Hansard, 1985-03-29

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:- Prof S. Jayakumar (Bedok), Minister for Home Affairs and Second Minister for Law - from 1st to 4th April, 1985. Mr Wong Kan Seng (Kuo Chuan), Minister of State, Ministry of Home Affairs and Ministry of Community Development - from 2nd to 4th April, 1985. Encik Abbas Abu Amin, PPA (Pasir Panjang) - from 19th to 21st April, 1985. YEOH GHIM SENG Speaker Parliament of Singapore

asked the Minister for National Development whether his Ministry has any plan to construct (i) a tunnel along Bedok North Road connecting the area opposite Block 54, Chai Chee Street and Block 542, Bedok North, and (ii) a slip road at the junction of Bedok North Road and Bedok North Avenue 1.

Mr Speaker, Sir, the PWD will be providing a pedestrian crossing across Bedok North Road in the vicinity of Block 54 Chai Chee Street and Block 542 Bedok North Street 3 in the second half of this year. The type of crossing to be provided will depend on the outcome of the site studies currently in progress. The PWD has started the construction of a slip road at the junction of Bedok North Road and Bedok North Avenue 1 as part of the overall scheme to improve the traffic flow at the junction, The work will be completed in about two months' time.

asked the Minister for National Development whether his Ministry has finalized the plan for Pachitan Estate on the number and types of flat it intends to build and whether there will be enough facilities for the proposed neighbourhood.

Mr Speaker, Sir, Pachitan Estate will have about 1,000 units of 4-room, 5-room and Executive flats. There will also be a badminton court and two children's playgrounds. Tenders will be called in early 1986 for completion by early 1988. As Pachitan Estate will only have 1,000 dwelling units, it will not be able to sustain a neighbourhood centre with shopping facilities. However, at a later stage when an MRT station is built nearby, a neighbourhood centre with shops, a supermarket and other facilities will be developed.

The following Question stood in the name of Mr Ng Kah Ting - 3. To ask the Minister for Finance, Minister for Education and Minister for Health (a) what success has been achieved in reducing education wastage; (b) what measures have been and should be introduced to enable each child to learn at his or her own pace; and (3) whether these measures will affect the basic objective of giving equal opportunities in education to all children.

Mr Ng Kah Ting.

Question No. 3. The Minister of State for Education and Communications and Information (Dr Tay Eng Soon) (for the Minister for Finance, Minister for Education and Minister for Health): Mr Speaker, Sir, I am replying on behalf of my Minister. Since streaming was introduced in 1979, the education wastage has been significantly reduced. Before the implementation of streaming, 20% of a Primary 1 cohort dropped out of primary school without getting any educational qualification and another 20% dropped out of secondary school without any secondary level qualification. After the implementation of streaming, the corresponding drop-out rates have been reduced to 10% for primary school and 5% for secondary school. This has resulted in a saving of about 13,000 pupils each year from becoming drop-outs. Streaming enables each child to learn and progress at his own pace. Through streaming, a weak pupil is given more time to complete his syllabus rather than being subjected to a faster pace of work which he is unable to cope with, and ends up by failing. On the other hand, brighter pupils can progress at a faster and more challenging pace. In addition, the Ministry has been developing new teaching methods and materials tailored towards the needs of pupils in all the streams. Workshops and in-service courses are conducted to train teachers to use these teaching methods and materials. Streaming gives greater opportunities for the pupils to succeed in school. Through streaming, the weaker pupils who otherwise would have failed to cope in school are now able to follow the lessons. The majority of Extended and Monolingual course pupils pass the Primary School Leaving Examination and the Primary School Proficiency Examination, thus enabling them to proceed further in education, either in schools or the VITB. This is much better than in the old education system where many of these pupils would have dropped out during primary school with neither formal qualification nor the skills needed for employment in Singapore's modern economy.

The following Question stood in the name of Mr Ng Kah Ting - 4. To ask the Minister for Finance, Minister for Education and Minister for Health (a) whether the standards of the Primary School Leaving Examination and the General Certificate of Education Ordinary and Advanced level examinations have been raised with the implementation of the Goh Keng Swee Report of 1979, and (b) whether examinations have been over-emphasized in the present education system.

Question No.4.

Mr Speaker, Sir, the standards of the various national examinations (such as the Primary School Leaving Examinations, the General Certificate of Education at 'N', 'O' and 'A' levels) have been maintained. Examinations are not over-emphasized in the present school system. The Ministry strives to give pupils an all-round educa- tion by encouraging them to take part in extra-curricular activities such as art and music programmes in addition to spending time on their lessons. Sir, examinations are necessary to assess the academic progress of students. The Ministry will continue to use examinations to determine a student's ability and level of proficiency.

11.09 am Order read for consideration in Committee of Supply (9th Allotted Day).

Head V (cont) - Resumption of Debate on Question [28th March, 1985], "That the sum to be allocated for Head V be reduced by $10 in respect of Subhead VA-01 Object Group 1100 of the Main Estimates." - (Dr Augustine H.H. Tan). Question again proposed.

Mr Speaker, Sir, I will respond to questions raised yesterday afternoon by Members for Whampoa, Clementi, Radin Mas and Jalan Kayu, and my Minister of State will deal with the rest. On the question raised by the Member for Whampoa about the state of the Singapore economy and the various reports built in the local press and in foreign press which have left the general impression that our economy is sliding into a state of recession. It is important that we look at the problem in perspective so as not to leave an incorrect impression for the rest of the world. Undoubtedly, there are sectors of our economy which are facing some problems. These are well-known. For example, the developers are facing cash flow problems, so are the retail merchants, the shipyards, and our refineries are facing squeezes on the profit because of wide spread international competition and reduction in demand. However, one should look at the economy of Singapore as a whole, and see what we mean when we say "it is in a state of recession." Unfortunately, in the case of Singapore, we do not have a standard definition of recession that is accepted by all economists, I think partly because we have not seen a real recession ever since we became independent. The widely used definition of recession in the United States and in some parts of Europe is that if an economy suffers two consecutive quarters of GDP decline, then it is entering a state of recession. If we use this definition, let us examine some figures relating to the Singapore economy. Mr Speaker, Sir, with your permission, I would like to ask the Clerk to distribute one Chart and two Tables. [Copies of Chart and Tables distributed to Members]. (Cols. 1791 - 1794) [Copies of Chart and Tables distributed to Members] - Gross Domestic Product at 1968 Factor Cost, Singapore's Economy as a Whole Gross Domestic Product at 1968 Factor Cost, Gross Domestic Product by Sector at 1968 Factor Cost (Cols. 1791 - 1794) The first sheet is a chart in which we have the GDP plotted against quarter-by-quarter performance over the last five years. You will see that it is represented by a jagged line which shows very marked seasonal effects in which the first quarter of each year's GDP shows a significant decline. Now, the explanation is fairly straight forward. In the first quarter, we have Chinese New Year during which large sectors of the economy simply grind to a halt. The fourth quarter in each year is a good quarter for export industries since our main export markets will be stocking up for the holiday sales. But, without exception, as you can see from the graph, the economy recovers for the rest of the year. There is a clear pattern of growth and decline. If you look at the year 1984, you will see that the curve starts to turn downwards. It means that the economy is slowing down, and that is what we are going through now, a slowing down of the economy, and I would state that it is not a recession by definition. If you turn to Table 1, we have tabulated over the last three years the actual comparison of GDP growth in Column A, the gross changes in each quarter over the same quarter in the preceding year in Column B, and the quarter-to-quarter changes in Column C. Now, you will see, other than the first-quarter declines, the reasons for which I have explained, that there is no case for a recession if you accept the definition that it means two consecutive quarters of decline. In 1984, you will see a slowing-down growth. So, indeed, that is the case. These are gross figures for the economy as a whole. It will be useful if you look at the development sectorally, which is shown in Table 2, where we have tabulated the economy broken down into six main sectors. I think the only relevant figures are the ones which are bracketted. Under Manufacturing, for example, you will see that the third and fourth quarters 1984, we had two quarters of consecutive decline. So you could say that, within the Manufacturing sector, there was indeed manifestation of a recession by the definition I have given you. On the other hand, Trade had a recessionary period during the first and second quarters of 1984 but appears to have recovered quite strongly in the second half. Transport and Communications has been growing throughout, without any interruption. The same applies for Financial Services and other buoyant sectors of our economy. Construction was also generally strong mainly because of public sector construction, although there was a decline within it of private sector construction. Others include, for this purpose, agriculture, quarrying, utilities and various miscellaneous items. You will see that it is in this sector where you can, indeed, say we have had recession for quite a long time, but a lot of this is due to the winding down of our pig industry, and also declines in some periods in the chicken and egg industry. So this gives you an illustration of the sectoral changes in our economy and the overall picture which, as you can see, is not as bad as some might get the impression. This is not to say that we do not recognize there are specific sectors which are in some difficulties, as I mentioned earlier, the developers are facing cash flow problems. This is primarily due to over-capacity and not lack of demand. Consumer demand for housing and for trade goods and for services has not declined. The problem arises because of gross over-capacity in both housing, offices, shopping centres, what have you. 11.15 am In the case of Singapore, the property market follows a cyclical pattern. The period between troughs is approximately 7-8 years. My recollection is that the last trough was around 1978. So we should be approaching a trough just about now. In the case of Singapore, this may be speculative but indeed the cycle is between seven, eight and nine years. In the case of Singapore, if we assume that the economy as a whole is going to continue to grow, property must recover because we have limited land. The question is: can companies survive the intervening period? This is the area which, I think, we ought to focus on, how we should help the companies get through the difficult period. Because fundamentally, that sector must recover, if we assume the economy as a whole is sound. The same applies to the retail sector where there is at the moment gross over-supply of retail activity. Again, it is not because consumer demand has declined. Tourist arrivals have remained fairly constant. In fact, it is rising. The purchasing of our local goods and services continues to be present. But everyone in the retail sector is suffering, simply because if consumption demand does not rise more than the 5%, 6% or 7% per annum and you double or quadruple capacity, everybody's profit margin suffers; and indeed this is what has happened. Sir, many companies which were caught with high rentals incurred during 1981 and 1982 are now facing severe cash flow problems. This is a problem we recognize. But it does not mean that consumer demand is falling off completely. It is simply that there are too many shops catering for the same consumer demand. I hope that this puts into perspective more correctly the state of the Singapore economy. Preliminary figures for the first quarter of 1985 look fairly encouraging. So I think we see problems in particular sectors, but for the economy as a whole I would still be fairly sanguine.

Point of clarification, Sir. In Table 2, under item 5, Construction, for the fourth quarter, there should be a decline there. The brackets are missing. It is 367. The figure 367 is less than 374 for the third quarter.

The brackets would be covering areas where we have two consecutive quarters of decline, not single. Because that is the definition for recession, which I have used.

But then in the first quarter of this year, there is a decline in Construction. That will make it so. What about the first quarter of this year?

The figures for the first quarter of this year will not be ready until towards the latter part of April. The second question raised by the Member for Clementi concerns the participation of Government companies in private sector activities. He wants to know whether this is going to be a continuing problem. The second part of his question was, what is Government's privatization policy? On the first question, the Finance Minister in his Budget statement has already made some general observations. But it may be useful if I repeated these for Members' information before moving on to the second question. In the Budget statement, the Minister for Finance said that Government has issued guidelines to Government companies which require them to confine their activities to their original mandate. Where they feel a need to depart from these guidelines, they would have to obtain the specific approval of a committee chaired by the Minister for Finance. This is to ensure that Government-owned companies do not stray into areas which compete directly with the private sector, and this is a clear-cut policy now accepted by the Government. On this point, perhaps I should elaborate a little on Government's philosophy between Government participation in the economy and its attitude towards the private sector. The First Deputy Prime Minister and the Minister for Finance have already enunciated on various occasions the wish that the private sector should participate more fully in the economic development of Singapore from now on for the next 10 years. The reason for this seeming change in direction is not that Government believes that its participation in the past in the economy was wrong, but because of the basic shift in the development of the world economy. In the early post-independence days, Government's priority was on job creation. And indeed in those days, without Government initiative and mobilization of capital into the areas of ship-building, shipyards, ship-repairing, encouragement of refineries, steel, I am fairly certain that the growth of the Singapore economy in the 60s and 70s could not possibly have been as fast as it did. We were facing a situation where the Singapore businessmen, traditionally engaged in trading, entrepot activities, and in servicing the British Army here, had no experience nor the ability to engage in industrialization and Government initiative was essential. The companies which were set up to do these jobs have done an excellent job. In fact, most of them have proved extremely profitable during the 60s and 70s. Why change direction now? That is because there is a fundamental transformation in the world economic development. Heavy industries, like shipyards, shipping or refineries and the others, are facing considerable difficulties and seeming long-term declines because of gross over-capacity, worldwide. And it will take some years of world economic growth for these industries to recover. Faced with this situation, we have to move forward very rapidly. Hence Government's move towards restructuring our economy because not only do we face declines in these primary industries which we were so successful with in the past, but we are also facing considerable competition from the lower wage countries in the region, including China and, potentially, India. Also, world technology is moving so rapidly into high-tech areas, into the service areas, which in the latter case is going twice as fast as conventional world trade. In this environment, in the new technology areas, in service industries, new companies require new techniques. These companies generally are smaller, need less capital, far greater innovation. These new technologies also face very short-term life cycles, rapid obsolescence. In this environment, the Government sees that the conditions required for them to survive are better served by the private sector with its greater risk-taking capacity, its greater possibilities of innovation and entrepreneurship; and less possible for Government with its civil servants to participate in this area. Hence a requirement to change direction fairly rapidly. It is also necessary to relieve the heavy load now placed on senior civil servants who are running our major industries. I do not think Members are probably aware that handfuls of senior civil servants are doubling up as chairmen of major companies, in addition to discharging their normal responsibilities. This imposes an impossible load on individuals and I do not think long-term it is sustainable. Indeed, if it were not for their particular dedication and expertise, it would not have worked. Hence the need to change direction. Turning to the question of privatization, what is Government's policy? The Government has not completed its plans for the programme of privatization but the intent is clear. There are 100% Government-owned companies which are currently not listed on the Stock Exchange. It is possible that some of these may be listed if they meet the Stock Exchange listing requirements of profitability, size and other criteria. For those companies where Government considers it does not need to retain majority control for strategic reasons, such as defence related companies, the degree of privatization or divestment of equity could be considerable. It could range from 100% divestment - by selling shares in the entire company to the public, leading to a change of management, or it could mean partial divestment in which the Government continues to retain a 51% control for example, in which case management will still be within the control of Government - to companies in which Government will merely divest an additional amount of equity but still retain a significant equity interest as a long-term investment. So there are many possibilities and permutations. We are not in a desperate hurry to accelerate this process because, compared to some other countries, we do not need the money. So we do not need to sell companies simply to raise funds. But where we want to issue equity, it will be when the timing is right, when the capacity of the Stock Exchange is able to absorb this release of equity and where it is considered beneficial to increase the shares in the market in order to add depth to the Stock Exchange. I will now turn to the question raised by, I think, the Member for Radin Mas on his request that local manufacturers need new technological infusion and will the Government provide further incentives more than what is now available through the PDAS scheme. We agree that technology transfer is vital for the development of local manufacturing capacity. The PDAS was set up for a very specific purpose of encouraging local companies to develop new products or to improve existing products. In addition, there are other incentives to encourage technological transfers such as manufacturers are allowed to write off capital cost, acquiring approved know-how, patent rights over five years under the Income Tax Act. Manufacturers are also allowed double deduction on operating expenses for R&D activities under the Income Tax Act. I believe the Member for Radin Mas also asked for specific incentives to encourage exports where concession tax might be granted for companies which are prepared to export on the margin. This is an area which, I think, we will have some difficulty because it will be quite contrary to the GATT code. And we are already facing complaints from the developed countries. Special tax concessions sought violate the GATT code. So in order to help our exporters, we have to look to other means which are now promoted by the Trade Development Board, finding new markets, new products and new methods of marketing. 11.30 am I believe he also suggested that Government might wish to consider the privatiza- tion of statutory boards, including Telecoms. Although I cannot speak on behalf of the Ministry of Communications, I think it is not the Government's present intention to privatize the Telecoms because Telecoms is doing an excellent job. It is profitable, although it is considered to be a monopoly. I know there is some criticism on those grounds. But nevertheless, firstly, we do not need the money. In the case of UK and some other countries, they are privatizing because it is a source of Government funding. We do not need that. However, I am not saying that we might not do this in the future but there is no present intention. Finally, Sir, I would like to talk about the question raised by the Member for Jalan Kayu, which is the suggestion that Government should encourage the development of venture capital, high technology companies, by providing tax concessions for individuals, like doctors and lawyers, who might have surplus capital and, instead of diverting this to the turf club, it might be useful if this could be pooled to provide venture capital. It is an interesting proposal which has already been looked at. There are, of course, tax implications which we will have to consider. It is something which has been used in other countries. So we are actively looking at this particular problem, including the possibility of allowing small companies, high-risk companies, to be listed in a separate board in the Stock Exchange, as is done in the United States, where these companies during the formative growth stages do not meet the criteria but could do with the infusion of risk capital. We are looking together with the MAS at the implications of allowing the OTC type operation to be done in Singapore. The Minister of State for Defence and Trade and Industry (BG Lee Hsien Loong): Mr Speaker, Sir, I will just deal with one more point from the Member for Alexandra, which was a question on intellectual property. This means, do we have copyright laws which will protect software, protect TV programmes on cassette tapes, protect inventions, films, and so on? Presently our laws, according to the Member for Alexandra, are slack and therefore it is difficult for somebody to protect his intel- lectual property. If I write a software programme, you can copy it, and there is nothing I can do about it. It is a real problem. In the Addendum from the Minister for Law to the President's Address, the Minister has stated that his Ministry will be reviewing the laws on intellectual property, on copyright and patents, in the term of this Parliament. It is complicated because there are two countervailing factors which must be considered. One that we cannot simply shut down and say, "Thou shalt not do so." Because if we say that, people will simply do it somewhere else. The Member may have read in the Straits Times recently how Hong Kong evening TV serials are copied. They make the tape. They fly it to Singapore the same evening. The next day it goes to Malaysia, it is copied, and by the afternoon of the second day, within 24 hours, they have got hundreds of copies all over Singapore, Malaysia and probably other parts of Southeast Asia. So for us simply to say, "You shall not do this" may not be effective at all. On the other hand, we have the opposite consideration, which is that it is our policy to encourage research and development, to encourage the growth of the software industry, to encourage creativity, to encourage people to generate ideas and to be able to profit from the ideas which they generate. And you cannot profit from the ideas which you generate if after you have written a book, somebody else prints 10,000 copies, the originals cannot be sold, and the 10,000 copies do not yield you royalties. We need to strike a balance between these two considerations. If we are going to foster an environment of creativity, and to encourage the development of our software industry, then we must have stronger, better copyright laws than we now have. This is a matter which I am sure the Minister for Law will bring before the House in due course.

