Hansard, 1984-08-24

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated:- Mr S. Rajaratnam (Kampong Glam), Second Deputy Prime Minister (Foreign Affairs) - from 5th to 11th August, 1984. Dr Ang Kok Peng, B.B.M. (Buona Vista) - from 17th to 21st ,August, 1984. Dr Lau Teik Soon (Serangoon Gardens) - from 22nd to 25th August and from 3rd to 5th September, 1984. Mr Sia Kah Hui (Paya Lebar) - on 24th August, 1984. Dr Yeoh Ghim Seng, B.B.M., J.P. (Joo Chiat), Speaker - on 24th August, 1984. Mr Liew Kok Pun (Boon Teck) - from 24th to 26th August, 1984. Mr Tang See Chim (Chua Chu Kang) - from 27th August to 10th September, 1984. Mr Lee Yock Suan (Chong San), Minister of State, Ministry of Finance - from 28th August to 6th September, 1984. Dr Augustine H.H. Tan (Whampoa) - from 2nd to 5th September, 1984. Mr Sia Khoon Soong (Moulmein) - from 3rd to llth September, 1984. Dr Yeo Ning Hong (Kim Song), Minister for Communications and Second Minister of Defence - from 4th to 7th September, 1984. Dr Chau Sik Ting, P.B.M. (Thomson) - from 10th to 21st September, 1984. Mr Ng Kah Ting (Punggol) - from 22nd September to 9th October, 1984. HWANG SOO JIN Deputy Speaker, Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the dates stated: 31st July, 1984 (i) The Income Tax (Amendment) Bill; and (ii) The Estate Duty (Amendment) Bill. 6th August, 1984 (i) The Companies (Amendment) Bill; and (ii) The Constitution of the Republic of Singapore (Amendment) Bill; 10th August, 1984 (i) The Legal Profession (Amendment) Bill; (ii) The Criminal Law (Temporary Provisions) (Amendment) Bill; (iii) The HUDC Housing Estates Bill; (iv) The Rubber Association of Singapore (Incorporation) (Amendment) Bill; and (v) The Employment (Amendment) Bill. 11th August, 1984 (i) The Parliamentary Elections (Amendment) Bill, 1984; (ii) The Penal Code (Amendment) Bill, 1984; (iii) The Criminal Procedure Code (Amendment No. 2) Bill, 1984; and (iv) The Arms Offences (Amendment) Bill, 1984. HWANG SOO JIN Deputy Speaker, Parliament of Singapore The House being met, the Clerk at the Table informed the House of the absence of Mr Speaker from this day's Sitting. Whereupon Mr Deputy Speaker proceeded to the Table and took the Chair, pursuant to the Standing Order.

asked the Minister for National Development, in view of the worsening traffic congestion along the Upper Thomson Corridor despite the opening of the Central Expressway, if his Ministry will construct a flyover linking Upper Thomson Road to Lornie Road.

Mr Deputy Speaker, Sir, the Public Works Department will be constructing a flyover to link Upper Thomson Road to Lornie Road to relieve the peak-hour traffic congestion along the Upper Thomson Corridor. The design of the flyover is currently in progress.

Sir, approximately when will the project be completed?

Mr Deputy Speaker, Sir, I think tenders will be called sometime next year. It usually takes about two years to complete a flyover because it is quite a large one.

2. Mr Sia Kah Hui: To ask the Minister for National Development if he will justify the increase by the Housing and Development Board from $3 p.m. rent to $785 p.m. TOL, in spite of the reduction in area from 50-odd thousand square feet to around 10, thousand square feet, in the case of Hong San Temple in Defu Lane 12, an increase of more than 130,000 per cent.

Question No. 2.

Mr Deputy Speaker, Sir, Question No. 2.

Mr Deputy Speaker, Sir, the question as it is framed is misleading. I will explain why. Hong San Temple is located in what was previously known as the Perseverance Estate. The site was acquired by the Housing and Development Board in June 1973 together with, other surrounding land for industrial development. While the site was under clearance action, the Temple paid rental to HDB based on rentals charged by the previous landowners. Under normal circumstances, the Temple would have been cleared and jointly re-allocated a new site with two or more other temples similarly affected by clearance. As it happens occasionally, the existing use on an acquired site is compatible with the surrounding areas being redeveloped by the Board. The existing user may be permitted to remain on the site subject to the issue of a new TOL and revision of the TOL fee. Hong San Temple fell into this category. The Temple Management Committee chose to remain on the site. In accordance with the prevailing practice, the TOL fee was revised. The revised TOL fee of $785 per month paid by the Temple, in fact, represents a substantial concession by the HDB. The TOL fee which other users would be charged for the same site would have been $2.90 per square metre or $2,820 a month. The Temple is therefore paying less than one-third of the ground rent which other users would have been charged. The claim that Hong San Temple originally occupied an area of 50,000 square feet is not accurate. Before the acquisition, the site boundary of the Temple premises was not clearly demarcated. The present area of 10,000 square feet which the Temple now occupies is based on the request of the Temple Management Committee. If the Temple Management Committee is unhappy with the terms of the TOL, the HDB is prepared to consider clearing the Temple. The Temple would then be eligible for allocation of a new site with two or more other temples similarly affected by clearance.

2.35 pm

"to amend the Finance Companies Act (Chapter 191 of the Revised Edition)", presented by the First Deputy Prime Minister and Minister of Education (Dr Goh Keng Swee); read the First time; to be read a Second time on the next available sifting of Parliament, and to be printed.

"to amend the Economic Expansion Incentives (Relief from Income Tax) Act (Chapter 135 of the Revised Edition)", recommendation of President signified; presented by the Minister for Finance and Minister for Trade and Industry (Dr Tony Tan Keng Yam); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." I wish to take this opportunity to explain to Members some aspects of the arcane art of Central Banking as practised in industrial countries and in Singapore. The classical model of a Central Bank is the Bank of England in Victorian England. Today it is the Federal Reserve System of the United States which carries most weight in the world's financial system, far in excess of the proportion of the world's GNP generated in the US. Central Banks, whether of the classical mould or in its modern variety, perform two essential functions: (i) They regulate the supply of money; (ii) They regulate banks. A third function has been added since the collapse in 1971 of the Bretton Woods system of fixed exchange rate parities. Central Banks look after the external value of their nations' money by active intervention or benign neglect or, in some unhappy instances, by desperate improvisation. The Monetary Authority of Singapore (MAS) is Singapore's Central Bank. However, because of the unique feature of Singapore's economy, the way it works is quite different from the practices of the Bank of England or the Federal Reserve System. This is not because we are perverse by nature. It is because the structure of our economy and the manner Government manages the public sector introduces a novel situation probably without parallel elsewhere. Let me explain this by reference to the three Central Banking functions. Every economics freshman knows that Central Banks of industrial countries keep a close watch on money supply in an effort to counter inflation which got out of hand in the late 1970s and early 1980s. The Federal Reserve System tracks three measures of money supply called M1, M2, and M3. I will not explain what these Ms mean except to say that their definitions vary from time to time, as they must when major financial innovations take place. What is important to note is that the Federal Reserve System aims to keep the growth of these monetary aggregates within publicly stated limits; in the case of M1, the current limits are between 4% and 8% annual rates of growth. The Federal Reserve System is not alone among Western Central Banks in having to check the growth of money supply. There are two reasons why Central Banks have to control the money supply. First, people are fed up with inflation. Second, people also do not want to pay the price of fighting inflation in the only sensible way, that is, for the Government to balance the budget and for the country to live within its means. Under the system of one-man-one-vote, governments are elected to deliver the good things of life. However, the voters are not easily persuaded that these must be paid for by taxes. Taxes are unpopular everywhere, with or without representation. The result is predictable - huge budget deficits which have to be financed by government borrowing. Where savings are high, as in Japan, budget deficits can be easily absorbed; where savings are low, as in the United States, these deficits have to be financed in three ways:- savings of Americans, savings of foreigners and credit creation by the Central Bank. Since the last option is closed by anti-inflation policy, the US budget deficit, now running at record highs, is financed by the first two means, ie savings of Americans and savings of foreigners. The Federal Reserve, by keeping money supply under control in the face of large budget deficits, has caused US real rates of interest to rise to unprecedented heights, thereby drawing in large amounts of foreign capital. In effect, a good part of the US government budget deficit is financed by foreign loans. Only a rich and powerful country like America can conduct this kind of fiscal policy without attracting the stern gaze of the International Monetary Fund. In Singapore, which of the monetary aggregates does the MAS Watch, M1, M2 or M3? The answer is none. This does not prevent the Government from regularly publishing data on our M1, M2 and M3. From time to time, academics perform clever statistical exercises to trace the relationship of these numbers with others, the Consumer Price Index, for instance. Why do we ignore our Ms? For the very reason Western Central Banks have to watch theirs. Their public sector accounts are in a state of chronic deficit; ours are in a state of chronic surplus. We are in a state of chronic surplus because employees have 50% of their pay packets sequestered into the Central Provident Fund. Further, the Finance Ministry does not pan easily with the revenues harvested by its assiduous tax collectors. So the MAS is probably the only Central Bank that does not have to watch the Ms. What then does it watch? It watches the foreign exchange rates. The collapse of the Bretton Woods system was due to the improvident nature of elected governments, under constant pressure from voters to live beyond their means. This event, ie the collapse of the Bretton Woods system, is much to be regretted for, in a world of gyrating foreign exchange rates, it is not a comfortable one for Central Banks of small countries. Let me explain how the MAS works the system of floating rates. We create what is called a basket of currencies. Anybody can create his own basket. Ours is based on the value of trade with major trading partners. We - that is the Ministry of Finance, the Ministry of Trade and Industry in consultation with the MAS - decide the future worth of this basket. In other words, the value of the Singapore dollar in terms of the US dollar, the Japanese yen, the Deutschmark, Pound Sterling, etc. Upper and lower limits are then set and the MAS is given authority to manage the float within these limits. This is done by buying or selling foreign currencies against the Singapore dollar or by swap operations. The intervention currency is usually the US dollar, as is the practice with nearly all Central Banks. That is why Mr Paul Volcker is such an important person. Because the public sector is in a state of chronic surplus, funds regularly flow from the banks into the MAS because Government accounts, other than for petty cash, are kept with the MAS. If these funds are not re-circulated back to the banks, the system will soon seize up. Funds are returned to banks when the - MAS buys foreign currencies. Such purchases also serve the purpose of keeping the Singapore dollar from appreciating too much. It works beautifully guided by Adam Smith's gentle, invisible hand. So long as we continue to work diligently and skilfully, so long as we spend carefully, and so long as we do not lend Singapore dollars to foreigners, it will continue to work beautifully - unless some calamity overtakes the world banking system. Do not bother about the horrendous deficit in our balance of trade. That will look after itself. The free enterprise system rewards those great Victorian virtues of industry and thrift. But alas these human traits are unfashionable in the contemporary world. As a result, the services of economists are in great demand everywhere to find out what has gone wrong and how to put it right. Unfortunately, the profession gives conflicting advice on both diagnosis and prescription. Let me now turn to the other function of a Central Bank, the regulation of banks. Banks in Singapore conduct business in our currency as well as in foreign currencies. The latter business is conducted mostly by large international banks who have established branches hers. Off-shore banking business in Singapore is an off-shoot of the Euro-currency market. One feature of the Euro-market is relative freedom from regulation by the Central Bank of the host country. Indeed it is freedom from regulation that is the raison d'etre of off-shore banking. No Central Bank wants to be too fussy about off-shore banking for fear that the banks will move elsewhere. However, the banking failures in 1974 of the Herstan Bank and the Franklin National Bank forcefully reminded members of the rich countries' Central Banks club, the Bank for International Settlements at Basle, how vulnerable a totally unregulated market could be. This led to the formation in 1975 of the Basle Committee, also known as the Cooke Committee, which laid down guidelines on Central Banks supervisory roles. These guidelines became grandly known as the Basle Concordat. The 1975 Concordat was revised in 1983 in the light of developments in banking practices, banking supervisory techniques and experience in applying the Concordat. The 1983 Concordat clarifies that it does not address itself to lender of last resort aspects of the role of central banks. The 1975 Concordat was misunderstood by the media to include this aspect, ie lender of last resort, when Banco Ambrosiano of Luxembourg collapsed in 1982 under scandalous circumstances. In addition, the 1983 Concordat incorporates the principle of consolidated supervision to enable parent authorities to monitor the overall risk exposures and capital adequacy of banking groups. Under the principles of supervision laid down in the 1983 Concordat, the supervision of solvency of foreign banking branches is defined as the primary responsibility of parent authorities while that of subsidiaries as the joint responsibility of the parent and host authorities. The supervision of liquidity for both foreign banking branches and subsidiaries is stated as the primary responsibility of the host authorities. These matters are of importance to Singapore as an international financial centre. We are members of an entity called "The Off-shore Supervisors Group" formed in 1980 representing 14 countries which offer host facilities to off-shore financial institutions. The group conducts periodic discussions with the Cooke Committee. In one of these discussions, members of the Group and the Cooke Committee agreed that they would discourage their banks from establishing in financial centres where there are no proper and adequate systems of supervision. I draw attention to these matters, even though they do not directly concern the Bill, to show that the supervision of banks in their international activities is a complex and delicate business and that comprehensive, binding and clearly defined principles have yet to be established. It could well be that central banking can never be reduced to vigorously defined rules and we must learn to live with uncertainty. The subject is of concern to Singapore and the well-informed Singaporean should keep abreast of events. A revision of the MAS Act is now timely. The Act was introduced in 1970 and amended once in 1972. Since 1972, however, there have been substantial changes in the structure of the financial market, together with a proliferation of different types of financial institutions. Over this period, the number of commercial banks have increased from 44 in 1972 to 125. Also, the number of merchant banks have increased, from five to 51. In addition, there are currently four discount houses, sight international money brokers and five credit card companies. Furthermore, in recent years there have been structural changes in the financial operations of the Government and an increasingly significant portion of the Government's activities are being carried out through statutory boards and government-related companies. Since one of the objects of the Authority is to act as banker and financial agent to the Government, the Authority's powers in this regard should be extended so as to take into account these changes. With these introductory comments, I will now deal with the main provisions in the Bill. The proposals in the Bill, in general terms, will: (a) provide greater autonomy upon the Authority in relation to employment of its staff and make changes to the organizational structure of the Authority; and (b) widen the scope of the Authority's functions and duties to enable it better to perform its role as regulator of the financial system and as, well as banker and advisor to the Government, having regard to the changes that have occurred in the financial environment. The principal amendment affecting the structUre of the Authority appears in clause 3. These amendments would enable the President to have greater flexibility than at present in the appointment of directors to the board of directors of the Authority as well as the deputy chairman of the board. With reference to the amendments dealing with the Authority in relation to employment of its staff, it should be mentioned that since October 1981 the Public Service Commission has granted autonomy on personnel matters to all statutory boards. Moreover, consequent to its reorganization, a personnel policy was adopted to attract and retain able staff, bearing in mind the competition from the well-paid banking sector is quite severe. To reflect this policy, section 17 of the Act has been repealed and re-enacted in clause 6 to confer upon the Authority powers to appoint employees, determine their remuneration and terms and conditions of their employment, to appoint advisors, and to make rules for these purposes. In addition, opportunity has been taken to revise certain other provisions of the Act which affect existing, future and former employees of the Authority. As regards former employees of the Authority, the obligation to preserve secrecy in relation to the affairs of the Authority has been extended to them (clause 5). In relation to existing and future employees, protection is conferred upon them in clause 8 from personal liability in relation to acts done in good faith in the course of the discharge of their duties under the Act. Further, since the Authority can only grant housing and vehicle loans to employees, there is a need to extend this power to grant loans for other purposes approved by the Authority, for example, the purchase of micro-computers for personal use. Clause 16 confers such a power upon the Authority. The next group of amendments seek to widen the scope of the Authority's functions to embrace changes that have occurred in the financial operations of the Government. They would empower the Authority amongst other things: (a) to pay at its discretion interest on deposits; (b) to accept deposits from companies in which the Government has substantial interests; and (c) to act as agent in respect of companies in which the Government has a substantial interest. Clauses 9 and 14 so provide. The aim of the amendment so described is to furnish such Government companies in which the Government has a substantial interest an alternative avenue to place surplus funds at their discretion, as the funds of these companies are essentially public funds. Also, it will be noted that the Authority will assume additional responsibilities in respect of the Insurance Act and the Securities Industry Act (clause 7). Moving on to another matter which also concerns the powers of the Authority, I draw attention to clause 13. The purpose of clause 13 is to provide a regulatory framework for the increasing number of other financial institutions that do not fall entirely within either the Banking or the Finance Companies Acts. These institutions such as merchant banks, discount houses and credit card companies have come to exert a significant impact on monetary and credit conditions in the country in recent years. A new section 24C is accordingly inserted which empowers the Authority to require financial institutions whose operations are considered to affect: (a) monetary stability and credit and exchange conditions in Singapore; or (b) the development of Singapore as a financial centre; or (c) the financial situation in Singapore generally, to be approved by the Authority for the purpose of carrying on business in Singapore. Approval may be withdrawn in certain circumstances by the Authority, though an aggrieved financial institution has a right to appeal against a withdrawal to the Minister. Additionally, the Authority will be empowered to issue directions, guidelines and conditions of operations to approved financial institutions in relation to such matters as the activities they may engage in or the range of service that they may provide. An additional new section 24D allows the Authority to levy fees on such financial institutions. The only other clause in the Bill that is worthy of special mention is clause 17. This clause would confer a qualified immunity upon the Authority from defamation actions. Such an immunity is considered necessary if the Authority is to properly discharge its supervisory functions over financial institutions. This kind of provision is not new in our law for a similar immunity has been conferred on the Securities Industry Council in recent amendments made to the Companies Act. Sir, I beg to move. Question proposed. 2.58 pm

