sent out to the Pensioners' Association. The Accountant-General has been asked to pay this and I believe the revised quantum has been paid out to the pensioners. As a matter of interest. Members may wish to know that for a pensioner drawing a gross pension of $100 or less per month, the allowance has been increased . . .'. He went on to give details of these revised figures. Whilst this will help the pensioners in one way, it shows that the Government has not neglected this particular group of people who have contributed to the economy of Singapore in the past. But I do feel that a revision of pensions is still necessary because of the fact that a good number of pensioners whose gross pensions are below $500 are facing financial hardship as a result of inflation and the cost of living. And if we recognize their contribution to the economy of Singapore in the past, surely we do not wish to see them suffer much financial hardship if the pensions are not revised as a result of the increase in the cost of living. We talk so much about encouraging children to look after their aged parents so as to maintain cohesion of the family unit. I know that if we were to increase the pensions to this group of people, the Government would have to cough out more money in order to pay for this. Ours is an eastern society built on the concept of a closely-knit family and so whilst incomes have increased quite dramatically in the last two or three years, I think we can afford to give the pensioners more. This is merely a small price to pay. Because we place so much emphasis on meritocracy, the young and more capable workers who have acquired a good education and better skills are able to earn more. We should, therefore, not let meritocracy lose its meaning and purpose. In other words, the better educated our younger generation is, the more income they will get. Therefore, I believe that the Government should not forget those who have helped and contributed towards the economy of Singapore in the past, and if we are sincere enough, Government should take the lead. In any case, I hope that something will be done for the pensioners, especially those whose gross pensions are less than $650 per month. I am not asking for those who are above this amount. Finally, I can only say now that I do hope that my observations and suggestions will be given more than due consideration. On that note, Mr Speaker, Sir, I give my full support to the motion moved by the Hon. Minister for Trade and Industry and Minister for Health. 5.26 p.m.

Mr Speaker, Sir, just a few short points which I feel ought to be made regardless of the fact that they have been touched upon by the other hon. Members of the House. Sir, the Hon. Minister for Trade and Industry has taken off from where he left off last year, and he has taken further steps to loosen the tightness that was building up in the economy. For there are many in Singapore, particularly among those who voted for the first time in the recent elections, who felt that we were an over-governed people. So the Hon. Minister's invitation to the private sector to play a broader and bolder part in expanding the economy is timely and would be welcomed. Indeed if we were to discern the trends in thought and attitudes of the future, trends that are beginning to express themselves in political terms, we would realise that the psychological aspects of freedom would loom large. The accent so far has been on disciplined work, to break the back of unemployment and poverty and also at the same time to transform Singapore from a primarily commercial society to an industrial one. Not an easy transformation at the best of times and in older societies fraught with social tensions and depressions. Coming late to industrialization, we have the benefit of hindsight. We can learn from the experience and mistakes of the pioneers. So all the criteria we have employed to-date are quantitative, our terms of reference by and large mechanistic. It is in the core of this scheme of things that I suspect and fear that the give would take place should the mood of the thoughtful in our society change in the future. The hon. Member for Katong gave an elliptical expression to an aspect of this problem in his inimitable language in this House yesterday. The economic strategy spelt out by the Budget Statement cannot be faulted. In fact, it should be justly commended. What is of equal importance is the expression, for the first time I think, in a budget statement of the beginnings or rudiments of a social policy. The words of the Hon. Minister that gave expression to this policy bears repeating. He said the building bricks of our structure is the family unit, closely knit by abiding ties of mutual love and mutual support. Without these strong bricks each bundled to another by lasting ties of mutual respect and trust, the whole structure of our society will crumble under its own weight of intolerance, divisiveness and strife. For our society to remain durable, the old must take care of the young, and the young the old. The able must support the disabled and the destitute, the employers must look after the interest of the staff and the staff must be loyal to their companies. Having thus defined our filial society, the Government must begin to implement it. It is a hard fact of life that families are breaking up at a rate that will soon make us sit up and look for its causes. Increasingly, the old and the disabled are not being cared for by the young, and the rate at which the old and retired members of our society are applying for hawker stalls is now a major problem. What happens then if the young refused to maintain the old? If the State is not to be burdened with this responsibility, an adequate system of sanctions must be devised if the situation is not to become scandalous. In any event, a start must be made to lay the framework of a satisfactory social security system, much along the lines that the Japanese have devised for themselves. The Japanese appear to have avoided the horrendous side-effects of the Western social security systems. There is a statistical darkness, Mr Speaker, Sir, surrounding the condition of the aged and the disabled, and much work remains to be done by the Ministry of Social Affairs to throw needed light on a dark area and to measure the enormity of the problem. If this premise is accepted, the question then is whether the Ministry of Social Affairs is adequately staffed with the technical expertise to monitor the situation of social distress and to adopt measures for their redress. For far too long has the Ministry of Social Affairs remained the Cinderella of the Government departments. In fact, the sum of $14.56 million allocated for Social Welfare in the Main Estimates represents a mere 0.29% of the total recurrent expenditure of $4,578.93 million in the Budget and I notice that there is no Development Estimates for the Ministry. If we are to further improve the social condition of the weaker sections of our society, this Ministry should be adequately equipped so that answers to some of our residual problems could be found. Mr Speaker, Sir, I support the Motion. 5.33 p.m.

Mr Deputy Speaker, Sir, I rise to congratulate the Minister for Trade and Industry and Minister for Health for his initiative, vision and courage in discarding the shackles of tradition and precedent, and giving us a pragmatic and practical budget. This is a bold and innovative budget which unfettered the outmoded conservatism and historical patterns, the legacy of our colonial past, and has taken into consideration Singapore's economic and social mood with priorities for the 80s. Mr Deputy Speaker, Sir, one of the problems of national development is that human beings tend to be conservative and traditional. This human trait is often reflected in Government policies, and in their problems. We tend to be bound by the past; it takes courage and vision to break away from these constraints. Mr Deputy Speaker, Sir, in 1959 when our Party was first elected to form the Government, we took the bold step of providing housing in large numbers for our people. At that point of time this was a radical departure from traditional thinking because housing for the people was supposed to be the responsibility of private enterprise. Today, we all realise that if the construction of thousands and thousands of Housing and Development Board flats had not been given priority, the social and environmental conditions of our people would be a source of discontent today. I therefore welcome this new approach in Government budgeting, which pattern, I hope, will be maintained in the years to come to meet the changing situations as we move into a new era in the 80s. In regard to housing, Mr Deputy Speaker, Sir, I would like to focus the attention of the House to the disastrous social and economic consequences of inflation on private housing. I have watched with dismay the soaring prices of the property market, and the reluctance of the Government to take positive steps to curb the artificial escalation of prices, especially speculation in property, which is one of the obvious causes of the high cost of private housing. 5.36 p.m.

