( In Mandarin): Mr Speaker, Sir, the Budget announced by the Minister for Finance other than the question of an increase in tax for taxis has generally met with good response. Here, I would like to touch on two matters. One is about the contribution to SDF, now reduced from 4% to 2%. In the present circumstances when there have been some economic slow-down and frequent retrenchments the business circle generally feel that the reduction is very welcome. The idea of SDF arose in the late 1970s and early 1980s when we reached a certain stage in our economic development which made it necessary for us to restructure our economy. To do this we need to upgrade the skills of our workers. At the same time we had to raise the wages of the workers to the extent of compelling employers to accelerate the process of mechanization, automation and to promote high technology industries. To implement this corrective wage policy the Skills Development Fund was then set up and a 4% levy was then imposed on employers. Although the Government could train about 20,000-odd workers in one year, there are 1.2 million workers in the labour market who need training. About 300,000 of them have only below Primary 6 education. When we talk of training, some employers may laugh because of the current spate of retrenchments. On the other hand at other times when the workers are busy, employers will say that they do not have the time to be retrained. However, in my view we should take the opportunity now that we have a slower economic growth to retrain our workers. In the long run, the training and retraining of workers will be beneficial to companies as they will then be better able to manage any new technology introduced by their companies. Thus without a skilled workforce, a company certainly cannot mechanise or automate smoothly. Why should we urge the companies to train their workers? Because workers are closely connected with the company in which they work. Therefore, it is only through the company that workers may be trained quickly and conveniently. Most companies or manufacturers know their businesses and market conditions well, but unfortunately often forget that it is equally important to train their workers for their own viability. An example is the BEST courses that we are promoting at present. Apart from the PAP branches and the NTUC, the BEST Courses Council has also encouraged more than 1,000 corporate employers to set up such courses. However, only about 20 over percent of companies responded to the call. Therefore, the best way is to make companies pay to the SDF so that the cost of training expenses can then be reimbursed from such fund. The small and medium companies may find it less beneficial to set up such training courses for their employees. However, collectively with assistance from the Fund they can provide training for their employees. I understand that the SDF has planned for more than 200 courses, including courses on cookery and fashion designing. People may say that the SDF has already collected a lot of money. However, it has to be pointed out that the contributions for 1984 has totally been committed to the various training schemes for 1984 and 1985. In other words, the funds which are available at present are accumulations from 1980, 1981 and 1982 because during those periods there were not many comprehensive training schemes that were formulated or proposed. Therefore, the money has not been spent. In order to move towards hightechnology development, the SDF should continue to increase its fund. Another important point is that in order to minimise retrenchments we should look into ways of increasing productivity and raising the quality of our products to increase their competitiveness in international markets. We should put greater efforts into training our workers so that we could elicit the best from each individual. Without proper training workers may not be able to meet the challenge of high-tech development and this may be one of the contributing factors for retrenchment. This problem is greater for older worker. Therefore, when the economy improves I am of the view that we ought to restore the SDF contribution to 4%. In a period of economic downturn we understand the Government's rationale to help companies to overcome their present difficulties. But in order to meet future challenges in high-tech industrial development, we should restore the SDF levy to 4% in order to ensure that training schemes will continue. Now I would like to touch upon the question of shortage of labour. Talking about this topic, it reminds me of the fact that there are 300,000-odd women who have not come out to work. Even worse, some 100,000 working women drop out of the workforce every year because of marriage or childbirth. Manpower is Singapore's only resource. Today there are equal opportunities for education and work for both men and women. To maintain a healthy economy those who are able must participate actively in it and it would indeed be a loss for Singapore if this tremendous potential in its womenfolk are not tapped. Only through economic progress and development can we realise the objective of raising the living standard of our people, Personally, it is thus my view that every human potential must be utilised and developed to ensure Singapore's continued economic progress and development. From a social view point, to ensure social stability we should work towards having our own local workforce comprising entirely of Singaporean workers. That I believe is the aim of the government and this objective could somewhat be met by encouraging the 300,000-odd women who have not come out to work into the labour market. However at