Mr Deputy Speaker, Sir, I am sure all of us can appreciate the masterly lecture on the role of central banks given by the Hon. Deputy Prime Minister, and now I assume it is time for tutorial. So I shall address a number of questions to him. Perhaps he ought to have mentioned that there is one other difference between central banks as they operate elsewhere and the Monetary Authority of Singapore, and that is in regard to the degree of autonomy that central banks normally have. Mr Volcker, for example, does not sit in the Cabinet in America and the Federal Reserve Board in America could, if it chooses fit, tighten the money supply or loosen it unduly. If he were to do so, for example, tighten the money supply unduly before November, Reagan could be thrown out of the next election. Whereas in Singapore the Monetary Authority does not quite have the status of a central bank and the Chairman is a Cabinet Minister and presumably better behaved. The second point I would like to refer to is in regard to what he said about the role of the MAS in regard to money supply and exchange rates. Here, I think, he has analysed the situation very clearly indeed. One does not read in too many places about how the system operates in Singapore. But I do want to take issue with him when he says that MAS does not watch the usual monetary aggregates of M1, M2 or M3. Just because MAS does not sit up to watch these aggregates does not mean that MAS should not watch these aggregates or does not have to watch these aggregates. I put my point to him in the following manner. He says that all MAS has to do is to look at the exchange rate changes within set limit. The term referred to is the effective exchange rate, which is the weighted exchange rates of various currencies in that basket that he referred to earlier, and that MAS just intervenes to keep the exchange rate within those limits, and that the money supply will fall out whatever the case may be. But, from the study of past figures, one can identify periods in which this intervention was done in such a way as to cause too easy a money supply situation in Singapore or too tight a money supply in Singapore. One can link up the behaviour of the stock market and the property market to the monetary effects of this MAS intervention in the foreign exchange markets. So I would like to contest that particular point which he made. But having said that, I think what he said in regard to the system that we have in Singapore bears further scrutiny and attention by people in Singapore. Other countries are in deep trouble not because their central banks are foolish, but because their governments are foolish. In the literature one reads about the need to pay attention to money supply, exchange rates as well as fiscal policy, but the key to the whole system is really fiscal policy and the national savings rate. That is why Singapore is in a very good position, with the Singapore dollar appreciating from time to time and MAS is in the easy situation of simply having to prevent our Singapore dollar from rising too high in value. It is because of a very conservative government fiscal policy; overall, the public sector generates a surplus, if one includes all the statutory boards. I would add a further point which he should have highlighted, and that is, the kinds of expenditure undertaken by Government. If one were to look at the composition of Government expenditure, one sees a very healthy trend in that the proportion of expenditure devoted to development projects has been rising over the years. Now over half the total budget goes to development. This means that we are then spending money not uselessly, not wasting funds away, but these projects will in future provide further productive capacity for the economy. But when one goes to a country like the Philippines and one reads of the President carving a huge stone statue of himself out of a mountain, now half completed because he has not got the foreign exchange to complete it, and one sees all kinds of projects in Manila and Makati, and they say, "Oh, these are the First Lady's projects" and so on and so forth, one goes away shaking one's head because of the sheer waste of expenditure in such countries on prestige projects. I think we can thank God that we do not have such a government in Singapore. Further, people complain about the CPF system. But it is precisely because of the CPF system that (a) we can afford so much economic development; (b) that we can do so without inflation; and (c) we can do so without having to borrow substantial funds abroad. We are also in the fortunate position of borrowing abroad only to establish our credit rating. In other words, if you do not borrow, you do not know how credit-worthy you are assessed to be by the banks. So you just borrow a bit, let them examine your accounts and then show that you are a good credit risk, in case you have to borrow in the future. And here, perhaps I may refer to the Prime Minister's proposed plan to safeguard our reserves in the future. I think there are some loopholes there that need perhaps to be tightened, even if we have a President with the kind of powers that could safeguard or lock-in the reserves that we have. Because the Government of the day could easily borrow abroad, when the bankers look at the reserves, although they are locked up, and you just borrow because you are credit-worthy, then if you default they can go to court; and whether you have got a President in power over those reserves or not, they are going to attack your reserves, attack your assets abroad. So what you have got to do is to do something else. It is to restrict the ability of the Government of the day to spend wildly and to borrow wildly. Without those additional powers, I do not see how that safeguard will be effective enough. The next point I have to raise is in regard to the relationship between the offshore banking and our domestic banking system. Here, in one of the clauses, I see that it is proposed to pay interest on deposits that are placed with the MAS by the banking system. I think there is good reason for this. I do not know whether it is the same reason that the Minister has in mind, but something of the following has been taking place ever since we lifted exchange controls in 1978. This is the so-called swap techniques by the banks to avoid reserve requirements on Singapore dollar-denominated deposits. MAS requires of the domestic banking system that they hold what are called reserve requirements, liquidity requirements, so that they do not run haywire in terms of their lending. But these reserves which are held with the MAS are not paid any interest. So that raises the cost of funds in two ways: (1) because of the reserve requirements, and (2) because of the lack of interest which is payable on those funds. The result has been, since the lifting of exchange of controls, that banks try to circumvent this by swopping Singapore dollars for US dollars, say, buying US dollar spot and at the same time selling US dollar forward; and thereby they are able to offer residence an Asian Dollar Deposit rather than the Singapore Dollar Deposit and at the same time avoid the reserve requirements on Singapore dollars. But by having MAS pay interest on the reserve deposits, this will reduce the cost of our funds to the domestic banking system and hopefully prevent this kind of what you call, round-robin effect.

Round-trip effect.

Round-trip effect. And at the same time the amendment also allows the MAS to accept deposits from Government-owned companies, and there appears to be some concern in the banking circles about this. I think already the Government appears to have intruded into many sectors of the economy, and here is another example that is causing people to be a bit nervous. Finally, Sir, I would like to ask him, what is the policy of MAS in regard to the number of domestic banks in Sin a ore? We have seen some mergers in recent years, the big banks are growing bigger while the smaller ones are disappearing. Is there a conscious policy to produce big banks? And how many of them would be allowed, or whatever other reasons that he may have?

Mr Deputy Speaker Sir, the Member for Whampoa has shown such a masterly grasp of the subject that I am almost tempted to nominate him for the directorship of the Board. He has raised a number of valid points, seven or eight in all, and I will answer them serially. First, he is right when he says that the MAS is not an autonomous central bank; it is not autonomous in the sense that the Bank of England or the Federal Reserve System is autonomous. Actually the autonomy of central banks is very largely a matter of semantics. When it comes to the crunch, the central bank will have to fall in line with government. Mr Paul Volcker has this free, but only within certain limits. And in the context of the American financial system, it is just as well that he has those powers of restraining the money supply. Nevertheless, he is answerable, if not to the administration, certainly to Congress, and he can be impeached by Congress if there is sufficient Congressmen who are incensed by his policy. The Member for Whampoa is concerned about the behaviour of Ms, and he said that even if we do not look at Ms we should. Actually we do not. I assure him that every week we have our meetings. We watch the aggregates, and the Ms do not appear at all. There is no reason why we should look at it. The theory behind it is extremely complicated, as he knows and the experts are not agreed on what causes what, which comes first. So far as we are concerned, we take the approach, rightly or wrongly, that the money supply is a result of real activity, of activity in the real economy. If Singapore gets richer, then there is more money around, either in the form of currency notes or in banks or whatever, so long as, and he has rightly stated, we do not waste our resources and go into foolish expenditure, which are possible. He said that studies have shown a relationship between money supply and stock prices and property prices. Actually, if you want to trace the relationship between two time series, you can trace the most implausible or the most fantastic of relationship. I once did a study of the relationship between imports of bananas in Singapore and GNP and found a very high degree of correlation: from which you can conclude that if you import more bananas, you get richer quicker. But the mere fact that there is a statistical relationship between two time series does not establish which is the cause and which is the effect. Of course, in the last two decades we have been prospering, the money supply has been increasing. And since there are more rich people - they speculate in the stock market, they speculate in the property market, especially when there is plenty of money in the banks - banks are willing to finance them. But then if they act beyond the limits of prudence, they will suffer in the end. I remember three or four years ago the Member was complaining bitterly about property speculation, people buying apartments and making huge fortunes within two weeks. Where are they now? It means that the invisible hand will take care of this problem. The Member has raised a very valid point on the possibility of a future spendthrift government going around the President and having access to foreign funds, borrowing recklessly from the international loan market. I am not sure whether one can legislate against improvidence of this kind. But let me now issue a warning to all international banks that if they lend to a future spendthrift government, when that government is duly overthrown in a future election, there is no reason why we should honour their debts. Let the banks be forewarned. The Member for Whampoa, I think, has misunderstood that clause in the Bill which allows the MAS to pay interest on deposits. These are really interest on deposits of statutory boards and some Government companies which place money with us. We are paying interest, and this is just to regularize the position. It is not the intention to pay interest on the liquidity reserves which banks are required to place with the MAS. Actually the increasing cost of local deposits occasioned by this liquidity requirement comes to about 1 1/2 % a year and, even allowing for this, the inter-bank interest rate (which is what we are talking about) in the Singapore dollar, is substantially lower than the inter-bank interest rates, say, in the Euromarket, in the US dollar. Before I go to round-tripping, I will deal with what the Member for Whampoa said about people being nervous over MAS taking deposits from Government-owned companies. He must not believe everything he reads in our newspapers. This hoo-ha about MAS trying to go into the market to deprive local banks of their clients' deposits is really something conjectured by local financial journalists. It just shows that the standard of local financial journalism is not very high. Let me explain. The local banks are net lenders in the inter-bank market, not net borrowers. When a Government company deposits money with a bank, they do not deposit like any of us here - $10,000 or even $20,000. They deposit millions of dollars and the rate of interest they earn on these deposits is the inter-bank rate, not the deposit rate which you and I get. The inter-bank rate is usually 1% higher than the deposit rates because these are big sums of money. Local banks are not really interested in getting inter-bank deposits because they are net lenders in the interbank market. The money that they have through the depositors, either cash account or term deposits, is much more than they can lend to their own customers. So they lend in the inter-bank market to foreign banks. Local banks are not in the least worried about the MAS taking deposits of Government companies. In any event, the Member would have known that the MAS has got so much money. We do not really need more. It so happens that three Government companies have deposited money with the MAS. I am not quite sure why. Maybe it is an old boy net working somewhere. We will oblige them but in the end we have got to feed it back to the banking system. So there is really not much point in this exercise. The fears that he has aired are really groundless. Round-tripping is different from swap. Round-tripping is possible with foreign banks who have, say, a branch in Hong Kong. Somebody deposits Singapore dollars in the Singapore branch. That money is remitted to Hong Kong and kept in Hong Kong as Singapore dollars. Then the Hong Kong branch will remit back to Singapore the equivalent amount of money and appears as headquarters' funds and therefore they do not require any reserve against that. In that way, they are really getting an advantage over local banks who do not get capital from abroad. Naturally, this is really a way of circumventing reserve requirements and the offenders have to be severely dealt with. They know it is wrong. It is not that they do not know it is wrong. There was quite a big row in the financial journals, with the foreign banks complaining bitterly. In fact, a foreign banker was supposed to have told one foreign journalist, "If only Dr Goh told us, we would not have done it." Tell that to the marines. Finally, on the number of banks. No one can say what is the right policy - whether we should have more banks or fewer banks - because this cannot be reduced to a mathematical model. For instance, Switzerland, which is a financial power in its own right. There are large numbers of small banks but then it is dominated by the Big Four banks. In Hong Kong, they have got large numbers of small banks. They even have deposit taking companies. If that is the way Hong Kong wants to do its business, that is their affair. But my own preference is to have a smaller number of big banks so that we can watch them more carefully, so that they can reach a certain critical size whereby they can introduce modern management techniques, employ the students that the Member has taught in the University, give them good jobs. On balance, the preference of the MAS is not to be over-generous in issuing banking licences.