It is often argued that the rise in prices of commodities and other items is due to inflation in Singapore, and that such inflation is imported inflation and therefore not within our control; this argument, however, is not always correct. A few years ago, when the price of rice (which is imported) was increased, the increase was blamed on inflation. But when the Government took positive steps, which included importing rice by a Governmentowned company, the price of rice dropped considerably to a tolerable level. Sir, inflation affects the poor man more than the rich, and if our Government is concerned with its socialist principles, it must take positive steps to dampen inflation. One of the causes of inflation is the secondary effects of the rising cost of private housing. It is clearly desirable that steps should be taken to check these spiralling costs which are, in part, the result of speculation. A fine example of such speculation was evident in the recent registration for apartments and shop houses being built by a private developer. Persons with small incomes and wealthy persons too were booking flats and apartments merely for the purpose of speculation. And while in the process they will make thousands of dollars in profit, the prices of private housing will be pushed up further. I am not an economist, Mr Speaker, Sir, but the question that has to be asked is "who ultimately pays" and I say the ordinary man pays in the end; because when the prices of houses, which are a basic need, go up, the prices of other service and goods also follow the trend and in the end we have greater inflation. It is therefore a matter of urgency that curbs be put on such speculation and one possible measure which could be used is to prohibit the resale of properties for at least one year from the date of purchase, and not six months as proposed. In fact, more drastic steps may have to be taken later but such steps can only be taken after a full enquiry. Sometime ago we were told that Singaporeans and not foreigners were responsible for the rising property market, because they were primarily responsible for speculation in landed property. This is no doubt true to a certain extent, but I would like to enquire on what basis was the statement made? Was there a survey conducted and checks made to ascertain whether the local buyers were utilizing their own funds or were proxies of foreigners? In any case, Sir, one of the contributing causes of high property prices and that of inflation is the policy of allowing foreigners to buy flats and other accommodation above six storeys. This concession was made several years ago when the building industry was sluggish and developers complained that they faced immense losses. This concession was apparently given at the prodding of developers to enhance their profit. This policy has enabled foreigners to purchase property, to invest their surplus funds in Singapore, in an area that is detrimental to Singapore in general, and beneficial only to a small group of developers. In fact, since such investments do not generate economic activity, there is no reason for them to be encouraged. Mr Speaker, Sir, surely the time has come to put a curb on the sales of property to foreigners, even if they attempt to make their purchases through local proxies. Singaporeans need houses and they need them at prices within their reach - within their earning capacity. Sir, such restrictions should not affect our economy because the profits earned by foreigners through a rise in prices are not earned income but capital gains. If it is argued that such restrictions would slow down the pace of our building industry, well I say, so much the better. Singapore is short of labour and we have to utilize the services of thousands of guest workers to keep the building industry going: and there is always the possibility of guest workers becoming a social and even national problem. The policy of allowing foreigners to acquire properties above six storeys benefits only the developers, the wealthy and speculators, whose combined operations made a positive contribution to inflation in Singapore. It is obvious that if the upper storeys of high-rise buildings can command fantastic prices, surely then the prices of lower storeys and other buildings will rise and contribute to our inflation. Sir, I would therefore urge the Government to conduct a full enquiry into the property market and take adequate and bold steps to curb speculation in property, so as to prevent private housing going beyond the reach of the average Singaporeans. Otherwise, Sir, we will soon find ourselves in the position that Hong Kong is in today. I shudder whenever I hear valuers and property developers contend that our prices are low because we are behind Hong Kong. The prices of housing in Hong Kong. Mr Speaker, Sir, should not be our objective. We are all concerned with inflation and unless our Government takes positive steps, our international competitiveness in industry and services will be priced out by inflation. 5.44 p.m.

