Hansard, 1986-03-07

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated:- Mr Chai Chong Yii (Bukit Batok) - from 11th to 19th March, 1986. Dr Dixie Tan (Ulu Pandan) - from 6th to 20th April, 1986. YEOH GHIM SENG Speaker Parliament of Singapore

Reply to Address

I have to inform hon. Members that I communicated to the President the Address agreed to by resolution of this Parliament on 28th February, 1986. I have received a reply from the President acknowledging receipt of the kind message of Parliament.

asked the Minister for National Development whether the Housing and Development Board will consider lowering its flat prices in line with the fall in prices in the private property market to make it easier for non-owners to own a home and for owners to upgrade to a better flat.

Mr Speaker, Sir, the selling prices of Housing and Development Board flats are not determined by prices of private residential properties. They are based on the costs incurred by the HDB and the subsidy provided by Government. The present sale prices of HDB flats are heavily subsidized and are well below current market prices of comparable private flats. HDB prices are pegged at a level within the means of most Singaporeans who want to own a home or upgrade to a better flat. To lower prices means to increase the subsidy between market prices and the present HDB prices. Selling prices of new HDB flats are well below the market prices of old HDB flats. There is therefore no reason to further lower flat prices.

Would the Minister please tell this House whether the tender prices for the construction of HDB flats have fallen last year?

Mr Speaker, Sir, notice of a similar question has been given by the Member for Bo Wen which will be answered at a later date.

Mr Speaker, Sir, the Minister has again mentioned about this subsidy.

Are you going to ask a supplementary question or not, Mr Chiam?

Yes. I would like to ask: How is this subsidy given to purchasers of HDB flats?

Mr Speaker, Sir, the subsidy is calculated at the development cost incurred by HDB less the selling price. That is equal to the subsidy. For example, if the development cost of a flat is $60,000 and the selling price is $40,000, the subsidy is $20,000.

Mr Speaker, Sir, would the Minister please let us have, in writing, his calculation of the subsidy which, up to date, we have been unable to obtain from him? That is, could we have concrete instances where the subsidies are actually given?

Mr Speaker, Sir, under the new accounting system this is clearly shown. In fact, if the Member for Potong Pasir is not aware, he can read the Gazette Notification on the Housing and Development Board's 1986-87 budget. It is quite clearly spelt out in this budget that the gross loss on sale of flats under the new accounting system for the financial year 1985-86 is a probable Actual of $633 million. The budget for 1986-87 is $660,510,000. He can read this in the Gazette Notification.

Mr Speaker, Sir, the Minister has not answered the question. What we want from him is actual instances, for example, in the development of Potong Pasir estate, or any other estate if the Minister so wishes, what is the calculation to show clearly the subsidies that are given. Up to now we have not got such calculations yet. Can the Minister please oblige?

Mr Speaker, Sir, on the calculation of Potong Pasir estate, if I remember correctly, this has been given in this House.

No.

Yes. Look up the Hansard and he will find that it has been given in this House.

I have a supplementary question for the Minister. First of all, does the Minister realize that what he has said this afternoon is a mere repetition of what we have been hearing from him several times? Does the Minister know that sometime ago I asked whether he would appoint a committee to look into the whole cost of HDB flats? May I ask the Minister whether he will now agree that perhaps a quantity surveyor, an accountant, an architect, should be appointed to go into the whole question of the cost to the HDB in the construction of these flats?

Mr Speaker, Sir, I think it is unnecessary and a waste of time.

Does the Minister realize all his answers sound very unconvincing to the public?

Sir, similar questions have been repeatedly asked. Therefore, similar answers have to be given.

asked the Minister for National Development why the Housing and Development Board has advertised vacancies for Accountants, Architects, Administrative Officers and Computer Professionals overseas and why it was not possible to recruit persons for these positions amongst Singaporeans.

Mr Speaker, Sir, the overwhelming majority of candidates recruited by the HDB are through local recruitment exercises. Overseas recruitment is resorted to only if the Board encounters difficulties in recruiting suitable candidates locally. In 1985, 180 graduates were recruited locally, as compared to only four graduates recruited overseas. However, the local recruitment exercises succeeded only in attracting suitable candidates for the more junior posts, but not for the senior ones. Only eight out of the 180 local graduates recruited have the necessary experience to fill the senior posts, while all the four overseas graduates recruited have five or more years of experience. Suitable Singaporean candidates are either already partners in professional practices or in well established positions and did not want to join the HDB. The vacancy position for the senior posts is further aggravated by the resignation of 20 experienced officers in 1985. The HDB therefore had to advertise overseas for the posts of Accountants, Architects, Administrative Officers and Computer Professionals to attract suitable applicants for these posts at senior management level.