On a point of clarification, Mr Deputy Speaker. The Hon. Minister rightly has confidence in the invisible hand of Adam Smith, but he forgets that there is a heavy hand of "Adam Goh". The heavy hand is in terms of manipulation of the exchange rate, the setting of the limits within which our exchange rates are free to move. How you set them, how restrictive or how liberal, would determine two things: (1) the degree of imported inflation from abroad via goods and services from abroad, and (2), the degree of capital inflow from abroad which will affect our money supply in Singapore.

Sir, I rise to clarify. Actually, the limits are not set by me. I do not have a heavy hand. I regard the MAS as the implementing agency of Government, and in this respect I have to listen to the Minister for Finance and the Minister for Trade and Industry. It is my colleague who ultimately decides what the limits should be and from time to time we change the limits, partly because it is necessary in the new circumstances, partly we have to keep the market guessing.

Question put, and agreed to. Bill accordingly read a Second time and committed a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - (Dr Goh Keng Swee). Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 3.24 pm

Mr Deputy Speaker, Sir, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time." The primary purpose of this Bill is to provide for a speedy and inexpensive machinery to handle small claims arising from disputes between consumers and suppliers. The Bill seeks to do this by authorizing the setting up of one or more Small Claims Tribunals to deal with the settlement and adjudication of these claims. The Small Claims Tribunal will be constituted as part of the Subordinate Courts but will not be bound by strict rules of evidence or by normal court procedures. To ensure that costs are kept to a minimum and that a litigant will not be at a disadvantage because he is unable to afford legal representation, the Bill provides that the parties to the proceedings must present their own case and excludes representation by an advocate and solicitor. Although this Bill is being introduced by the Ministry of Law, it has its origin in the Ministry of Trade and Industry, whose objective for the Bill is to create a new institution to help consumers to protect themselves. Before touching on specific aspects of the Bill, I would like to briefly restate Government's basic thinking on consumer protection. The Government believes that the consumers are best protected through free trade and competition in a free market. Competition not only ensures that prices are the lowest possible but also ensures good quality and service. However, this does not mean that the consumer can make his purchases blindly. In order to get the most out of the free market, the consumer has to be vigilant and must shop around to compare prices, quality and services. He must also be aware of his rights as a party to a contract. Sir, our better informed consumers are now becoming more conscious of their rights as consumers and are more ready to assert their rights. Unfortunately, the market place is never always a perfect one nor operated entirely by honest traders. Consumers who have purchased defective products or have been given shoddy services sometimes encounter recalcitrant traders or workmen whenever they seek redress. Those who are confronted with this problem now have two courses of action open to them. They can seek the help of the Consumers Association of Singapore. Indeed, in the past year, CASE received nearly 1,000 written and more than 1,000 verbal complaints concerning defective products, exorbitant charges, unconscionable contracts and other mal-practices by traders and persons providing services. Although CASE has been rendering an admirable service, largely through the threat of using adverse publicity against the traders and companies concerned, it has to-date been successful in resolving only a small number of such complaints. The second course is for consumers to seek their redress and remedies in the courts. However, proceedings in the courts are often expensive, time-consuming and subject to technical and procedural complexities. The recovery of small claims, that is claims below $2,000, may therefore be hardly worth the effort. Cost is involved and is prohibitive and may well exceed the amount which the successful litigant could recover. There is, therefore, a clear need for a cheaper and less formal forum to deal with such small claims. As the decisions of the Small Claims Tribunal become widely known, it will also help consumers to become more aware of their rights. Sir, this Bill attempts to assist a consumer who has a claim of up to $2,000 relating to the sale of defective goods or to the provision of shoddy or unsatisfactory workmanship to pursue such a claim in a Small Claims Tribunal. Claims above $2,000 will be dealt with by the normal civil courts. Through the tribunals, it is hoped that such small claims can be souled quickly to the satisfaction of the parties concerned. A consumer who has a complaint to make noeds only to fill in a form stating the facts of the case to the Registrar of the Small Claims Tribunal. For those who are less educated and are unable to file their complaints, the Consumers Association of Singapore has indicated its willingness to provide a service for this purpose. To emphasize the informality, the word "tribunal" is used. A tribunal connotes an atmosphere of informality and it is the informality of proceedings in a tribunal which is one of the reasons for its success in those countries where similar tribunals have been established. Each tribunal will be presided over by a Referee, who will be a legally qualified person. Again, the use of the term "Referee" implies a certain degree of informality. No party to the proceedings in a tribunal will be allowed to be represented by an advocate and solicitor. However, where a party involved is a firm or corporation, it may be represented by one of its employees. The informality of the tribunal and its simplified procedure should enable any layman to present his own case. An important feature of the Bill is that once a claim has been filed, the Registrar has the duty to call up the parties to a dispute before him to try to achieve a settlement. Only when a mutual agreement cannot be reached will the Registrar arrange for the claim to be heard before a Referee in a tribunal. An order made by the Registrar or Referee in a tribunal is binding on all the parties and is enforceable in a Magistrate's Court. Costs will not be awarded against any party unless his claim is frivolous or vexatious. The purpose of this is not to discourage genuine claims. There shall be no appeal against an order made by a tribunal except on a question of law or where an appellant alleges that the claim was outside the jurisdiction of the tribunal. Sir, the proposed scheme, of course, is new to Singapore although it has been tried successfully in a number of countries with a similar legal and judicial background such as New Zealand, Australia and Hong Kong. Since this is the first time that such a tribunal is being established in Singapore, its jurisdiction is confined to small claims arising out of contracts for the sale of goods or for the provision of services. After the system has been tried out and found to be successful, consideration may be given to extending the jurisdiction of the tribunal to cover other types of actions. This Bill represents an important milestone in the field of consumer protection, and I hope that Members will whole-heartedly support it. Sir, I beg to move. Question proposed. 3.33 pm

Mr Deputy Speaker, Sir, the introduction of the Small Claims Tribunals Bill marks a further milestone in consumer protection in Singapore. It will not only strengthen the Consumer Protection Act which was passed by this House in 1975 but also provide what it did not give, ie legal redress for consumers through a tribunal. The underlying principles of the proposed Small Claims Tribunals Bill are commendable. It aims to provide the consumer with a simple, informal and inexpensive way of having his complaint heard. This is underlined by the fact that advocates and solicitors have no right of appearance before the tribunal. Sir, traditional justice places the consumers at a legal disadvantage in view of the prohibitive cost of legal proceedings, the long delays involved before justice can be meted out and the formal procedures and legal jargon involved, all of which have often deterred the average consumer from seeking redress through the Courts. The Small Claims Tribunal would eliminate all this. By precluding lawyers, it will place the consumer on a more or less equal footing with the traders, businessmen or suppliers of services. Since both parties have to argue their cases out in the tribunal, both sides, especially the consumer, will save on legal fees. Of course, unethical traders and businessmen who resort to underhand sales tactics would now think twice before resorting to such unethical methods in their normal day-to-day business. The other virtues of the tribunal such as its air of informality, simplified court procedures and the exclusion of the rigid rules of evidence like in the normal courts make the tribunal a very desirable one to be established in Singapore for the benefit of consumers. However, I would like to seek clarification from the Minister on three points. First, does the Bill cover not only the sale and purchase of goods but also the rendering of all types of services as well? For instance, can a person institute claims on poor workmanship of, say, the tiling and painting work done by a contractor? Can an HDB flatowner, say, claim compensation from the HDB for his leaking toilet? All the small claims add up together would become a big claim for the HDB. Can the tribunal possibly handle and arbitrate on such complaints? My second question is: will the Bill cover the claiming of wages by an employee for the services provided for the employer? I do not believe the Bill should cover this because there are relevant labour legislation to cover payment of salaries. But would the Minister please confirm this point? My third question is: can a trader or seller of goods and services lodge a claim in an attempt to recover money from the buyer of goods if the buyer fails to make payment according to the agreed payment plan? If so, would the tribunal degenerate into a debt collection agency utilized by the traders and creditors for recovering money that consumers owe them? I understand that this was the experience of Canada and the United States when they first set up the Small Claims Court. Sir, in order that the general consumers are aware of the existence and the function of the Small Claims Tribunal, l suggest that adequate publicity be given to this Bill. It is essential that our consumers not only be aware of the existence of the proposed tribunal but also of the manner in which they can have access to it. The Consumers Association of Singapore can also help to disseminate the necessary information on the workings of this tribunal and how to have resort to it. Co-operation from all parties is necessary if the tribunal is to play an effective role in ensuring justice for consumers. Businessmen too must accept the tribunal with an open mind and with goodwill for they must not forget that they too are consumers when they acquire goods and services for their needs. Furthermore, the business community as a whole will profit from having such a tribunal for it will serve to weed out the black sheep in their community who make it a point to fleece, defraud or short-change their customers by providing them with shoddy goods or sub-standard service. With these comments, Sir, I support the Bill. 3.38 pm

Mr Deputy Speaker, Sir, I join the Member for Boon Lay in welcoming the introduction of this Bill which I think is long overdue. It is indeed a milestone in the history of consumerism in Singapore. Hitherto, dissatisfied consumers find difficulty in obtaining satisfactory redress from unscrupulous or recalcitrant traders because of the small nature of their claims. The only way a consumer can enforce his rights is through litigation. However, there are several factors which dissuade a consumer from resorting to this means: cost, time and the complexity of procedure. Sir, in the past experience of my association with the Consumers' Association of Singapore, I know that a consumer with a legitimate claim against a trader amounting to no more than $200-$300 is usually neither prepared to incur legal costs nor expend time and energy to vent his grievance through the judicial system, which may take anything up to six months to two years for a decision. If he is fortunate and if his claim, is undisputed, he could obtain redress within one to two months. However, in the more normal case of a disputed claim, it is just not worth the while to press it. It is therefor probable that many legitimate consumer complaints do not receive due satisfaction. Mr Deputy Speaker, Sir, justified complaints like these if accumulated could mean consumers losing large sums of money and unscrupulous retailers getting away with trade malpractices much to the detriment of their honest counterparts. Furthermore, there is also the need to protect consumers from being misled or falsely persuaded to enter into contracts for the purchase of goods or services and also from being unduly harassed by traders or businessmen subsequently in respect of such contracts. The formation of the Small Claims Tribunals is therefore commendable as it could act as a deterrent to such undesirable trade malpractices. Mr Deputy Speaker, Sir, the main advantage of having the tribunals, as I see it, is that it enables small consumers to assert their rights by commencing civil proceedings against the suppliers of defective or sub-standard goods and services. It also allows small consumers not to be unduly alarmed by the threat of litigation by unscrupulous suppliers of goods and services which have been foisted upon them by unethical methods of sale. In the Singapore context, it is reasonable to fix the ceiling for small claims at a maximum of $2,000 per claim as such a limit will adequately cater for the needs of the small consumer, for the protection of whose interests the tribunals are intended. Sir, clause 21 provides that no party may be represented by an advocate and solicitor or agent at hearings of a tribunal. This is a good move. At present, many small consumers are deterred from asserting their rights by litigation or are unnerved by the threat of litigation because they usually have no dealings with lawyers. Consequently, they have a very vague idea as to the cost and other implications of litigation. On the other hand, the suppliers of consumer goods and services normally retain the services of lawyers as part of their trade or business, particularly if they know that their methods of securing trade or business from consumers are likely to give rise to dissatisfaction which can result in litigation. It is therefore a routine matter for a trader or businessman to instruct his solicitor to issue threats of legal action against defaulting consumers. On the other hand, a consumer, when faced with the prospect of having to commence proceedings or having proceedings com- menced against him, has to consider how and who to engage as a solicitor in relation to such proceedings. On top of it all, he has also to consider the worrisome problem of meeting the legal cost of such proceedings. These are all matters which are unfamiliar to an average small consumer. Mr Deputy Speaker, Sir, clause 21 also provides that all actions in the Small Claims Tribunals must be presented by the parties themselves. Grievances may be stated in plain words with no legal jargon. Thus, as far as proceedings are concerned, there is no disadvantage in not being legally trained. Both parties tell their side of the story and decisions can be rendered immediately or within a few days after the hearing. Furthermore, the tribunals' proceedings would take place in private, thus underscoring the informal setting. Sir, the setting up of such tribunals in Singapore will therefore help to remove from small consumers the uncertainties of litigation and in particular the question of legal cost. The preclusion of lawyers from appearing in such a court will help to place the small consumers on a more equal footing with the suppliers of the goods and services. It may also help to deter traders and businessmen from using unethical methods of sale since they may have to justify such methods of sale personally when claims are brought by disgruntled consumers. In such a tribunal, it will no longer be possible for unscrupulous traders or businessmen to shield themselves behind professional lawyers who can avail themselves of the esoteric and impersonal intricacies of the legal machinery to obscure the social aspects of any claim before a court. Sir, the Small Claims Tribunals' main merit, however, will be in its very existence. Because the Tribunals exist, consumers will be less helpless and apathetic. In turn, less than ethical traders and manufacturers, who know consumers can resort to the tribunals, will become more responsive to consumer complaints. Sir, may I now express some of my observations. Although the Small Claims Tribunals seem to be set up for the benefit of the consumers, they are in fact an avenue for redress for both traders and consumers alike. We must guard against the abuse of use of the Tribunals. In particular, we must guard against traders utilizing the services of the tribunals to recover unpaid sums owed by consumem and other traders. If this safeguard is not provided, then the tribunals will become merely a tool for use by corporate creditors for debt collection. This point was also expressed by the Member for Boon Lay just now. It is also possible that employees of the corporate creditors, though without formal qualifications, could acquire a series of skills and a familiarity with practices and personnel of the tribunals which con give the corporate creditors a decided advantage over the unrepresented debtors who may be going through the proceedings for the first time. To prevent such a situation, the Minister may have to consider the following measures: (a) Expressly exclude claims by corporations, partnerships or associations; (b) Preclude professional debt collection agencies from utilizing the tribunals; (c) Limit the number of cases which may be brought up by a particular claimant in a given period of time. Sir, clause 36 sets out the powers of the High Court on an appeal under clause 35:-