Sir, may I just point out that I also mentioned about counterfeiting of trademarks, and I hope this matter will be raised with the Minister for Law.

Mr Speaker, Sir, the question I want to raise with the hon. Minister of State is whether there is any policy on the setting up of foreign trading companies without any manufacturing and/or assembly facilities in Singapore. Sir, we are aware that the EDB and other Government agencies have been instrumental in not only promoting investments but also assisting them in R&D projects and marketing, etc. Some of the industries have also contributed to the transfer of technologies or management expertise, and to our economic progress, and providing jobs for our people. In the case of foreign trading companies, such benefits are negligible. Some of these are principals of locally established trading houses which have been operating here for many, many years. Over the years they have developed a sophisticated marketing system in Singapore. Some of these companies have also contributed to the development of local managerial expertise. One has just to look through the staff list of many of these locally established companies, one will have noticed many of the senior positions are held by Singaporeans. But with the establishment of these foreign trading companies, particularly from Japan, which merely take back their product lines from the former local agents, there is a significant increase in expatriate personnel. Some of the functions of these expatriate personnel can, in my view, be performed by our local executives. There is no transfer of technologies or management expertise. In some instances, it resulted in retrenchment of local employees. There is no means to protect the interests of the locally established trading companies which have in some way contributed to our economic and social progress.

Having spent a large part of my career doing economic planning in the public sector and now corporate planning in the private sector, and having mentioned the need for a tripartite body comprising the Government, the private sector and the Union to deliberate on national economic strategies and policies, I thought it is appropriate for me to pass some com- ments or suggestions on the proposal to set up a national economic committee to review the 10-year Economic Development Plan. Sir, sound economic planning has been a fundamental factor in our success in the last 25 years. In the preparation of our national economic plans so far, the public sector has played a major role in that though there were consultations with the private sector on an informal basis, a large part of the ideas on the plan actually came from the public sector, which includes the statutory boards and the Government companies. For this was inevitable as the public sector has been a prime mover in our economic development in the last two to three decades. The result of this is that we seem to have good planning expertise in the public sector while it appears that we do not have good planners in the private sector. Consequently, the private sector tends to look to the Government for long-term direction. Following the Government's intention to gradually withdraw from business and to let the private sector be the prime mover in our economic development, it is only appropriate that the private sector should now be more involved in our national economic planning process. I am sure there is no lack of good ideas from the private sector on how we should steer our economy from here. By getting the private sector and the union involved in the planning process, they will understand and appreciate the rationale for certain Government economic strategies and policies better, and will certainly be more committed in the implementation of the national economic plan since they have a hand in its preparation, and hopefully, in the years to come, the level of planning expertise in the private sector will improve. Sir, the proposal to set up a national economic committee comprising the Government, private sector and the union to review the 10-year Economic Development Plan for the 1980s is indeed timely and praiseworthy. The plan was prepared in 1979-1980, and, like all plans, it is based on certain assumptions. Some of these assumptions may no longer be valid today, as the external and internal factors and constraints affecting our economy have changed in the last five years. I believe the overall mission or goal as laid out in the plan is still valid. But the means towards achieving that goal should be reviewed and, if necessary, fine-tuned or modified. We all know that we are moving into high value-added, high-technology areas. Other countries, like Hong Kong, Korea and Taiwan, are all upgrading in the same direction. I hope the Committee will clearly identify those high value-added and high-technology areas that we should get into, bearing in mind our strengths and weaknesses, our competitors' strategies and the need for us to develop our own niches. The Committee, for it to be effective, should be kept small. But a lot of back-ground work will have to be done outside the Committee. The latter should therefore be supported by various sub-committees, representing the key sectors in our economy. The small businessmen should not be left out, for they too are performing a useful role. They may be small businessmen today, but they could be big-time entrepreneurs tomorrow. Sir, the total setup of this Committee would therefore be bigger than anticipated. But this is inevitable since we have a diversified economy and there is a need to cast our net wide to ensure that good ideas are not left untapped. Finally, Sir, planning is a dynamic process. I therefore propose that the Committee should not be dissolved after the exercise to review the 10-year Economic Development Plan. The Committee should instead continue to monitor the progress in the implementation of the plan on a regular basis and recommend the necessary fine-tuning along the way. There appears now to be a lack of a formal dialogue mechanism between the Government and the private sector on general economic and business matters. As a follow-up of the planning process, the Committee's role could perhaps be expanded to assume this dialogue role, that is, to act as a formal body whereby ideas from the private sector could be channelled regularly to and discussed with the Government, and Government's thinking on economic and business matters disseminate downwards to the private sector. The Committee could perhaps meet regularly at quarterly or six-monthly intervals. But a word of caution, the Committee should not be allowed to degenerate into a complaint bureau by the private sector businessmen. Sir, these are some of my comments or suggestions. I hope the hon. Minister of State for Trade and Industry and Defence will find them useful when he gets on the business of reviewing our 10-year Economic Development Plan.

Mr Leong, you have two amendments.*

Sir, like my colleague, the Member for Kaki Bukit, I have also worked at the Ministry of Trade and Industry. There are several areas of interest to me. This morning I shall confine the points which I would like to raise to trade matters. Since presently in this House we have a Member who is also the Chairman of the Trade Development Board, I hope we have a sympathetic ear. First of all, Sir, as stated by the Minister for Finance in his Budget Statement, he said that in the 1980s the engine of economic development should be the private sector and not the Government. Therefore, in the same direction I would suggest that there should be more private sector involvement in the trade promotion activities of the Trade Development Board. It is the private sector members who would know best where are the new market opportunities, where are the market niches which will be opening up in the world, They will be the persons who know what needs and requirements they have to establish themselves in these new markets. Therefore, it is only appropriate that in future there should be more private sector involvement in the trade promotion activities. Next, Sir, I would like to speak a little on our small local traders and small local companies. This is one group of com- panies that needs assistance and help from our Trade Development Board. They will find difficulty in gaining access to foreign markets. They will find difficulties in establishing contacts in some of the major growth markets in the region, such as Japan, Australia and China. Therefore, if the Trade Development Board would consider setting up a Small Companies Unit specially to look into ways and means on how we could help such small companies, it would be of great assistance to them. At the moment, we have a Small Industries Unit in the EDB which primarily takes care of small industries in terms of manufacturing and local operations. The proposed Small Companies Unit in the TDB would be a useful follow,up from there to help our local companies to look for export opportunities and export markets. Next, Sir, I would like to move on to a suggestion on how we can help some of our new technology companies in establishing themselves in Singapore. The Government is promoting new technology companies with new products and services to be established in Singapore. These companies will face difficulties in opening up potential markets because invariably their products are new to the region. In fact they are new to buyers and users both locally in this region. Therefore, they will have to spend greater efforts and resources to open new markets and opportunities. I would like to suggest that the Ministry or the TDB could consider helping such new technology companies. For example, at present we permit double deduction allowances for trade promotions and trade fairs overseas. Perhaps the Ministry could consider expanding this Allowance to include new companies which are looking for new markets to help them defray their promotional expenses in the first few years of operation. For example, they could spend money and effort in organizing seminars to introduce their products. They could spend money and effort in attending trade conferences, trade fairs and exhibitions, both locally and overseas. Perhaps the Ministry could consider extending the Double Deduction Allowance Scheme to cover some of these expenses, Next, Sir, I would like to move on to how we can help to encourage More multinational companies to set up their international purchasing offices in Singapore. As we know, the Pacific region is going to be one of the fastest growing markets in the future. It is the region where we will see very fast growth in the 80s and the 90s. Many multi-national companies will be looking towards this region for the supply of cheap parts, components and products. There are several low-cost producers in this region which could manufacture products, components and parts much cheaper than the Western economies. Therefore, there will be many multinational companies which will be looking towards this region to explore how they can source from all these low-cost producers in the region. Therefore, the Ministry or the TDB could consider establishing schemes that can encourage such multinational companies to establish their purchasing offices in Singapore. Finally, Sir, the last point I would like to raise is on whether we should establish an Information Resource Centre in Singapore to help such foreign as well as local traders. Our traders would need information on the suppliers in the region, the buyers who can buy their products, and information on contacts they can establish in all these foreign markets. Therefore, if the Ministry or the TDB would consider setting up an Information Resource Centre, I suggest within the TDB, to help our local and foreign traders, it will be of great assistance to them. I gather that there is a library in the TDB. Perhaps this library can be upgraded to serve this function and the library could be computerized to provide an efficient service.

Sir, I will respond to the points from the Member for Toa Payoh first. He asked why foreign trading firms were allowed to set up in Singapore and squeeze out some Singapore companies. We in Singapore operate a free market economy. Foreign firms are free to set up here, to do business here, to enter into arrangements with Singapore businessmen here and, when these arrangements no longer suit their needs, to terminate these arrangements according to legally and commercially acceptable terms. It is not the policy of the Government to give protection to a particular domestic sector, however long established it may have been, because the Government does not believe that it is in the long-term interests of the economy to do so. Singapore is so small that it is not feasible for us to produce things ourselves in order to generate employment, in order to generate markets within the country, in order to be self-sufficient in a way which a large country like the US or Japan can be, If a local firm is to compete, it must have something to offer which a foreign firm does not have to offer. It has to upgrade itself. It has to provide specialized skills. It must do something which an expatriate cannot do. From the point of view of the company, I am sure they would much prefer to operate with Singaporean staff than with expatriate staff, because it is very expensive to bring an expatriate to Singapore. The overheads, the allowances, the family and so on, are not expenses to be entered into lightly. Certainly it will not be done for emotional reasons. If a company decides to bring in foreign staff, I presume they have compelling reasons to do so, and that the expatriates are able to provide something which our people have not yet been able to provide. The solution is for us to upgrade ourselves, not for us to keep out expatriates. The Member for Kaki Bukit made some suggestions on improving private sector economic planning, and on the progress of the Economic Committee which I am chairing. I thank him for his suggestions, which we will certainly consider in the work of the Committee. It is indeed the purpose of the Economic Committee to involve the private sector in this process of looking ahead, of forecasting where the niches are, what the possibilities are, what developments offer considerable growth over the next 10, even 20 years. It is a difficult job. It is one which will require vast experience, a wide diversity of background, and a considerable power of judgment, even clairvoyance. So we really need people who know their business, who can loo ahead and can tell us what they think w should do. Indeed, we will keep the Committee small, and have many sub-committees so that as many people as possible can be involved and can express their views. The process of consultation continues. We do not need an Economic Committee just to start the consultation process. It is a process which has been in existence and shall continue after the main report has been completed. And if the Committee is a successful one, then I am sure the links which have been established in its work will be maintained and will serve to modify the plan, and to generate further ideas in years to come. The Member for Thomson spoke about trade promotion and using private sector ideas. That is what we are doing. Encouraging local companies to export is a serious problem. The Member for Radin Mas mentioned this yesterday. It is very difficult to export overseas, because we have to break into the markets, and unless you are familiar with the markets, unless you have contacts there, you cannot break in. The Government helps quite a lot. The Economic Development Board has overseas offices in 13 cities and two more honorary representatives elsewhere. The Trade Development Board has 12 overseas offices and five honorary representatives. Their job is not only to answer questions when asked, but actively to go out and solicit business, to discover new opponunities, and to feed this information back to our companies in Singapore, so that we can take advantage of it. The Trade Development Board does have an Information Resource Centre. It is a library which shall be upgraded, so that if anybody wants information he can find a directory of businesses, know what the rules are, know which government departments to go to for licences and permits. It will be done. As for the suggestion on export promotion, the Minister has replied, and explained the sensitivity of it. I would add two points on export promotion. One, nearly every company in Singapore lives on exports, either directly or indirectly. Even if you make chips which you sell to Texas Instruments, Texas Instruments does not sell them in Singapore. It sells them in America or in Europe. Every company goes for exports. Everybody has to export. To say that you are giving export incentives is not to make a sectoral concession but actually to give it across-the-board. The second point about export subsidies is that not only are they contrary to the GATT code, but they also attract very specific and very inconvenient attention from our trading partners. At a time when many countries, particularly the United States, are preoccupied with trade deficits, any attempt by a trading partner to give some special concessions to his company so that he can sell more is treated with grave suspicion, and examined with legalistic minuteness. It is not only a matter of looking and being embarrassed, but also of counter-measures being taken. The Americans have a system of countervailing duties. For those Members who do not understand, I should explain. It means that if they find a Singapore company is getting an export subsidy of, say, 10%, then to compensate for that, they will impose a tax on the exports of 10% in the United States when you sell to them. So, if we subsidize, they will tax. In other words, take money from the Singapore Government and give it to the American Government. Those are called countervailing duties. And there are many pressure groups within countries with trade deficits, industries which are affected, which watch very carefully their market conditions. If particular unfair benefits are given to companies, they prod their legislators to take action against these companies and to impose countervailing duties. Once imposed, they are very hard to remove. So we have to be very careful when we talk about export promotion. I think we have to work hard at it, but it is difficult and may be counter-productive to subsidize it. 12.00 pm

Mr Speaker, Sir, may I be allowed to speak for a few minutes. In spite of the economic slowdown, I believe some industries are still facing a labour shortage problem. Last year, in fact, in October, there was a report drawn up by the National Task Force on women in the labour force, and the report was presented to the National Productivity Board and subsequently to the National Productivity Council. One of the major recommendations of the Task Force was to establish child-care centres in order to draw women out to join the labour force. The report also contained other kinds of recommendations, including training and re-training of women, and also more flexible kinds of work schedule, better working conditions, part-time work, and so on. Now, we are seeing the establishment of child-care centres particularly under the charge of the Ministry of Community Development. The other day, I raised a point about the new fee structure, and I questioned its effectiveness in encouraging women to come out in large numbers to ease our labour shortage problem. I believe some industries, such as the electronics industry, employ quite a large number of women, in fact, about 80% of their workforce are women, and they depend quite heavily on foreign workers. In view of the fact that some industries are still suffering from this problem, does the Ministry of Trade and Industry or the Ministry of Labour have any plans to tackle this problem? I can raise this question again this afternoon, because this question actually straddles the three Ministries. Does the Minister or the Minister of State for Trade and Industry have any further plans to draw women out into the labour force, apart from depending on the childcare programme?

Mr Speaker, Sir, just a point of clarification. I believe the Minister of State has not answered two of my points, the first of which is whether the TDB should consider setting up a Small Companies Unit; and the second is, how can we promote international purchasing offices to be set up in Singapore.