I am indebted to the Minister for giving us the whole history of the general practice and policy of the HDB. But does the Minister realize that my question is directed particularly to the advertisement which was reported in December 1985? Perhaps the Minister could confine his answer to this exercise and not give the House the history of HDB policy. May this House be told, first of all, whether the salaries offered to these people overseas, these expatriates, were the same as were offered to the locals? Secondly, were they offered housing in addition to their salaries? Thirdly, when were these posts advertised locally? Fourthly, how many of the local architects, accountants and others responded to this advertisement? Fifthly, may we know why they were not found suitable for these vacancies?

Mr Speaker, Sir, I would suggest to the Member for Anson to submit a Written Question so that I could give a very detailed Written Answer on all the points he has raised, because they are not part of the Oral Question that he has asked.

I will send you a Written Question.

asked the Minister for National Development if he will outline the steps which Housing and Development Board home-owners, who are facing difficulties in their housing loan repayment, can take to defer their loan repayment schedules.

Mr Speaker, Sir, HDB home buyers who are facing difficulties in their housing loan repayment can arrange with the HDB to: a) extend the maximum loan repayment period to 25 years; b) make partial payment of monthly instalments temporarily and repay the arrears in subsequent instalments if the home buyers are in financial hardship; c) include another family member as joint owners of the flat so that his/her CPF contribution can also be used to pay the monthly instalment; d) sublet a room to supplement the family income; e) defer the instalment payment temporarily if the home buyers have lost their jobs or suffered business failures and the CPF Accounts are depleted. The drop in the HDB mortgage rate announced recently will also help to reduce the financial burden on the home buyers.

Mr Speaker, Sir, if they have lost their job and are unable to obtain another job, how long would this deferment be allowed?

HDB will normally allow a deferment of six months initially and this can be further extended. But usually those who lost their jobs are able to find another job within six months. But if they cannot find a suitable job, HDB is prepared to extend beyond six months.

May I ask the Minister whether in the cases of deferment of payments, interest will cease to run or whether interest will also be suspended?

Mr Speaker, Sir, the repayment will be suspended but not the interest.

Mr Speaker, Sir, please allow me to continue from where I left off in the last question

The last question has been dealt with, Mr Chiam.

Because the Minister said that he was going to answer the Member for Bo Wen. I asked whether or not last year's tender prices have dropped.

I am sorry. Next question, Encik Wan Hussin.

asked the Minister for Foreign Affairs what steps the Government took to facilitate the bringing back of the bodies of the victims of the Pulau Langkawi tragedy to Singapore.

Mr Speaker, Sir, the Ministry of Foreign Affairs learned of the Pulau Langkawi tragedy at about 5 pm on 10th February 1986, which was a public holiday in Singapore. The Singapore High Commission in Kuala Lumpur was immediately alerted and the Ministry took action to inform the families of the deceased. The Ministry made arrangements, through the High Commission, to have the bodies flown back on 11th February for burial in Singapore. As there were no scheduled flights available from Pulau Langkawi to Singapore, the High Commission chartered an aircraft on behalf of the families to fly the bodies to Singapore. The bodies arrived at 5.50 pm on 11th February and they were buried on the same day under special arrangements made by the Police and the Ministry of the Environment.

asked the Minister for Communications and Information whether advertisements are allowed in in-house video programmes provided in hotels. The Minister of State for Communications and Informatiom (Mr Wong Kan Seng) (for the Minister for Communications and Information): Mr Speaker, Sir, I am replying on behalf of my Minister. We have allowed hotels to provide in-house video service for the entertainment of their guests. But, like all other video operators, they are not permitted to insert advertisements in the video programmes.

It appears to be an undue or unnecessary restraint on our business. Why did the Ministry or its officials not respond when a press report on this matter came out?

The video operators are fully aware of the licensing requirements. And the Ministry, or the Government, cannot and does not respond to every little point that is mentioned in the newspapers for lack of resources.

Sir, may I ask the Minister of State what is the rationale for not allowing them to have advertisements in the programmes?

They are like all other video operators. And video operators have to comply with a licensing condition - they are not allowed to have advertisements. So even for hotels, the same condition applies.

asked the Minister for Communications and Information if he will raise the 10-year limit on motorcars for Preferential Additional Registration Fee to save foreign exchange.