Mr Deputy Speaker, Sir, I rise to welcome this Bill and to give my support to it. I was a little disappointed when I saw this Bill that it restricted disputes that may be tried by this tribunal, the disputes between, as the Minister said in his speech to consumers, purchasers of goods from suppliers and between users of services and suppliers of those services. I wonder why opportunity was not taken to give the tribunal jurisdiction in other areas of dispute. I understood the Minister to say that this Bill is an experiment and with the passage of time, perhaps consideration will be given to increasing the jurisdiction of the tribunal in other areas of disputes, small disputes that is. I do not know the number of cages between consumers and suppliers of goods on the one hand and the consumers and suppliers of services on the other hand that is at the moment before the courts. I do not myself think that there are a great number but I do know that there are a great number of cases, small cases, that clog the courts at the moment and cases where it will be desirable to move away from the stylized formal hearings that the courts accord, to a more informal resolution of the disputes. I am thinking particularly of disputes between neighbours in HDB flats. I know myself of cases that come up before the courts daily, small little disputes between neighbours over things broken or fights. Perhaps consideration should be given to setting up a tribunal, if it is not to be the same tribunal as this, to try those sort of disputes as well. With that, may I pass on to certain clauses of this Bill. Sir, reference has been made by a speaker to clause 13 of the Bill which sets out what the record of the tribunal should be. I see that it need not consist & the evidence that is given before the tribunal, but simply summaries of the facts as determined by the Referee during the hearing of the claims. As has been pointed out and I would echo that, this would make the task of an appellate court much more difficult, and I do not know why the Referee is not obliged to keep, perhaps not a full record of the evidence given before him in these hearings, but at least a summary of the evidence, not as determined by him, but a summary of the evidence as given by the parties and the witnesses before him. Perhaps the Minister might like to consider whether an amendment should be made to sub-paragraph (b) of sub-clause (2). The other clause on which I should like to say something is clause 21, Mr Deputy Speaker, Sir. Mention has been made by speakers before me that this perhaps puts the parties on an equal footing. But, as the Minister pointed out, and it is in the Bill here, the Government, if it is a party to a dispute, may be represented by a public officer and the public officer may be a legal officer from a Government department or from the Attorney-General's Chambers. So it will be open to the Government at any time in any proceedings before the Small Claims Tribunals to send a lawyer against a consumer presenting his own case. Equally, Mr Deputy, Speaker, Sir, when you come to consider a body corporate, especially if they happen to be big companies, they may send one of their employees, a member of their staff, who is perhaps legally trained or even if he is not legally trained, he is well able to present his case on behalf of the company against a consumer who may not be trained to the same level as the person presenting the case on behalf of the corporation. I can understand and I think it is desirable that advocates and solicitor should be excluded from this tribunal. But I do not understand why a consumer, a person who feels he cannot himself adequately present his case, should not get a friend of his to present the case for him. There are people who are unable, not through any fault of their own, to present their case adequately. They may not know what are the salient points, the evidence that should be presented. And it may be of assistance to people who are placed in that son of situation to have a friend to present their case for them before the Small Claims Tribunals. The common law right is that if you cannot do anything yourself, you can appoint an agent to do it and I do not know why we should cut down on this right of a person to present his case through an agent, provided of course this man is not a professional agent who charges fees. If the tribunal makes sure of that and this man is there merely as a friend, I do not see what objection there can be. I find clause 22 mystifying, Mr Deputy Speaker, Sir. It says: 'All proceedings before a tribunal shall be held in private.' May I know why proceedings before the Small Claims Tribunals should be held in private? As the Minister knows, one of the safeguards in the dispensation of justice, and this is dispensation of justice, adjudicating between two competing parties, is that it is open to the public and the public are there, who have an interest in the proceedings and they, as has been said, are watch-dogs of the proceedings before the tribunal or the court. The public have a purpose and a use in being admitted into courts and tribunals. I cannot understand why the proceedings before a Small Claims Tribunal should be held in camera, and the public excluded. It may also be salutary if some of these cases are reported in the papers where there is shoddy work by a contractor or shoddy articles or goods sold by a company and that is reported in the Press. So what is the need, may I ask, for excluding the public, and by that the Press, from proceedings before a Small Claims Tribunal? Clause 25, Mr Deputy Speaker, Sir, says: 'A tribunal shall not be bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.' Sir, it is easy to run away with the idea that the Evidence Act and the evidentiary provisions make any hearing technical, stylized, formal and difficult. But it has been found through experience, not just over a few years but over centuries, that the laws of evidence serve a very useful purpose. The rules of evidence have been designed to see that justice is done between the parties and that a Referee or Judge who has to decide between competing claims decides on the evidence that is presented by both parties and does not go outside the evidence presented by both parties. These are safeguards for the administration of justice and therefore I am not very happy to see that the tribunal is excluded from this restriction which is imposed on any tribunal or adjudicator. I can understand the tribunal being given a little more latitude but I should have thought that the tribunal should, in making its finding, make it on the evidence that is presented before it and be bound by the evidence that is before it. In that way you have a greater chance of doing justice between the panies rather than leaving it very much, as it were, in the bosom of the Referee for him to decide what should be the result of the dispute between the two parties. May I move on, Mr Deputy Speaker, Sir, to clause 36 which deals with the powers of the High Court on appeals from the tribunal. Perhaps I should have mentioned clause 35 first that an appeal to the High Court is provided under this Bill "on any ground involving a question of law." But, Sir, if you look at clause 36(2), you find that the High Court, on hearing an appeal, may not "reverse or vary any determination made by a tribunal on questions of fact." Again, the Minister must well be aware that determination on questions of fact may well be questions of law. There is the question as to whether a finding of fact is a perverse finding and that is a question of law whether it is a perverse finding or not. So there would appear to be a conflict between these two provisions in the Bill. One says that an appeal can be made to the High Court on any ground involving a question of law but the clause following it prevents the High Court from reversing or varying any determination made by a tribunal on questions of fact which may well be questions of law. I would ask the Minister whether he would give consideration to that.

Mr Deputy Speaker, Sir, I thank the three Members who have expressed their support for the Bill and I have taken note of all their specific points. I shall also cause the records of these proceedings to be sent to the officials of the Judiciary who will be drafting the relevant rules of the tribunal so that they can be advised of the points raised. Mr Deputy Speaker, Sir, may I touch on some of the points raised by the individual speakers. The Member for Boon Lay asked the following question: besides disputes arising from the sale of goods, whether it would also cover the rendering of services. He gave a few examples. The answer to that is yes, as can be seen from the wording of clause 5. As to the specific example he gave, I think, I will be prejudging the jurisdiction of the court if I were to say yes or no. But obviously questions of poor workmanship and defective materials supplied, I would certainly expect, would come within the scope of clause 5. As regards his question as to whether this will cover claims arising out of an employer-employee relationship, the answer is no, because the provision in clause 5 talks of contract relating to contract for service. There is a distinction between contracts of service and contracts for service. So it would not cover the kind of disputes he mentioned relating to employer-employee relationship. The next point that he raised relates to the prospect of claims being brought by traders or suppliers - this is also a point raised by the Member for Jurong - the answer is yes. It covers both sides, claims by the consumer and claims by the trader or supplier. The point raised by the Member for Boon Lay as well as the Member for Jurong was not that persons who r&use to pay for goods or services should not be subject of any kind of proceedings in any tribunal. I believe they were expressing a more general concern as to whether this tribunal would possibly become a subject of abuse by traders resorting to debt collection. The answer to that is, as of now, traders and suppliers have access to the High Court and the Magistrates' Courts and even with the passage of this Bill, their access to the normal Courts would not be barred. As to whether they will have any special advantage in going to the Small Claims Tribunal will remain to be seen. The whole structure of the scheme is such that the advantage will really be with the consumer. Informality, the absence of legal representation, the absence of strict application of rules of evidence and so on favour, not the corporation, but the consumer. But let me say that this is new. We must see how it works. If experience shows that it is being abused, then let me give him the assurance that appropriate steps will be taken to make sure that it will not be allowed to be so abused. May I go on to the comments of the Member for Jurong. I have taken note of his points which are similar to the points raised by the Member for Boon Lay. He has also asked whether we should exclude claims by particular partnerships and corporations. There i.s no immediate need to so exclude such claims. He has asked whether we should put a limit to the number of claims that are brought by parties. It may not be necessary to have this restrictive provision for one can envisage a situation where a particular consumer or consumers have been in an unfortunate position of suffering repeated misfortune at the hands of unscrupulous traders and corporations and such a restrictive provision would be to their disadvantage. On the point raised by the Member for Jurong on the provision of appeals, as he will see, the provision in clause 35 provides for appeals on very narrow grounds: '(a) on any ground involving a question of law; or on the ground that the claim was outside the jurisdiction of the tribunal.' Sir, these are very restrictive grounds and, in fact, if you look at clause 36(2), even on appeal, the High Court may not reverse or vary any determination made by a tribunal on questions of fact. So I do not think that this is a provision that is going to undermine the claims brought by consumers in the Small Claims Tribunal. In any case, I would like to draw Members' attention to the fact that clause 35(2) provides for rules to be made to regulate and prescribe the procedure to be followed on appeals. So the authorities making these rules will no doubt bear these points in mind when the necessary rules are drafted. May I now go on to the points raised by the Member for Anson. I am glad that, for once, he has supported a Bill moved by the Government and his points also are noted. He has commented that confining the jurisdiction of the tribunal to disputes concerning sale of goods and services is rather restrictive. Why not other categories of disputes? As I have said, this is experimental. We will have to see how it works and, with experience, we could consider extending the categories of disputes. But I am not sure whether the example that he mentioned, that is disputes between neighbours in flats, is the kind of dispute that should be brought to the Small Claims Tribunal. Instead of advocating that, he should note that we have Residents' Committees throughout Singapore. We have campaigns of good neighbourliness and courtesy. So perhaps he should come forward and support these campaigns if he is really interested in reducing the incidence of quarrels between neighbours. Going to court may only aggravate the relationship between neighbours. He has asked why is it in clause 13 the record of a tribunal is so brief that it would make the Appellate Court's task more difficult. The answer to that is that the more lengthy, the more comprehensive notes and grounds of decisions which have to be made by the Small Claims Tribunal, will of course lead to more delays and will take up more time on the pan of the Referee concerned and it will make the proceedings even less informal. In any case, the rules will provide for the process of appeal. He has referred to clause 21 and pointed out that corporations and the Government may be represented by an employee or, in the case of the Government, by a public officer. I am afraid his interpretation is wrong. It is true and it says in clause 21 that a party to a proceeding before a tribunal, if it is the Government, a public officer may present the case. He has concluded that a legal officer can represent the Government. But he has failed to see that this is subject to subclause (3) which says: 'No party to any proceedings before a tribunal shall be represented by an advocate and solicitor or agent, whether paid or otherwise.' 4.15 pm

A legal officer may not be an advocate and solicitor.

So no party to any proceeding before a tribunal shall be represented by an advocate and solicitor. And I am sure the tribunal will be able to interpret both the spirit and intent of this provision. The Member has expressed reservation and criticism of clause 22 which says: 'All proceedings before a tribunal shall be held in private.' Why is this so? There are good reasons. Many of our laymen are reluctant to go to the tribunal because of publicity. If everything they say in a tribunal is going to be reported the next day with photographs and sensational headings, this is going to put off bona fide consumers who have grievances from going to the Small Claims Court. On the other hand, the Member for Anson has forgotten to relate this to clause 42 of the Bill which says: 'The Registrar shall cause to be published, in such manner as the Minister from time to time directs, such particulars relating to proceedings in tribunals as the Minister specifies in the direction.' It is perfectly possible that orders and decisions could be publicized in the direction. The Member has advocated the need for laws of evidence to prevail. But this would precisely conflict with the objective of keeping the proceedings as informal as possible. If the laws of evidence were to apply, as we know, the evidentiary rules are fraught with technicalities which no layman will be able to understand. So this is why it is provided in clause 25 that: 'A tribunal shall not be bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.' Finally, the point raised by the Member for Anson regarding clause 36 on appeals. The point that he has raised is that clause 36(2) provides that the court may not reverse a determination of the Small Claims Court on questions of fact. His point was that some questions purporting to be questions of fact may indeed be questions of law. But surely we must leave it to the Court of Appeal to decide whether an alleged question is a question of fact or question of law. That determination is one which must be left to the Court of Appeal. Sir, I think I have covered most of the points.

Mr Deputy Speaker, Sir, may I clarify my objection to clause 22 of the Bill which I do not think has been adequately understood by the. Minister? I was not merely campaigning for a reporting of all the proceedings next day in the papers. What I was saying was that, as he knows, all proceedings in any court are open to the public and there is a reason for this. That is because the person who is presiding knows that he is being watched by the public. This is well recognized. They serve as a watchdog, on behalf of the litigants or the public interest because the public have an interest in the administration of justice. And this Small Claims Tribunal is doing just that, trying to do justice between two competing parties. That is why I said I cannot understand why the public should be excluded. I can understand some people having reservations about their cases being published in the papers. That can be done by a direction that the papers do not publish certain reports or names of parties or any evidence. But why exclude the friends of the claimants from attending the court and watching the proceedings?