Mr Speaker, Sir, I rise to support the Motion standing in the name of the Minister for Trade and Industry and Minister for Health only partially, provided he can assure us later on that all our suggestions will be dealt with. I know that he would, as he has said so in his Budget statement that he encourages suggestions and comments and I take it that he means what he has said. But from the answers to the Oral Questions we had yesterday some of them reminded me of a funny joke and I must seek your indulgence to repeat it, Sir. There were this Minister and his Permanent Secretary who went on a car ride to some destination only to find that they were lost. Then there came a passer-by. The Minister turned to the passer-by and said, "Can you please tell us where we are?" The passer-by said, "You are both in your car." And so the Perm. Sec. said to the Minister, "How nice an answer to a Parliamentary question." The trick is to say as much as you can but giving nothing away. Coming back to my speech proper, first, I must congratulate the Government and the people of Singapore for working closely together to achieve such excellent results. I think the workers must be congratulated for the double-digit growth in productivity and with better management-worker relationship for the 80's, I trust we will do better. The Minister mentioned in his Budget statement about the disadvantages of labour-intensive industries, and he quoted the textile and shoe industries. He also said that he would give incentives to encourage automation and he would also help them to go into higher technology industries. There is something which we can look into, that is, the high fashion industries somewhat along the lines of Pierre Cardin and Lanvin. These industries I feel, will then be able to move into higher value-added products to capture the more sophisticated export markets and consumers who can afford to part with their money to satisfy a personal need, like possibly what the Hon. First Deputy Prime Minister was talking about in terms of gambling. From his speech, I believe the Economic Development Board will continue to encourage local industries to upgrade and participate in joint ventures with foreign companies with the necessary technical know-how and export markets. In his 10-year plan, the Minister mentioned the re-training of managers and workers to upgrade their skills because of the faster changes in technology as we upgrade our economy. The Minister also correctly observed that university education provides only the basic training of professionals. Somehow these professionals will need to work and have commercial experience and exposure to competition to sharpen their skills. And here I have the hon. Member for Punggol to thank for teaching me the value of repetition. So I shall repeat again what I asked for before. Some time ago I appealed to the Government to consider allowing a double deduction on tax for technical missions going overseas to expose Singaporeans to new and advanced ideas in the more industrialized countries like Japan and America. The Minister himself was reluctant to allow this. I am now requesting him to reconsider this. Surely the basic question is whether or not the exposure is good or bad, I think the Minister cannot but agree with me that the exposure is ,good. The thing that remains to be done, therefore, is to set up a group to study the mechanics as to how we are going to think of ways to cut down on or to prevent any abuse. I do not think this is difficult. How can we expect our local people to compete with expatriates working in Singapore if they are not given a chance to be exposed to new ideas? These expatriates have an advantage over us because they have seen the machines in their own land. They have no problem. We have. An interesting thought occurred to me when I was reminded in the Minister's speech that recession in the major industrialized countries has led many companies to shelve or defer new investments in Singapore. Japan, for instance, has slowed down her investment in Singapore. However, Japan has gone to America. What does this imply? I do not think there is much technology that the Americans can learn from the Japanese, relative to what we can learn from the Japanese. This means that there will be a relatively slower transfer of technology to us here in Singapore which would make us slower in our climb up the high technology ladder. We must take the cue from this disturbing trend. We must, therefore, hasten the development of our science and technology park and our measures to develop our other existing research laboratories such as those in SISIR. There is mention of this in his Budget statement, but I would stress the importance of quickening the building of these facilities. We cannot afford to wait because time is not with us. We want to close the gap as soon as we can between the technology level of the more advanced countries and ourselves; then only can we be more confident of our success in the future. I note in the Minister's 10-year plan the intent to set up our own patent office to enable patents to be directly registered. There is no doubt that the registration and the gathering of information through patents is very important. The Minister has correctly observed that it will be a great source of technical information for industries here. In fact, without this back-up, it would be like asking us to do industrial research without a library, or carry out whatever we have to do without the necessary tools. Again, I would suggest that we move swiftly. These things are getting very expensive. I suspect that in the days when the Japanese were actually looking at patents, it was easier to get at them than they are today. I am getting a bit concerned, because with most countries moving into the development of their own industries and with difficult times ahead of us, especially for the advanced countries, even a thing like a patent or industrial software may receive its fair share of protectionistic measures. In order to help our local manufacturers upgrade, another way is for Government departments themselves to insist on better specifications and better quality products when they purchase their requirements. The Government is a big purchaser and is, therefore, in a position to demand better and higher standards. Then our local manufacturers will have no choice but to improve, Let us also take advantage of this. The Minister mentioned that Singapore does not have a strong base of local entrepreneurs, as yet. I suspect this problem has already existed sometime ago. The question, of course, is what kind of monitoring are we doing on it and whether or not the situation has improved today. In our efforts to develop skilled technical and professional manpower, I think another way we can help this is to decentralize some of the extra-mural courses organized by the National University of Singapore. I am thinking in terms of some of them being conducted at the various community centres and so bring the courses closer to the people. It may then be easier for our people to attend extramural courses. Those who have cars do not mind travelling great distances to the NUS. But those who do not have cars may suffer this disadvantage. They will, therefore, not be able to learn management skills and other skills that are available in these extramural courses. Again, if it is at night and you have to travel great distances, our fair ladies will probably not be able to get there. At the same time, we can save a lot of fuel. Let us swing across to the discussion on the training of doctors. I too support the fact that we should make Singapore into a good medical centre. But I wonder why no mention was made of the training of nurses. I feel that the training of nurses is as important as the training of doctors. Once the doctor has taken care of the patients, his work has to be complemented by nurses, and if nurses are found wanting, we will not be able to achieve our targets. I suspect that with a tight labour market, and more women moving into industries, we may not be able to get the right calibre of nurses if we do not begin to act on the situation soon. However, if we expect the nurses to complement the work of doctors, then we have no option but to see that they complement effectively. And for these ministering angels in white, they need to be motivated to stay on in the profession or join it. Otherwise, if we are not careful, we may find ourselves in a situation where the import of foreign nurses becomes a necessity. The training of nurses, therefore, cannot be over-emphasized and it is important to give due consideration to taking in people with better qualifications when they apply to join the profession. This will ensure that there will be a pool of available talents in the future to fill the more senior positions in the nursing profession. Therefore, if there is no complementary upgrading of the nursing profession to meet the needs of the future, then no matter how we upgrade the quality of our doctors, the proposal to make Singapore a medical centre may not be a success. Of course, the morale of nurses will also have to be duly considered. Maybe the structure of the nursing profession will require looking into and some money may have to be spent on the older hospitals to upgrade facilities, such as the installation of automatic sanitizers, etc. Mr Speaker, Sir, finally can I just take a bit of time to express further my concern about the effects of television on the development of our future citizens. Unfortunately, the Minister for Culture has left, because I was just going to tell him that in making these comments I am not trying to run SBC. Since touching slightly on it during my reply to the President's opening speech of this Parliament, I managed to come across quite an interesting article on TV's disastrous impact on children. This was a report on an interview with Dr Neil Postman, who is a Professor of Communication Arts and Sciences at New York University. By the way, Mr Speaker, Sir, the Minister for Foreign Affairs and the Minister for Culture had a talk with me outside the Chamber and he said that if I bring this subject up now, he may not be able to reply to me. The Minister for Trade and Industry and Minister for Health might like to reply on his behalf. In this interview, Dr Postman expressed concern that watching television over a long span of time can seriously damage children's ability to think clearly and can shorten the attention span of the children as well as eroding to a considerable extent their linguistic powers and their ability to learn mathematical symbols. It is the Government's policy to promote bilingualism and by some statistics the Education people tell us that a child's language ability is somehow related to his performance at school. If we assume that Dr Postman is correct, then, as I said earlier on, we have a silent little box at home that can very silently erode what we are trying to achieve in building up our future citizens. May I have your permission, therefore, to withdraw my earlier suggestion during the time when I was thanking the President at the opening of this Session of Parliament where I suggested that we should screen the more adult-type films in the evenings because, according to Dr Postman, it is a fantasy people have that after 10 p.m. children are not watching television. And if we prefer to believe that our parents can effectively keep children away from the television, then I think we have to re-think again because, according to him, parents can only try to limit as much as possible indiscriminate viewing. But most of all, parents themselves must get away from the idea of just turning on the television set to pass away the time. Maybe the Minister for Culture in this case is correct when he suggested locking up our television sets. SBC can perhaps keep advising parents of the disadvantages of indiscriminate viewing of certain programmes by children. They do so about smoking. They do so about many other things. I will talk about it in the Committee of Supply. Earlier on I also objected to the programme "Love Boat" and I am glad that Dr Postman at least quotes this particular programme as one that can be responsible for eliminating the dividing line between childhood and adulthood. It portrays children as little adults, using the same language, having the same interests and possessing the same sexuality as adults. We should be warned and probe further his findings. He even quoted an example of a hand lotion commercial where viewers are shown a mother and daughter and challenged to tell which is which. We must therefore give further thought to how we can best tap the advantages of modern communications such as TV can offer us and not allow it to ruin us. Mr Speaker, Sir, I support the Motion with reservations. 6.03 p.m.