present of greater importance is how to retain the women who are already in the workforce. Before I suggest any solutions or proposals however, I would like to say that before trying to solve a problem we ought to be clear in our minds what our objectives are. We should then have the right perceptions and have confidence in achieving these objectives. Why did I say that we ought to have the right perceptions? This is because there have been many views expressed on the pros and cons of women working outside their homes. There is of course some relevance in the view that the increasing rates of divorce and juvenile delinquency could be partly attributed to women working outside their homes. This is because with economic independence women may be less tolerant in their marriages and this may lead to higher rates of divorce. But the problem of divorce in a society actually related to many factors. One's perception towards this issue is usually moulded by the prevalent social norms, family values and cultural background, etc. For instance, in our conservative society, divorce is normally regarded as an unpleasant and even shameful thing and quite often because of this family members may also intervene to help salvage a marriage. But to the West, it is a personal matter, that is entirely a personal choice. Maybe the more divorces you have gone through, you will, perhaps, become the more popular. Talking about women coming out to work, in Japan as in the United States 50% of them are in the workforce. In spite of this, the divorce rate in Japan is five times lower than that in the United States and juvenile delinquency cases are also fewer than in the US. Compared with the other ASEAN countries, the female participation rate in Singapore is higher, so also is the divorce rate. As regards social and crime problems, I think you all know the answer. Finally, let me say that whatever measures we take to encourage women to come out to work, I still would stress on personal choice. I am not saying that every woman must come out to work otherwise she would be at fault. What I am saying is that it depends on the individual. But I feel that the Government and the social organizations have the responsibility and duty to take every possible measure to enable married women to make a better choice between looking after the family and coming out to work or even better to be able to take care of both so that all the people concerned will benefit. On the question of working mothers in relation to child development, some say that when the mother comes out to work, it will affect the development of her children. But we have real examples as in the case just after the Second World War, when many married women and widows came out to work yet their children were brought up quite well or satisfactorily. Of course this may not necessarily be so in every case and is certainly debatable. But the point to note here is that there are two viewpoints on the matter. The more optimistic one stresses on quality parent-hood with working parents still able to provide good care for their children. Social organizations and the Government have an important role to play here. We must promote various measures to take care of the situation. Let me just mention some measures that have been taken in Singapore to encourage women to come out to work and have a better social standing. The Government has contributed much in the past 25 years during which period many changes and reformations were made. First of all, in 1961 Parliament passed the Women's Charter and the next important reformation was when the Government implemented equal pay for equal work for men and women in the Civil Service. Before that, female civil servants after marriage would be treated as temporary workers. There were also other measures such as the setting up of creches in housing estates and family planning. In 1981 the Government implemented a half day working scheme for women and in 1983 it allowed female civil servants to have one year's unpaid leave to look after their children. In order to help married women the Government also implemented full-day schools for children and reduced their income tax contributions. Encouragement has also been given to three-tier families by HDB, and so on. You may say that since much has been done by the Government there is no need to do anything more. However, we need to review and assess the results of those measures in order to make adjustments, changes and improvements wherever necessary. I would like to add that the Government should appoint one particular department as a coordinating body to coordinate the measures carried out by the various departments, such as the Ministry of Community Development, the Ministry of Education, and others which have been dealing with the related matters under their respective portfolios. This central coordinating body will be able to coordinate and promote all the various measures. Here, I would like to suggest some improvements. In respect of the half-day working system, for instance, we could make certain adjustments to allow for flexibility in the working hours or in the working conditions of the women. On the question of setting up creches to enable women to work, although the Government has given financial assistance at the moment, there are only 37 creches in the whole of Singapore, compared with Japan, where there are 22,000 creches. In Japan, the creche accommodation ratio is as follows: For one out of 49 children under one year old, there is one creche that can accommodate him. The ratio is 1:49. One out of nine children between one and two years old can be accommodated in a creche. The ratio is 1:9. For children