Mr Speaker, Sir, the PARF scheme was introduced in 1975 as an incentive to encourage car owners to scrap their cars before they are 10 years old. The objective is to reduce the number of old cars so that there would be fewer breakdowns and greater safety on our roads, and also to minimize the traffic congestion during peak hours caused by such breakdowns. This policy has proved effective over the last 10 years. We now have a relatively young car population. Raising the 10-year age limit will mean more old vehicles with a greater likelihood of breakdowns returning to our roads. That will result in greater inconvenience for all road users. The PARF scheme has been an incentive to encourage scrapping before the cars become unroadworthy and have to be scrapped out of necessity. There is no compulsion. Car owners are free to choose when to scrap their cars. Those who have well-maintained cars can keep them beyond the 10-year limit. It is unnecessary to give an incentive to owners who have cars older than 10 years old and wish to scrap them when they are no longer roadworthy. I should add, Sir, that our car restraint policies, in fact, achieve what the hon. Member appears to ask for, ie, to save on foreign exchange. By keeping the car population at a low level, we have reduced the amount of foreign exchange spent on the purchase of new cars.

Sir, does the Minister not agree that the compulsory inspection of vehicles contributes to a reduction in breakdowns of vehicles? Some hon. Members: Hear, hear.

Sir, the compulsory inspection ensures that minimum standards are kept. But we all know that old equipment and old machinery do have a greater tendency to break down with increasing age. So too with cars.

Mr Speaker, Sir, does the Minister have any figures on the age of cars which do break down on the roads?

Sir, we do not keep a record of all the cars that break down on the roads. But I am sure the Member for Whampoa will remember that way back in the 70s it was a common sight to see cars breakdown along the roadside and owners plucking off a branch from a tree and sticking it at the back of the bumpers. Some hon. Members: They still do.

Is it not true that the recession is really the major cause of the decline in the car population growth last year? If that is the case, why do we not allow a suspension or lift the 10-year limit for a limited time until the economy recovers?

Sir, it is probable that the recession was the primary cause for the slower growth of cars over the last 12 months. The PARF is a different scheme altogether. The PARF is meant to keep the number of old cars down to a reasonable number.

Does the Hon. Minister have any figures on cars which are 10 years and over which are exported to other countries? Because if they are actually exported, we are gaining some foreign exchange.

Sir, the Ministry does not keep track of where all the old cars go. But we know that most of the old cars have been scrapped locally. If the Member is interested, Sir, I could inform the House that in 1975, one car out of every five was 10 years or older. Today, one car out of 14 is 10 years or older. That has helped significantly in ensuring that we do not have serious traffic congestions, particularly during peak hours.

asked the Minister for Home Affairs why the police forbid the playing of religious music and singing of religious songs at temples and by those accompanying the persons carrying kavadi along the route during the observance of Thaipusam.

Mr Speaker, Sir, the Police did not forbid the playing of religious music and singing of religious songs at the temples during Thaipusam. Religious music was played and religious songs were sung at the temples. Also, the singing of religious Kavadi songs and hymns by those accompanying the Kavadi carriers was not prohibited. Sir, the Police have disallowed the playing of music to accompany all religious processions on public roads since 1973. The experience of the Police was that the playing of music en route slowed down the pace of the procession and caused serious traffic congestion. Moreover, there have been complaints by devotees that some persons accompanying Kavadi carriers were making a mockery of this solemn religious occasion by playing bonggos, cymbals, drums and even dustbin covers, plastic pails and metal containers.

Sir, I have heard of complaints from some devotees that there was a certain political party who sent its members ---

Please let me have your supplementary question, Dr Koh?

I will come to that quickly, Sir.

You are making a speech out of it.

Some members of the political party went to the recent Thaipusam procession to distribute its political materials. Is the Minister aware of this? And will the Minister please inform this House whether such practice is to be condoned?

Mr Speaker, Sir, I too received several complaints from outraged devotees that the leader of a political party, not the PAP, and his followers were at strategic points in the morning and in the evening of Thaipusam, along the route of the procession, to sell their political pamphlets or newspapers to members of the procession, including those accompanying the Kavadi carriers. The Member for Telok Blangah asked me what is my view of this. Well, it is certainly both irresponsible and despicable because it shows scant regard for what is a solemn religious occasion. It also has the potential for mischief, misunderstanding and disorder when a political party distributes or sells political broadsheets and pamphlets during a solemn religious occasion in a public place.

Mr Speaker, Sir, first of all, responding to this question from the Member for Telok Blangah, may I ask the Minister how many complaints he had received from these devotees? Would he disclose the number of the complaints that have been received? Secondly, was he aware that the sale was to those who were standing along the sides, not to the devotees? Thirdly, is he aware or has he been told that there was a tremendous sale of the paper? Does he know that? Coming to my question, would the Minister appreciate that the question is directed to the playing of religious music, not to pop music or to any other music, but to the playing of religious music? And may I know what is the objection to religious music being played along the route accompany the Kavadi carriers? Secondly, have there been complaints from anybody about the playing of religious music along the route?