Mr Deputy Speaker, Sir, obviously this is a question on which different people will have different ideas. The approach taken in the framing of this legislation on this point is simply this. If we want to encourage a layman, however educated he is, whatever education he has received, if he feels he has a genuine grievance, a genuine claim, to be able to come to the court, he should know that there are as few inhibiting factors as possible. The other side will not be represented by a lawyer. He will have to present his own case. Imagine the position if there is a large audience around him. Surely this will be an intimidating inhibitive factor. If one side is allowed to bring friends, the other.side must also be allowed to bring friends. For many people who have never stood up and spoken before a strange forum, this could be an inhibiting factor. So I think we should try to have as informal, as simple procedures, with as few strangers and audience as possible. This will promote expeditious and smooth handling of the cases and the Referee will be able to give the decision.

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. - (Prof S. Jayakumar). Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading reed. 4.24 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." With the growing affluence of the Singapore population, the number of vehicles on our roads has been increasing at a rate of 6-7% each year. Despite fiscal disincentives in the form of higher Additional Registration Fees (ARF) and increased road taxes, car ownership has continued to grow. The motorcycle population grew even faster, at a rate of 8-10% each year, as there is no disincentive imposed on its ownership. In 1983, of the total number of 476,288 vehicles, 46% were motor cars and 30% motorcycles. The number of vehicles to population in the same year was 18,900 per 100,000 population compared to 13,100 per 100,000 population in 1978, an increase of 44%. On the other hand, there was only a small increase in our road mileage, from 2,263 km in 1978 to 2,568 km in 1983, an increase of 13%. This higher volume of vehicular traffic has resulted in greater congestion on our roads. It has also contributed to the rise in our accident rates. In 1983, 49,777 traffic accidents were reported compared to 32,752 in 1978, which is an increase of 17,025 cases or 52%. Of the 216 who died in road accidents in 1983, 45 or 21% were due to speeding. In the course of pursuing the hell-riders, some of our Traffic Police officers also suffered injuries. From 1979 to 1983, and for the first seven months of this year, there were at least nine such cases. The Traffic Police have responded to the situation by adopting both preventive as well as other remedial measures. It has embarked upon a plan to upgrade the training standards of drivers. At the same time, it has continued to educate the general public on the various aspects of road safety through campaigns, the mass media and schools. The Police have also stepped up enforcement by increasing patrols along roads and expressways where accidents used to occur, and are taking steps to enhance penalties for traffic offences. Mr Deputy Speaker, Sir, "hell-riding" or "hell-driving" activities by motorcyclists and motorists on our expressways and other roads have been a growing problem in the last few years. In 1981, there were 1,509 instances of hell-riding/driving reported; in 1982, 2,986 and last year 3,728. Such activities, often committed late at night and in the early hours of the morning, are not only a menace but also a nuisance to the public. Hell-riders race their vehicles beyond the maximum speed limits with total disregard for traffic rules. They not only endanger their own lives but also the lives of other road users. In 1979, there were only nine known venues where hell-riding activities took place regularly. In 1983, 20 such venues were identified. From only a few youth groups connected with hell-riding, the Traffic Police have now identified some 57 organized groups. In 1979, 42 hell-riders were arrested, compared to 800 in 1983. There is also a link between hell-riders and the rising incidents of motorcycle thefts. In 1983, the Traffic Police arrested nine hell-riders on stolen motorcycles. Thirteen stolen motorcycles were also recovered when their riders abandoned them. Gambling and fights with an undertone of secret society involvement have also taken place in connection with hell-riding. Over the years, the Traffic Police have stepped up their operations against hell-riding. In 1983, 61 operations were mounted and 4,620 vehicles were impounded for inspection of illegal modifications, compared to 729 vehicles in 1979. Although the operations resulted in many arrests, the punishments meted out to those convicted did not have a deterrent effect on such activities. Hell-riders are charged under the Road Traffic Act for speeding, reckless or dangerous driving, and driving without care or reasonable consideration. Out of 179 convictions from 1981 to 1983, prison sentences were meted out only in eight cases. In five of the cases, imprisonment was for one day and, consequently, the culprits went home when the court rose for the day. For the first seven months of this year, out of a total of 26 convictions, only one offender was sentenced to imprisonment for two months. In all the remaining cases, the culprits were only fined or fined plus disqualification. The fine imposed is normally less than $1,000. The continuous deployment of Traffic Police officers to pursue hell-riders/drivers and apprehend them is not only an unproductive use of manpower but is also dangerous to the enforcement officers as well as to the culprits and other road users. The Traffic Police have also been counselling all such offenders apprehended on the dangers of such activities, but to no avail. Heavier penalties are thus being sought virtually as a last resort. In the first seven months of this year there were 1,252 reported cases of hell-riding. It is therefore timely to enhance the punishment to deter such menace on our roads. This Bill therefore seeks to provide mandatory imprisonment for a term not exceeding six months in addition to a fine of not less than $1,000 and not more than $2,000 for a first offence. For the second and subsequent offences, the penalty will be mandatory imprisonment for a term not exceeding 12 months in addition to a fine of not less than $2,000 and not more than $3,000. A person convicted of the offence of hell-riding will also be liable to be disqualified from holding or obtaining a driving licence for a period of not less than 12 months from the date of conviction. In addition to these penalties, the new laws also provide for the confiscation of vehicles used in the commission of the offence of hell-riding, even though no person may have been convicted of such offence. Hell-riding activities are rampant right now because a hell-rider can easily acquire a motorcycle on instalment payments under hire-purchase. Hell-riders are charged for speeding or dangerous/ reckless driving under the Road Traffic Act, but there is no provision in the Act to empower the Police to confiscate a vehicle used for such activities. The forfeiture of vehicles used for hell-riding, irrespective of whether they were bought on hire-purchase or otherwise, would be an important deterrent to such activities as the hell-riders would lose their vehicles on conviction. When motorcycle traders are made to recover the cost of forfeited motorcycles from hell-riders through civil litigation, they would also exercise greater care in selling motorcycles to persons on hire-purchase. I would like to point out to the House that there is a clear difference between speeding and hell-riding. A person will be charged for speeding if he drives a motor vehicle on a road at a speed greater than the speed which is prescribed as the maximum speed in relation to a vehicle of that class or description. On the other hand, a driver or rider who takes part in any competition or trial of speed shall be guilty of the offence of hell-riding. All enforcement officers on motorcycles are required to follow a speeding vehicle and clock its speed after 400 metres or so. A motorist who is merely speeding would therefore not be charged under the new provisions unless he had actually participated in a competition or trial of speed. Further, our Traffic Police officers have enough experience to know the difference between mere speeding and hell-riding. To constitute an offence under the proposed new section 68(3), there must at least be two vehicles travelling at fast speeds in competition. Other factors to constitute an offence would include deliberate overtaking of competing vehicles at high speed, taking corners at high speed in competition with another vehicle, disregarding traffic lights, and so on. Whether a motorist was racing or otherwise would have to be proven to the satisfaction of the court. There are, therefore, sufficient safeguards to protect them from prosecution for hell-driving/riding if they have not been involved in racing. 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 Chua Sian Chin]. Bill considered in Committee; reported without amendment; read a Third time and passed.

I propose that we take a break here. I suspend the Sitting and will take the Chair again at 5.10 pm. Sitting accordingly suspended at 4.40 pm until 5.70 pm. Sitting resumed at 5.10 pm

Order for Second Reading read. 5.10 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The existing Housing Developers (Control and Licensing) Act protects purchasers of residential properties by empowering the Controller of Housing to license only developers with a minimum paid-up capital of $100,000 and who are not undischarged bankrupts and to investigate the affairs of a licensed developer. There is no provision, however, to protect the interest of a purchaser in a housing project should the developer go bankrupt or face liquidation. To offer greater protection to purchasers, my Ministry has introduced a Project Account Scheme since August 1981. Under the Scheme, a developer has to open a Project Account with a bank or a finance company for each housing project undertaken by him. All the progress payments by purchasers up to the issue of a Temporary Occupation Licence are paid into the account. The bank or finance company will allow withdrawals from the account only for the servicing or redemption of mortgage loans, and for payment of the project's construction cost upon certification by the quantity surveyor or the architect of the project. After the issue of the Temporary Occupation Licence, all surplus money not required to complete the project will be released back to the developer. If the property is mortgaged, partial discharge will be executed for individual purchasers upon issue of the Temporary Occupation Licence. The Scheme makes sure that progress payments made by purchasers are used only for the construction of the project and safeguards against purchasers' funds being unscrupulously channelled elsewhere for other uses. The Bill will give the Project Account Scheme legal status. It seeks to prevent money in a Project Account from becoming the property of the developer in the event of bankruptcy or liquidation. The money in the Project Account will vest in the official receiver, trustee in bankruptcy or liquidator, to be applied for the completion of the project. Any money left after discharging the developer's obligations and liabilities under the sale and purchase agreement in respect of the project will be money belonging to the developer to be applied in accordance with the law relating to bankruptcy or liquidation. Any developer who contravenes or fails to comply with the requirements of the Project Account Scheme is liable on convic- tion to a fine not exceeding $10,000 or imprisonment for a term not exceeding one year or to both. The Project Account Scheme will not apply to: (i) any building project where the units are not for sale before the completion of the project; (ii) any URA building project which is governed by a similar scheme imposed by URA in its sales agreements; or (iii) any building project for which the developer has furnished to the Controller of Housing a banker's guarantee of an amount not less than 140% of the total cost of construction as certified by the architect in charge of the project. The Bill also empowers the Minister to appoint an auditor to investigate the books, accounts and transactions of a Project Account and to make rules relating to the Project Account Scheme. 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 Teh Cheang Wan] Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 5.17 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." At present, the Housing and Development Board is empowered under the Housing and Development Act to provide loans with the approval of the Minister to enable persons to purchase developed land upon a mortgage of that land. Clause 2 of the Bill extends the HDB's power to include the granting of loans for the purchase of vacant land belonging to the Board. A case in point would be the granting of loans to lessees of HDB sites for the development of petrol stations. As the Act now stands, no trust in any form can be created in respect of an HDB dwelling or property. The original intention of this provision was to prevent abuse by persons not eligible for HDB flats from purchasing a flat in the name of nominees. Over the years, however, there has been increasing need for the HDB to permit the creation of trusts for legitimate reasons. For example, it is necessary to empower trustees to hold flats in trust for minor children who are citizens in the event of death of the lessee parent, and where the surviving parent is neither a citizen nor a permanent resident and therefore not eligible to assume ownership of the flat. Similarly, in some cases of legal separation or divorce, flats have to be held in trust for minor children until they reach the age of 21 years. Clause 3 of this Amendment Bill, therefore, seeks to allow a trust to be created in respect of an HDB dwelling provided such trust is approved by the Board. The HDB may compulsorily acquire sold property under the circumstances prescribed in section 48A of the Act. The existing section 48C(1) empowers the Board to pay into Court any compensation payable for t"e compulsory acquisition of an HDB dwelling when any party refuses to accept the amount of compensation or where there is a dispute between interested parties on the proportion of compensation they are entitled to. Clause 4 of the Bill seeks to amend section 48C(l) to enable the HDB to also pay into Court the compensation for any acquired dwellings in cases where the persons entitled to receive the compensation cannot be found with reasonable diligence. The amendment, like clauses 2 and 3, will provide greater flexibility and enable the HDB to carry out its functions more effectively. The other important aspect of the Bill pertains to amendments to the financial provisions of the Housing and Development Act. Since the HDB's inception, its annual accounts have been prepared on a "Double Account" system. This system was designed to reflect the results of the HDB's original objective of providing public housing for rental. With the HDB's major activity being shifted from rental to sale of flats, a new accounting system is now needed for the Board. Mr Deputy Speaker, Sir, hon. Members are aware that the HDB is currently designing a new accounting system. Certain amendments have to be made to the Act to pave the way for the HDB to implement the new accounting system. In this respect, clause 8 of the Bill seeks to amend section 59 of the Act by abolishing the "Housing and Development Fund" comprising a Capital Account and a Housing Account, as these are inherent features of the "Double Account" system which will be replaced. Clauses 5 and 9 make consequential amendments respectively to section 52(1) and section 60(1) of the Housing and Development Act, as a result of the amendment to section 59 to abolish the Housing and Development Fund. The amendment to section 55(2) of the Act as stated in clause 6 of the Bill is to enable the accounts of the Board to be kept by the Chief Financial Officer instead of a Financial Officer. The HDB has all along had a Chief Financial Officer and this amendment serves only to clarify and reflect the actual situation. To provide greater administrative flexibility, clause 7 seeks to empower the Chairman and the Chief Financial Officer or the Chairman and another authorized officer of the Board to sign the audited statements of the Board. Sir, I beg to move. Question proposed.

Mr Deputy Speaker, Sir, before I speak on this, may I ask the Minister by way of clarification, two questions and then when he has answered them, may I speak on this. First of all, would the Minister say what exactly is comprised in this "any other land belonging to the Board"? Is this land which was acquired under the Land Acquisition Act for the Board and which the Board now does not propose to use for the building of flats or is this other land acquired otherwise than under the Land Acquisition Act? The second question is this. Planning permission to develop has been obtained under the Planning Act. Does this contemplate the Board obtaining planning permission for the land that is being sold or is it the intention that the purchaser should obtain planning permission and the Board would sell the land to him when he gets the planning permission?

Mr Deputy Speaker, Sir, the acquired land was not originally owned by the Board and was acquired either from a private land owner or acquired by private purchase or by private treaty.

It may include land acquired under the Land Acquisition Act.

Yes, that is correct. The second point is about planning permission. The Board will obtain planning permission prior to the sale of the land. If the Board sells the land for the development of a petrol station, the Board must obtain planning approval before it can sell the land. Otherwise, if we sell the land for the development of a petrol station and the person applies for planning permission and his plan is disapproved, then the sale would be abortive. It will be a waste of time.