between three and five years old, one out of four can be accommodated in a creche. The ratio is 1:4. But in Singapore, out of 133 children between two years and six years old, the creche can accommodate only one child. The ratio is 1:133. The HDB's three-tier family method can also be improved upon. Young couples living away from old parents after having children of their own should realize the advantage of staying together with their parents. When there is a flat available nearby for sale or resale, priority should be given to such couple or aged parents to stay together. On the full-day school, it will be useful to parents and students particularly older parents. The full-day school should thus not be given up just because of failure in the first experiment. To make it attractive, we should consider the various factors like locality, transportation, teaching facilities, the contents of curricula and time-table. I would also like the Government to encourage private enterprises to respond to the Government's measure in giving married women one or two years' unpaid leave to enable them to look after their children. I hope that more systematic aid can be given to the womenfolk who intend to come out. to work, to guide them in lessening their psychological inhibition. There are certain women's organizations which are helping the womenfolk to come out to work but they lack human resource and financial assistance. Let me quote some examples from Japan for reference. The rate of female labour participation is nearly 50%, slightly higher than ours. What is to be noted is that for those between 25 and 29 years old, the participation rate is also about 50%. That is to say, 50% of the mothers also come out to work. Those between 40 and 55 years old, the participation rate is 60% whereas in Singapore only 47% and 26% respectively. In Japan, 50% of the children of working mothers are being looked after in the creches, 47% by their grandparents or relatives while in Singapore 43% of children of working women are looked after by their grandparents or relatives and about 2% are looked after by the creches. Although women in Japan are working a half-day system, according to what I have read the so called half-day working system is actually a 6-hour day. Women in Japan, quite unlike what we think, play an important role in their economy. As early as the Second World War, women had played an important role in the Japanese economy while their men were in the armed forces engaged in the war. Here in Singapore, ours is an unique society where we may need to accept and absorb Western science and technology and management skills but at the same time continue to preserve our good traditional values and culture, that is the eight good traditional virtues of loyalty, filial piety, humanism, love, courtesy, righteousness, integrity and shame-consciousness. So we need not be worried about any undesirable consequences if we want to encourage our women to come out to work. If we want to increase our national productivity and economic progress and raise the living standard of the people and reduce the gap of wealth between the rich and the poor or to help those poorer people, I feel that the best way is to give them work. So I appeal to the Government to appoint a special department to coordinate, promote and implement various measures to encourage women to come out and participate in various kinds of work in the society. 11.53 am The Minister of State for Defence and Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Sir,l would like to address my comments today to the substance of the Government's economic policy. When times are not as good as they used to be and firms are not doing well, it is common for the finger to be pointed at the Government, and criticism to be levelled at its policies and what it has been doing. The Member for Rochore yesterday made a very comprehensive critique of the policy. I shall refer to some of the things which he said for convenience, because these are arguments, lines of thought, which are common, and which we hear over and over again. He crystallized three arguments, which I would like to discuss. First, the Government should not be in the private sector. It should confine itself to public business. It should not go into entrepreneurship, into enterprise. Secondly, Government surpluses are the cause of private sector deficits. Because the Government has kept its house in order, it has been able to spend within its means, and therefore the private sector is unable to cope within its means. And thirdly, Government expenditure has drastically increased over the years. I would like to present an alternative view, because these are impOrtant issues, and therefore both sides of the argument should be heard. First of all, on the subject of Government in business. Why is this bad? Allegedly, it is bad for two reasons. (1) Bureaucrats are not entrepreneurs. They do not know how to make money. (2) Government exploits its position and squeezes out other private entrepreneurs. In other words, the bureaucrats are too clever at making money. Let us examine this. Why did the Government go into business? The Government moved into business where private capital, private enterprise and experience, were lacking, where risks were great, where the contribution to the national economy was significant. These were areas which, if the Government had not moved into, nobody would have moved into. Some examples were given yesterday of Government companies. Let me give a few more - SIA, DBS and NTUC Income. What sort of company is SIA? It is one of the best airlines in the world. It makes money. It is progressive. It is competitive. It is an