Mr Speaker, Sir, the guilty party has risen to make the confession. The Member for Anson has failed to note the most important point. It is not how many copies of the publication were sold.

Answer the question.

The point is that the political party does not consider it improper or irresponsible to indulge in political propaganda and in the selling of political publications on what is a solemn religious occasion, thus ignoring the sensitivities of those involved in the procession.

You are not answering the question on religious songs.

I think the Member for Potong Pasir had better listen instead of interjecting, so that he will know what is going on. The Member for Anson asked me if I had received complaints. I have told him that not only the Member for Telok Blangah has received complaints, but I also have received complaints. And it does not matter whether there were 10, 20 or 30 complaints. The point is that the Member for Anson has totally disregarded of the religious sensitivities of those involved.

May we see the complaints?

"May we see the complaints"?

Yes.

He has failed to be responsible and he has forgotten that events in other countries have shown when dangerous and mischievious activities ---

May we see the complaints?

--- of this nature occur, they have the potential for creating strife. They have the potential for creating discord. We have seen on our television this happening in other countries. We can be proud of the stability, the racial harmony that we have achieved all these years. I think ---

We do not want a speech.

I think it is very, very irresponsible for any political party to try and abuse and misuse solemn religious occasions for purposes of distributing or selling their political propaganda. As to the other question, Mr Speaker, Sir, I have already answered. The first part of his question was: why did the police forbid the playing of religious music and singing of religious songs at temples? I have told him categorically that there is no truth in this.

That is not my question. My question was about the routes.

Mr Speaker, Sir, let me repeat his question: "To ask the Minister for Home Affairs why the police forbid ---"

On a point of clarification. Prof. Jayakumar remained standing.

Are you giving way, Mr Minister?

On a point of clarification because the Minister is just repeating. He does not seem to be able to answer. He thinks he can repeat everything.

Mr Speaker, Sir, it is necessary for us to remind ourselves of the question asked by the Member for Anson. It shows that he has not got his facts correct. What was his question? His question was: To ask the Minister for Home Affairs why the police forbid the playing of religious music and singing of religious songs at temples. That is the first part of his question. There is no basis to this. The second part of his question concerns "those accompanying the persons carrying kavadi along the route during the observance of Thaipusam." I have answered the question, and I think I have answered the question adequately.

Mr Speaker, Sir, supplementary questions. First of all, about the sale. I repeat my question to the Minister, would he let us have the complaints received by him? Does he also know that, far from anyone protesting about our selling, they were milling round us trying to get the publication from us? Coming to this question that I have tabled, I accept the Minister's answer about the temples. But my question is about religious music along the route. How many complaints has he received and from whom, about the playing of religious music accompanying the kavadi carriers along the route? And what is the objection to the playing of religious music, not pop music or anything else?

Mr Speaker, Sir, I have already stated that the singing of religious kavadi songs and hymns by those accompanying the kavadi carriers is not prohibited.

I said religious music.

Religious music and musical instruments were not allowed for more than 10 years, from 1973.

Why?

For the reasons that I have stated, namely, that the experience was that the playing of music en route did slow down the pace of the procession and caused serious traffic congestion. Mr Speaker, Sir, the Member for Anson and all Members here must realize that there must be a balance between, on the one hand, accommodating the religious objectives and sentiments and, on the other hand, maintaining a smooth flow of traffic, commerce and pedestrian movements during the whole day that the Thaipusam celebrations are going on. Indeed the Police presence has been appreciated by the devotees as well as the authorities of the temples. They have shown much tolerance, much care, in exercising their powers. And this measure concerning music and musical instruments is, in fact, to facilitate as far as possible the rapid flow of both kavadi carriers and normal traffic.

Let us come to your next Question, Mr Jeyaretnam.

A supplementary question, Mr Speaker, Sir.

You are not asking your Question 8?

I am. But I have got a supplementary question on this.

There seems to be no end to your supplementary questions.

If you think I should not ask, I will accept your ruling. But I have a supplementary question.

Let us go to your next Question.

All right, Sir. Question No. 8.

asked the Minister for Health (a) whether the Accident and Emergency department of the hospitals turn away persons if they do not happen to have on them the fee payable for the treatment; and (b) whether the same fee is again levied for repeat attendance at the department for follow-up treatment.