Mr Deputy Speaker, Sir, I am indebted to the Minister for clarifying the expression "any other land belonging to the Board." As I understand him now, it includes land which has been acquired for the use of the Board under the Land Acquisition Act and may also include land acquired by private treaty. I should have thought that most of the Board's land is acquired under the Land Acquisition Act but be that as it may. Sir, as the Minister has said, clause 2 now extends the power of the Board to granting loans to purchasers of land acquired by the Board for a specific purpose under the Land Acquisition Act and he cites a case in point would be for the development of the land as a petrol station. In my view, it is a complete misuse of the Land Acquisition Act if the Housing and Development Board is now allowed to sell land acquired under the Land Acquisition Act to oil companies to be developed as petrol stations. Under the Land Acquisition Act, section 5(1) of the Act says: "Whenever any particular land is needed -

Mr Deputy Speaker, Sir, I am very surprised that the hon. Member for Anson does not even have an elementary knowledge of how the Housing Board develops a new town. He is the Member for Anson and most of his constituents are staying in HDB estates. I presume that he should know something about his own constituency. When the HDB develops either a big housing estate or a new town, the HDB has to acquire all the private lands within the area for development. In fact, I want to emphasize that most of the HDB new towns were built on HDB's own land; that means the land was inherited from the former Singapore Improvement Trust. Some may be State land and some may be private land. It is a mixture. In certain cases, there may be more State land and in other cases, there may be more HDB land or there may be more private land. After the HDB gets all the land together, the HDB proceeds with the development. First of all, of course, we have to clear all the squatters and any encumbrances on the land. When the people have moved out, development takes place. We start earth works to level the place. Then we start the construction of the roads and we start the building of HDB flats. Then we start the development of swimming pools, the recreation areas. We build car parks. We build parks. We build children's playgrounds. We build shopping centres. We build all the other facilities.

We know all that.

You know that! I am very surprised. I thought that you did not know. Basically, the land is acquired by the HDB for various purposes. If we follow the theory of the hon. Member for Anson, then what he is saying is that if the acquired private land is meant for commercial development - HDB has commercial development - it should be returned to the private landowners so that they can make a lot of money. For the land earmarked for the development of a swimming pool, do we return it to the private landowner and tell him, "Look here, please spend $12 million to build a swimming pool"? I suppose he will say that it is the Government which should spend the money to build the swimming pool. For the construction of roads, we have to spend millions of dollars. Who is to pay for this? Basically, the accounting for HDB is very simple. The HDB is spending money for the construction of roads for which there is no return. The HDB is spending money for the construction of facilities like swimming pools and each swimming pool costs more than $10 million. The HDB is building children's playgrounds. There are no returns for all these facilities. There is no economic return for a swimming pool. In fact, the gate admission of 40 cents per entry is not sufficient even to maintain the pool. The HDB is building, for example, town gardens in various new towns. The HDB is spending millions of dollars for town gardens and admittance to town gardens is free. So what the HDB is doing is that it is acquiring all the land for development. There are certain projects for public benefit, public recreation like swimming pools, town gardens, roads, children's playgrounds. The HDB is spending money for all these facilities. The HDB builds flats for sale which again is subsidized. In other words, the HDB is not recovering the full cost. From commercial development, the HDB is recovering some money by building shops, factory premises and petrol stations. The hon. Member for Anson gives the impression that he is really pro-landowner. I was under the impression that the hon. Member is a socialist. I did not realize that the hon. Member, in fact, is a very conservative capitalist. Where there is money to be made, the landowner should make the money. Where money has to be spent, the Government should spend the money. That is what he is advocating. As regards the piece of land which can be developed for a petrol station, why is it suitable for a petrol station? It is because the HDB brings the population into that area. The HDB develops the new town. The HDB develops the roads and therefore that piece of land can be suitable for a petrol station. Without the HDB spending all the money to bring the population into the new town, that piece of land is totally unsuitable for a petrol station because without the population, there are no cars. The hon. Member is suggesting that after the HDB has put in all these efforts, the landowner should be the one to benefit and not the HDB. I am very surprised.

Mr Deputy Speaker, Sir, may I by way of clarification say that the Minister seems to have completely missed the point. I am sorry but he has missed completely the point of my speech in this House on this Bill. He talks about HDB building this and building that. I was not talking about HDB building this and building that. I was talking about the Land Acquisition Act and that is quite specific. Land may only be acquired for a public purpose and may be acquired for a statutory board for its own undertakings. The Board, I take it, is not going to operate the petrol station. The Board is going to give that land at an exorbitant price to a private company to operate the petrol station. That is not one of the purposes for which land may be acquired under the Land Acquisition Act. I am saying that quite seriously and I am saying that you are misusing, as this Government has misused a number of Acts, legislation. The Government is misusing the Land Acquisition Act if it now allows the Board to sell land to oil companies after having acquired them for a public purpose.

Mr Deputy Speaker, Sir, I think the hon. Member for Anson is trying to evade the point which I raised. But since he has raised this point, I will take on his point. In the planning of the land use of the area -

The Land Acquisition Act.

Yes. Land acquired by the Government has to be zoned for various purposes. That particular piece of land may be zoned for a petrol station. The land is still owned by the HDB because it is leased to the operator of the petrol station for a period of 30 years. After 30 years, this piece of land will revert to the State. The oil company actually has to pay a high premium for the use of the land for 30 years. It is not because of the land itself that has any significance; as I have said earlier, it is because of the HDB's development. There is a housing estate there. There are cars there and therefore an oil company is willing to pay the so-called exorbitant price for the use of the land as a petrol station for a certain period of time.

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 Teh Cheang Wan). Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 5.45 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." In the early 1970s, Muslim leaders and members of the Majlis Ugama Islam Singapura (MUIS) saw the need for mosques to be built in HDB new towns to serve the Muslim residents. The task of raising the necessary funds to meet the land and construction costs proved to be most difficult. The first mosque planned at Toa Payoh New Town could not get off the ground because the funds collected through donations and fund-raising projects were insufficient to meet the project cost. To solve this problem, Government gave its approval for Muslims in Singapore to contribute to the Mosque Building Fund of MUIS through the Central Provident Fund Board. In September, 1975, the Administration of Muslim Low Act was amended accordingly for the implementation of this Scheme. The objective was to ensure a steady source of funds for the building of mosques in HDB Now Towns in Singapore. As a Muslim Singaporean, Sir, I am very proud to state that although contributions to the Mosque Building Fund are voluntary, it has received the whole-hearted support of our Muslim employees. Their contributions have enabled MUIS to build seven multifunctional mosques in HDB New Towns. Eight more are at various stages of planning. Mr Deputy Speaker, Sir, the Administration of Muslim Law Act is being amended once again to extend the purpose and application of the Mosque Building Fund to the payment of contributions to Yayasan MENDAKI (Council on Education of Muslim Children). However, before I proceed any further, Sir, allow me to give a brief background on Yayasan MENDAKI - how and why it was formed and what it has been doing so far. As we all know, Sir, the Report of the 1980 Census of Population revealed that the Malays were under-represented in the higher levels of education. There were only 679 Malays in Singapore with university qualifications in that year, representing 0.21% of all Malays aged five years and above compared to 31,286 Chinese (1.8%) and 3,518 Indians (2.4%). Similarly, the number of Malays with technical qualifications in 1980 was 1,046 (0.3%) compared to 24,227 Chinese (1.4%) and 1,234 Indians (0.9%). Malay pupils also do not perform as well as pupils of other races in the PSLE, GCE 'O' and GCE 'A' level examinations. Given the practical importance of examination success, there is, therefore, a definite need to take steps to help Muslim students Malays especially, to realize their full potential in terms of their educational attainment. It was this realization that prompted the Muslim Members of this House and leaders of 11 leading Muslim organizations in Singapore, including MUIS, to form MENDAKI in 1981 with the aim of providing an educational uplift to Muslim children. It is appreciated, Sir, that it takes a long, comprehensive and sustained effort to encourage students, even before Primary 1 and throughout their school career, to achieve their full potential. However, it was felt that, as a first step in the drive to improve the educational attainment of Muslims, MENDAKI should organize a tuition scheme for students in the "terminal" levels. Special tuition classes have therefore been organized for students sitting for the PSLE, GCE 'O' and GCE 'A' level examinations. I am pleased to inform the House that about 3,000 students are presently attending tuition classes at MENDAKI's 13 tuition centres. MENDAKI also realizes that to give tuition only to students of Primary 6, Secondary 4 and JC II/pre U III to got them to pass their respective end-of-year-examinations is a short-term expedient which may at the most produce better results only at the margin. Plans are therefore afoot to extend the tuition scheme to students in Primary 5, Secondary 3 and JC I/Pre U II. As a start, tuition classes for Secondary 3 students will start next year. Classes for Primary 5 students will commence in 1986. In addition to its tuition scheme MENDAKI, in consonance with its objective of uplifting the educational performance of Muslim students, has been awarding bursaries to postgraduate students and study loans to students in tertiary education since 1983. Based on 1984 estimates, MENDAKI needs about $300,000 a year to run its tuition classes for PSLE, GCE 'O' and 'A level students, for its postgraduate bursaries and study loans, and to meet administrative costs. More, of course, will be needed if MENDAKI were to mount tuition classes for students at the other levels, organize other related educational projects and meet the higher administrative costs when it moves to its new Headquarters at the former Siglap lndah Primary School next year. As of now, MENDAKI does not have a steady source of income. Fortunately, both Muslims and non-Muslims in Singapore have so far responded positively to appeals for donations to MENDAKI. However, it is difficult to predict the level of public enthusiasm and financial support as this fluctuates with changing economic situations. In the long run, MENDAKI must have its own source of income if it is to continue serving the educational needs of Muslims in Singapore. Mr Deputy Speaker, Sir, the Muslim leaders and members of the MENDAKI Council, and Muslims in Singapore in general, were therefore pleased when Government gave its approval for Muslim employees to contribute 50 cents each month to MENDAKI through the CPF Board. The amendment to the Administration of Muslim Law Act now before the House is to enable the proposal to be put into effect. The Mosque Building Fund will be redesignated as the Mosque Building and Mendaki Fund. The minimum contributions payable to the Fund will be $1 for the purpose of building mosques and 50 cents for Mendaki. I would like to reiterate that money collected for MENDAKI through this fund will be used solely for the purposes of implementing MENDAKI's tuition and other related educational projects, and to meet administrative overheads. It will not be administered by MUIS. MUIS, on receipt of all contributions to the Mosque Building and Mendaki Fund from the CPF Board each month, will pay to MENDAKI, as soon as practicable, the net amount of the contributions received for the purpose of MENDAKI after taking into account the appropriate expenses referred to in subsection (1) (c) of clause 3 of the Bill. Sir, it is my sincere appeal to all Muslim employees that they will continue to give the same amount as they are giving now for mosque building, and, in addition, contribute another 50 cents for MENDAKI. If a Muslim employee feels that he can afford to give more to MENDAKI, I would urge him to do so by completing an authorization form obtainable at the office of MUIS at Empress Place and presenting it to his employer so that the appropriate deduction from his salary can be made by the employer. I would like to reiterate that contributions to the Mosque Building and Mendaki Fund are entirely voluntary. Any Muslim employee who does not wish to contribute for mosque building or MENDAKI or both may go to the office of MUIS to exercise his option and obtain a Certificate of Option which he should present to his employer instructing the latter not to pay contribution to the Fund on his behalf during any period not exceeding 12 months. However, just as Muslims have given their whole-hearted support to the Mosque Building Fund since 1975, 1 hope that they will be equally supportive of the Mosque Building and Mendaki Fund. For all of us know that contributions to MENDAKI will benefit Muslim children in Singapore. It is their education that we will be investing in. Finally, Sir, I would like to allay the fears of some Muslim contributors to the CPF who were wrongly informed by a newspaper that part of their savings in the CPF would be channelled to MENDAKI. This is not correct. The savings in the account of the CPF contributor cannot be withdrawn for any purposes other than those prescribed by the CPF Act and Regulations. No part of his. savings in the CPF can therefore be channelled to MENDAKI. Mr Deputy Speaker, Sir, I beg to move. Question proposed.

( In Malay): Mr Deputy Speaker, Sir, I would like to thank the Government for giving its strong support and encouragement to Mendaki. With the passage of this Bill, Mendaki will be able to secure a steady flow of income to finance its various programmes. Sir, Mendaki has the formidable and enormous task to raise the education level of Muslims in all fields and at all levels of education. With better education and the upgrading of their knowledge and skill levels, Muslims in Singapore will be able to meet the challenges of new technology more confidently. With a regular source of income, Mendaki must quickly develop a strong administrative infrastructure with staff who are highly capable and who can plan and implement programmes which can effectively raise the educational level of the Muslims. Mendaki will only be able to achieve marginal success when its programmes are planned and carried out on a piecemeal basis by volunteers who can only offer their services part-time. Sir, I would like to take this opportunity to stress that the Muslim parents will have a crucial role to play to help Mendaki fulfil its mission. Muslim parents must be determined to see that their children take full advantage of the educational opportunities which Mendaki can help make available. They have the responsibility to make sure that in their homes, they will not only provide strong encouragement but also the right condition for -their children to study. In other words, they should have a very keen interest in their children's studies and should spare no effort to ensure that their children can be developed to their fullest potential in their education. To provide our children with the opportunities to acquire knowledge and skills is to provide them with an abundance of opportunities to enjoy a better quality of life. The development of Mendaki has demonstrated unequivocally that the Muslims in Singapore are self-reliant. We are indeed thankful for the generous help and support given by the Government and the other communities in Singapore to Mendaki. We realize that the responsibility to ensure that Mendaki will be able to suc- cessfully attain its objectives must fall squarely on the Muslim community itself. With all of us, the leaders of the various Muslim organizations in Mendaki, parents, students and other members of the Muslim community continuing to work together in a positive and confident way, I am sure that we can attain our objectives. We must show that we have the courage, determination, perseverance and stamina to try and try again until we succeed. By not giving up, we will earn self-respect and dignity. This effort to raise the educational standards of Muslims in Singapore will benefit everyone. In a country without any natural resources, it is important that we develop our human resources to their maximum potential so that they can increase their contribution to Singapore's development. Sir, I support the Bill. 6.03 pm