Mr Speaker, Sir, may I congratulate the Minister for Trade and Industry and Minister for Health for his Budget Speech. I would like to draw attention particularly to his concluding remarks which moved me in such measure. I do not know why. Perhaps it touched several chords and conjured in my mind vivid images of what is true to fact. Economic growth as a means to forge a durable society - the old and the young taking care of one another, the able supporting the disabled, the employers and workers looking after each others' interests, the Government working for the people and the people pulling together with the Government, the bonds of mutual love and support in the family as both the very concrete base and spirit of our society's life, the courage with which we should weather the storm, get wet, and without fuss get indoors to put on dry clothes again - these, Mr Speaker, Sir, are images which are beautiful in their truth. These are the concepts that we must translate into step-by- step action if we are to endure the hardships ahead of us. But I cannot also help recalling the Hon. Prime Minister, about a decade ago and more, envisioning the distracting dilemma we are facing today. For example, in 1973, he predicted that with rapid economic growth and affluence we would reach - as we may now have done - what he called the "comfort line" with all the dangers that cushy comfort would bring. "We may," he said, "lose our keenness to work, to strive and to achieve . . . loosen social and work discipline . . . become a people who only want to enjoy life." This dilemma we face looks simple. In the 60s and 70s, we pushed hard to survive. We succeeded. More than that, we went beyond everybody's expectations. We have become more modern. We are well-to-do. We have become the model for other nations, which have the resources, on which to build their own plans and chart their own destinies. But then the kick-backs, or rather, the failing back, the drawing of lines - I work so many hours and no more. Don't press me any further. Give me a five-day week. An airconditioned office - the sun is so hot and so humid outside. Overtime? Night shifts? Oh no, don't ask me for that, I've got better things to do. I want to watch Man in the Net HDB flats, yes, they are cheaper than private apartments, but then the Government, in all my life, has made things easier for me to be a house-owner. But don't give me an estate that's too far away from my work place. It's so inconvenient. So is the top floor. And then if I come home late at night, what I want is a parking lot close by, you see, so that it won't take me five minutes to reach my block of flats. And then we have the clock watchers, the time servers during office hours looking at the latest sales in the big department stores, planning what to buy, at a bargain, in this shoppers' paradise of ours - planning how to spend the evening, the weekend, so as to enjoy themselves. Now, I am not saying that there is anything wrong with this. But if it becomes a regular habit, an escape, to compensate for what people think to be the limits they have already been driven to at work - to make up for what they consider to be the boredom of work, the demands of their jobs, the burden - if this should become a general attitude, then I say we are in for trouble. Then I say we are heading for what the Hon. Prime Minister feared most in those days - Singaporeans getting and getting, spending and spending, as though happiness lay in pleasure, as though work were a curse we were born into. And I say, Mr Speaker, that opportunities abound in our society. A chauffeur can queue up overnight, book a flat, wait a couple of months and make $40,000. And every day and night, this is being drummed into the minds of our tiny population with tremendous force - the more money you have, the more you make. Who would want to be a fool to slog long hours when you can become rich almost overnight (or so many people think) those people who spend their lifetime gambling, speculating, fooling around with prices so as to line their own pockets. Even without time-lapse photography, everyone watching a particular advertisement by one of our banking groups can see money growing on trees! Then what about our children? The straight and narrow path of their education is the examination. That is their road to salvation, a sure ticket to the paradise of a cushy job. Which parent does not want the best for his or her children? If society says the best in life is a piece of paper, that is what they are going to make their children strive for. Then, like horses that must not be distracted, they put blinkers on their children. Look only at the model answers. Think nothing else. You do not have to do the housework. Do not spend hours and effort going by bus in the sun and rain. I will fetch you in my airconditioned car. As I have said, Mr Speaker, Sir, this distracting, this ironic dilemma is simple. It is obvious. The evidence is clear on both sides - success, affluence, modern facilities on the one hand, and the very appalling symptoms of softness, pleasure seeking, pursuit of money for its own end, withdrawal into self-centredness - the dangers of the "comfort line" - on the other. The question I would like to pose to this House is what do we do about it? Where do we go from here? This is the difficult part of the simple problem I have just raised. But let me stress this. It is not enough to throw around such heavy and abstract technical jargon like better management-labour relations, productivity, and the like, and turn them into so many new but meaningless cliches to be mouthed in the next year or so by every MP, civil servant, teacher and pre-university student. What, if I may suggest, we need is a workable step-by-step plan, to solve the problem. That is why I find the Minister for Trade and Industry's concluding remarks so beautifully apt. He pinpointed the crucial issues. He has also succinctly set the directions we may be able to take. First, to get our bearings right - everyone of us lives and moves within the orbit of three or four spheres. The first is the family into which we are born or the family we have created. The second is the school or the work place. The third is the society with its physical, human and spiritual environment. Our social structure is based on the building blocks of the family. Our economy is based on the life, relationships and experience in the work place. Our survival as a people is based on the nation as a cohesive society. Each sphere is uniquely vital to us all as well as to the other two spheres. A man lacking a good family life will be torn between problems at home and problems at the work place. He cannot be expected to be an effective worker. Nor can he be expected to provide the kind of home in which his children may be nurtured into stable, secure and positive persons and citizens. This is my basic premise. Since each sphere is vital to our life as a nation and its link with the other spheres is equally vital, it is necessary for us to have, not a piecemeal, but a total approach to the problem. If we have been blessed by visionaries in the first generation leadership who have the foresight to anticipate problems as far as ten years ahead, we of the second generation should at least learn from hindsight. For one, we should not allow ourselves each to do his own things like a parking coupon for URA car parks and another for HDB ones. This is hardly an