Mr Speaker, Sir, I apologize to the Member for Thomson. I overlook these two points. Indeed, TDB will consider setting up a Small Companies Unit. I will refer this suggestion to them for their consideration. On international purchasing offices, here, I think, our best strategy to encourage industries is the assurance that this is a stable country, and confidence that this is an efficient government. We have that, so we are able to attract not only international purchasing offices here, but also many other industries, many other firms, to this region. I will give EDB the suggestion on international purchasing offices. I think we have certain natural advantages geographically which the companies can take advantage of, and I am sure they will follow up. On women in the labour force, the Member for Changkat asked whether we have any plans. We have been working on this for some time now. It is not only a matter of child-care centres, but also of attitudes and institutional arrangements to be worked out, so that women can participate in part-time work, half-day work, interrupt for a few years to have children, and come back to work. We have discussed this extensively. It is something which we should work on. Our labour participation rate for women is still low, and the best way for a family to raise its standard of living and increase its income is for the wife to work, if the wife is not working. Even if the wife cannot earn as much as the husband, if she earns half as much as her husband, that is a 50% increase in family income. Our Labour participation rate for women is still low. There is a chart in the Annual Economic Survey which shows that for women in the 35-39 age group, only about 35% of them work, one-third; that means two-thirds are at home. They are probably looking after their families, but if we could find some way for them to work, even half the time, it would make a tremendous difference to their families and to our economy. So we would certainly look into it.

May I clarify a point here? Actually our labour force participation rate among women is quite high. It is comparable to other advanced countries like Japan, West Germany, France, UK. But what is low is, in fact, among those women who are already married and have children. So this is where the critical point is, especially for women who will be bearing their second child. This is where the rate really drops off drastically. This is where we have to work on. That is why child-care centres are so important to provide an opportunity for married women with young children to work.

I agree with the Member for Changkat. That is why I said "aged 35-39", they are mostly married, and mostly have two children.

I prefer women to look after their own children. Sir, before I withdraw my amendment, may I just offer a few observations. Sir, we are moving into a new era where the private sector will take a leading role in our economy and, I believe, that the reformulation of some policies are going to be necessary, and the Members from this side of the House have been forthcoming with some good ideas. I think the suggestion on venture capital ought to get the attention of the Government, especially when Government begins selling government companies. There will be plenty of capital to dispose of. So one avenue would be in terms of venture capital. And I think we need to revamp our tax structure to shift capital from speculative activities to productive activities, and marketing is an area which our companies need help in. So I think the TDB's efforts will be much appreciated. At the same time, Sir, the idea about private inputs into public planning is an important consideration. The Minister for Trade and Industry has been very reassuring to this House and the figures presented before this House, I hope that would put paid to the dismal analysis and dismal presentations about the state of our economy. I am glad the Minister of State has voiced strong support for the GATT and I look forward to his participation in international forums to push the free trade idea, free trade policy, because that is so important for Singapore. Just a note of disagreement with him: he mentioned rightly that the domestic market is too small for us to consider protectionist -

Dr Tan, you have finished all your 10 minutes. You had eight minutes yesterday and two minutes today.

Yes. I would just urge him to give special consideration to local companies in other ways.

Are you going to withdraw the amendment?

Yes, I will do so now, Amendment, by leave, withdrawn. The sum of $84,841,700 for Head V ordered to stand pan of the Main Estimates. The sum of $425,395,700 for Head V ordered to stand part of the Development Estimates. Head R - The following amendment stood on the Order Paper Supplement - Dr Ow Chin Hock Dr Augustine H.H. Tan Mr Lim Boon Heng Mr Heng Chiang Meng (1) That the sum to be allocated for Head R be reduced by $10 in respect of Subhead RA-01 Object Group 1100 of the Main Estimates.

Dr Ow. He is not here. Dr Augustine Tan.

Sir, I beg to move, That the sum to be allocated for Head R be reduced by $10 in respect of Subhead RA-01 Object Group 1100 of the Main Estimates. Sir, the first issue I would like to raise concerns the transfer of funds in the CPF to Medisave. I was quite surprised when I received my CPF statement recently that, sometime last year, quite a substantial sum was transferred from the Special Account into the Medisave Account. And I had thought that only 6% contribution was transferable, but apparently much more has been done.

Sir, the Ministry of Labour has announced its intention to allow a wider choice to CPF account holders to invest part of their savings. I welcome this policy, but I must urge caution. It is in the nature of investments that risks are associated with it. When the use of CPF funds is freed selectively, consumption is also selectively directed and controlled. Such selective action interferes with the free-play of market forces. It is one thing to allow CPF funds to be used for the purchase of HDB flats, but another thing to allow it for the purchase of private property. Government does not decide the prices of private property. So by making CPF funds available only to purchase private property, we create a higher demand for private property. This inflates property prices. We have seen this happen. Property prices firmed and rose when CPF funds were allowed to be used to purchase a first private residential property. In my opinion, it delayed a necessary correction of private residential property prices. Many who made use of their CPF savings to purchase a first private residential property two or three years ago now find the value of their properties sharply reduced. Recently, the First Deputy Prime Minister has suggested for discussion that CPF funds be made available for the purchase of a second or third residential property. A local newspaper reported that many people supported the idea. I am afraid I cannot support this suggestion whole-heartedly, at least not at this time. If we allow it now, another artificial boom will be created and the price correction that is happening now will once again be delayed. Presently, a segment of our working population who fall above the HDB income ceiling of $3,500 are unable to buy HDB flats. They have also found the prices of private residential property beyond their reach. With the current adjustment of the private residential property prices, they see a glimmer of hope that at long last they may be able to afford a private property. The last thing we should do now is to create an artificial boom and drive private property prices once again out of their reach. It is not my intention to throw cold water on the Government's efforts to find ways of liberalizing the use of CPF funds. On the contrary, I support it. But CPF savings are hard-earned and we should try to ensure that they are wisely spent and not eroded by inflation due to an artificial boom. If we allow CPF funds to be used to purchase a second or third property, it must be allowed together with a range of other options. We should look into other areas. One investment is in education. The Minister for Education has reiterated that education and training is a cornerstone of our economic upgrading strategy and the key to a better life for our people. Investment in education would, therefore, boost the productive capacity of our people. The call for the use of CPF funds to finance the education of the account holder's children has been made before. It has been rejected on the grounds that CPF is for old age security and there is no guarantee that the children will pass nor any guarantee that they will look after their parents. I think we can have safeguards. If a child can gain entry into our institutions, for example, the NUS, NTI, Singapore and Ngee Ann Polytechnics and perhaps even the VITB, he has a certain probability of passing. The risk of failure is worth taking. We can limit this only to our own local institutions for a start and, perhaps, we should also make it compulsory that once the child starts working, the amount can be paid back into the parents' CPF account with the appropriate interest. I think this proposal should also be extended to the CPF account holder himself if he wishes to upgrade his skills. If he can gain entry into our institutions, I do not see why we should not allow him to use his CPF funds, We may even consider assisting him with SDF support. Another use of CPF funds that we may allow is the purchase of insurance policies. In this respect, I do not think it is necessary for CPF to run its own insurance scheme. Account holders ought to be allowed to decide from which insurance company he wishes to purchase a policy. I am sure there are many other suggestions and these should be seriously considered and implemented. Above all, in spite of all these proposals for liberalizing the use of CPF funds, we must not forget the original basic objective of the CPF, which is to provide financial security at old age. I think we can allow CPF funds to be used if a certain quantum is left behind. He can either use a per- centage of contributions or a sum, or a combination of a sum and a percentage. I hope my suggestions do contribute to the discussion which the First Deputy Prime Minister has called for. 12.15 pm

Mr Speaker, Sir, I would like to follow up on the idea of allowing members to use their CPF monies for their children's tertiary education proposed by the hon. Member for Kebun Baru. Sir, this is not a new idea. It has been brought up almost every year but, for some strange reason, this idea has always been turned down. However, as somebody said, if it is a good idea, we must play the four Ps, ie, the politics of perseverance, persistence and patience. Sir, I do not wish to go into the benefits of such a scheme. I think the Members, past and present, especially the Member for Kebun Baru, have gone into this. But I would like to touch on some of the points that have been raised by Ministers in previous years when they refused to consider this proposal. Briefly, they fall into four areas. The first area, Sir, is that they said such a scheme is consumptive, which means that the funds are withdrawn before the age of 55. This is really not an acceptable argument because, similarly, the funds withdrawn for purchase of houses, especially when prices of private houses fluctuate very widely in our market, are also withdrawn before 55. In fact, I would like to say that with tax benefits for CPF contributions, I know a number of companies that pay low salaries, high bonuses and high CPF contributions so that CPF monies can be withdrawn later for the purchase of houses. In this way, employees get their funds for the purchase of private residential properties as well as getting the tax deduction for their CPF contributions. Sir, if property investment is considered as something that is desirable, then I think more desirable would beth e investment in the children's future. The second argument is that if the funds are used, the CPF member could be destitute in old age. This presumes that the funds are completely used up for their children's education. But, Sir, I do not think this would be the case. Just like property investment where you can withdraw only 90% of the Ordinary account balance and up to 80% of the valuation of a property, I think similar controls can be instituted for withdrawal for children's education. Also it does not necessarily mean that every child will completely ignore his parents if the child fails to pass the course or if he does not get a good job. I would think that since his parents have sacrificed their savings to secure the best for his future, he will definitely be more motivated to support his parents. Sir, we are an Asian society. That has been said many times in this House. And I would say that it is in the nature of our values that we want to sacrifice our own future for our children's future. This sacrifice is the stuff on which filial piety is built upon, and I fail to understand why the Government which is trying to promote these values is dead against this idea. At the same time, I understand that another objection is that the child may fail. It is not necessary that the child must pass his examinations or complete his tertiary education. But it is because of this sacrifice that the parents are prepared to make that we create or further the concept of filial piety and strengthen the bonds between the parents and the child. Finally, there is the objection of abuse in terms of the institute as well as the course. Here, I am sure the Public Service Commission has sufficient controls and means to make sure that the university they go to, whether it be in Singapore or abroad, must be an approved university. And as far as courses are concerned, certainly the CPF Board is not going to approve somebody doing a Ph.D. in, say, the mating habits of butterflies. But, Sir, if one is going to do a proper course like economic development, computer studies, I am sure this is something within the approved list of the Psc. The mood, as the Member for Kebun Baru said, seems to be more liberal today; in the sense that there is talk to allow CPF members to have a greater say and responsibility over their funds. it is in this mood, Sir, that I hope that the Minister concerned would add another P to the four Ps, ie, that the politics of perseverance, persistence and patience will finally pay off. Sir, another point I would like to make is that we have read in the papers recently about the non-payment of CPF contributions by some employers. The present system and the present situation of workers' CPF payment under the law and the monitoring of the CPF payments by the Board is not satisfactory. We have read or we have heard that the CPF contributions do not have much priority in terms of the ranking of payments when companies are liquidated. In fact, presently, if the CPF contribution is deducted from the employee's salary, I think, it ranks about second or third. And if it is the employer's contribution, ie, the other 25%, it ranks even lower. Sir, we know that workers in Singapore today use the CPF contributions for many things, the most important being the purchase of a roof over their head. And it must be a shock to those workers who find that they are actually not paying for their houses when they thought that they are. Currently, the CPF contributions rank below secured creditors and receivership costs. Here, I would like to suggest to the Minister for Labour to consider changing the law to put the workers' wages and CPF contributions, regardless of whether they come from the workers' wages or from the employers, ahead of secured creditors. This is not something new, Sir, because under maritime law, the seamen's wages come ahead of secured creditors. In this respect, I must admit that we are likely to get objections from secured creditors, such as the banks, which, normally in most cases, will be holding legal mortgages on the liquidated company's assets. Hence, to prevent abuse by unscrupulous employers who may pay themselves millions of dollars and high salaries, I would like to propose that this suggestion should only be applied to workers covered by the Employment Act. In this case, hopefully, the amount would not be too much and the secured creditors would have less objections.

Mr Speaker, Sir, the Government has announced its decision to sell off its shareholdings wherever possible. But no equally significant proposal has been made regarding the Central Provident Fund. I am speaking from the viewpoint of workers who find a big chunk of their money going into the CPF until they retire or die. Of course, CPF contributions can now be withdrawn on other grounds. However, my concern is with the present basis of the CPF. The CPF is run very much like a savings scheme. What the contributor puts in is exactly what he or she would take out later plus the accumulated interest. In other words, a CPF account superficially resembles a POSB account except that the savings are compulsory and the savings are doubled by employers. Sir, as long as the CPF is treated like a savings scheme, there is a definite limit to the number of ways we can use CPF contributions. If a worker expects to have no more than $100,000 inclusive of interest to his or her credit with the CPF after a lifetime of work, the worker cannot do very much more with that sum of money other than paying for a home and living expenses in retirement. Sir, it is for this reason that I am suggesting a slight modification to the basis of CPF. To illustrate my point, with a yearly premium of $150, I can buy an endowment policy of, say, $5,000 or a whole life policy of $15,000. To put it simply, the endowment policy stresses on savings while the second policy stresses on protection. I know I am over-simplifying this aspect of life insurance. But my point is that the CPF can achieve more if it is not wholly run as a savings scheme. The arrangement whereby a contributor who uses his or her CPF contributions to buy an HDB apartment is insured by CPF against his or her mortgage liability to CPF is an example of what can be done by CPF, In the same way, Sir, a small portion of a person's CPF contributions can be used to buy, as has been suggested, an annuity for the person on his or her retirement. Or an insurance policy can be taken out to pay an unemployment allowance to a retrenched worker in addition to whatever retrenchment benefit the worker may receive from an employer. Sir, in these days of high CPF contributions, it is very hard for trade unions to convince employers to pay as much retrenchment benefit as in the days of low CPF contributions. On the other hand, workers who are temporarily unemployed for a few months may have a real problem of making ends meet if he or she receives little or no retrenchment benefits. 12.30 pm I know many CPF contributors will be unhappy with any suggestion that may reduce their CPF savings. But that is because they have been so used to the idea of CPF as only a savings scheme. They have to start thinking of the CPF as being a scheme of protection. The main purpose of the scheme will be, of course, protection against want in old age. Other purposes can be, as at present, protection against homelessness or ill-health. Another purpose, as I have suggested, is protection against unemployment. A portion of the CPF contributions naturally has to be used up in paying the various forms of protection, as nothing in this life is for free. Sir, the other side of the story is that the limited amount of CPF contributions at the disposal of each person can be used to secure more benefits for each person than at present. I think the Government should give more thought to modifying the basis of CPF in keeping with our social economic development. Sir, if my suggestion means more business for the insurance industry, that is unfortunately unavoidable.

Would the Minister like to answer, or would you like them to carry on?

They may carry on, Sir.

Mr Speaker, Sir, the question I wish to raise is whether the hon. Minister for Labour would con- sider extending the use of CPF balances for major repairs to Housing Board flats, particularly in older estates. This is quite different from renovations to new HDB flats. Flats in the older HDB estates were constructed at a rapid pace, coupled with poor workmanship. And many parts of the flats deteriorated over the years and are in need of major repairs. Sir, in my Constituency there are six blocks of flats faced with problems. In many of them the wooden windows have rotted and have to be completely replaced. I conducted a survey with the help of the RCs and found that in one particular block, 80% of the windows require replacement. The original cost of the flat was only $8,500, but the cost of replacing these windows amounted to a total of $6,000. We should consider this renovation as an investment in one's own property. Most HDB residents are wage earners and they could not possibly fork out such a large sum of money at one time. I hope the Hon. Minister will give consideration to my suggestion. Sir, another point I wish to raise is that the Member for Potong Pasir made a big issue on the proposal to defer the withdrawal age of CPF contributions. He demanded whether the Government had consulted the people. Recently, he had the audacity to propose that CPF contributions be reduced from 50% to 40%. Is he aware that CPF contributions is part of a worker's wages? Whatever the percentage quantum he proposed to reduce from an employer's contribution amounts to a reduction in wages in the same percentage terms for the worker. Did the Member for Potong Pasir consult the people or the workers of Singapore that they support or agree to his proposal? How will a 10% reduction in CPF contribution, as envisaged by him, benefit the workers of Singapore? Sir, I have been dealing with employers for more than 25 years, and I have yet to come across an instance where an employer would voluntarily pass on any savings from any concessions, like reduction of excise duty or statutory contributions. Sometime ago the Government reduced the rate of duties on leather goods, garments, cosmetics and other consumer goods. The savings accrued out of these concessions were never passed on to the workers or the consumers. The recent reduction in entertainment duties is a case in point. There is no reduction in the price of cinema admission tickets. The Member for Potong Pasir also claimed that CPF contributors can afford to purchase HDB flats even with a reduction in CPF contributions from 50% to 40%. In the recent general election, members of Opposition parties also maintained that the people would eventually not be able to afford to purchase HDB flats based on current CPF contributions of 50%. So I am questioning the validity of his argument that with a reduction of 10% a contributor could continue to afford to purchase a Housing Board flat, If we take a worker's gross salary as $600 (Why $600? The wage norm considered by the NWC last year was $680. So I just round it up to $600) and based on 40% CPF contribution, as suggested by the Member for Potong Pasir, he will barely make it if he purchased a 3-room flat in Woodlands or Yishun with a 20-year loan. As we all are aware, most HDB lessees pay their monthly loan instalments with their monthly CPF contributions. Should a contributor choose a flat in Ang Mo Kio, Bedok, Tampines, then he has to make up the difference on his monthly instalment payment in cash. Furthermore, Sir, is the Member for Potong Pasir aware that the so-called increase in take-home pay for the workers is subject to income tax liability at the end of each year, and they also lose out by a similar amount in CPF savings? Sir, I have worked out some calculations on the current selling price of a 3-room flat in Woodlands and Yishun, that is a new town, $37,300 less 20% down-payment of $6,600, leaving a balance of $30,700. If the contributor takes a loan of $30,000 from the CPF, which is the normal case, depending on the loan period, for 10 years he has to fork out $344 pm; 15 years $262 pm; 20 years $222 pm. So if a contributor decides to purchase a flat in Woodlands or Yishun, he can make it if he takes a 20-year loan. Example 2. The selling price of a 3-room flat in Ang Mo Kio, Hougang, Bedok, Tampines, $52,200 less 20% downpayment of $9,000, leaving a balance of $43,000. That can be converted into a $40,000 loan spread over a period. For 10 years he has to pay $458 pm, 15 years $349 pm, 20 years $296 pm. And in the end, if his CPF contributions is reduced to 40%, he can never make it. These are not fictitious figures, Sir. I have obtained them from the application form from the Housing and Development Board.