Mr Deputy Speaker, Sir, I rise to join my colleague, the Member for Geylang Serai, to support this Bill. With the introduction of this Bill, once again it shows that our Government is farsighted and looks at problem areas in their essence and eliminate them by nipping them in the bud. The objective of the Foundation for Education of Muslim Children, better known as Yayasan Mendaki, is to raise the level of achievement in the academic field of Malay/Muslim children in the context of a plural society in Singapore. This is not a sectoral objective but a national one and I am glad that the Government has lent its support by allowing the CPF mechanism to be used to collect initially 50cts per Muslim contributor to alleviate a major problem of funding Mendaki's programmes. With this, Mendaki can now concentrate on achieving its aim. I am confident that the objective of raising the level of achievement in the academic field of Malay/Muslim children is well on its way. Much thought and action have already been instituted in this direction. Now, with the support of the Government through the CPF contributions, it needs only to maintain the momentum and to monitor the control loop of these systems which will ensure the achievement of the desired objective. Again, in this instance, the Muslim community must note with pride that whilst the Government assists them to achieve, it will not achieve for them, as in the case of the Mosque Building Fund where many new and bigger mosques have been built, much for the benefit of the Muslim Singaporeans.This concept of self-reliance has been tested and will be put again to the test in this Bill. I feel my confidence in the Muslim community woUld be well placed and they would rise to the challenge and stand up for the future of Singapore by contributing even more than the 50cts, if allowed to do so later. All said and done, I am, however, slightly concerned that while the input to this Mendaki project is assured, the output needs to be carefully monitored. Monitoring needs people. Good results would come from good monitoring by good people. Therefore, it is important if we want to achieve this long-term objective, much to the benefit of the nation, a strong and efficient infrastructure must be instituted for Mendaki. I could not emphasize more than to say that it must be done as quickly as possible and I would say that today would not be early enough. With full-time staff, Mendaki would then be able to look into the future because that is what that matters. Allow me to explain. Success is like a coin with two sides. On one side is the attainment or achievement of knowledge. And on the other side is the application of the knowledge gained, either in the public or private sector, in industries, commerce or even Government administration. This application of the knowledge, especially if it is for the common good of the nation, is equally, if not more important. As I mentioned, the achievement of academic knowledge of the Malays and Muslim children is on an even keel and the realization of this objective is just a matter of time. This is because of the positive and concerted efforts by Mendaki as well as related organizations. However, I would like to ring a note of caution that we should now, with the current funding convenience, have the necessary infrastructure, take the time and make the effort to think how we are going to complete the picture on the other side of the "success coin". Of course, when I say "think", it is understood that we should also act - quickly and decisively. It is never too early to plan for the future. It would be, however, a most unfortunate scenario if we have produced the graduates and skilled people through the efforts of Mendaki and we could not make optimum use of the acquired education and skills. I am sure this problem can and will have a solution. Now is the time for Mendaki to sit down and concentrate on this potential problem area. If the same fervour and enthusiasm that gave birth to Mendaki could be recreated, channelled and focused on this area, with the positive assistance from the Government as well as an established infrastructure, this problem would certainly be overcome. Sir, if it is not done, it would be a sad day for not only the Muslim community in Singapore but also Singapore itself. However, with our current leadership and our ability to identify, mobilize and monitor to ensure that the right people are in the right jobs, this would not happen and I look forward to 10-12 years in the future when Mendaki's objective would be realized. Sir, I support the Bill.

( In Malay): Mr Deputy Speaker, Sir, I support the Amendment Bill moved by the Hon. Minister for Social Affairs. I wish to congratulate the Government for giving its full support to Mendaki. The Hon. Prime Minister, at the inauguration of Mendaki's Congress held at the Singapore Conference Hall on 28th May 1982, said: 'It is in the interest of all if the Singapore Malays possess better education and qualifications and can make meaningful contributions towards national development.' Sir, since Mendaki was established in 1981, various endeavours had been carried out to raise funds in order to pay for the cost of projects and activities launched. Also, several surveys had been carried out to expand the sources of finance so that money would not be a stumbling block for the Muslim community in its efforts to achieve higher education. The support and encouragement received from the Muslim community as well as from the non-Muslim community is encouraging. However, the contributions received so far are not permanent in nature and unstable, as has been explained by the Hon. Minister earlier. The introduction of this Amendment Bill is like a windfall which affords an opportunity for the Muslim community to mobilize their resources and make their contributions to Mendaki in a permanent manner. The enthusiasm manifested by the Muslim community to be self-reliant and work together through their contributions towards the Mosque Building Fund has been proven by the erection of mosques in the various housing estates. I am confident that with the introduction of this Amendment Bill, the Muslim community can once again demonstrate their positive attitude by continuing to contribute to Mendaki. I wish to support the views expressed earlier by the Member for Geylang Serai that Mendaki should take measures to strengthen its infrastructure in order to manage its financial administration, programme research and the implementation of its activities, both short-term and long-term, professionally, and not be dependent upon volunteers whose services are perhaps constrained by time and energy. Another matter which should be given attention is how Mendaki can bring home the message of trust to the whole community, especially to the less educated parents, concerning the role they should play to educate their children. The raising of the standard and quality of Muslim children's education cannot be achieved so long as the Muslim community, particularly parents, relatives and students themselves, fail to practise the characteristics of life that extol knowledge of learning and, at the same time, be self-reliant to achieve our laudable objectives. Finally, I seek further clarification from the Hon. Minister concerning the facilities at Siglap Indah Primary School which will become the headquarters of Mendaki. Also, when can the school be used as Mendaki's headquarters? Mr Deputy Speaker, Sir, I support the Bill.

( In Malay): Mr Deputy Speaker, Sir, it is not my intention to cover the points that have been raised by my colleagues. However, allow me to express my views in support of the Amendment Bill under discussion. Since the enforcement of the Administration of Muslim Law Act on 1st July 1968, the Muslim community of Singapore has undergone improvements under the guidance of and through the continued and unstinting efforts put in by the Majlis Ugama Islam for the benefit of every member of the Muslim community in the field of religion, education and also welfare. Problems faced by the Muslims of Singapore, individually or organizationally, had been channelled to MUIS for its consideration and assistance accordingly. Under the Administration of Muslim Law Act, MUIS has successfully managed to handle the affairs of the Muslim community. On 1st October 1975, an amendment to the Administration of Muslim Law Act was passed empowering the Majlis Ugama Islam to administer the Mosque Building Fund. Muslim employees extended their overwhelming support and of their own volition agreed that deductions could be made from their salaries, according to their means, towards the contributions for the erection of new mosques in housing estates throughout Singapore. Efforts in this direction are continuing and will continue and hopefully every housing estate will have its own mosque in order to particularly meet the needs of the Muslim community. The Administration of Muslim Law Act and the amendments thereto have brought in its train praiseworthy consequences in the development of the Muslim community. We are now discussing yet another amendment to the Administration of Muslim Law Act which I greatly wel- come because of its continued good effects on the development of the Muslim community in Singapore. This amendment will enable Muslim employees to contribute to Yayasan MENDAKI through salary deductions on a monthly basis. My faith in this amendment is based on my confidence that continued progress of the Muslim community in a multi-racial, multi-religious and multi-lingual country like Singapore which upholds meritocracy can only succeed because the Administration of the Muslim Law Act and amendments thereto can bring forth the characteristics of society that are essential in the process of nation building. One of the principles of nation-building is the fact that a society can progress only if every member of that society helps himself and helps ons another. MENDAKI was set up for the purpose of uplifting the level of progress of Muslim children. This amendment will enable every member of the Muslim community to participate on the basis of self-reliance, so that the objectives of MENDAKI can be realized. This indirect involvement will unite the Muslim community of Singapore because they can pool their financial resources, manifest their spirit of togetherness and, most important of all, demonstrate their attitude towards education which cannot be denied as being the key to the attainment of social progress in the years ahead. Besides unity, the spirit of self-reliance and gotong-royong can be enhanced. We can inculcate the spirit of sactifice and thrift in our community. There are many bendits to be derived directly as a result of the stability and size of MENDAKI's finances, ie our common objectives and aims can be achieved. I would like to take this opponunity to express my appreciation, as a member of the Muslim or Malay community, to the Government of Singapore for its support during these 25 years towards the betterment of the Muslim community in Singapore. With the Administration of Muslim Law Act and its successes, the Government has made meritorious contributions for the betterment of the Muslim community of Singapore which will continue to make progress, strongly upholding the principles of Islam, united with its own identity. I am sure the Muslim community here will be loyal subjects of a multi-racial, multi-lingual and multi-religious Singapore.

Mr Deputy Speaker, Sir, I must thank the hon. Members for Geylang Serai, Telok Blangah, Pasir Panjang and Kaki Bukit for supporting the amendment to the Administration of Muslim Law Act now before the House. On the suggestion of the hon. Members for Geylang Serai, Telok Blangah and Pasir Panjang that MENDAKI must quickly develop a strong administrative infrastructure with good staff who are capable and who can plan and implement programmes which can effectively raise the educational level of Muslims, hon. Members may be pleased to know that MENDAKI is actively considering this. I fully agree with them that MENDAKI will only be able to achieve marginal success when its programmes are planned and carried out on a piece-meal basis by volunteers. The Member for Telok Blangah has expressed concern that having produced the graduates, we could not make optimum use of the acquired education and skills. Here, Sir, I hope that the term "graduates" used by the Member for Telok Blangah does not only refer to University graduates but also graduates from the Polytechnics, from the Vocational Institutes of VITB; in fact, graduates from all levels of education. Sir, I think the Member's fear is real and I agree with him that MENDAKI needs to sit down and address itself to this potential problem area. However, I am confident that with positive assistance from the Government and the sincerity of the other ethnic groups in Singapore, this problem, hopefully, would not arise. The Member for Pasir Panjang would like to know of the facilities available at the new MENDAKI headquarters when we take over the Siglap Indah Primary School sometime next year. Among the facilities to be provided are a conference room, committee rooms, computer room, office for MENDAKI Secretariat, director's office and library. Renovations to the Siglap Indah Primary School are scheduled for completion in May 1985.

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. - (Dr Ahmad Mattar). Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 6.25 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Bill is essentially a technical enabling legislation to provide the legal framework for: (a) the Medisave Scheme; (b) extension of the Home Protection Insurance Scheme to HUDC Phase Ill home-owners; (c) the imposition of a ceiling on the employers' contributions by statutory bodies; and (d) any Cash Grant Schemes. Sir, the details of the amendments are in the Explanatory Statement and I shall not repeat them here. I shall merely touch on the more important aspects of the Bill. As regards the Medisave Scheme, the main features of the Scheme were debated in this House and it was approved in principle by this House in August last year and came into effect on 1st April, 1984. Clauses 2, 4, 5 and 8 are to provide the legal framework for the implementation of the Medisave Scheme. They will, inter alia: (i) create Medisave accounts and provide for the transfer of balances in members' special accounts as at 1st April 1984 to their Medisave accounts. (ii) provide that a member will not be entitled to withdraw any moneys in his Medisave account when he reaches the normal age for withdrawals of his other amounts in his CPF. Provision is also made for self-employed persons who will be covered by the Medisave Scheme and all contributions paid by them will be credited into their Medisave accounts. As regards the Cash Grant Scheme, Sir, the details o,f the Scheme, which is under the charge of the Ministry of Home Affairs, have been widely publicised and it was implemented on 1st June 1984. The new section 11 B in clause 4 will empower the CPF Board to accept any cash grant made by the Government for the purpose of such Cash Grant Scheme.

Sir, on a point of order. I do not think we have a quorum in the House.

Will the Clerk please check whether we have a quorum? The Clerk: We are short of one Member. Some hon. Members entered the Chamber.

Some Members have just come in and we now have a quorum. Thank you, Mr Jeyaretnam. You may continue, Prof. Jayakumar.

Thank you, Mr Deputy Speaker, Sir. Under the Scheme, the cash grant will be credited into the Ordinary account of the member and can only be used for the purchase of an HDB flat. The section will also provide for the recovery of the cash grant from any moneys standing to the credit of the member in the Fund, if the cash grant was obtained by any false or misleading statement or document or if the member has committed a breach of any of the terms and conditions of the cash grant. As regards the limits on contributions, Sir, there is no limit on the employer's CPF contribution for the public sector, ie the civil service and statutory boards. Non-pensionable officers enjoy the employer's CPF contribution at the full rate, currently 25%, and pensionable officers at the par- tial rate, currently 15%. The pensionable officers are also eligible for benefits under the Pension Scheme. Government's intention to set appropriate ceilings was indicated one year ago. In May this year, Government announced the limit on the employer's CPF contribution for the public sector so that the superannuation benefits of the pensionable officers will not be less favourable than those of non-pensionable officers. However, as the current contracts of employment of some statutory boards stipulate that the employer's CPF contribution is without any limit, amendments are necessary to implement this decision and to remove any doubts. Hence, the effect of clause 3 of the Bill is to provide that no statutory board shall be liable to pay CPF contributions in excess of the prescribed amount. However, where, for any individual, the quantum of the employer's CPF contribution already exceeds this prescribed ceiling, the contributions payable by the employer will be frozen at this quantum. The employer will continue to pay this higher quantum for such employee. Finally, Sir, the Home Protection Insurance Scheme covers members who have purchased a house or flat from the HDB, JTC, HUDC or the Minister for Finance (Mindef Housing Scheme) with CPF moneys and who have mortgaged the property to such bodies. The amendment in clause 7 is to extend the Scheme to members who have purchased an HUDC Phase III property from the HDB with CPF moneys but have obtained a mortgage loan from an approved mortgage instead of the HDB. 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 - [Prof S. Jayakumar]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Resolved, 'That at its rising today Parliament do stand adjourned to a date to be fixed." - [Mr Teh Cheang Wan].