elegant solution. For another, we should not be too hasty in making decisions. Whereas the ban on visors might have cost us the lives and limbs of a few motor cyclists - tragic as this may be - a hasty solution to the problem I am asking hon. Members to address their minds to would be disastrous to us all. These things would not do. We have to think through the problems and work out alternatives thoroughly. If I may be allowed to borrow an analogy from our Hon. Prime Minister, in building our infrastructure, in being forced to develop physically, we have taken care of the hardware. It is high time we looked into the software. And this is not as simple as it sounds. As we all know, when we order computer hardware without really knowing what we want to do with it in terms of software, we get into a terrible jam. One example is the HDB flats which, because we had to build rapidly, were designed at first as physical structures only. These were meant to house the homeless. Unfortunately they could not become homes. There were no void decks, no playground for the children and the family. One-room flats had communal bin chutes which became centres of disgrace. Home ownership did not take into account the need for the extended family to be allotted flats close-by. Of course, that is not all there is to the HDB. The feat it has performed is undoubtedly worthy of praise and emulation by other countries. But it is not too late to recognize one obvious fact. Design, layout and facilities have a way of influencing the types of relationships, the life-style of flat dwellers. It is not too late to apply a more comprehensive approach to public housing. What do I mean when I propose this total comprehensive approach in the terms associated with computers? Two simple points come to my mind. First, each Ministry or statutory board in varying degrees provides the hardware as well as the software. Second, what each of them does must be plugged into the national network, using the same languages, tying the efforts of one with the other. The Ministry of Finance in evaluating budget proposals appear to base judgements on stringent dollars and cents criteria. But sometimes it must be remembered that cost benefits alone are not enough to justify a project. The effectiveness of a project may not be reckoned in numbers. Take the National Stadium which was looked upon as a non-economic proposition. Very true. But anyone who has witnessed the national soccer team taking on another team - and win - can feel the excitement of the Kallang Roar, that sense of pride that our boys are down there playing their guts out for us and that we belong together. The hardware is that huge Stadium and the software, the watch of the evening. Similarly, $1,470 million or 15.28% of the total 1981 budgeted expenditure is spent on the Defence Ministry. This is a huge chunk. But all the military hardware must be fully used to ensure one thing - the programme, the software. And it is when our boys are being conditioned to lay down their lives for their country - that is the crucial point. Today, our attitude is to stress the need for society to take care of the destitute. Again, this cannot be reckoned in dollars and cents that we may benefit society with. Rather, what is important is the hard decision to make as to whether to withdraw support from those thousands of cases that should not be on the dole. The Social Affairs Ministry has yet another crucial role to play. As we cry out for more workers, we are faced with the success achieved by family planning. Now, with the two-child family as a norm, is it not natural for parents to feel how precious their children are? Is it not natural for good, loving mothers to want to devote their whole time and energy giving these children their personal attention? If we consider creches as the hardware by which to attract women into the labour force, it must be accompanied by the type of software that will set the mother's mind at ease, knowing that their tiny tots are truly well looked after. And I do not have to remind hon. Members that it is the first five years of the child that are the most crucial to his becoming what he is as a man. While on the subject of education, may I also be allowed to raise two points. First, whatever provisions are made to improve physical facilities and educational hardware, the whole crux of the matter in education lies elsewhere. It lies in what goes on between teacher and pupil. It lies in their relationship, in how much the teacher is prepared to give off himself. Secondly, there is the problem of the split between the moral education provided by the Ministry of Education and the kinds of conflicting attractions and distractions the school-going child is exposed to outside the classroom. Which brings me to the Ministry of Culture - for education is not confined to the class or the school alone. Perhaps time is not on our side in evolving our own culture. To telescope within a few years or a decade what takes generations to achieve is a tall order. But we have no choice. The alternative - a bloodbath or being reduced to boating around the high seas - is too horrendous. And yet, we all know that while there is good in Western culture, our less perceptive youngsters are aping what even the serious Westerners condemn, the frivolous, the fads, the fetishes. Now, having invested millions on audio-visual hardware. TV in particular, we find that this is used to transmit foreign and Western culture. Why, may I ask, do hundreds of thousands of Singaporeans sit glued to their television sets to watch such programmes like Man in the Net? We can imagine how emotionally involved these viewers are with the way such programmes reflect their life-style, their thinking and actions as human persons. With such a potent medium right in the living room of the Singaporean, could we not try to produce programmes that can capture his attention as well? Could we not have local programmes that reflect our own life-styles; our problems, experiences, and moods; the texture, rhythm, colour, spirit of our own society? This is a more meaningful and attractive way of putting across relationships between manager and worker, the model worker, the model citizen, productivity - a whole range of themes which may be classified under the three tasks spelt out for us in the President's Address. My main point is, given the dangers of the comfort line, what can the Government do to provide alternatives such as those I have mentioned, which are convincing, powerful, and which at the same time appeal to the better sense of our people, Singaporeans, who in general are sensible, intelligent and appreciative of quality. Of equal importance, what can we do to build in a filtration system to choose the best, especially from Japanese culture which is such a shining example of the right blend, a balance of Western technology and indigenous culture? What I am basically saying is this. As a nation we have proved that we can take adversity within our stride. We do not get weather beaten a little, as the Minister for Trade and Industry has said, but we have come out again none the worse for it. Given this experience, can we not learn from hindsight to also take within our stride as a nation the dangers of the comfort line? In conclusion, I would like to join my colleagues in this House in supporting the Motion standing in the name of the Minister for Trade and Industry and Minister for Health. 6.24 p.m.