Mr Speaker, Sir, I will answer on behalf of my Minister. Persons requiring emergency treatment are not turned away at the Accident and Emergency Department of Government hospitals if they do not happen to have the fee payable for the treatment. They are given medical attention as soon as possible and a bill is presented to the patient for settlement at a later date. The Accident and Emergency Departments do not, as a rule, undertake follow-up treatment. Patients requiring follow-up treatment are referred to the Specialist Outpatient Clinics or the Primary Health Care Clinics for attention. However, should the patient return within 12 hours because of a recurrence or persistence of his symptoms, he will not be charged for the repeat attendance.

Sir, supplementary questions for the Minister of State. First of all, he says in emergency cases people who do not have the money are not turned away. Would he say what are these emergency cases where they are not turned away? Will he then concede that there were several cases of people turned away because they did not have the $12 on them? And does this also extend to people coming in with cuts or wounds on their bodies? Secondly, about the repeat attendance, would he confirm that a similar fee of $12 is again levied for dressings on surgical wounds when they are asked to come back again the next day or the day after, simply for the wound to be dressed? And the question following that is, why is that necessary?

Mr Speaker, Sir, the Member for Anson has asked, what constitutes an emergency? Under the guidelines given to the public, an emergency is an illness or an injury which could end in death or serious complication if it is not treated immediately. Examples of emergencies would include major injuries such as fractures and dislocation of the skeleton, head injuries, deep cuts or large wounds on the body, severe bleeding and severe burns or scalding. Minor injuries such as bee and insect stings are also emergencies as they require immediate treatment. Non-traumatic emergencies such as heart attack, acute appendicitis, abdominal colic, renal colic, vomitting blood, etc, including high fever, are also considered as emergencies. What are non-emergencies? Non-emergencies are conditions that do not require immediate treatment, such as minor coughs and colds, mild fever, aches and pains which have been present for a long time. So those are the guidelines as to what are emergencies and what are non-emergencies. As to whether several people have been turned away because they do not have the $12, the answer is no. But recently we have been turning away people from the A & E departments because those were non-emergency cases. So they are turned away not because they do not have the money but because they are not considered as legitimate emergency cases. As to whether cuts and wounds on bodies are considered as emergency cases, it depends on the degree of the cuts and wounds. If they are minor cuts, no. If they are major cuts and wounds, definitely. As to repeat attendances in terms of surgical dressings, if they are asked to come back for surgical dressings immediately, ie, the next day, they could be considered. But if they are asked to come back to the Specialist Outpatient Clinics, which is normally the case, then it is considered to be another consultation in which case a fee of $10, or $12 if it is at SGH, would be imposed.

Mr Speaker, Sir, may I ask the Minister of State a question so that we can find what the nature of the problem is? Who decides which patient is an emergency case or not?

Recently the public has been educated very thoroughly on what constitutes an emergency condition. Of course, for the individual, most people would tend to err on the side of safety and treat their own ailment as an emergency. At the A & E departments, the decision as to whether or not it is an emergency is made by the nurse who will triage the case. If there are any objections, then the case is referred to a doctor who will then make the final judgment.

Sir, is the Minister or Ministry aware that some of the doctors are very unhappy about this state of affairs, turning away patients when they should be treated?

If the Member for Anson has any information of that nature, I will be very happy to get the facts from him. As far as we are concerned, we have discussed with the doctors and they are all in agreement with the scheme.

Mr Speaker, Sir, before we jump to discuss on Aids, we might as well move on to Question 9.

asked the Minister for Health whether he will review and reduce the present ceiling for Medisave for the time being, in view of the current economic situation.

Mr Speaker, Sir, for Medisave Account holders below 55 years of age, the Government has set a limit of $15,000 and any balance beyond this amount will be transferred to the CPF Ordinary Account. It will be implemented on 1st April this year. The Ministry does not intend to reduce this ceiling of $15,000 as the amount has been computed based on the anticipated hospitalization expenses of the Medisave Account holder and his family. The average Medisave balance today is still low, at $2,522 per account. 85% of Medisave Accounts have balances below $5,000.

Mr Speaker, Sir, would the Minister of State consider making the necessary arrangement with the Acting Minister for Labour to allow a CPF contributor to use the fund in his Ordinary account to replenish his Medisave account should it be depleted?

There is no need for this procedure to be considered because patients going into the Class C wards and B2 wards can overdraw on their Medisave account.

Would the Minister of State inform us how is the patient going to make up for the deficit?

He can make up for the deficit from future contributions.

Sir, in cases where both husband and wife are working and contributing to Medisave, is there a need to keep such a large sum in the Medisave account?