Mr Deputy Speaker, Sir, I beg to move. That Parliament do now adjourn. Question proposed. 6.33 pm

Mr Deputy Speaker, Sir, I have claimed this right to speak on the motion for the adjournment on the powers that have been granted to the Housing and Development Board under the Act and the manner of the exercise of those powers by the Board. Sir, in raising this question may I say that I am not in any way belinling what has been done by the Housing and Development Board under the Government in providing housing for the people. But may I perhaps in passing point out something which has been acknowledged by the Government that after 1981, particularly 31st October 1981, the construction of public housing has speeded up considerably. But I shall not, of course, claim any credit for that. I do wish to say that I am not belinling what has been done, but it is with the powers that have been granted to the Board and the exercise of these powers that I am concerned. As Members are well aware and all of us in Singapore are aware, about 60% or 70% of our population are now housed in apartments built by the Housing and Development Board. Therefore, the writ of the Housing and Development Board runs into all these families that are housed in the apartments and they, as I say, comprise about 60% to 70% of our population. Sir, was it in the last century that a philosopher wrote about the State becoming a leviathan and the citizens being helpless against the monster that has risen. We have in the Housing and Development Board, Mr Deputy Speaker, Sir, a veritable leviathan, because if you will consider the powers that have been granted to the Board under this Act, the Board has now the power to exclude people from their homes, to throw people out of their homes and the residents are helpless against the exercise of these powers by the Board. I say helpless in spite of the provision provided in the Act for an appeal to the Minister. I propose, I hope in the time that is available to me, to show that this provision is really illusory and it is very limited. Mr Deputy Speaker, Sir, may I illustrate what I am saying by a letter that was written to the papers on the 2nd of August this year, not very long ago, by the wife of an intending purchaser of a flat from the Housing and Development Board. She wrote saying that her husband had applied in July 1979 for a 5-room flat. And in completing his application form, she says he had inadvertently failed to complete a box in that application form which required the applicant to state whether he was living in a rented flat or in a purchase flat at the time he made the application. She says it was pure inadvertence. Well, that is her letter. Then in 1984 the man was told he could get the flat for which he had applied way back in 1979. But when he went to collect his keys, apparently he was told, "Oh, in 1979 you left this little box uncompleted and therefore you now have to pay a fine, equivalent to 10% of the purchase price of the new flat that we are selling to you. Not only that, you will have to wait a month before you can get the keys of the new flat." I do not know what has happened to this particular case. I have not seen any reply from the Ministry or the Housing and Development Board to this letter, So I really do not know what has happened. That is the sort of situation I am speaking of. Here is a purchaser who, according to the writer, inadvertently leaves something blank in the form and he is told that, "either you pay $8,750 immediately and in addition to that you can only get the keys a month later or the sale of the flat to you will be withdrawn and you will have to reapply and go down to the bottom of the line and wait for another five years." As she says in her letter, the husband really had no choice. That is the sort of situation in which our people find themselves under the mandate that we have given to the Housing and Development Board. Mr Deputy Speaker, Sir, if one looks through the Act and the sections in the Act which give the Board the various powers, you find that the Board can evict tenants who fall into arrears with their rent. And I am here, first of all, talking about monthly tenants, those who have not purchased their flats but are living purely as monthly tenants. I think mention was made when we were debating the Report of the Committee on the Problems of the Aged about people who are unable to pay the rents of HDB flats. What I would like to know from the Minister is: does the Board evict in every case a tenant who has fallen into arrears? Because there may well be situations where a tenant through no fault of his may be unable to pay the rent due to the Board. The simplest case is where the breadwinner in the family is taken ill and I know of one case in my own constituency where the man has had an accident, had his leg amputated, and he is out of employment, and has been out of employment for the last six months. It is in these situations where the family may find it very difficult to pay the rents. There are other situations. I could go on but I do not have the time. What I would like to know is: does the Board grant any relief in the case of tenants who are unable to pay their rents? Or does it, regardless of the consequences to the family, throw them out because they are unable to pay their rents? The Act would give the Board the power and I have myself known of cases where the Board has thrown people out because they have been unable to pay the rents. Indeed, when I asked a question in August 1982 of the persons who are debarred from applying for HDB apartments, the Minister's answer showed that persons who had been thrown out of their flats for non-payment of their rents and who did not clear these arrears would be debarred forever from applying for HDB flats again. Well, that shows a complete heartless attitude and a lack of appreciation of the difficulties that may be encountered by families. I would like to know what is the policy of the Board as regards people who are unable to pay their rents. What about those people who are on public assistance? Does the Board still require them to pay he rents due to the Board every month or are they given any relief? Moving from them to others, those whom we call owners of HDB apartments, but who are really not owners. They would appear to be pure occupiers of these flats at the pleasure of the HDB. Turning to them, one finds in the Act that the Board has powers for a variety of reasons to re-possess or to re-acquire the flats or the apartments from these owners. Mr Deputy Speaker, Sir, I can well conceive that there may be situations where the right of public housing has been abused, that the Board should re-acquire the properties. But if one looks at the instances for which power is given to the Board to re-acquire, one finds that they are for trivial reasons and which can hardly be called an abuse of public housing. For example, Mr Deputy Speaker, you find in the Act a power given to the Board to re-acquire the property if the owner has someone staying in his house, not as a tenant, but as a guest for a few days or for a month, because the Act says that if a lessee has an unauthorized occupier, the Board may exercise the powers. Is it really necessary that we should control the lives of all these people to this extent? Do they have no rights? Should they be at the mercy of the Housing and Development Board? Mr Deputy Speaker, Sir, I think it is time we realized that even though these people are living in houses provided by public funds, they have some rights. We should not treat them merely as recipients of charity. After all, they are paying for these apartments and they are not cheap, whatever the Minister may say about it. I cannot see any reason why they should be treated as though they are recipients of charity and that the tenure of their occupation should be dependent completely on the decision of the Board which may be arbitrary. Even on the death of the tenant or the lessee, the apartment may not devolve upon the next-of-kin or the personal representative because you find in the Act that the Board may refuse to grant permission. And if the Board r&uses to grant permission for the transmission on the death of the tenant or the lessee, then the property vests in the Board. To add insult to injury, the Act says that where the Board exercises these powers, the compensation to be paid shall be determined by the Board and that the compensation pays no regard whatsoever to the market value of the apartment at the time that the Board re-acquires the apartment. I said there was a safeguard provided in the Act which was illusory and this is the right of appeal to the Minister. The tenant or the lessee is not given the evidence upon which the Board exercises these powers. He does not know how the Board got the evidence. He has got no power of challenging this evidence. He is merely told something and then he is asked to appeal against it. It is a hopeless situation for the tenant or the lessee. I was talking to a Danish journalist sometime ago and he was surprised that the lessees have no representation on our Housing and Development Board. He said that in Denmark where there is such a board, the purchasers of flats are represented on the board. He thought that it was strange that they do not have representation whatsoever on the Housing and Development Board. I think it is high time we considered protecting our lessees. I call them lessees because they are not really owners of these flats. They do not have a freehold interest but only a term of years. I think it is high time that we set up a tribunal. This afternoon we proposed setting up a small claims tribunal to protect consumers. What about a tribunal?

Order. Mr Jeyaretnam, perhaps I should ask. Are you advocating a change in the law, a change in the legislation?

I am saying that it is time we gave them some rights by allowing them a proper appeal to a tribunal.

Would you say that it has to be done by means of a change in the legislation?

Well, it may have to be, yes.

If the answer is yes, I am afraid it is out of order. The Adjournment motion is not the time to talk of a change in the legislation. I would let you go on speaking so long as you are not advocating a change in the legislation.

All right, Mr Deputy Speaker, Sir.

I would like you to go on talking but I have got to let you know the rule.

The suggestion may involve, but I am not proposing a change.

You are not.

It may involve, and I am asking the Minister to consider this.

Yes, all right.

I am saying that the Ministry should consider whether it is right that the Housing and Development Board should be, as it were, the prosecutor, the judge and the executioner in matters which, as I said, concern the lives of about 60-70% of our citizens. It is all wrong. I think it is only right that where the Board considers that it has a case for acquiring the property or turning the tenant out because he has abused the provision of public housing, that it should make an application to an independent body and that body should then determine whether there has been an abuse by the lessee of the provision of public housing. It is important that our citizens should be encouraged to feel that they are not at the mercy of the Government or a statutory board.

I am sorry to interrupt, Mr Jeyaretnam. You have one minute left.

Thank you. This is no way of encouraging them to feel that they have a stake in Singapore because we keep telling our citizens that they have a stake. But what stake do they have in these apartments which are ostensibly sold to them and of which ostensibly they are owners? They stand in peril of losing them at any time if the Board thinks they have in any way abused the provisions or the terms and conditions under which the apartments have been leased to them. Thank you, Sir.

Mr Deputy Speaker, Sir, the hon. Member has mentioned many times in this House that as a result of the by-election which he won in Anson in October 1981, the HDB building programme has increased considerably - a sort of magical power which the Member has. If indeed the Member has this sort of magical power, I think he will be greatly sought after all over the world, by all the countries which have a serious housing shortage, ie the whole of Africa and Latin America. If the hon. Member has that sort of power, I think there will be a long queue of Ambassadors and Ministers from various countries at his door to invite him to their countries so that their housing programme can be substantially increased and their housing problem can be solved. I would like to tell the Member for Anson that it is not because of him. It is because of the organizational ability of the PAP Government and even then, there is a big number of applications for houses as a result of improvement in income, that we are able to meet the demand. The Prime Minister mentioned recently that more than half of the applicants for public housing are upgrading themselves. Tenants become home-owners. Those living in three-room flats are asking for four-room flats. Those living in four-room flats are asking for five-room flats. Why are they able to do so? Because their incomes have greatly improved and they are able to get better housing. Therefore, there is a big influx of applicants. And in spite of a building boom, in spite of a shortage of building materials and in spite of a shortage of construction workers, the PAP Government is able to organize the housing programme to meet the demands of these people. The number of applicants on the waiting list has come down. People are now getting their flats very quickly. And Members of Parliament know that during their meet-the-people sessions the number of people requesting for allocation of flats has dropped substantially. The myth that the hon. Member for Anson tries to create that he has got this magical power is, in fact, totally untrue because I have not seen any foreign ambassador or any minister from other countries queuing up in his office to request him to go to their countries to solve their housing problem. On the point raised by the Member whether the HDB will throw out tenants who are in arrears of rent, the answer is no. HDB will not throw anybody out because of their arrears in rent. HDB will investigate into the case to see in what way HDB can assist them, ie whether their circumstances justify these rental arrears. And HDB usually tries to help them in any way it can. For example, if the tenants are eligible for social welfare assistance, then HDB will refer them to the Social Welfare Department for assistance. For those who are in arrears of rent and who ask that they pay the arrears by instalment because they cannot settle their arrears immediately, HDB allows them to pay their arrears by instalment. As regards the case which appeared in the newspapers that somebody has forgotten to fill a column in the application form and he has been asked to pay a very big sum of money, I do not know what exactly are the details of this particular case. But I can say that if anybody forgets to fill any part of his application form, he will not be penalized.

It is in the newspapers.

Yes, it is in the newspapers but I said I do not know the details of the case. The First Deputy Prime Minister mentioned earlier that you should not believe everything that is published in the newspapers. He said this to the Member for Whampoa just now. I would like to repeat to the Member for Anson that he should not believe everything that is published in the newspapers.

Why didn't you reply to this letter?

The HDB will give a reply. I would like to mention that at present, not 60-70%, which the Member has mentioned, but nearly 80% of Singaporeans are living in HDB flats. In the broader national context, the HDB has to look after the interests of the majority of our citizens and therefore it is essential for HDB to institute rules and regulations to govern these flats, to prevent people from abusing the flats. For example, like using the flat as a gambling den, drug distribution centre or as a brothel or, worse still, as a centre for housing illegal immigrants. So it is essential that HDB must have rules and regulations to prevent the abuse of the flats. The HDB will not acquire any flat for no reason whatsoever if the people have not been abusing the flat. The Member talks about home-owners being at the mercy of HDB. This is entirely wrong. In fact, today, the lessees and tenants of HDB flats are strongly represented by their RCs, CCCs and by their Members of Parliament. In almost every case, whenever there is any compulsory acquisition of flats, the PAP Members of Parliament have appealed to the HDB, first, at the official level, to the Chairman of HDB. They have appealed to my Senior Parliamentary Secretary and they have appealed to me, fighting very strongly. I would only turn down the case when there is overwhelming evidence that the person has misused his flat or has been subletting his flat without authorization. I would like to repeat that our lessees and tenants have the strongest protection under the PAP Members of Parliament. Both the lessees and tenants, in fact, are not helpless, as the Member for Anson is trying to present. Let me just mention that they can appeal to the Housing Board and they can appeal to the Minister. And any person who is not satisfied and who feels that he is aggrieved, he has recourse to the courts. We are ruled by law in Singapore. He can also appeal all the way to the Court of Appeal or even to the Privy Council, if he feels that he is aggrieved.

On a point of clarification, Sir. Is the Minister not aware that the Act says that the Minister's decision shall be final?

Yes, I am aware of that. Still, if people feel aggrieved that the HDB has acted against the law, there is redress for the people. At this stage, I would like to say that because of the national interest and that 80% of our population are living in HDB estates, it is essential that the Government and HDB continue to study the needs of residents in this ever-changing social environment. Rules and regulations will continue to be made and implemented as a strong deterrent to those who act against the interests of the HDB flat-dwellers because they represent the majority. Those people who misuse their flats represent only a minority. We must prevent people from abusing the privilege of subsidized public housing.

For the record, I feel I should perhaps inform hon. Members that any grievance for which the sole remedy must be by way of legislation cannot be discussed and debated on a Motion for Adjournment. In such a case the hon. Member would have to resort to other means. I would like this to be in the Hansard.

Question put, and agreed to. Resolved, That Parliament do now adjourn. Adjourned accordingly at Three Minutes past Seven o'clock p.m. to a date to be fixed.

asked the Minister for Finance and Minister for Trade and Industry the number of companies that were liquidated each quarter from the third quarter of 1983 to the second quarter of 1984 in (i) the manufacturing industry; (ii) the trade industry; (iii) the transport and communications sector; (iv) the financial and business services; (v) the construction sector; and (vi) other services.

The number of companies that were liquidated each quarter from the third quarter of 1983 to the second quarter of 1984 is as follows: _______________________________________________________________ 1983 1984 Total Sector 3Q 4Q 1Q 2Q _______________________________________________________________ TOTAL 63 61 75 44 243 Manufacturing 15 7 11 6 39 Trade 26 26 37 19 108 Transport and Communications 10 8 6 7 31 Financial and Business Services 4 6 5 5 20 Construction 3 3 4 2 12 Others 5 11 12 5 33 _______________________________________________________________

asked the Minister for Labour and Second Minister for Law and Home Affairs the number of work permits granted/renewed and the number cancelled each quarter from the third quarter of 1983 to the second quarter of 1984 in (i) the manufacturing industry; (ii) the trade industry; (iii) the transport and communications sector; (iv) the financial and business services; (v) the construction industry; and (vi) other services.

The figures sought by the Member are not available in the breakdown required.