Mr Speaker, Sir, many comments and suggestions have been put forward by Members of this House, and the members of the public regarding CPF contributions. The most unkind of them all, I believe, is the proposal advocated so strongly by the Member for Potong Pasir, ie, to reduce the CPF rate of contribution. Sir, CPF is workers' money. To suggest reducing CPF is to suggest reducing the pay and reducing the savings of the workers. I strongly object and detest such a move. Rather than suggesting a reduction in CPF, I think the more sensible thing to do is to see how the CPF money can be better utilized to serve the interest and the need of the CPF members. The CPF scheme has enabled the ordinary citizen to own a home. It has helped our citizens to save for old age. It has enabled our people to save money to pay for medical expenses through Medisave. As and when the CPF members have accumulated sufficient savings in their account for old age, the Government should perhaps consider further liberalizing the use of CPF savings. The use of CPF savings for tertiary education of the account holder's children or for their own education, for instance, should be seriously considered by the Government. Here, I would like to express my support for the views expressed by the Member for Kebun Baru and the Member for Jalan Kayu for the use of CPF for education and training. Sir, as I have mentioned earlier, CPF savings are workers' money, and we must ensure that whatever contributions which are due to the workers must be credited to their CPF accounts. It is in this connection that I wish to voice my concern over the collection of CPF contributions by the CPF Board. In recent months there have been frequent reports in the press of the defaults by employers, their failure to pay to the CPF Board not only their contributions to the CPF but also their employee's contributions. Sir, CPF contribution is part of employee's wages, and it will be tantamount to daylight robbery if an employer, after deducting CPF contributions for his employee's salary, fails to credit the amount to his employee's account. I suggest the CPF Board be more vigilant in the collection of CPF contributions. I understand that sometimes the CPF Board does not want to press the company too hard for fear of forcing the company into bankruptcy, but action must always be taken before it is too late. I am aware of cases where the CPF Board tried to give the company some breathing space, but other creditors could not wait and proceeded to take action to recover the debt. The employees were therefore left high and dry. I believe there must be adequate provisions in our legislation which accord top priority to the recovery of the employee's CPF. The interest of the employees must come first under such circumstances. Sir, I would also like to take this opportunity to make two comments regarding some specific provisions of the Central Provident Fund Act. My first comment is, if it is the requirement of the CPF Board that employers must make their monthly payments promptly, why is there a need to have section 6 (1) which authorized the Board to allow an employer to pay CPF contributions at intervals not exceeding six months? Would it not convey to the employers the wrong impression that they can delay payment for as long as six months? My second point is, in the event that penalty interest is levied on the employers who were in arrears of CPF contributions, I understand that the interest collected is not credited to the CPF members but re- garded as the income of the Board. I think this is not fair to the CPF account holders, and I suggest that a portion of the interest equivalent to what the Board pays to the CPF savings should be credited to the members.

Mr Speaker, Sir, CPF is a very hot issue. It has been discussed both inside this Chamber and outside this Chamber. I would like to endorse the views expressed by the Members before me, appealing to the Minister to allow CPF funds to be used for education. Sir, this is part and parcel of the Asian value. I personally think the risk is worth taking. However, if the Minister still thinks that that is not permissible under existing rules, perhaps he would like to consider the alternative of providing a loan from CPF to the children of the CPF members whereby either interest is charged at the same rate of interest paid to the members or no interest at all to show his support to the education programme. 12.45 pm Sir, I would also like to appeal to the Minister to direct the CPF Board to look into the possibility of providing more information on the statements sent to CPF members every year. At the moment, what we have is only one line under various columns. For those employees whose salaries are variable, whose pay includes overtime, shift allowance, etc, they are in no position to check the accuracy of the amounts contributed. Even for an accountant, sometimes it will take quite some time to really verify the accounts. Printed on the statement is a note saying that should the member have any query on the accuracy, he is requested to inform the Board. The majority of the members are in no position to check and to inform the CPF Board whether the figures are accurate. Sir, I would like to make this appeal, as quite a number of my constituents have brought this to my attention. I also read about this request in the newspapers. Perhaps the Minister would like to ask his officials to look into this possibility if the cost is not prohibitive.

Sir, I have an amendment.

I know that.

The Acting Minister for Labour and also the Member for Toa Payoh have said that the CPF is workers' wages and that the lower the CPF contributions the lower the wages. I agree with the former but not with the latter. I would say it would be the contrary. If you lower the CPF rate, as the Member for Rochore has said and I support him, from 50% to 40%, the take-home pay of the worker will be higher. As we know, in a tight labour market, the wages for certain skills or professions will reach a certain level. The economists call it the equilibrium point. You cannot lower the wages. If you lower the wages below that point, workers will not work and if you increase above that point, employers will not employ the workers. Take a simple example of, say, a skilled worker earning $1,000 a month. At the moment, at 25% contribution by the employee and 25% by the employer, he has a take-home pay of the balance of 50%. In money terms, $250 contributed by the employee matched by another $250 by the employer to the CPF account of the worker and his take-home pay is $500. An hon. Member: $750.

I have to clarify myself. The wage must be taken as the total wage from the employer's point of view. When we talk of wages, we have to include, as I have said earlier, the 25% contribution of the employer and another 25% of the employee and the 50% of the take-home pay. We cannot calculate the wage just from the point of view of the worker. The total wage is these three components. If the CPF is lowered from 50% to 40% that means from a total wage of $1,000, the employer pays $200 and the employee pays another $200 and the take-home pay is $600. The Member for Toa Payoh has said that -

The take-home pay is $800.

I am talking about the total wage, The total wage means the three components. For $1,000, 25% comprises the employer's contribution, 25% the employee's contribution and the 50% is the balance for the worker to take home.

Sir, on a point of clarification. I would like to ask the Member for Potong Pasir how he proposes to reduce the CPF by 10%. Take it off the employer's contribution or the employee's contribution?

The 10% CPF will have to come from either side of 5% each. As the Member for Toa Payoh says, if the employer is unwilling to take off his reduction for the benefit of the worker, then he will lower the wage of that particular sector of employee and the worker will not work. He has to top it up to his former total wage for the worker to work in that sector. As I said, in the tight Singapore labour market today it will definitely benefit the worker and at 40% contribution it will be enough for him to buy a home, Medisave and security for old age. It has been calculated that a worker who starts to earn $720 per month will over 30 years accumulate over $320,000. How can it not be enough? The Acting Minister for Labour has said, on 19th March, in this House that the Government is able to pay all the CPF contributors because it has enough asset backing. This point has been made in the elections by the Minister for Foreign Affairs and it is not new. When the question was put, I believe, to the Second Deputy Prime Minister whether the Government will pay the whole lot out, he quickly shot back and said, "No. There will be inflation." I agree with him. If we pay out the money in one go, the inflation will shoot up and go through the roof. This is one of the problems of the Government in regard to payment of CPF eventually. The question in everybody's mouth is whether the Government will pay or the Government has intention to pay. Just look at the proof. The Howe Yoon Chong Report on the Aged, amongst other things, said that there will be a postponement of the repayment of CPF from 55 to 60 and to 65 years. Why is that so? Certainly, the reason given that a person reaching 55 years cannot manage his funds is not an answer. The Prime Minister, on the eve of the last elections -

Sir, can I just ask a point of clarification? I fail to see the link between the proposal in the Howe Yoon Chong Report to defer the withdrawal age of the CPF holders and the ability of the CPF to pay. There is no link whatsoever. One of the reasons advanced by Mr Howe in the Committee's Report for a deferment is to ensure that the old people can continue working and will have a source of funds to look after them in their old age. That has got nothing to do with the ability of the CPF Board to pay. So I do not see the link between the two. Could the Member please explain the link?

We are not here asking the question whether the CPF Board has the ability to pay. This point has already been dealt with. They said they have enough asset backing. But the question in everybody's mouth is: will they pay? Have they the intention to pay out, in particular, in one lump sum, as promised by the Government? This is the question that we have to ask the Government at the moment and, according to the evidence shown, there is probably no intention of the Government to pay back in one lump sum. As evidence, the Howe Yoon Chong's Report on the Aged is one point. Mr Goh Chok Tong rose -

If you do not mind, let me continue and produce other evidence.

You should use your mind before you use your mouth. An hon. Member: Produce evidence.

Yes, I am producing the evidence now. That is one point. The other one is the reply given by the Prime Minister himself. A question was asked: "There is concern among the people nearing the 5Os about the starting point". 'No, no. They don't have to worry about that. we are not worried about people over 50, we are not even worried about people over 45, because their numbers are small. It is not going to be a serious problem.' Now listen to this: 'The problem will be enormous when the people in their early 40s get old, at 65.'

Where are you reading this from?

This is from the Straits Times, 21st December, 1984, on the eve of the general elections. 'From then onwards, larger and larger numbers will be involved. I can give a categorical assurance that if this is implemented, it will be done in stages. Let's say, we decide it is $25,000. In the first few years, it will be, let's say, $5,000 or $10,000, gradually it is built up until $25,000.' Here is the evidence.

Sir, on a very important point of clarification. The Member for Potong Pasir has completely misunderstood the meaning of the Prime Minister's statement, The Prime Minister was not at all concerned with the ability of the CPF to pay because that was never a question. He was concerned with the fact that Singaporeans, especially younger Singaporeans, would have 20-25 years of good life after retirement at 55. How do we take care of that portion of a person's life when he retires at 55? Financial security is very important and the Prime Minister was addressing himself at the question of financial security for Singaporeans when they retire at 55. It has got no link whatsoever with the ability of CPF to pay. The Member for Potong Pasir should not belabour that point when, in fact, answers have been given in this House to prove that CPF has got the money to pay every cent of the CPF depositor whenever he wants to withdraw his funds.

As I have to repeat myself, it is now not a question of ability to pay. Can the CPF Board pay or have they the intention to pay a lump-sum when the worker reaches 55? 1 am producing evidence that it will be paid by instalments, and there are other evidence, other means where CPF is to be soaked up, or siphoned off or locked up. These are all the evidence -

Mr Chiam, your 10 minutes are up. But I will give you another two minutes because of the interruptions.

I am much obliged, Sir. The other evidence is an article published in 1982 by a university lecturer. In that article, he says that even at 33% it is sufficient as a means of financial security for old age, money enough for home purchase and for Medisave. He went further and said that the accumulation of CPF was large and if you should increase the rate higher it was like a keg. He called it the CPF keg. It was like a time bomb. Of course, he suggested ways of reducing the pressure by liberalization as one of the means. Our age pattern of the workers will make it in such a way that, about 15 years from today, the number of workers contributing and the number of workers withdrawing the amount of CPF will be about the same. There will be problems then and probably all these measures taken by the Government are only to postpone that event. We know that our M1 or money supply is about $8.2 billion circulating in Singapore. In about 15 years' time or so, the amount of payments will be something like $8-$9 billion. Can you imagine if the Government pays it out in one go? That is the time when the payment is calculated to be about $8.2 billion.

Your time is up, Mr Chiam.

Sir, can you just let me round this off?

You have used up 12 minutes.

I was interrupted by the First Deputy Prime Minister.

Yes, that is why I have given you an allowance of two minutes. I am afraid your time is up.

I am making these points as evidence -

Mr Chiam, I said your time is up.

Yes, I am much obliged to you, Sir. Mr Goh Chok Tong rose -

One more minute before Suspension time.

Thank you, Sir. I am pleased to note that the Member for Potong Pasir has now recognized that CPF has got the ability to pay. Earlier on, he has come out with figures to show that CPF did not have the ability to pay. I think it is a concession on his part and we are pleased to note that.

It is 1.00 pm. Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

This Sitting is suspended until 2.30 pm. Sitting accordingly suspended at 1.00 pm until 2.30 pm. Sitting resumed at 2.30 pm

Mr Speaker, Sir, I beg to move, That the proceedings on items 2 to 5 on the Order Paper today be exempted at this day's sitting from the provisions of Standing Order No. 1. Mr Speaker, Sir, these four items may require a little more than the half hour that we have to complete, and I am sure that Members would rather that we complete the business today than come back on Monday. Sir, I beg to move. Question, put, and agreed to. Resolved, That the proceedings on items 2 to 5 on the Order Paper today be exempted at this day's sitting from the provisions of Standing Order No. 1.

Debate in Committee of Supply resumed.

Head R (cont.) -

Mr Speaker, Sir, I rise on a point of clarifi- cation. Sir, I seek clarification from the Member for Potong Pasir regarding what he said earlier on the release of CPF Funds causing inflation and its relationship to, I quote, M1. I am very concerned, Sir, regarding CPF-induced inflation. If this is true, may I beg his indulgence and your indulgence, Sir, for, as a medical practitioner, I am confused with this relationship to M1. What is M1? Could he please clarify and, I hope, allay my fear.

Mr Chiam, you have a chance to speak a little bit more.

I am obliged, Mr Speaker, Sir. May I first clarify the figure I gave in respect of the overall wage bill of $1,000? Now, this should be based on a salary of $800 and a 50% CPF contribution from either side, employer and employee. The take-home pay would be $600 and $200 each for the employer and employee to contribute. Now, as I said, in a tight labour market situation, the wage for a certain skill and profession at an equilibrium -

Mr Speaker, Sir, on a point of order. I asked for clarification on a specific topic.

I am clarifying my own earlier statement.

Your earlier statement has been finished. It has been dealt with. You were given 12 minutes to do so. Now you are being asked to clarify a certain point which the Member has raised.

Mr Speaker, Sir, M1 is an economic term for the supply of money. Now, I have here a report in the Business Times, December 1983: "Singapore's M1 money supply rose by $52 million to $8.13 billion in August after a $164 million fall in July." This is the money supply that is circulating in Singapore. We have this much money. Now, by my party's calculation, in about 15 years' time, the withdrawal of CPF in the year about 2003 would be around $9.5 billion. This is the problem that the Prime Minister was talking in his report given on 21 December. This is the time when those who are 40 years old or so would have problems getting their money back. And this money added into the circulation would certainly create immense problems as regards inflation. So this is the problem I am referring to. I hope the Member for Fengshan is quite clear on this point now. I am much obliged, Mr Speaker, Sir.