Perhaps I would like to bring the point brought up by the Member for Bo Wen a bit further. I think this relates to how much flexibility should we have in the Medisave scheme. The Medisave ceiling has been computed based on certain assumptions relating to family size, whether they have children, whether they have parents or grandparents, or the lack of grandparents. If we are to extend the scheme and introduce flexibility into the scheme, then it would be very complicated to administer, especially since the Medisave scheme is on a national basis. From the point of view of the individual, flexibility would be both desirable and fair. I can understand that. Unfortunately, since we have to administer the Scheme on a national level, we must keep the Medisave Scheme simple and straightforward, in terms of administration. Therefore it is not possible for us to make exceptions dependent on the family circumstances.

Mr Speaker, Sir, taking up what the Minister of State has just mentioned that 85% have at the moment less than $5,000 in Medisave. Does it not mean that the balance, ie, the other 15%, are actually over-providing? If at the moment 85% with less than $5,000 find it just about adequate, therefore those who are saving more than $10,000 are actually over-providing, is it not?

The Member is assuming that $5,000 and below would be well provided for and those above $5,000 are over-provided. The answer is no. The realistic figure, or the appropriate figure at the moment, based on our computations, is $15,000. However, since the scheme has been in operation for only two years and we are still in the midst of liberalizing the usage of the scheme, it is prudent for the Ministry to monitor the operations of the scheme and observe the usage pattern for the next two to three years, and to make adjustments, if required, when the time comes.

Sir, in the two years of experience, what is the percentage of this 85% who have overdrawn their Medisave account?

The Member for Telok Blangah has made an error. He has asked what is the number of those 85% who have overdrawn? The number who have overdrawn, out of the total and not just the 85% who have below $5,000 in their accounts, the total number who have overdrawn in the last two years have been small. But I think that relates more to the fact that the scheme is still very new.

asked the Acting Minister for Labour what is the number of jobs lost for the years 1984 and 1985 and during the month of January 1986.

Mr Speaker, Sir, the number of jobs lost in 1985 was 95,900 and in January 1986 was 3,100. There were no job losses in 1984. In fact, 1,000 jobs were created.

Mr Speaker, Sir, may I ask whether the Minister has received my question in which I asked for a breakdown of jobs lost among holders of work permits and holders of professional visit passes?

Mr Speaker, Sir, I am not sure whether the Member is referring to another question which is coming up at another sitting of Parliament. If so, I will answer it in due course.

Mr Speaker, can the Minister tell us what is the number of persons who are now registered with the Labour Employment Services Department?

Mr Speaker, Sir, the answer is about 10,000.

How many jobs have been found for those who have been registered through the Department?

We should not relate the 10,000 who are now listed with the jobs found last year because this was over a period of one year. Last year, speaking from memory, I think our success rate of emplacement was about 20%. There are various reasons for this. One reason is that the employers who come to us are normally those who have difficulty finding workers to fill their jobs; another is that preferred jobs cannot be found for the applicants. The problem, as we have found from our records, is that there is quite a big mismatch between those people wanting jobs and the jobs available. For example, a lot of people want clerical jobs but there are relatively few available. On the other hand, last year we had requests from employers for about 2,000 seamstresses for garment factories, and only nine job applicants were willing to work in those factories. So the important thing really is not that there are no jobs available, but there is a need for both the job registrant and the employer to make adjustments so that we can try and put more of these people into jobs.

Mr Speaker, Sir, is there a coordination of effort between the Labour Employment Services Department and other Government departments and statutory boards in helping the unemployed to look for work?

Yes, we do have requests from most of the Ministries and departments. In fact, whenever they require daily-rated employees, for example, they will come to our Employment Services Department to look for workers. We also coordinate with the Job Placement Unit of the NTUC as well as the Singapore Manufacturers' Association.

Mr Speaker, is it true that those with higher education have been discouraged from registering with the Labour Employment Services Department?

Mr Speaker, Sir, they have not been discouraged. I think the situation is that most of the more highly educated, in looking for jobs, are able to respond on their own. If Members were to look at the classified advertisements they will find that there are quite a lot of vacancies for various jobs, and the experience has been that these people tend to reply directly to those advertisements. In fact, from our own experience, ie; from our Labour Force Survey, we find that only a relatively small percentage of the unemployed decide to come to us while the rest prefer to go directly. And this is the way it should be. They either go through friends or other channels, or they respond to advertisements. So the end result is that those people who come to us generally are those who have greater difficulty finding jobs, and the same thing applies to the employers.

asked the Acting Minister for Labour (a) what is the amount of members' contributions to the Central Provident Fund in the (i) Ordinary Account, (ii) Special Account and (iii) Medisave Account for 1985; and (b) how much was withdrawn from the Medisave Account for the same year.