Mr Speaker, Sir, hon. Members of the House have been unanimous and generous in their support of the financial policy for the fiscal year 1981 -82. They have also been very generous in their criticisms and suggestions on matters which they found wanting in the Budget statement. Several Members have brought up matters which I feel do not properly belong to a debate on the budget. I would therefore not be able to answer those Members who have brought up questions on Culture and even on the HUDC. Such matters I will leave them to the Minister concerned to reply at the appropriate time in the Committee of Supply, if the Members would raise the matter again. I would, therefore, restrict myself to matters concerning the financial policy for the coming year. At this late hour, Mr Speaker, Sir, when the body and, more importantly, the mind are almost frozen, I propose to be very concise in my reply. I do not propose to be wordy and say nothing in my reply, otherwise the Member for Mountbatten will not find satisfaction in the replies which I will be giving.

Hear! Hear!

First, let me dispose of some establishment matters. The Member for Delta noted what he thought was an anomaly between the high number of vacancies in the Establishment and the retirement age for civil servants which he thought was 55. He is mistaken here, because officers appointed after 1st July, 1956 are compulsorily retired only at the age of 60. Those officers who were appointed before 1st July, 1956 have to retire at 55 years of age. These officers, however, provided they are in good health and have given satisfactory service to the Government, could be offered re-employment on a year-to-year basis. On medical benefits for civil servants, this is a matter which has been brought up time and time again. The guiding principle in providing medical benefits to civil servants or dependants of civil servants is whether the dependants are truly dependent on the employees of the Government. Where a woman officer has children who are solely dependent on her, as in the case of a widow, a divorcee, or a married woman who has been granted a decree of judicial separation, she is accorded medical benefits exactly the same as those of a married man in the civil service. And in the unlikely event a woman officer has a husband completely dependent upon her, the Ministry of Finance is prepared to consider the provision of medical benefits to him as a special case. The Member for Nee Soon and some other Members have criticized the two-tier system in implementing the National Wages Council's guidelines. The National Wages Council is meeting again to deliberate on new guidelines for the coming year. I am sure their criticisms and suggestions will be noted by the National Wages Council. Several Members have suggested that pension should be linked to inflation. The matter is not as simple as that because if we were to link pension to inflation, then there will be pressure from those who are not receiving pension. Pension applies mainly to civil servants who have retired, and so others who are not on pension and who have also contributed to the economy and who are on the Central Provident Fund scheme would likewise put pressure on the Government to suggest a formula whereby the CPF deposits should also be linked to inflation. There could be suggestions later on that even wages should be linked to inflation. Inflation indexing is not a scheme which we will recommend because in linking payments to inflation we will get ourselves into a situation where we are chasing our own tails! There is then very little real effort to try and tackle the real causes of inflation because everything is linked to inflation. If the cost of living goes up, wages will go up, our CPF deposits will go up and pensions will be adjusted. We are then not tackling the real problem, and that is, the causes of inflation. At any rate, the plight of the pensioners was taken care of last year when we gave a Singapore allowance to the pensioners. Maybe later on, the Singapore Allowance could be reviewed again by the Ministry of Finance. Coming to tax matters, the Member for Henderson disagreed with the increase in entertainment duty. He argued that, by increasing the entertainment duty, we would not be promoting cultural shows, stage shows, concerts, symphony orchestras, and so on. Here, the Member may not be aware that the Ministry of Finance has been very generous in granting remission of entertainment duty on matters pertaining to culture. Where stage shows are held not with the purpose of profit but to promote cultural development in Singapore, the Ministry has always given an exemption on entertainment duty. Several Members have pleaded once again - those who were in the House before plus new Members - that personal relief for income tax should be increased. Here, I would like to explain that reliefs are not meant to meet the total cost or expenditure to sustain a taxpayer, his wife or family. Reliefs are meant merely to ameliorate his tax burden. We could either increase the reliefs or adjust the tax rates. If we were to increase the personal relief by $1,000, the tax loss would be in the region of $35 million, and Members cannot expect an adjustment to tax rates. The Ministry is prepared to give a tax rebate of about $45 million for this year, taking into account the need for revenue and the expenditure required in the coming years. This could be attained either by an adjustment to tax rates or by an increase in personal reliefs, and of the two methods an adjustment to tax rate is a superior method. By increasing the personal relief by $1,000, we would be allowing some 64,000 taxpayers who are now within the tax net to get off the tax net. This is contrary to our basic philosophy of wanting as many people as possible in Singapore to pay tax. Those who earn an income should pay a reasonable amount of tax. The underlying thinking is not because we are hard-hearted and that we want everybody to pay tax for the sake of doing so, but because we feel that Singaporeans, by paying tax will understand better that there is no place for subsidies and welfare programmes. If welfare programmes are being pressurized on the Government, these welfare programmes must be financed, and if Singaporeans pay tax they will know very well that tax will have to be increased in order to pay for subsidies and welfare programmes. Hence, the underlying philosophy of having as many people as possible within the tax net if their income exceeds a certain level. Also, if we were to increase the personal relief, it is not the lower income group that will benefit more but the higher income group, and hence the benefit is regressive. Several Members have also argued, seemingly convincingly, that the relief for aged parents should be increased, and they have quoted me from the Budget statement to urge that I back up my words with deeds. Again, relief in this regard is not meant to meet the full expenses of supporting aged parents. I would go back to what the First Deputy Prime Minister said some years ago, which was quoted by an hon. Member, that filial piety cannot be quantified in terms of dollars and cents. The relief that has been given by the current Minister for Finance - to me it is a signal of our intention to educate the Singapore public to show respect for the old. It should not be equated to the amount that is necessary to support aged parents. It cannot be, but it is an important signal that we have compassion for the old and that we want our young to look after the old. Of course, the question can be asked whether we should not signal again such compassion by upping the relief. There is a Committee looking into the problems of the aged, and it is chaired by the Permanent Secretary in the Ministry of Social Affairs. The approach that should be taken should be total, not one of tinkering with tax relief alone or offering concessions to the old in the cinemas or when they are taking buses. The Committee has not quite yet completed its deliberations, and it would therefore be premature for us to talk about enhanced relief for supporting aged parents. Moving on to the question of presumptive tax, we are fully aware that there are many problems connected with this particular new proposal. It is wrong, however, to conclude right away that presumptive tax will penalize the lower income hawkers or taxi-drivers, i.e. those who do not do so well as compared with the more successful ones. There is always a way out for them. If they feel that the presumptive tax worked out as a result of sample surveys is on the high side, they can keep simple accounts to show that their actual income is much lower than what the presumed norm set by the Inland Revenue Department is. I concede, however, that presumptive tax is inequitable in the sense that the more successful self-employed would still be evading tax, I would not expect the more successful self-employed to show accounts to the Inland Revenue Department with their ending up paying more tax. There is, therefore, still an element of inequity. But if these successful self-employeds are eventually caught by the Anti- Evasion Tax Unit, the penalty to be exacted from them will more than compensate for the loss in revenue in the meantime. The Member for Thomson suggested that company tax could be progressively reduced from 40% to 30%. I feel that there is no pressing need for a reduction this year. The rate of 40% for company tax has been maintained since tax on income was legislated in 1947. There is certainty in the present rate and corporations have adjusted themselves to the present rate of 40%. If we were to lower the rate, the impression could be created that the rate could also be revised upwards in the years to come and uncertainty is thereby created. I feel that, unlike personal income tax, the tax burden on companies is not that heavy as to discourage them from increasing their earning capacity. The tax burden on companies in Singapore is among the lowest in the ASEAN region. Other than company tax, we do not have other taxes like development tax and profit remittance tax. But there are other Members who compared Singapore with Hong Kong, arguing that our tax rate should be reduced if we were to be competitive with Hong Kong companies. To agree with this argument is to agree to a substantial reduction on company tax. It must be at least 10% and even at 10% reduction, from 40% to 30%, we still would not be competitive because 30% tax rate on company profits is certainly high as compared to the 161/2% for Hong Kong companies. If the company tax rate is reduced by 10%, the total tax loss would be in the region of $150 million, and since we still require revenue to finance expenditure we have to decide whether we should up personal income tax rates or other taxes to make up for the loss in the company tax. It is, therefore, a question of balancing the budget - which tax we should retain, which one we should up, and which one we should give away in order to achieve our overall purpose which is to sustain a high economic growth rate for the country. Also, although the rate of tax is 40%, many companies are not taxed at this rate because of the various tax incentives and concessions offered by the Government. Pioneer companies, for instance, are exempted from tax. Companies engaged in ware-housing and servicing, international trade and consultancy services are taxed at a concessionary rate of 20%. For offshore income of ACU operations, it is taxed at 100/o. Tax incentive schemes, such as double deduction and investment allowance, have also reduced the tax burden on companies. There is therefore no need at the moment to lower the company tax. There was the suggestion by the Member for Bedok that we should consider giving tax incentives to parents who send their children to learn music or to take up the arts so that they can become more cultured in the process. He also suggested that tax incentives should be given for the purchase of books outside the school textbooks. Whilst I would agree with his sentiments, I think the suggestion is not capable of practical implementation. We would be opening Pandora's box if we allow expenditure incurred by parents on their children's education in music, reading and so on, to be exempted or to be taken into account in calculating the tax burdens of the parents. The Member for Punggol suggested that we should consider increasing the relief that is allowed for contributions to the Central Provident Fund. This matter was, in fact, considered by me this year. It is not opportune because we have a Committee looking into the overall qUestion of the right interest rate payment for depositors who have funds in the CPF. The rate paid to depositors in the CPF at the moment would appear to be low and some Members have suggested that the interest rate should be upped.