Mr Speaker, Sir, since we are talking about money matters, perhaps I should clarify on behalf of the MAS. I think the Member for Potong Pasir is unnecessarily worried about effects of net CPF releases causing inflation in the Singapore economy. His concern is understandable but it is totally misplaced. Let me cite. M1 is defined as a narrow money supply indicator and represents only cash in circulation plus coins in circulation and current account deposits. When you talk about total money supply in Singapore, you really should be talking about M3 which includes fixed deposits, certificates of deposits, savings accounts and deposits in non-financial institutions such as finance companies. When we talk about this, the total amount currently in Singapore is $36 billion. In addition there are also considerable other financial assets available for investment by Singaporeans because the total stock market capitalization, as at the end of 1984, was $68 billion, of which $28 billion was accounted for by Singapore registered companies and about $40 billion by Malaysian companies. So there is even now no shortage of financial instruments for the prudent Singaporean to invest in, if he could lay his hands on the money. So that is one point. Secondly, I think he has calculated that in about 15 years' time, net CPF withdrawals would be around $9 billion. I do not know how this is calculated. Our own calculations show that a net reversal or net outflow would take place probably by the year 2013, or roughly 18 to 20 years in the future. Now, by that time, one must realize that the Singapore economy, even assuming a conservative growth rate of 6% per annum, would have quadrupled in size. So again, the pool of funds in the economy for investment purposes or assets for investment would be very much larger, even discounting inflation. Thirdly, even if the facts as stated by the Member for Potong Pasir were correct, that a $9 billion flows into the system in 15-20 years' time, I think the Member is doing every Singaporean a disservice because every single Singaporean has proved to be a very prudent individual and is, in fact, an inveterate saver. In addition to the gross contributions of CPF in 1984, around $5 billion, he has also salted it away in the POSB about $7 billion. In addition, private account saving deposits in banks total another $4.5 billion. You can see, therefore, even if the entire amount of money were released to them, I think it is highly probable that a good proportion would be re-saved or invested in financial instruments by the year 2005, 2010 or 2015, at which time we would hope that the range of financial instruments available for investment would be vastly larger. So there is really no need to be worried or be concerned that the Government would be unwilling to release money when this falls due because the opportunities for investments are vast. In fact, in my day-to-day meetings with visiting foreigners, when we discuss about the CPF, they have invariably expressed the opinion that it is the greatest invention since the wheel, and they wished that their governments had the gumption or political ability to introduce similar schemes.

On a point of clarification from the Minister. Is it true then that there will be no CPF-induced inflation in the future, no such thing?

I think it is highly unlikely. Firstly, the other point which I forgot to mention is that Singapore operates a very open economy. I did mention yesterday, or the day before, that about 70% of our goods consumed in Singapore, are imported. Therefore, even if you pour $9 billion into the system, assuming there are no net savings, there will be some pressure on services possibly, but the great bulk of these consumption items would be available from a vast world market where, therefore, even $9 billion is a drop in the bucket and will create no problems whatsoever.

Thank you.

Mr Speaker, Sir, I have got two points of clarification for the Minister for Trade and Industry. It would appear by the way the Minister says that there appears to be no problem in regard to the payment out of CPF. Now, if that is his view, then what is the Prime Minister talking about the problem of those who are in the 40-age group. Now, that is one area. The other problem about CPF is, why are there so many schemes now being hatched, for example, the postponement of the repayment of CPF at age 55 to 60, to 65, and the other schemes to soak up or lock up CPF money? Perhaps the Minister could explain these two points.

Mr Speaker, Sir, on the point about the Prime Minister's concern, I think, understandably, the Prime Minister generally tries to see as far into the future as possible, and he is concerned that there may be a basic change in the habits of the Singaporean. I myself think it is probably unlikely, but he cannot discount this.

You do not agree with him then.

No, no. I think he is, what you call, testing the parameters. And when you are a far-seeing political leader, you have to consider the possibility of something happening. So you prepare in anticipation. I think, by and large, there is a proportion of the younger population who may consume and spend all they saved. But by and large, when the time comes, firstly, even if he does spend, there will be adequate outlets for his expenditure if it takes place. So inflation will not take place. So I see, from the inflation point of view, no real need to be concerned. On the second point, perhaps the Minister for Labour should clarify.

Mr Speaker, Sir, first, I would like to thank the Minister for Trade and Industry, who is the real expert here on financial matters, for explaining so clearly what the Member for Potong Pasir is completely ignorant about. I am sorry to have to say so.

Please just explain.

I will, don't worry. I am coming to it. But it is obvious from the fact that he was not able even to explain what M1 is. He has not a clue of what he is talking about. And yet, despite this ignorance, or despite wrong advice by people who have been advising him, he has been publishing all these in the Demokrat. I have a copy here, Sir, of the Demokrat dated October/November 1984 which was the issue before the Elections. I think those who have read this, and who do not understand the full facts, would be confused and would be alarmed unnecessarily. I consider this to be a higher irresponsible action on the part of one who claims to be constructive opposition. 2.45 pm Again, this morning he has misquoted what the Prime Minister said during the press conference. I do not know whether he is genuinely not able to understand what the Prime Minister said or his whole frame of mind is such that he is not able to understand the issues. Acting on wrong advice or on ignorance, he has come up with this notion that because the sums to be withdrawn from the CPF many years from now will be very big, that, he has been told, is going to cause inflation. Therefore, he has been going around telling everybody that the Government is trying to delay payment of CPF in order to postpone this day of reckoning. This is the basic premise of his statements today and also of this article in The Demokrat. He has come out with all kinds of preposterous ideas. One point he made here, or the writer made, is the claim that HDB prices have been increased in order to soak up the CPF savings. How preposterous can he be? We all know that from 1979 to 1981, the construction industry was overheated and as a result -

Point of clarification, Sir. Is it not true that almost all property prices dropped last year by 25-30% and yet HDB prices increased against the trend of the market? Can the Minister explain why, if it were not to soak up the CPF savings?

This is one of the claims made by him. I would like to remind him that he still has to decide on the offer by the Minister for National Development to build the four blocks of flats. The real increase in HDB prices came after the severe problems faced by the industry in the years 1979-81 when the construction cost shot up because there was overheating of the industry. And this affected not only HDB flats but also all kinds of properties. I just mentioned this by way of illustration. I do not want to digress into HDB which is not my problem. I just wanted to quote one example to show the kind of ideas he has been led into. His second point is his original claim - today he has shifted his position - but his original claim as reflected in the article is that the Government will not be able to pay the CPF withdrawals because the sums will be very big. I am glad to note that today he has finally accepted our explanation and agreed that the money will be there, and there will be no problem of repayment. But because he thought the Government was afraid it might not be able to pay, he has suggested that the Government was, in fact, raising the CPF rate year by year in order to get more money to pay back the depositors and thereby postponing the issue. There again, it shows how he has not understood the problem. The third point which has already been well answered by my colleague concerns inflation. He claims that because there is going to be inflation, therefore, the Government is trying to delay payment of the CPF and that is why the Government has been discussing this postponement of the withdrawal age. I am afraid, Sir, the Member has misunderstood or misquoted the Prime Minister who was commenting on the problem that will come in the future as our population gets older. In the Howe Yoon Chong Report, it has been projected that (if we consider the different age groups, those who are economically active, ie, people between the ages of 15-64 as one group, and then we have those who are the aged, aged 65 and above, who are the ones most likely to have left employment) as of the year 1980, there were 15 economically active persons to one person aged 65 and above. As our birth rate declines and the population grows older, this ratio is going to change from 15:1 to 10:1 in the year 2000 and to 3:1 in the year 2030. This is the problem that the Prime Minister was alluding to. He was concerned that with so many aged people in our midst, there will be a problem of financial security in old age. This is the basic concern. It is not because the Government is trying to postpone the withdrawal age, not because the Government is concerned about CPF withdrawals causing inflation, but because being a farsighted and responsible politician and Prime Minister, he has forewarned the people of this problem. What it means is that, as the population ages, there will be fewer and fewer working Singaporeans to support every member who is aged. Furthermore, people are living a longer life. The life expectancy will probably go up to about 70-75 years, maybe longer. And this prolonging of life may come about through medical advances, through modern medical techniques, such that people are kept alive at high medical costs. This is the problem, a very serious and genuine problem, which we will have to face up to in the years to come. This is what the Prime Minister was referring to. Since so much confusion has been created over this issue, I would now like to take a few minutes just to explain the various aspects of this CPF withdrawal age problem. Much of what I am going to say is not new. It has been reported. It has been discussed in this Parliament. But I want to take this opportunity to spend a few minutes on explaining what the issue is all about. As I have said, the whole thing started with the problem of the aged which is coming within the next 20-30 years. All these are contained in the Howe Yoon Chong Report. This Report was meant only for discussion, both inside this House and outside, to get public response. One of the proposals in the Report was to defer the withdrawal age from 55 to 60. As people work longer and so on, the idea is to postpone this withdrawal age. But because of the very strong negative reactions from both the public and from Members of the House, the former Minister for Labour has given some ideas about what could be a possible solution. These are ideas at this stage. The idea that he indicated was that perhaps a minimum sum could be held back, say, $25,000. This figure has not been fixed, Anything above that amount can be withdrawn completely. During the elections, the Prime Minister further clarified that this minimum sum includes the value of the property that you buy. So if you own an HDB flat and has already paid up to the sum of $25,000, then there is no need to hold back any more CPF savings. The whole sum in excess of this $25,000 or the value of the HDB flat can be withdrawn at age 55. In the heat of the elections, many people have missed this point because it is a very significant point. As you know, Sir, the Government is aiming for 100% home ownership. If, in fact, we do achieve that, then where is the sum held back? Because everybody would have invested some CPF savings in their properties to the extent of this amount. But recently the Prime Minister has said that he is not optimistic that we will be able to achieve 100% home ownership. There may be a small minority, maybe 10-15%, who may not be able to achieve this objective. This is a small group of people whom we have to take care of to help them manage their savings, to make sure that they will have enough savings after retirement for their financial security. Whilst we want to do this, Sir, the intention is not to penalize the majority. We know that the majority are fully capable of looking after their money. As my colleague has mentioned, Singaporeans are avid savers. So when they withdraw their CPF money, they will probably put it into a bank. But there will be a group, maybe a small group, who may not be able to manage their own savings. So this small group may require assistance, without penalizing the rest. If there is not enough provision made for this group, they may end up as a burden on their relatives and maybe eventually on the State. Sir, let me just give you some numbers to view this sum of $25,000 because, if we just look at the figure "$25,000", it looks like a big number. Let us consider a young man who starts work today. For example, he is 25 years old today. By the time he is 55, he would have worked for 30 years. If we assume that today his salary is $500 per month, which is a very normal pay, his CPF per month would be $250, 50% of $500. For one year, therefore, he would have $3,000 CPF savings. If we multiply this figure of $3,000 by 30 years, the time that he would be working till 55, we would get a figure of $90,000, a very big figure. Let me explain. This is looking at it in a very simplistic view. If we assume that the CPF rate just equals inflation - in fact, it is greater than inflation, but for simplicity, we assume that the CPF rate is equal to inflation - and if there is no wage increase, which is most unlikely, then this figure of $90,000 will be his real savings in CPF at age 55. 1 am not saying this will be the actual figure. The actual figure will probably be bigger because the CPF rate is higher than inflation and there will also be actual wage increases. I am just using this figure, Sir, for easy comprehension. If a Member can follow my calculations mentally, he will be more convinced of what I am trying to tell him. Looking at these figures alone, in real terms, this young man earning $500 per month today would have by the age 55 a sum of the order of $90,000. So this young man will be well provided for. He will be able to own a 3-room flat costing about $40,000. He will be able to put aside $10,000 for Medisave. He will still have savings of $40,000 to live on. So this CPF scheme is a wonderful scheme. He has saved over the years. He has got this much money. 3.00 pm The question then is, looking at this figure of $40,000 that he has got left, does he realize that, at age 55, he may still live for another 20 years? Some may not. Some may live even longer. But on the average, maybe up to age 75. If that is the case, in order to live for 20 years, even at $200 per month to live on, a very modest sum, you need $2,400 per year. You multiply that by 20 years, you will need, in fact, $48,000 to last him from age 55 to age 75. So the point I am making is that the Singaporean worker starting out today will be well provided for, but not so well that he can afford to squander away his money. He must still manage his savings carefully in order that this sum can last him through his twilight years. I know what Members are thinking. Most of us can look after our own savings. I agree. But I think many of us have come across instances of retired persons who have withdrawn their meagre CPF savings and spent it straightaway on television, on videos, on trips to China, maybe speculated on the stock market, and then eventually ended up dependent on their relatives and families. Many of us have heard of or experienced such instances.

Do you have records of this?

There is no record of this because the Government does not collect these records. But the fact is, it does happen. There are some people who need to be assisted, a minority group, maybe a very small group, to look after their savings. They may have the illusion that this CPF saving which they will get is a very big sum, but in actual fact that sum has to last them for the rest of their lives. I am not saying that the Government should try and protect him completely, to make sure that he is provided completely for the rest of his life; maybe only partially. But we should at least try and look into the problem to see how we can provide for this group of people, without penalizing the majority who are prudent and who know how to manage their own funds. The Prime Minister has also mentioned in this press conference, which was alluded to earlier, that there will be many people who are. reaching their retirement age. These are people who are aged 50 and above, aged 45 and above. These are people who were earning relatively low salaries in the earlier years when pay levels were low. In those years the CPF rate was also low. So their CPF savings as of now are, in fact, quite small. For this group of people we will have to give special consideration because the sum of $25,000 is just too big to be retained. And this group of people, in total numbers, is small in comparison with the whole population. This is what the Prime Minister meant. He said that if this idea of a minimum sum retained was accepted, then it should be implemented in stages. Maybe those above 50 should not have any sum held back, those who are younger maybe smaller sums, and so on, in gradual stages. This is really what he meant. So please do not misunderstand him and misquote him. Sir, I would like to emphasize that all these points that have been discussed so far are just ideas at this stage. My Ministry is still studying the problem. It is a very complex problem and we will try and come up with a proposal by next year. The proposal will be thoroughly discussed before a decision is reached. Some Members in this House, when this matter was being debated, also brought up this idea of old money and new money. In other words, should you distinguish between CPF money put in at a certain date from that put in at a later date? That is something we will have to look into. There is also the question that there are many people who are not yet in the labour market, who have no CPF savings yet. These are the younger workers. The Government will also have to look at them. In other words, the Government has to see all the factors, not just those I enumerated, before we come up with a proposal. I would like to mention also, Sir, that my Ministry is considering introducing a dependant's protection insurance scheme. Some Members mentioned this morning that they would be in favour of some insurance scheme to protect the CPF members. My Ministry is examining the merits and details of such a scheme. The idea is to provide a minimum level of life insurance for members to protect their dependants against the risk of the member's premature death. The premiums payable will come out of the Special Account of the members. We are still looking at the details. So I hope this answers the pleas made by some Members that we should improve on the CPF scheme and make use of CPF for various purposes. This is one such scheme we are studying, Sir. Another point I want to make is that, contrary to the unfounded allegation that the Government is trying to hold back the money, in actual fact the Government is thinking of how to liberalize on the use and management of these funds, As the First Deputy Prime Minister has mentioned, we are thinking of allowing the use of CPF to purchase more than one residential property, perhaps even commercial property, perhaps shares, and other assets. But even, as of now, with the various schemes that we have, the CPF money is, in fact, not locked up. Vast sums have been withdrawn by members to buy HDB flats. Do not forget this point. This is the reason why many members are able to furnish their flats lavishly; they are able to buy cars; they are able to go on travel. Because they have been using the CPF money to finance the homes that they own. So they have money to spare, which they are using for various other purpose& So the money is actually not locked up. If I may now turn, Sir, to one other point which the Member for Potong Pasir made this morning. It was his idea that we should reduce the CPF rate from 50% to 40%. He himself has confirmed that this reduction of 10% will come from the employer's portion as well as the employee's portion. This means that he is advocating a reduction in the wage packet of the ordinary worker. I do not think our Singaporean worker will thank him for it. As the Member for Toa Payoh has explained this morning, our Singaporean workers need this CPF money in order to pay for their HDB flats, and even at 50% rate they can barely make it to own a 3-room flat at Woodlands. If it were a 3-room flat in a more central location, already there will be a problem. And here, this Member for Potong Pasir is advocating that we should cut down the CPF rate. First and foremost, Sir, I think he should get his sums straight about CPF. He was so confused with the numbers that I do not know whether Members could understand him - about gross salary $1,000 and deduct $250, and therefore the take-home pay is $500. Perhaps he should go back and do the sums first. But the basic point is that CPF is workers' pay. If you cut it, if you reduce the CPF rate, you are going to reduce the workers' pay. It is as simple as that. It is no use talking about equilibrium, this, that and the other. If you give the employers half a chance, I think they will try and reduce costs. Sir, I would like now to turn to some of the other issues raised by hon. Members. Members seem to have sensed that the Government no,w has a more liberal mood towards CPF and are trying to introduce or suggest all kinds of new uses for CPF funds. Before we proceed further, maybe I should remind Members that they should really take a look at the breakdown of CPF savings of different members at this point of time. What is the real situation as far as the quantum of savings in members' accounts is concerned? As at 31st December, 1984, out of about 900,000 active members on the CPF list, 33% had less than $10,000 in their accounts. This includes the amounts withdrawn for HDB, for SBS, and so forth. 55% had less than $20,000; 69% had less than $30,000, 78% had less than $40,000. If you compare this to what I have mentioned just now, about the sum you need for old age financial security, you will see that we are still quite far away from that financial assurance upon retirement for existing members. If you exclude amounts withdrawn for HDB, the proportion is even more striking -88% had less than $40,000 in their accounts. So before Members start jumping up and suggesting all kinds of new ways to use the money, just look at the quantum of the savings. The Member for Toa Payoh has already mentioned that the CPF savings are needed to pay for HDB flats. So we should have our priorities right. First and foremost, the objective of the CPF scheme is for old age financial security. This is the most important basis of the CPF scheme and we should not forget that. Secondly, we want him to own a home; priority No. 2. So we must make sure these two are assured first before we even consider other possibilities. Various Members have spoken eloquently on why we should release CPF money for education, that it is a form of investment, it is good for filial piety, and so on. Members have also given the reasons which were explained before in this House. So I will not repeat them. But before we look at that possibility, we should take up the proposal of the Minister for Finance the other day - that one way is for the Government to offer interest-free loans to students going for tertiary education in our Universities. I think that is an excellent idea and something we should look into. Because it means the students, the young men and young ladies, will be able to finance their own tertiary education without taxing their poor parents who need the CPF savings for their old age. As of now, already there are many scholar-ship schemes and bursaries which have not been fully used. Perhaps the PSC should be more liberal. It could be that there are not many takers. But if it is because the PSC has been too strict, then I would suggest that they should really liberalize and provide more bursaries, more scholarships, more loans (interest-free loans), before we touch the CPF money. 3.15 pm There was also a suggestion that we use CPF for renovation. The problem here, apart from this basic factor of preserving the quantum of the savings for old age security, is that it will be very difficult for CPF to administer the scheme because, what constitutes renovation? Is it furnishing? Is it changing of a window? What is it? But that is not the basic objection. The basic objection is that we should first look towards providing financial security in old age and home ownership before we think of other possibilities. How much time do I have, Sir?