Mr Speaker, Sir, CPF contributions credited to members' Ordinary, Special and Medisave Accounts in 1985 are as follows: Ordinary Account - $4,814 million Special Account - $488 million Medisave Account - $692 million In 1985, a total of $43 million was withdrawn from the Medisave Account.

asked the Acting Minister for Labour (a) what actions are being taken to monitor the problems of retrenched workers; and (b) what programmes are planned to assist them.

Mr Speaker, Sir, the Ministry keeps a close monitor on retrenchments and the problems of retrenched workers in finding jobs. Many employers have developed the practice of informing the Ministry of impending retrenchments, two weeks to a month in advance. The Ministry also conducts a quarterly survey of companies to find out the number of workers retrenched. From these two sources, the Ministry obtains the names and addresses of retrenchees. The information is used to offer employment assistance to retrenched workers and to monitor at the aggregate level their progress in seeking re-employment. The best way to assist retrenched workers is to help them find alternative jobs. My Ministry's Employment Service Department sends personal letters to the retrenched worker to offer its job-matching services. The response to this invitation last year was, however, low, only about 15%. It is very likely that the majority did not need our help. Among those who seek my Ministry's assistance, many are selective in their job requirements. They are counselled in the hope that they will lower their wage expectations and accept other jobs which they are also qualified for. We also request employers to relax their requirements, eg, by taking in older workers and those with lower educational qualifications. In the past few months, my Ministry has made general improvements to its job-matching process and increased manpower and other resources to help unemployed workers find jobs earlier. My Ministry is also in close liaison with the NTUC Job Placement Unit. We exchange job vacancy information to increase job opportunities for unemployed workers.

Mr Speaker, Sir, would the Minister say, in cases where the employers advise the Ministry about impending retrenchment, whether the Ministry takes any action to inquire if the retrenchment is really necessary or not? Or does it merely accept the company's retrenchment?

Mr Speaker, Sir, if our Singapore economy is to function properly, it is important that companies should be able to adjust and redeploy their workers in the best way they think fit. I do not think the employers would just retrench workers out of spite or for no good reason. Usually because there is a drop in orders there simply are not enough jobs to offer their workers. They have, in fact, to offer to the workers, especially those with longer service, very substantial retrenchment benefits. This, in itself, will act as a check against hasty or unjustified retrenchments. The philosophy of the Government is that we should not interfere with that process. We should leave it to market forces. Those who are retrenched, in fact, are able to find jobs. Let me quote some figures. Last year, there were about 20,000 workers retrenched. Of this number, about 16,000 were Singaporeans and permanent residents. As at the end of last year, about half of them have found jobs; that means about 8,000 have found jobs. Another 3,000 were retrenched only in the fourth quarter. So they were still looking for jobs. This leaves about 5,000 workers. Some of them may have found jobs on their own, some may be self-employed, and so on. We do not know much about these people because they are not shown up in the CPF records. We check on them through the CPF records. Others, like housewives, may have dropped out of the labour market. Whilst the present situation of unemployment is a cause for concern (the Government therefore is taking various measures to try and stimulate economic recovery) in actual fact the situation is not really that bad because even now we are still getting requests from many companies, for example, garment factories, wanting to employ foreign workers because our Singaporean women and young girls are unwilling to work in garment factories. The same thing applies to the construction industry and the woodworking industry. I have given Members the example of our offer of assistance to the retrenched workers. Very few of them come to us for assistance. So I think they are able to find jobs on their own. In fact, over the last few days we have found that the Seagate Technology advertisement appears every day. Is that a sign of severe unemployment?

Mr Speaker, Sir, may I ask the Acting Minister for Labour what would be his advice to industrialists who are looking for Singaporeans to fill the jobs but cannot find any Singaporean, and yet they cannot get work permits for foreign workers?

Mr Speaker, Sir, recently a lot of garment factories appealed to me to be allowed to employ Malaysian girls because they could not find Singaporeans. We tried our best to bring the unemployed workers from our Employment Service Department to these factories and encouraged them to adjust to these new jobs. Unfortunately very few of them stayed on or wanted the jobs. Eventually I had to relax our regulations and allow more of these garment factories to bring in Malaysian girls. So we do adjust our work permit regulation and we also counsel the job seekers, as well as the employers, to try and minimize this problem. But our problem is really nowhere as severe as in the early 1960's when our unemployment rate was 12-15%. At that time there were no foreign workers in Singapore. As of now, we still have over 100,000 foreign workers in Singapore.