Yes.

Again, the solution is not as simple as it seems. The Housing and Development Board borrows from the CPF to finance its development projects. Other Government Ministries and statutory boards also finance their development projects from funds from the CPF. These funds carry interest rates which are less than the market rates. If we have to pay a higher interest rate to depositors in the CPF, then there should be consequential adjustments to interest rates that are charged on loans borrowed by the statutory boards and by the Government. This would, in turn, increase the cost of the final product. In the case of housing, the financing cost will go up and the price of flats sold to the public will have to be adjusted accordingly. The matter requires careful consideration. There is a committee that is looking into all these matters and because its deliberation is not complete, it is not opportune to consider the suggestion made by the Member for Punggol.

It can be by way of interest-free loans.

I shall disregard the Member's remark for the time being and move on to his suggestion on payroll tax. He has done a lot of research to show the shift in Government policy in the application of the proceeds of the payroll tax. He has quoted the then Minister for Labour in 1965 and he also quoted the current Minister for Finance who gave certain replies in 1971. But the Member for Punggol appears to have omitted quoting the First Deputy Prime Minister, who was then the Minister for Finance, when he gave the reason why the earlier idea of a social security scheme was not applicable for Singapore. I could perhaps, therefore, enlighten him.

The Minister need not enlighten me. I thought I have gone through the whole subject.

The reasons for Government's decision to abandon the social security scheme were, first, the proposed scheme as advised by the International Labour Organization experts at that time will require contributions from both the employees and employers. This could not be done since employers and employees were already contributing to the Central Provident Fund. Secondly, and this is a more important reason, it was better to solve problems of unemployment through economic expansion rather than by arranging transfers of income from those who are well-off to those who are unfortunate to lose their jobs.

Mr Speaker, Sir, may I make a clarification?

Will the Minister give way? Mr Goh Chok Tong resumed his seat.

Thank you very much. Mr Speaker, Sir, I would like to refer the Hon. Minister to the same Volume 24 of Hansard of 16th December, 1965 [Col. 205], when the then Minister said, with regard to payroll tax mentioned by the Member for Bras Basah who is now the Member for Khe Bong: 'This tax was foolishly imposed by the then Federal Minister for Finance. It has the ill-effect of discouraging employers from employing more labourers that we have in surplus. When we were in Malaysia, we opposed it strongly in Parliament. But since this has already been imposed on us and since they have been collecting it for about a year, we do not intend to stop it yet.' Thank you, Sir, for allowing me to clarify.

Thank you. I do not propose to counter-quote. I would merely say that the purpose of a tax must be viewed in the circumstances of the day and also what we expect to be the circumstances of the future. Therefore, there is no inconsistency, even though the purpose of the payroll tax has been changed over the years. The present policy of the Government is that tax revenues should not be earmarked for any specific purposes. Like other tax revenues, payroll tax revenue is credited into the Consolidated Revenue and it is used to defray Government expenditure. If training is required, funds for training can be made available from the Consolidated Revenue other than from the payroll tax. Even the reimbursement or the make-up pay for the national servicemen should come from the Consolidated Revenue rather than from a specific tax. This brings me to the question of the Skills Development Fund, that is, whether it would in the future suffer a similar fate as the payroll tax. I cannot look too far into the future, but I would say that if the situation in the future warrants the surplus in the SDF being credited to the Consolidated Revenue, then a case will have to be made for it. And, of course, the approval of this House will have to be obtained for that purpose at the appropriate time. For the time being, the fund will be used for the purpose it was meant, that is, the training of workers to help us in economic restructuring. But we must not be prisoners of our own past. If the situation requires a change in the use of funds, we should be courageous enough to change the purpose of the fund, with the prior approval of Members of the House.

Yes, I agree with you there.

As regards estate duty, the Member for Punggol has suggested that the raising of the ceiling is inadequate or could be inadequate for some people and, therefore, we should consider exempting one house from estate duty instead of having a ceiling of $600,000. I would think that the proposal would be inequitable because, what is a house? There are houses which are worth a couple of million dollars and there are houses which are worth $700,000 or $800,000, and others very much less. A more equitable basis is what we have done - to set a quantitative ceiling on exemption. If $600,000 proves to be inadequate because of escalating property prices, we can always look into the possibility of upping the exemption ceiling.

Thank you very much.