I will give you another 10 minutes.

The Member for Kebun Baru was concerned that if the Government were to allow CPF for purchase of more than one property, then we might cause overheating of the property market. In actual fact, the amount of money that could be released from CPF into the property market is limited by the amount of savings that people have. As of now, they can invest all their money in one property, one big house or whatever; or they could invest the same sum of money in several properties. Instead of buying a big house, this member may decide to buy a small terrace house because he has a small family. He does not need a luxurious house. He might then buy another house to rent out. In fact, it is an improvement of the scheme and does not necessarily lead to further heating of the property market. Of course, members will have to use their judgment as to when is the best time to buy -whether it is now or later. But, as in any investment, there must be some risks although in the Singapore context, with our land shortage, we expect that investment in properties will be a good hedge against inflation and will be a good investment in the long run. Sir, the Member for Jalan Kayu and the Member for Boon Lay touched on the problem that we have been experiencing with some employers who have been late in their payment of CPF on behalf of their members. If Members recall, the CPF Board has issued a very comprehensive statement on this problem. Let me just explain the mechanism. Sir, the CPF already has a very comprehensive enforcement system. All the accounts are computerized. As soon as any company is late in payment, the CPF computer will detect this late payment and a letter of demand will be sent to the company to pay up. If the company does not pay up, the CPF Board will then have to take legal action to get a court order to enforce payment. If, despite this court ruling, the company still does not pay, then the CPF Board may have no choice but to seize the employer's assets for sale to recover the arrears of CPF payment. If need be, the CPF Board can even go after the company's debtors -what are known as garnishee proceedings, in legal jargon; in other words, to go after the debtors of the company to get them to pay to the CPF. Unfortunately, all this process takes time. The courts are busy and they take time to hear the cases and so forth. What the CPF Board has done is to inform members within a reasonable period that their employers have not been paying their CPF. Once that is done, the CPF member should be alerted that his employer has been underpaying him. So it is up to him to decide what course of action he wants to take. It is as if the employer has not been paying him wages or underpaying his wages. He might go and bang at the door of the personnel manager, or whatever other action. In the extreme case, he might even decide to leave the company because the employee is in a sense offering his services to the company. If the company is a good employer, has good welfare benefits -

On a point of clarification. Will the Hon. Minister say what the employee can do in those circumstances? He suggests banging at the door. The next minute the man will be dismissed. What is he really suggesting?

I am just putting it simply to Members that the CPF money is the members' pay. If a worker were suddenly to find that his employer is not paying him, what does he do?

The employer can be prosecuted under the Criminal Law. Do you know that?

Whatever it is, the employee himself is alerted. He can make his own choice, and it is a very immediate reaction from the employee. The CPF is doing its best within the legal process, which takes time. If it were a good employer, the employee affected might decide, in that instance, to allow the employer to pay later. That is part of this concept we are promoting - company welfarism, loyalty and so on. But if the employee feels that he cannot accept this underpayment of salary, then it is up to him to decide what action he wants to take.

You suggest something. What can he do?

Sir, the Member will have every chance to make his point afterwards. Could I request that I be allowed to continue in peace without interruption? In view of the problems and the concern, the CPF Board is trying to see how it could improve on the collection. For example, the Board is arranging with the Attorney-General for his approval of the request for prosecution, which will be forthcoming within a week. Previously, it took longer than that, except for urgent cases. Now we are trying to expedite the legal process. The CPF Board is also asking the Subordinate Courts to arrange for earlier hearings. One of the problems we must realize is that the CPF Board must weigh the pros and cons of taking action. If you take premature action, you will be just pushing the employer over the brink. If it goes bankrupt, then everybody loses. One further problem is that many of these employers have taken loans from banks and other financial sources which are secured against their machinery, factories and so forth. These creditors have first charge on those assets. This is normal banking practice. I believe this is the situation all over the world but I have to verify this - that when a banker lends money against security of an asset, he is effectively the owner of that asset. He has first claim. We cannot have a situation where his claim is subordinate to some other claim, be it wages or CPF or whatever. This is the problem. So if you push that company over the brink and there is not enough money to pay all the creditors, then the CPF holder gets nothing. But within the legal framework and within the present system, under the Companies Act, in the category of unsecured creditors, the first priority goes to winding-up expenses. The second category is salaries and wages. The third category is workmen's compensation for injuries and so on. The fourth category is pay for leave that has not been taken. The fifth category is CPF contributions. The Attorney-General has advised that where an employer has deducted CPF from his employee's pay and failed to pay into CPF, that money still ranks as wages. So it is really No. 2 on that priority list. On the other hand, the employer's CPF ranks No. 5. The question is whether we want to move this No. 5 up to No. 2. Personally, I feel there is no strong reason because all the other categories, except the first one, are really dues to employees, whether it is wages or workmen's compensation and so on. There is really no advantage in moving this up. The Member for Jalan Kayu mentioned this possibility of applying the maritime law. I am not familiar with that law but I do not think it is quite applicable to a landed situation, because with a ship you have special considerations.

Point of order, Sir.

You want to clarify something, Mr Heng?

I just want to point out to him that the use of maritime law is a very specific case. Whether it can be applicable to land law or not depends really on how the law is enacted here.

Sir, I have a write-up here on maritime law which I could show the Member afterwards if he wishes. But the way I read it, it is not applicable because with ships there are a number of other considerations. The owner is not on board the ship. The cargo might not be paid and so on. Under maritime law, I understand, wages rank first for very special reasons. But that might not apply to, say, a situation in Singapore, a landed situation.

Mr Lee, I will stop you here and allow Members to speak.

Sir, I am moving away from the CPF to a subject which is very near my heart. I have spoken on this time and time again, and that is, the pass to which our workers have been reduced by this Government which came to power on the backs of the workers. It promised the workers that it was their Government which was going to bring justice to them in this land. Perhaps I will illustrate the pass to which our workers have been reduced, by a case example. An employee in an engineering company brought to my notice the circumstances surrounding the termination of his employment. It happened in this way, Sir. He was at work which required two people to do the work at the same time. He had a colleague working with him at this job that was assigned to them. After two or three hours of work, the colleague decided that he had to take a little break to have a smoke. They stopped working for a few minutes and the colleague went off to have his little smoke. This man does not smoke and so he took out the Reader's Digest which he had in his pocket and was browsing through it, The Works Manager then suddenly saw him browsing through the Reader's Digest and, hey presto, within the next hour or so he got a letter warning him that he was found reading the Reader's Digest during his hour of work. This poor man protested that there was nothing for him to do because his colleague had gone off to have a smoke and he could not do the job himself and so he was just browsing through this magazine. That would not do for the Works Manager and, he was told, he was warned. This man appealed to his union and I see there was a letter from a Member of Parliament replying to this, and the answer was, "Oh, no. We do not agree we can do anything about your case because, after all, you were reading the Reader's Digest, weren't you?" That was one incident. 3.30 pm A month later, he got another warning letter, and this came about for this reason, Mr Speaker, Sir. There was an accident at the workplace and after the man had been conveyed to the hospital, some of the workers gathered round to see what had gone wrong, and he seeing them just went to inquire what was wrong and, hey presto, the next minute he had another letter saying, "You have been warned not to form groups of people." And a month later, he had a letter: it has been decided that your services should be terminated; here is a month's salary, take it and go. This man has had some years of employment with the company, and the company obviously was building up towards terminating his services. So they had to find excuses or causes for his termination. No doubt they gave him a month's salary which is the sum allowed under the Employment Act. This poor man has appealed to the Minister for Labour to ask him whether he would do something about this which he considered a most unfair dismissal of him. Mr Speaker, Sir, it is a dismissal, notwithstanding the man was offered a month's wages. I have not been able to speak to him today, but I do not think he has had any reply from the Minister for Labour yet, and that was two months ago when he appealed. So this is the situation which our workers find themselves. They have no protection against the employer. The unions are not there to protect them. Is it any wonder, Mr Speaker, that the unions are losing their members? I see concern Voiced in the Press over dwindling membership of unions. Union leadership today, Mr Speaker, Sir, is management-orientated. Somebody was complaining to me the other day about elections to union leadership. Persons who want to serve the union and the workers and wish to stand for office in the union leadership suddenly find themselves transferred by the company to another place, depriving them of any opportunity to gain office in the union leadership. And I am told the same members find themselves back in office year after year. All management-orientated. So what is the Government going to do about this state of affairs? Is it not time our workers have a break? I have spoken about the amendments that have been made to the Industrial Relations Act, to the Employment Act, which took away all the rights of the workers and have reduced them to the position of serfs. These amendments were made at a time when there was fear felt about Singapore's economic progress and the workers accepted the amendments. But now that we have come out of the uncertainty, the Government says we have made economic progress can anything be done now to restore the workers to their rights which they did possess at one time, and even before this Government came tO power in 1959? Today, our workers are but the playthings of employers and the union leadership. I have complained times without number about the complete helplessness of our workers. I would ask whether the Government now intends to repay a little bit of the debt that we Singaporeans owe our workers. They have contributed not a little to the prosperity of Singapore and I think they deserve a little more than what they have got from this Government. I have referred to Section 14 of the Employment Act not once, not twice, but several times. I think the Ministry should take a closer look at Section 14 of the Employment Act. It was intended to afford some protection to our workers, but it does not. It is an empty section. I would ask that the Ministry give very serious consideration to strengthening the position of our workers by amending Section 14. 1 would ask the Ministry to consider introducing an Unfair Dismissal Act, which is now the law in a number of countries, where if a worker feels that he has been unfairly terminated, even by the grant of a month's wages, he can go to a tribunal and complain about the unfair dismissal. And then the tribunal will order his reinstatement. It is no good saying again the Minister can do this because I have said, time and time again, the appeal to the Minister in many cases is just an exercise in futility. May I finally finish by saying, Mr Speaker, about this man, why the company got rid of him? Because he was, in the eyes of the company, a trouble-maker. He was somebody who was concerned about his fellow workers' benefits, their welfare and their rights. And so, between the union leadership and the company, this man has lost his job. Is this how we are going to treat our workers?

Mr Speaker, Sir, on a point of clarification. The Member stated that he wants to move away from the CPF issue. May I ask him a question whether he shares the same views as the Member for Potong Pasir on CPF, in particular with regard to the following points: (1) CPF Board will be unable to pay back in the near future; and (2) whether CPF withdrawals will be put in M1 and hence cause inflation?

I think it is completely out of order.

But he said he wanted to move away. I just want to ask him whether he shares the same views as the Member for Potong Pasir.

He has moved away.

Mr Speaker, Sir, before I speak, may I ask a point of clarification from the Member for Anson, whether the worker that he was referring to was a gentleman called Mr Chua Chwee Kay?

You've guessed that right.

Sir, the Member for Anson is predictable. We have heard his usual diatribe in this House about the -

Is he replying on behalf of the Minister, or is he making a speech?

He has got an amendment here.

Sir, I am making a speech because I have two more amendments and I thought I will take up the time to clarify a few matters, because I am familiar with this case. Sir, the unfortunate worker was issued a warning letter by the management because he was found not to be working but doing something else other than work when he should be working.

What did he do?

In this particular instance, the management quoted the fact that he was reading the Reader's Digest instead of working.

What were the circumstances?

Mr Speaker, Sir, the union took the matter up with the management and, after a series of discussions with the management, decided not to pursue the matter because, apart from this incident, the management pointed out to the union that there were many instances of his not performing his duties.

And you agreed.

And therefore it was decided that, instead of giving him verbal warning, the management felt it was important to let him know, in writing, that his continued behaviour in this manner would not be conducive to the working environment of the company. We had discussions also with various officials and we decided that we would not continue to pursue the matter. Mr Speaker, Sir, may I ask again a point of clarification from the Member for Anson, what were the circumstances under which a letter of termination was issued to Mr Chua Chwee Kay?

Well, I should have thought the Member would know that. He works with the management. An hon. Member: He was a shirker.

All I was shown was a letter from the company saying, "It has been decided to terminate your services by offering you a month's salary." The management did not have to spell out its reasons because, under our Employment Act, you can just throw a worker out by giving him four weeks' wages, and tell him, "You cannot ask any question. Get out."

Mr Speaker, Sir, the circumstances under which the letter of termination was issued by the company were different. The company was engaged in activities of a serious nature, and there were certain areas within this company that were restricted, and only authorized personnel could be allowed to enter those premises. Unfortunately, Mr Chua Chwee Kay was caught in these areas, without authority.

Why don't you charge him?

The management issued a letter of termination. The union discussed this with the management on his behalf to see whether the management could retain his services in view of the contributions that he might have made to the company in the past number of years. The union made several attempts to find a solution with the management, failing which the union wrote to the Minister for Labour on behalf of this member, and the matter is with the Ministry of Labour.

Mr Speaker, Sir, on a point of clarification from the Member for Anson. The Member for Anson cited one case which he says that the worker has not been given a right and he goes round saying that that represents the condition under which workers in Singapore are placed under the PAP Government. Is he saying that one case represents hundreds of thousands of workers in Singapore?

Yes. I know of several cases where the company has just thrown workers out by offering them this four weeks' wages.

On a point of clarification, Sir. Does "several" represent all the workforce in Singapore, Sir?

You figure that out yourself.

Mr Speaker, Sir, I think Members by now are very familiar with the story and the line that come out from the Member for Anson. Sir, there are always bad apples in any basket. I do not know why the Member is always associating himself with the bad apples and thereby generalizing that, "Oh, our laws are terrible, we are not looking after the workers' interest" and so forth, and making a big song and dance out of it. An hon. Member: He is a bad apple.