airline which we are proud of, and whose benefits to us go far beyond the balance sheet and the profit and loss statement, which is very healthy, year after year, at a time when international airlines .in general, and airlines in the West in particular, have been having a very difficult time of making business. Lacking in entrepreneurship? They may be Government servants, but that does not mean they do not have brains, or initiative, or ideas. So that is SIA. DBS. It is the only bank in Singapore, even today, which makes long-term loans for industrial purposes. Other banks make commercial loans, short-term. You take it, you do business, you return the money to me. The bank is safe - which is the correct thing for a private bank to do. DBS fosters long-term industrial development of the country. It is a role which DBS has played successfully and which, if any other bank wishes to fulfil, it is most welcome to do so. And DBS also pays dividends and makes money. NTUC Income. Income has become one of the largest insurance agencies in Singapore. Why? Because it developed a brand new, vast, and important insurance market, a market of workers, of union members, of ordinary men-in-the-street, who previously did not make any precautions against ill-health, against death, against the unforeseen. NTUC Income came in and Yes, you have a need for insurance. Let us give it to you at reasonable, very competitive prices." And our economy is that much better as a result of there being SIA, DBS, Income. Have we squeezed other people out? Far from it. We wish others would come in. Perhaps the problem is that these Government companies have become so successful, that rather than attribute it to business acumen, the explanation given is that they have cut corners, and exploited the Government's position. I do not think that explanation holds water. Some investments have gone bad, of course. The Government is not infallible. The Government has never claimed to be infallible. When you are in business, you take risks. And when you take risks, you must know when to cut losses. One of the cardinal principles of this Government is that we do not throw good money after bad. If an investment which looks promising turns out in an unexpected, unfavourable way, well, that's that. It was a bad decision, we learn from it, but we do not throw good money in to rescue it. What happens to the successful investments? Once it is built up, is there a strong reason for the Government to stay on? There is no strong reason, and in fact as the Minister for Finance has stated in his Budget statement, we are planning to move out of some of these activities, as the private markets have developed, and there is more capital available to finance these activities. But I would just like to leave this thought with you: there is nothing sinful in the Government owning a profitable investment. Would you rather the Government own loss-making investments? Surely if there is a profit, it redounds to our credit, and we are proud of what we have done. So although we are moving gradually into an expanded private role in our economic development, and we hope the private entrepreneurs can move in as quickly as possible, nevertheless, we are not at all ashamed about what we have done in business. The second argument is about surpluses: Government surpluses are bad because Government surpluses are financed by private deficits. This is a most remarkable argument. I consulted the Member for Leng Kee yesterday. He said he had never heard of it before. So I really could not figure out what it means. But surpluses, so far as orthodox economists understand them, are the result of a successful, growing, prospering economy, and prudent management on the part of the Government. Why do we have surpluses? Is it because we have been raising taxes year by year? Is it because we have been spending money like water? Neither. We have, in fact, been reducing our tax rates year by year, every year, with one exception, and that is, car taxes, for good reasons of public policy, not reasons of fiscal policy. And every year the Minister for Finance has come forward, and every year the Straits Times has published, "Another Painless Budget." You can read the records. So each year the burden on the economy has been less, each year we have lived within our means, and spent the money wisely on things which we need. As a result of these surpluses, we have a strong Singapore Dollar, we have large foreign reserves, and we have a very low inflation rate. Last year, it was 2.5%. So all his talk about inflationary policies being out-of-fashion in this inflationary time, flummoxes me. I cannot figure out what it means. I tried to understand a bit more, and the argument was further elaborated into talking about deficit financing - that the Group of Seven, the most advanced industrialized countries in the world, have all gone for deficit financing. Why is it we are in surplus? Is there something wrong with that? The United States for years has been struggling helplessly with its deficit problem. They have US$200 billion short a year, and there is no way they can solve this problem. They are extremely concerned, and they are hoping to wish it away. That is effectively what Congress is doing. Would you wish that on us? Can we, as a government, spend money, put money into people's pockets, ask them to go and spend it, and that way fill up our shipyards, fill up our hotel rooms? What will happen to the money? It will be spent on consumption, it will be spent on imports. The Singapore Dollar will go down, prices will be driven up, inflation will be up. We will have the worst of all possible worlds. What is the sensible way to