I think a ceiling of $600,000, like what we have, is more generous than to stipulate "one house". Parents can decide for themselves whether they wish to own one house or two houses so that when they pass away from this world each house can be left to each of their two children. The parents have flexibility on the number of houses and the type of houses which they wish to own, whereas if we were to exempt only one house, it is in my view, less generous than the present exemption. So much for matters concerning tax. I move now to comment on economic matters. The Member for Serangoon Gardens noted an omission in the "Highlights of the 10-year plan on Social and Development Strategy Directions and Goals." The "Highlights" is an economic plan and it is true that we have not included chapters on social and cultural development. The idea can be taken up not by the Ministry of Trade and Industry but by the other Ministries that are concerned with the matter. We can approach them and ask them to formulate their views and, if suitable, incorporate them in the "Highlights" of our plan in the coming ten years. The Member for Serangoon Gardens was very concerned about the widening trade deficit. He claimed that he was not an economist, and I think he spoke not like one who is an economist. We need not be overly concerned about the widening deficits in the merchandise trade account, that is, the visible trade account, e.g. trade in commodities, manufactured goods and other tangible items. We should be more concerned with the overall balance of payments or the balance of payments in the current account, including earnings from invisibles, that is, from the financial services, tourism, insurance and so on. I can assure the Member that we have a very healthy overall balance of payments as evidenced in our stable, strong Singapore dollar. The Member was also a little unfair in saying that we have not succeeded in our export promotion because of this widening merchandise trade deficit. Singapore does not possess natural resources and naturally, as we grow, our demand for imported goods or capital equipment will also increase, and we can expect in the natural course of events that the visible trade will widen in terms of deficit. We have been monitoring the export of domestic products and as a percentage this has shown an increase. The share of domestic exports in total exports has increased from 39% in 1970 to 62% in 1980. This is an indication of a fair success in our export promotion. The Member suggested that we should look into ways of improving the balance of trade with specific countries. He mentioned the United States, Japan, Saudi Arabia and Malaysia. Again, in trade matters, it is not necessary for us to have a balanced trade with individual countries. It is not possible. It is not possible, for example, for us to have a balanced trade with Saudi Arabia. We import oil and there is no way in which the Saudi Arabian market can absorb all our products to match the extent of purchases which we need to incur on their oil products. The Member wanted an assurance from me that, as we upgrade into the manufacture of components and high-value products, there will be no protectionistic measures taken against such products. I am afraid I cannot give him that assurance. It is not for me to assure the House that such items would not be subject to protectionistic measures levied by other countries. But I can say that as we move up-stream, the likelihood of protectionism will decrease. Primarily, importing countries want to protect their jobs and these are industries which require plenty of labour, such as textiles, manufacture of television sets and similar labour-intensive industries. These industries are very prone to protectionism. But if we manufacture faceless components, things like universal joints for cars which are required in the total manufacture of cars and if there are very few plants producing such components, then the likelihood of protectionism would be very much less. The Member for Boon Lay suggested that we should have an energy labelling scheme on appliances. I think this is a good suggestion and if it can be implemented, we should do so. But we do not produce all the appliances which we require in Singapore. These appliances have to be imported from abroad. And in the implementation of this particular suggestion, we have to ensure that we do not unwittingly or wittingly use this measure as a non-tariff measure to prevent the import of such appliances. This matter will be further looked into by the Ministry of Trade and Industry. The Member's suggestion that the Central Provident Fund could be used by young entrepreneurs to start up investment is a less practical suggestion. There are many demands on the Central Provident Fund. There has been a suggestion that the Central Provident Fund could also be turned into some kind of a national health scheme. I do not think the Central Provident Fund is such a bottomless pool where everybody can use it for all kinds of purposes. I do not think the idea will be agreed to by the Minister for Labour. The Member for Mountbatten suggested that we should consider double tax deduction for technical missions abroad. He thought, by repeating or by sheer repetition, his idea will be accepted. I am not sure whether I can accept his idea right away, but I would assure him that I would ask the Trade Development Committee to have a re-look at his proposal. And if the Trade Development Committee agrees that double tax deduction should be given for technical missions abroad, we would then convince the Minister for Finance to accept the recommendation. On property speculation, the Member for Khe Bong and the Member for Bedok, in particular, have spoken very vehemently about the escalating property prices. I tread rather apprehensively on this subject because it belongs, in a sense, to the Minister for National Development. From the point of the Ministry of Trade and Industry and also the Ministry of Finance, I would say that the Government is not oblivious to the situation in the real property market, 1980 has been a year in which prices of residential property and office space increased rather rapidly. This is a source of concern as high prices and rentals have a disturbing effect on investment and potential investment and the ability of citizens, especially those in the middle-income group, to acquire their own homes. The current state of the property market can be attributed to increased demand due to an influx of investors, rising affluence of citizens, the growth of the economy, high liquidity and easy availability of finance, rising labour and construction costs and speculative activity. In a nutshell, it is a supreme sign of confidence in the stability and security of Singapore. When we talk about checking of escalating property prices, we have to decide whether we want to intervene with the basic factor that causes property prices to rise. Do we want to intervene with the confidence factor? I think we should not rush in very quickly without proper consideration of the subject. Just to curb rising property prices without understanding the basic factors behind the rise could undermine the very confidence in Singapore that has brought about high property prices. The Minister for National Development has already announced his intention to increase the supply of properties in an attempt to meet demand. I think this is a sound method. If demand is there, increase the supply, as he has promised to do. Various other measures that can be adopted and suggested by Members of the House are a credit squeeze and rent or price controls which, however, are undesirable as we believe in a free market economy. Restrictions on purchases by non-citizens also appear unwarranted at this stage as an examination of the transfers of ownership in 1980 reveals that only 2.9% involved non-citizens and foreign companies. The other alternative suggested by Members are a freeze on resale of property, six months or a year, and capital gains tax. These measures must be carefully studied before any action is taken. Opponents to the introduction of capital gains tax on real property fear that the tax will reduce Singapore's attractiveness as a centre for investment. In addition, the tax may not succeed in curbing speculation if there is a genuine demand and confidence in Singapore. In such a case, prices of properties would merely rise to take account of the tax factor. Enforcement will also be difficult as under-the-table payments are bound to be made in an attempt to evade tax. Proponents of capital gains tax advocate that it can be structured to penalize only speculators who are out to make a fast buck. It will not affect the genuine investor. They argue that the tax will help to check runaway prices in the property market. They further argue that speculative activities are undesirable and distortionary forces prevent true market forces from operating. The result of all these pros and cons would suggest that Government should not take hasty decisions and this matter must be deliberated very carefully before we decide to intervene in the market. I believe, Mr Speaker, Sir, that I have covered the more important items. For those items which I might not have covered in my reply, I would suggest that the Members raise them in the Committee of Supply under the appropriate Ministries. I would like to thank Members for their pains in going through the Budget, for their congratulations and, more importantly, for their constructive suggestions. [Applause]

Question put, and agreed to. Resolved, That Parliament approves the financial policy of the Government for the financial year 1st April, 1981 to 31st March, 1982.

Resolved, "That Parliament do now adjourn." - [Mr Chua Sian Chin]. Adjourned accordingly at Fourteen minutes past Seven o'clock p.m. Official Report - MAIN AND DEVELOPMENT ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR 1ST APRIL, 1981 TO 31ST MARCH, 1982 (Cols. 777 - 780) Annex 1 - REVISION OF SALARIES OF MINISTERS, CHIEF JUSTICE, ATTORNEY-GENERAL, CHAIRMAN PSC, JUDGES AND MEMBERS OF PARLIAMENT, AVERAGE EARNINGS OF TOP THREE IN VARIOUS COMPANIES AND PROFESSIONS IN 1979, LOCAL LAW GRADUATES, PSC LOCAL LAW SCHOLARS, PSC OVERSEAS LAW SCHOLARS (Cols. 781 - 790)