Our labour laws are fair. They provide the minimum conditions for employers and employees to enter into a contract of employment. I do not think, Sir, we want to over-provide in our laws. We must leave room for employers and employees to come to agreement themselves, to leave room for employers to show concern and care for the welfare of their employees. Now, this Section 14 has been mentioned which provides for appeals to be made in cases where employees feel they have been dismissed without proper reason or excuse. The appeal is made to the Ministry of Labour. My officers will look into it thoroughly. We will request the employer to explain their background, their reasons, justification, whether they have conducted due inquiry and so forth. 3.45 pm

This particular case that he mentioned, Sir, is something which my Ministry is looking into carefully. It takes time. He mentioned two months. It shows how carefully we are studying the case. If there is a just cause for the employee's appeal, the Government will then order the employer to compensate the employee or to reinstate him. But we will have to look into the facts fully. The Member's usual line is that we must refer this matter to a tribunal. There must always be contention, and so on. But in these cases, my officers do their jobs to the best of their ability. It is a question of administrative policy. It is not a question of legal matters, commissions, and so on. It is a question of whether the employer has treated the employee fairly. So whether it is dismissals which are provided in the law, or whether it is terminations, if there is reason to believe that the employee has not been properly treated by the employer, such that the employer has used some excuse to terminate him, the employee can write in to the Ministry, and I can assure everyone that my Ministry will look into the case thoroughly and make sure that the interests of workers are well protected. Sir, we are a small country. Our laws must be such that the framework for investment remains attractive. We can write the most iron-clad provisions into our labour laws to protect the workers. But if, in the end, we scare away the investors, then these laws are just empty pieces of paper. So we must get our priorities right. Sir, as time is running short, l would just like to respond to two other points. One concerns the National Wages Council. This was raised by the Member for Boon Lay during the Budget debate and no reply has been given. I share the view of the Member that the NWC continues to have a useful role to play. The Council was set up 13 years ago to facilitate the transition from a labour-surplus to a labour-scarce economy. It has performed its function well and has contributed to industrial harmony and orderly wage increases over the years. The NWC has been discussing a proposal from the employer groups to expedite the move towards direct wage bargaining at the enterprise level. This arose because employers believe that there are certain shortcomings with the NWC system. They are apprehensive that the NWC system may have contributed to higher wage costs. While we understand the concern of the employers, I would like to urge all parties involved to examine carefully any proposal to phase out the NWC. We should work within the NWC system and try to improve on it, to make it more responsive to market forces rather than phase out NWC at this stage. We should not discount the contributions made by the NWC to the peaceful industrial relations climate and the orderly wage increases which we enjoy. It should be possible to make the NWC system work to the mutual benefit of both employers and employees. The NWC recommendations are only guidelines which are wide enough to cover a broad spectrum of companies. Moreover, actual wage agreements can depart from these guidelines. Employers and unions only need to convince one another that such departure is necessary because of the peculiar circumstances affecting the firms or the industry in which they operate. The other announcement, Sir, I want to make concerns the problem of the levy on foreign workers. As you know, Sir, on the 1st October 1984, a flat levy of $200 per month was imposed on foreign workers other than domestic servants on the levy scheme in place of the then 30% ad valorem levy. The flat levy was scheduled to increase by $50 per month every six months as follows: $250 per month from 1st April 1985; $300 per month from 1st October 1985; $350 per month from 1st April 1986. In view of the current economic outlook and representation from employers, the Government has decided to defer by six months the increases in the levy sheduled to begin from 1st April 1985. The scheduled increase will be reviewed in six months' time. The purpose of the levy is to ensure that the cost of employing such foreign workers will not be less than that of employing Singaporeans and permanent residents. It is to discourage employers from resorting to indiscriminate recruitment of such foreign workers. This will undermine efforts to upgrade our economy and increase productivity through mechanization and automation. In the construction sector, it will hamper efforts to build up a permanent core of skilled local construction workers. To keep up the pressure on upgrading and to reduce dependence on unskilled and cheap foreign workers, it is therefore necessary for the increase to proceed as soon as appropriate. Sir, there are one or two points on the CPF which I have not fully answered. The Member for Boon Lay raised this question of the interest on late CPF payments. I think this issue was raised in the House previously and an answer was given. The reason why the CPF Board has not been crediting part of this interest into member's account is that it is in the nature of a fine on the employers. It is meant to defray the expenses of the CPF Board in recovering the late payments on behalf of the members. Nevertheless, considering the appeals by the hon. Member and by the public, I have asked the CPF Board to credit interest at 61/2% per annum to the members' accounts when the late payments and penalty interest are received. This will be with effect from 1st January 1985. Sir, I hope I have answered all the questions. If I have missed out any item, will Members please bring them up now?

May I ask the Minister a question on the appeals to the Minister? He has told us that the Ministry receives representation from the employers once an appeal is received from an employee. Does the Ministry communicate to the employee the representations made to the Ministry by the employer, so that the employee may be able to answer them? My understanding is that nothing of this sort is done. That is why I say an appeal to the Minister is an exercise in futility. The poor worker does not know what representations are made by the employer to the Minister. And on what grounds the Minister has refused to intervene?

Sir, may I say that the Member for Anson is completely wrong in his statement. The actual practice is - and I know of several cases which have come to my attention so far in my three months in the Ministry - that the employer's written submission is given to the employee, if need be. In fact, my conciliation officers, have called up both parties so that they can talk together with the conciliation officer, with a view to reaching a settlement. What better way than through direct discussion. So there is no question of our hiding information about why we decide one way or the other. The whole thing is done fairly and openly.

Sir, at the end of the day, after a long debate, the surest protection for our workers is an economy with full employment and without inflation. Because as long as there is a plentiful supply of jobs, if any employee feels aggrieved or discriminated against, he can move to another job and he can better his prospects in the process. Sir, Members have voiced a lot of concern about inflation in this House today. But if the truth should be made known, the real causes of inflation reside in these factors. Firstly, low savings rate. Countries with very low savings rate are very prone to high rates of inflation. Secondly, high government deficits spent wastefully on subsidies of various kinds. And, thirdly, in an effort to finance the heavy government deficits, large sums of money are printed. The M1, M2, M3 figures go up. Those are the real causes of inflation. And we can be thankful, Sir, that in Singapore we have avoided both unemployment and inflation. Sir, if one were to simply take the 1984 figures for the CPF, $5.4 billion was credited to the accounts of members. $3.5 billion was withdrawn, of which $2.7 billion was for housing. In other words, $3.5 billion was withdrawn last year out of a GNP of $38 billion. Let us put it roughly at 10%, without inflation. By the year 2000, if the Member for Potong Pasir's figures are correct, $9.5 billion withdrawal out of a GNP of probably $95 billion by the year 2000, again a figure of around 10%. So there is no reason why CPF withdrawal per se should cause any inflation. In fact, Sir, if hon. Members are willing, they could come up to the University and study the first course in economics and then they will realize some fundamentals of economics: that in any year you create a basket of goods and services which has a monetary value, and if you save some of that and later take some of that money and spend it, it is not going to cause inflation. It is only when you get the Government to subsidize PUB, bus fares, housing, ad nauseam, then you are going to cause inflation. As I said, Sir, we have much to be thankful for. In fact, if there is any worry about inflation, it ought to be this. If we were to elect a government that is irresponsible, wasteful, corrupt, then by the year 2000, even if you were to withdraw the $9.5 billion from your CPF, you will find $9.5 billion of worthless bits of paper. So that is the real lesson for us. With that, Sir, I beg leave to withdraw my amendment. Amendment, by leave, withdrawn. 4.00 pm The sum of $34,811,460 for Head R ordered to stand part of the Main Estimates. The sum of $44,391,900 for Head R ordered to stand part of the Development Estimates.

I shall now deal with the remaining heads of expenditure in respect of which no amendment stands on the Order Paper Supplement. In respect of the Main Estimates, they are Heads B, C, D, E, G and H. I propose to take those heads of expenditure en bloc.

Question, "That the sums stated for those heads of expenditure which appear in the last column of the Schedule of Estimated Expenditure under the Main Estimates on page 17 of Paper Cmd. 4 of 1985 stand pan of the Main Estimates for the financial year 1st April, 1985 to 31st March, 1986," put, and agreed to.

In respect of the Development Estimates, the remaining Head is Head E. The sum of $1,416,500 for Head E ordered to stand part of the Development Estimates.

Question, "That the sum of $8,348,120,020 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1985 to 31st March, 1986, contained in Paper Cmd. 4 of 1985," put, and agreed to. Question, "That the sum of $10,472,455,300 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1985 to 31st March, 1986, contained in Paper Cmd. 4 of 1985, put, and agreed to. Resolutions to be reported. Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. First Resolution reported - "That the sum of $8,348,120,020 shall be supplied to the Government under the heads of expenditure for the public services shown in the Main Estimates for the financial year 1st April, 1985 to 31st March, 1986, contained in Paper Cmd. 4 of 1985." Second Resolution reported - "That the sum of $10,472,455,300 shall be supplied to the Government under the heads of expenditure for the public services shown in the Development Estimates for the financial year 1st April, 1985 to 31st March, 1986, contained in Paper Cmd. 4 of 1985."

Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

Question put, and agreed to. Resolutions accordingly agreed to.

Order for Second and Third Readings read. 4.05 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." In accordance with Article 145 of the Constitution of Singapore, heads of expenditure to be met from the Consolidated Fund other than statutory expenditure have to be included in a Bill to be known as the Supply Bill. The purpose of the Supply Bill before Members is therefore to give legislative approval to the appropriations from the Consolidated Fund to meet expenditure in the financial year, 1st April, 1985 to 31st March, 1986. The heads of expenditure and the sums that may be incurred in respect of each head are shown in the schedule to the Bill. These have been approved by the House in the Main Estimates of Expenditure for the financial year, 1st April 1985 to 31st March 1986, and appear on page 17 of Command Paper No. 4 of 1985. The Supply Bill, when approved, will empower me to issue warrants, authorizing expenditure up to the amount for each head as shown in the Bill to be paid out from the Consolidated Fund. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time.

Sir, I beg to move, "That the Bill be now read a Third time."

Question put, and agreed to. Bill accordingly read a Third time and pased.

Order for Second and Third Readings read.

Mr Deputy Speaker, Sir, I beg to That the Bill be now read a Second time." The purpose of this Bill is to make provision in accordance with Clause 2 of Article 145 and Clause 2 of Article 147 of the Constitution of Singapore for additional expenditure in excess of the provision authorized by the Supply Act, 1984. The additional sum has been scheduled as a Supplementary Estimate which has been considered and approved by the House as Command Paper No. 3 of 1985. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time.

Sir, I beg to That the Bill be now read a Third time."

Question put, and agreed to. Bill accordingly read a Third time and passed.

Order for Second Reading read. 4.08 pm

Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, section 3(6) of the Adoption of Children Act provides that a child must be resident in Singapore before an adoption order can be made. However, the term "resident" is not defined in the Act. In practice, the court would normally consider a child to be resident if he has been staying continuously in Singapore for about six months. If the court is satisfied that the child is so resident, it would decide whether to grant the adoption order, after taking the child's welfare into consideration. The child's immigration status and immigration policy are not relevant for this purpose. Consequently, Sir, some Singaporeans have made use of adoption to bring in their relatives from other countries to enjoy our social benefits, including subsidized education and medical services. There have been cases of Singaporeans who already have many children of their own adopting their foreign relatives, thus imposing an additional burden on the State. The Bill seeks to amend section 3 of the Adoption of Children Act so as to prevent the indiscriminate adoption of foreign children by Singapore citizens and permanent residents. The Bill provides that an infant who has entered and remained in Singapore on a Social Visit Pass, a Student's Pass or a Special Pass, or whose presence in Singapore is unlawful under the Immigration Act, is to be deemed not resident in Singapore for the purposes of the adoption under the Act. Sir, with this amendment, a foreign child on any Immigration Pass other than a Dependant's Pass will not be considered resident in Singapore and cannot be adopted under the Act. Once it is determined that a foreign child is suitable for adoption, the Immigration Department will grant him a Dependant's Pass to enable his adoptive parents to obtain an adoption order. Thus the proposed amendment will not prohibit the adoption of foreign children in genuine cases and deserving cases. The proposed amendment, Sir, is necessary so as to prevent adoptions of convenience. We have many examples where adoptions were used to circumvent Immigration policies. In a case already recounted to this House earlier, a 59-year-old Singaporean with seven children of his own adopted his own grand-daughter who had overstayed her Visit Pass and was illegally in Singapore. The child's natural parents, we will recall, were Malaysian citizens with four other children. Her natural father was working as a construction worker on a Work Permit. Although he was not eligible to bring in his wife and children for long-term stay, he sought to circumvent this restriction in regard to his daughter by making her the adopted child of a Singapore citizen. Sir, there have been many other such cases where Singaporeans have been approached, or attempted, to adopt their foreign nephews and nieces even though they already have children of their own, and there was no reason for them to adopt another child. To deter such adoptions of convenience, administrative measures have been taken by the Immigration Department hitherto to restrict the stay of unaccompanied foreign infants. However, Sir, past experience has shown that administrative measures alone are not completely adequate to prevent adoptions of convenience. It is therefore advisable to amend the law now before we get more cases of adoptions of convenience. With this amendment, a foreign child on any Immigration Pass other than a Dependant's Pass will not be considered resident in Singapore. A Dependant's Pass will be granted to facilitate adoption proceedings unless the adoption proceedings are adoptions of convenience or intended to circumvent our Immigration policies. Thus, Sir, the proposed amendment will not prohibit the adoption of foreign children in genuine cases. I should add, Sir, that the Government will be sympathetic in cases where childless couples, who are unable to have their own children, wish to adopt a foreign child. Sir, I beg to move. Question proposed. Mr Jeyaretnam. Mr Deputy Speaker, Sir, I see in the Explanatory Statement accompanying the Bill that the Bill "seeks to amend the Adoption of Children Act so as to prevent the indiscriminate adoption of foreign children by Singapore citizens and permanent residents." The Minister in his speech seemed to imply that there were a large number of these cases. May I ask whether he has the number of these cases, whether there is a large number of people sending their children in to be adopted by families in Singapore. Secondly, the Minister says this amendment will not prevent adoption of foreign children in genuine cases. As I pointed out to the Minister when I raised the question last week that when an adoption petition is presented to the court, it is served on the Attorney-General. The Attorney-General refers it to the Department of Social Welfare, and the Department of Social Welfare then makes all the investigations necessary to help the court decide whether an adoption order should be made or not. So even without this amendment, the Government has the wherewithal and the power to make the investigations and to bring the matter up before the court. And I am sure that if the court is informed that the proposed adoption is not a genuine case of adoption but a case of convenience, as the Minister puts it, the court will not make the adoption order. The court must have regard to the welfare of the child, must have regard to the standing and to the genuineness of the application to adopt the child. So I do not know why this amendment is really necessary. You have, as I said, the power and the wherewithal now to make the representation to the court and the court is left to determine in every single case whether it should make the order or not.

Mr Deputy Speaker, Sir, if I may respond to the two points. The first question is: have there been such a number of cases as to warrant concern to justify this legislation? The answer is yes. If it was not a problem which needed a solution by way of legislation, then we would not have recourse to this option.

What is the figure?

I do not have the figures but I can inform the House that the Immigration authorities were so concerned because people were arriving at the checkpoint with infants in arms requesting Social Visit Pass and long-term Social Visit Pass, and when they were asked why, they said, "Well, we want to have this child adopted by this relative in Singapore." The numbers are sufficiently large to cause concern and to introduce administrative measures requiring these persons to undertake that they will not proceed with adoption proceedings. This is why, Sir, the case which was mentioned a week ago showed that some of the administrative measures are not foolproof because of the large numbers of persons coming here on Social Visit Pass or long-term Social Visit Pass. As to the second question, as I explained a week ago, under the legal regime on adoption contained in the law as it stands at present, the court's function is guided primarily by the welfare of the child. The Immigration policy or the Immigration status is not a dominant or primary consideration. It is true, as the Member for Anson has said, that the procedure under the law for adoption is such that references are made to the Department of Social Welfare for investigation. But under the law, the Department of Social Welfare's investigation must be circumscribed by the duties imposed by the law, and the law requires the Social Welfare officers to look at the case and put up a report with regard to the interest and the welfare of the child. Whether the child is an illegal immigrant, or what his immigration status is, and so on, are not primary considerations. Sir, in case anyone should think that we have embarked on a very unusual and novel method, let me mention the practice in the United Kingdom. In the United King- dom, they also have laws on adoption. I would like to read a typical letter sent out by the Secretary of State, Home Office, to any prospective applicant on adoption proceedings, and I quote: 'Immigration requirements. There is no provision in the Immigration rules for a child to come to the United Kingdom for adoption. However, the Home Secretary may exceptionally exercise discretion to allow a child to come here for this purpose if he is satisfied that this is appropriate in all the circumstances of this case. He [the Secretary of State) will first need to consider whether the intending adopters and the child they wish to adopt fulfil the requirements of the Immigration rules relating to admission of children for settlement in so far as these are applicable as if the child had already been adopted and these rules apply. In particular, the Home Secretary will wish to be satisfied that the proposed adoption involves a genuine transfer of parental responsibility on the grounds of the original parents' inability to look after the child and that it is not one of convenience arranged simply to enable the child to gain entry in the United Kingdom. Sir, if an advanced country with vast resources deems it necessary to have a safeguard such as this before invocation of the legislative procedure for adoption within the country, surely it makes sense for us to do the same.

Sir, may 1, by way of clarification, ask the Minister whether it is not possible to ask the Social Welfare Department to refer a case, where a foreign child is involved, first to the Immigration Department?

Mr Deputy Speaker, Sir, no doubt there can be a host of alternative approaches and solutions to the problem. The solution that my Ministry has proposed is the simplest and the least complicated. It leaves intact the jurisdiction and power of the court in adoption cases which is, quite properly, to look at the case from the viewpoint of the welfare of the child. But before the child comes to Singapore, some authority must be satisfied that the Immigration rules are not circumvented, and surely the proper authority for that must be the authorities which are entrusted with the implementation of Immigration laws and policies.