fill up the hotel rooms? Encourage tourism, is it not? How do you encourage tourism? Well, one way is to light up Chinatown, light up Orchard Road, and invite tourists to come. But somehow or other, yesterday morning, I remember during the Oral Questions the opposite argument was put forward, "Why are we lighting up Chinatown?" It is extremely strange. We light up Chinatown so that the tourists will come in, the hotels fill up, the retail trade moves, and everything is carried along. That is why we light up Chinatown. We talked about overheads. What overheads are you talking about? Payroll tax has gone. Skills Development Fund - you heard what the Member for Yuhua said - that is for training, for upgrading, for improving our skills, for raising our productivity. That is what SDF is about. Cut it down? In order to stagnate? What is an overhead? CPF - is that an overhead? Is that something which the Government takes away from the workers? Or is it something which is part of the salary, which belongs to the workers, something which the workers use to spend for Medisave, for a house, and for old age? CPF is part of the worker's earnings, and we are proud that we are able to have such a large amount of savings put aside for a house to live in and for old age. Very few countries can do this. Our payroll was supposed to have doubled in five years. (I do not know whether this is exactly so, I have not checked the numbers.) But if so, I think we should congratulate ourselves. What does it mean to have a payroll which doubles in five years? It means our high wage policy has worked. Workers' incomes have gone up. Inflation has stayed down, and that means real purchasing power has increased, We deliberately raised wages because the alternative is to go for low wages, low skills, and low standards of living - misery. Is that desirable? Why has payroll gone up? Payroll has gone up because productivity has gone up, because workers are producing more, because it is more worthwhile for employers to employ workers. If it were not, workers would be unemployed. And despite everything which the Member for Anson and others say, there are no workers unemployed in significant numbers. The third reason why payroll has doubled in five years is that this is the way to share wealth. This is the solution to the problem of the 10-15% of the population which we have been talking about. To have the whole economy booming, and to have all share in the income. Do you want to have a low-wage policy? Do you want to have a payroll that remains stagnant in five years? I do not think we would have Opposition Members criticizing us if the payroll remained stagnant for five years. I think we would be the Opposition, if payroll remains stagnant in five years. That is what we have done. So the Government surpluses, financing private deficits, or private deficits financing Government surpluses - I do not know, but perhaps I shall have to seek some more advice after this from the Member for Whampoa. But I really cannot figure that one out. Least of all can I make sense of that, when we go on to the next argument that Government expenditure is up, and that is bad. I would have thought, if you said Government surpluses are bad, then Government expenditure should be good. If I am spending money, I am trying to get rid of the surplus. On the contrary, Government expenditure was also criticized. What are we talking about? From 1979 until 1985, our GDP has expanded in real terms by about 70%, that means nearly double. And our requirements, our standards, our expectations, have correspondingly doubled. What does the Government spend money on? It spends money on defence; it spends money on health; it spends money on education. It spends money on investment in people, it spends money on providing the infrastructure for the wealth to be created. We are proud of what we spent. What have .we spent which we think we have wasted money on? There is none. We have spent money on universities, on investing in facilities for our people, on hospitals for our people, on necessary equipment for our defence forces. If we disagree that Government expenditure should go up in this fashion, then I think a supplementary question would be in order. What would you propose the Government not spend the money on? Tell us. Do you prefer to give up NUS? Or would you rather prefer to give up NTI? Or perhaps, if neither of the above, you would like to sacrifice two junior colleges, one hospital, and half a dozen other teachers? What do we wish to sacrifice? I think we buy things which we need. We discuss the Budget which we spend. We discuss the items of expenditure. We shall be spending the next two weeks doing this, and if anybody believes that we should have a Budget which is half what it is, I think we have time to debate that. Let us hear which he wishes to do without. Mr Speaker, Sir, the arguments are so self-contradictory that they only realize the absurdities of the business when they all come together at the same speech. Well, we are talking serious business here. This is not a court. This is a Parliament in which we debate. In court, you can do this, and there is a good reason you can do this. If a person is charged with murder, he is allowed to make incompatible lines of defence. My first line of defence, "Your Honour, I was not there." My second line of defence, in case you do not believe me, "I was there, but I did not hit him." And my third line of defence, in case you still do not believe me, "I was there and I hit him, but he did not die straightaway." I do not know how many people charged with murder get away with those lines of argument. I would not advise it in this House. 12.13pm