Question put, and agreed to. Bill accordingly read a Second time and committed to Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Prof. S. Jayakumar]. Bill considered in Committee.

Clause 1 ordered to stand part of the Bill. Clause 2 -

Sir, on a point of clarification. If I heard the Minister correctly, children, one of whose parents is a Singaporean, would be on Dependant's Pass and therefore they would not come under the ambit of this Bill. But I have come across cases where there is a child, one of whose parents is a Singaporean, but who is on a Student's Pass. What happens in such a case?

Is the Singaporean already here?

The child is not a citizen but one of the parents is a citizen. So would the child be on a Dependant's Pass or on a Special Pass? Because I have come across cases where they are here on Students' Passes, for example.

If the child is already a child of a Singapore citizen or permanent resident, is he going to be adopted by another parent? Dr Augustine Tan indicated assent.

In that case, it would be covered by the Act. But if it is a genuine case of adoption and not an adoption of convenience, then the Immigration authorities would give a Dependant's Pass. Clause 2 ordered to stand part of the Bill. Bill reported without amendment, read a Third time and passed.

4.25 pm

Mr Deputy Speaker, Sir, I beg to move the motion* standing in my name as it appears in the Order Paper. *The motion reads as follows:-- That this Parliament in accordance with paragraph (1) of Standing Order 95, appoints the following as members of the Committee of Selection:-- Mr Chua Sian Chin Mr S. Dhanabalan Mr Lee Yiok Seng Mr Lim Boon Heng Encik Sidek bin Saniff Dr Tony Tan Keng Yam Dr Tay Eng Soon. Sir, the motion is self-explanatory. Sir, I beg to move. Question proposed.

Mr Deputy Speaker, Sir, this is a motion for the appointment of the Committee of Selection under Standing Order 95 of the Standing Orders of this House. This Committee will then proceed to nominate Members to the other committees. Sir, I am aware of the provisions of the Standing Orders relating to committees of Parliament and that committees should reflect as far as possible the balance of Members in this House. I have raised before, the non-appointment of the only Opposition Member in the last Parliament to any of the committees of the House, I am aware that it may be interpreted in another way. But I maintain that under that clause, the committees of the House should, if it is at all possible, reflect the composition of the House. This House is no longer composed of just Members of one Party. This House is now composed of Members of three Parties. I am not saying that there should be a Member from each Party on each of the Committees. But I do say that the committees of this House should include at least one Member from the Opposition Bench. That would be a fair way of interpreting that Standing Order and implementing this Government's now stated intention not to try and obstruct the Opposition but to allow the Opposition to work together in trying to find solutions for our people. I would propose, Mr Deputy Speaker, Sir, that one Member from the Opposition should be included on the Committee of Selection.

Mr Deputy Speaker, Sir, we are aware that we now have two Members of the Opposition in this House. They form about 2,2% of the House. The Committee of Selection has seven members, apart from the Speaker. I think 21/2% of seven makes not even one-quarter. However, Sir, we are intending to take into account, the points made by the Member for Anson. If you take all the parliamentary committees to be appointed, the number of Members will come to around 50 and we can justify one Member of the Opposition on one of the committees. It is our intention to have either one or perhaps even both in one or two committees of Parliament.

Question put, and agreed to. Resolved, That this Parliament, in accordance with paragraph (1) of Standing Order 95, appoints the following as members of the Committee of Selection:- Mr Chua Sian Chin Mr S. Dhanabalan Mr Lee Yiok Seng Mr Lim Boon Heng Encik Sidek bin Saniff Dr Tony Tan Keng Yam Dr Tay Eng Soon.

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

Sir, I beg to move, That Parliament do now adjourn. Question proposed.

4.30 pm

Mr Deputy Speaker, Sir, I make no apology for detaining Members for another half an hour after a long and arduous sitting of this House. I say I make no apology, Mr Deputy Speaker, Sir, because of the importance of the matter that I wish to raise, and that is, of course, the first objective outlined in the President's Address to this House on the 25th February. The first objective set out in the President's Address was "to reach an accord on the character of the society people desire, and involve the young in working towards its achievement". Mr Deputy Speaker, Sir, we have had two weeks of debate in this House where we have examined various programmes of this Government. But superimposed and standing over all programmes and policies of the Government is the one important question, and that is, the character of the society people desire. Put in other words, Sir, the values we cherish for our society in Singapore. It is on the values that we hold as a society in Singapore that we then decide on the various programmes and policies. So the values for us as a society must come first. There must be agreement on the values of our society. What are these values to be? Are they to be Asian values or are they to be Western values? I shall be referring to the Prime Minister's speech in reply to the amendment I moved to the President's Address. He seemed to see it as a contest between Asian values and Western values. It will be my endeavour to show that he is wrong in seeing like that. The question remains, what are to be our values for us as a society? So I bring this up this evening, Sir, to urge that we devote our attention to finding for our society the values that we cherish for our people. We have heard from the First Deputy Prime Minister, after the elections, of the machinery that will be set up to provide feedback to the Government and to provide dialogue. Mr Deputy Speaker, Sir, we have had two weeks in this House but we have not had very much time to examine the values, and my fear is that, after this debate, we will perhaps abandon the search for values. If past experience is anything to go by, Sir, after the Budget session, Parliament does not meet again for the next three or four months. But debate cannot just be centred in Parliament. Debate must take place outside Parliament, and this is where I want an assurance from the First Deputy Prime Minister. I am sorry that the Prime Minister is not here to reply to this because he has brought this starkly into focus, when he replied to my amendment. I want to know whether enough opportunities will be provided for this dialogue in our search for the values for our society. It is because of the importance of determining what values we cherish for our society that 1, in my speech on the Address of Thanks to the President, dwelt not on any particular programme or policy of the Government, but directed my thoughts to spelling out what I thought should be the values for our society. The Prime Minister replied to that at length. I am afraid, Mr Deputy Speaker, Sir, I do not have the Hansard with me, but I have with me the Straits Times for the 2nd March which reported his speech at some length. On the front page, the Straits Times says "The young face crucial choice". And then it quoted: 'I am asking the younger generation to ask themselves what makes Singapore work. Are you wise in tossing overboard fixed, settled values which are part of our culture, of our ethos, for principles and theories of government espoused in the West which are not part of our culture, not part of our system?, It is perhaps unfortunate that the Prime Minister, after exhorting the generation to decide wisely, did not go on to spell out, in that one hour that he had, what were the values that his Government was advocating for our people as a society. As I said, he seems to see it as a choice between Asian values and Western values. Well, I do not see it like that. The Prime Minister went on to say that the battle was on for the minds of the younger generations. The Prime Minister was right that this is a question of great importance, of great magnitude, at the moment. What are the values that we wish to adopt as a society? Because the Prime Minister did not go on to ask the questions and to give the answers in his speech, I called a press conference after that, and I posed a number of questions. The press did not carry my questions when they reported my press conference. So I wrote to the Straits Times a letter on the 4th March 1985 asking what I thought were pertinent questions, asking the Prime Minister if he would answer them. That letter never saw the light of day in the Straits Times. Instead, I had a letter to say, "We are very sorry. We can't publish your letter but please keep writing", or something like that. May I say, in passing, that I have another letter which has gone to the Straits Times and which has not yet seen the light of day. Probably, tomorrow I will have another letter saying, "We cannot publish your letter but please keep writing." Mr Deputy Speaker, Sir, the questions that I asked in this press conference were as follows: (1) What theory of government do we now have and which was accepted in 1958 when the Prime Minister was part of the political scene? (2) What system of law do we now have in Singapore? (3) What is his ideal of justice if he rejects the ideal of justice of the Common law, which is justice based on the Rule of Law? (4) Does he think that our present system of government and system of law are not suitable for us as a society? If they are not suitable, with what theory of government and system of law does he propose to replace them? I asked these questions, Sir, because, as I read out, the Prime Minister was saying, "Are you wise in tossing overboard fixed, settled values which are pan of our culture, of our ethos, for principles and theories of government espoused in the West which are not part of our culture, not part of our system?" The burden of the Prime Minister's speech was that I was advocating something which is quite alien to us, and that we should stick to Asian values, and he referred to 4,000 years of history. Mr Deputy Speaker, Sir, the values that I have been trying to advocate are values that recognize the dignity of the human being, that do not treat the human being as a unit, a numeral unit, but as a human being endowed by his creator with qualities, god-like qualities if I may say so. And it is around that I say that we should build up our idea of man and the society that we should have for us in Singapore. And so, Mr Deputy Speaker, Sir, it is important that our people do know, it must be put quite clearly to them, what kind of society does the Prime Minister and the Government have for us in Singapore. What is their idea of society? What is their understanding of man as a human being? The Prime Minister, before the elections, in this House talked about amending the Constitution to provide for certain executive powers to the President. I said that we would oppose it, and we would oppose it if it was ever brought about. Well, we have not heard anything after the elections about this proposal. But on polling day, the Prime Minister again mentioned about the need, as he saw it, to consider changing the system by which we elected Members into Parliament, the first-past-the-post system. After that, we have not heard anything. I would urge the Government that they should not remain silent on all these issues now. But that all these issues be brought out now openly to the public, for public discussion. I would like to know what opportunities will be provided for our people to engage in this search for common values for us as a society. It must be values that are accepted by all of us in Singapore, not values dictated to us by a minority, but values that are understood and cherished by every single member of this society that we make in Singapore. So my appeal is that we should not let it rest after making these pronouncements but that the Government should now set about immediately on the task of reaching in the words of the first objective in the President's Address, "an accord on the character of the society people desire." Mr Deputy Speaker, Sir, since there was no response to my appeal at the press conference for a public debate on the values for us as a society, we have decided to take the lead ourselves. We propose to call a public meeting on the 1st of May, Labour Day, at the Foochow Association Hall in Tyrwhitt Road. We have applied to the - now I think it comes under the Police - Public Entertainments Unit for a permit to hold this meeting. I want to know from the Minister for Home Affairs whether this permit will be granted because we would like our Singaporeans to come and engage in debate on the kind of society they would like to see in Singapore. So I hope we will have no difficulty whatsoever in obtaining this permit for this meeting on the 1st of May. More important than that, I do ask the Government to provide the opportunities for this debate so that everyone can take part and we can reach agreement and then we can all work towards this common goal. We have heard about visions of societies and we have been told that it can only be a vision if it is a vision that is shared by everybody. We in the Workers' Party want every citizen in Singapore to share in this vision, to feel that he has a part in it and that it is his own vision and not a vision that is imposed on him. I do not want to impose my idea of a society, my vision of a society, on the people of Singapore. All I want to do, Mr Deputy Speaker, Sir, is to engage all our people in this common search.

Mr Deputy Speaker, Sir, the Member for Anson has spent about 20 minutes. I expected him to talk about his values of the society which he would like us to have. Instead he has gone on and on without elaborating on the kind of society which he would like to have. And I think the whole purpose of his long speech was simply to ask whether we would grant him a permit to hold a rally. I have not consulted the Minister for Home Affairs to check whether there is any security objections. But I can tell the Member for Anson that since this is a topic which he wants to discuss with his members and with members of the public, I would support the application for a permit to discuss the values of our society. Mr Deputy Speaker, Sir, we may be a young nation, 25 years if we measure It from 1959, 19 years from 1965, but we are not a nation born out of nothing. We brought with us when we became independent values from where we came from. The Chinese had their values from China the Indians from India, and the Malays from Malaya. We did not start from a barren desert. There are values in our society. But our worry is whether the values which our parents cherish, which we cherish, will be there in the future. It is not just the divorce rates which concern us, which is a manifestation of whether we are able to retain our traditional values, or whether we are now opting for undesirable Western values. I think the more important rate which we have got to examine closely is the one which is close to the heart of many Members over here, the rate of abortion. If the rate of abortion is high amongst our young, what kind of future do you think our young will live in? Will they cherish the basic unit which is the family unit, which we all know is the basic building block for our society? If the young, the teenagers, go in for abortions and repeated abortions, I think we have got to fear for their future. Would the family unit remain intact? If the family unit does not remain intact and there is no close relationship between son, daughter, parents, brothers, sisters, friends, then would we have the kind of society we want? So these are concerns, not just of the Prime Minister, these are concerns of the Members of Parliament, the leaders of Singapore.

And every citizen.

And every citizen, as the Member for Anson says. It is a matter which concerns every citizen.

That is what I am saying.

The Member for Anson talked about dignity of human beings. Never in the last three or four years since December 1981 have I heard him talk about the duty and responsibility of the individual. A human being has got certain rights but he also brings with him certain duties and responsibilities to society. In other words, the emphasis is not just on the individual. It is on the larger unit, the individual's obligations to society. If the Member places so much emphasis on the dignity of the individual, so much respect for the individual, as a Member of Parliament, he should set a prime example as all of us should do. He should, for example, not use innuendoes to smear innocent people outside this House - Mr Howe Yoon Chong and a Howe family.

Mr Deputy Speaker, Sir, I thought this would come up, without the Minister attempting to answer or reply to the points that I made. I do not know when Ministers of this Government will learn that they have a responsibility and a duty to lay bare all facts on any decision made by the Government and which is questioned in this House. There is no question of any smear or innuendo, unless the Minister has a guilty conscience about it. All we have to do is to ask him a question and he has got to lay bare all facts. There is no question of any smear or innuendoes.

Sir, I do not think we should be side-tracked into this.

You started it.

All I want to say is, if the Member for Anson does not believe that he has smeared innocent people -

I have not smeared. I am asking questions.

If it is not defamatory or libellous, then he should repeat such innuendoes outside this House. An hon. Member: Repeat it outside. Another hon. Member: Yes, repeat it outside.

Repeat it outside! Repeat it outside!

Coming back to values, Mr Deputy Speaker, Sir, the choice is not between eastern values and western values.

That is what the Prime Minister said.

Again I am afraid Members of the Opposition, as manifested by the Member for Anson now, tend to distort and misinterpret the Prime Minister's words.

What did he say here?

It is not a stark choice between eastern values and western values. It is a rejection of western values or eastern values which are undesirable.

Thank you.

I can quote examples to the Member for Anson of western values which we must check, which we must toss overboard. And these values are the emphasis on self: me first, you last; me first, society second; the trend towards promiscuity, fun loving, free loving, kind of society. Those are values which we do not want to have. The values which we want to have are traditional values, values which bind us together as a cohesive society. We started off as a multi-racial society. Each one has got his own culture, his own language, his own religion. So what values do we want to have to ensure that we remain as such? These are values of tolerance, respect for each other's religion, respect for each other's language. We do not force Malays to speak Mandarin at home, neither do we force Chinese to speak Tamil at home. These are values of respect and tolerance for one another which we must continue to uphold in Singapore. They are part of the characteristics of our society. They are part of our character, a tolerant, disciplined, individual in a tolerant disciplined society. These are the values which we talk about. The Member for Anson wants to have a discussion on this. I am not sure whether we welcome that. But we certainly welcome a discussion with members of the public.

You cannot argue with me.

I doubt whether it is wise for us to sit down and discuss with him because based on the experience over here, I have found the exchange not worth while. But the important point is that we want to create the opportunities to discuss this matter, to strike an accord with citizens, with Singaporeans. I think this is what we must do. What are the avenues? Besides the RCs, CCCs, we could have formal or informal exchanges. If Members like, and I am here addressing myself at Members other than Opposition Members, we can have a dicussion on TV. In fact, if the Member for Anson insists on having a debate, as he is insisting now, I think we can have Members here who may enjoy sitting down with him on a panel and discuss values over television. The Member for Queenstown is shaking his head. He does not want to be seen discussing with the Member for Anson. But it is a serious point. We want to reach out and discuss with all citizens on this. The Question having been proposed at half-past Four o'clock pm and the Debate having continued for half an hour, Mr Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order. Adjourned accordingly at Five o'clock pm to a date to be fixed.

asked the Minister for National Development what is his Ministry's plan for Masjid Angullia at Angullia Park in the development of the area; and whether the mosque will be preserved for use by Muslim workers in the Orchard Road area or whether it will be demolished along with the other buildings affected by the redevelopment.

The Masjid Angullia will be demolished as part of the comprehensive redevelopment programme for the Orchard Road Area. However, recognising the needs of Muslim workers in the Orchard Road area, the Urban Redevelopment Authority has leased to Majlis Ugama Islam Singapura a space within its Cairnhill Place residential project for use as a prayer hall. The Masjid Angullia will not be demolished until the URA project is completed in July 1987. [Copies of Chart and Tables distributed to Members] - Gross Domestic Product at 1968 Factor Cost, Singapore's Economy as a Whole Gross Domestic Product at 1968 Factor Cost, Gross Domestic Product by Sector at 1968 Factor Cost (Cols. 1791 - 1794)