We have 15 seconds left before end of Question Time.

asked the Acting Minister for Trade and Industry whether the Government foresaw in 1984 the impending downturn in our economy.

Mr Speaker, Sir, at the end of 1984 the Ministry of Trade and Industry projected that growth would be reduced from 8% in 1984 to about 5% in 1985. 3.30 pm

I am afraid, General, it is End of Question Time. Copies of the answers (See section 'Oral Answers to Questions Not Reached' (Cols. 439 - 440)) to the Questions which have not been reached would be sent by the Hon. Ministers to the hon. Members concerned and to the Clerk.

3.30 pm

"to provide for the issue from the Consolidated Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April, 1986 to 31st March, 1987", recommendation of President signified; presented by the Minister for Finance (Dr Hu Tsu Tau); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"for making supplementary provision to meet additional expenditure for the financial year 1st April, 1985 to 31st March, 1986", recommendation of President signified; presented by Dr Hu Tsu Tau; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Central Provident Fund Act (Chapter 121 of the Revised Edition)". presented by the Acting Minister for Labour (Mr Lee Yock Suan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order read for consideration in Committee of Supply [Allotted Day].

First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1985 to 31st March, 1986, contained in Paper Cmd. 4 of 1986. Head W - Pensions - Mr Ng Kah Ting. Head W -

Sir, I beg to move, That the sum to be allocated for Head W be reduced by $10 in respect of Subhead Code WA-02. Sir, in moving this amendment I would just like to seek further elucidation from the Hon. Minister for Finance with regard to the need to provide a sum of $3.33 million as contained in Paper Cmd. 4 of 1986, ie, the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1985 to 31st March, 1986. The explanation as stated therein, in my view, does not give a clear picture of the need to appropriate this sum of $3.33 million; for example, the kind of staff who have been "superannuated following the completion of engineering projects and improvement in work procedures, and contracting out of airport maintenance services." In this respect, could the Hon. Minister enlighten this House why such an expenditure could not be foreseen at the time of preparing the budget for FY 85? Thirdly, Sir, may I ask the Minister whether there will be other supplementary expenditure needed. Since it concerns Head W, which is Pensions, may I, with your kind indulgence, make a comment on the recent announcement by the Ministry of Finance? A letter addressed to the Hon. Secretary, Government Pensioners Association, dated 1st March 1986, was copied to me and the Accountant-General for his notice and necessary action. I note that there will be an increase of $25 to the Singapore Allowance, ie, from $75 to $100, to those pensioners whose gross pensions do not exceed $850 per month. I accept the rationale of the argument as contained in this statement but what I cannot agree with is the uncalled for remark contained in paragraph 2, third last line, and I quote: 'Therefore, on strict technical grounds, there is no justification to increase the Singapore Allowance at this time.' And in the next breath, first line of the third paragraph, it states: 'Nonetheless, the Minister for Finance feels that there is a case for increasing the allowance on compassionate grounds.' I totally agree with the second observation. We have been talking so much about courtesy. Let us show it. I do not think the first part of that observation is necessary. Sir, I submit that this is uncalled for and unfortunate. I hope the Government will not allow its bureaucracy to say things or do things which hurt people's feelings even though the Allowance has been increased by 33 1/3%. It is appreciated but let the appreciation stand. I hope the Minister will take note of this and comment on my remarks.

Sir, the Pensions head of expenditure needs to be supplemented mainly because of payment of ex-gratia retrenchment benefits to former daily-rated employees of the Public Works Department (PWD). The services of 179 PWD DREs were no longer required following the completion of the second runway project at Changi Airport and following the contracting out by the Civil Aviation Authority of Singapore of maintenance works at the airport. Another 59 DREs became redundant after the implementation of the scheme to decentralize responsibility for minor works and repairs to user departments. Retrenchment action was only taken after all efforts have been made to redeploy the redundant staff to other departments and statutory boards. My colleague, the Minister for Labour, has during the recent debate on the President's Address given this House a detailed account of the steps taken to emplace the redundant staff in other jobs. It is therefore not necessary for me to elaborate further on this. Retrenchment action was taken well after the fiscal year 1985 budget for the Pensions head of expenditure has been finalized. In fact, of those retrenched, 108 were served notice of termination in December 1985. Funds are therefore not available in the fiscal year 1985 budget to meet the retrenchment payments and supplementary provision has to be approved by Parliament. These ex-gratia retrenchment benefits, like pensions, gratuities and all other superannuation benefits, are chargeable to the Pensions head of expenditure. However, unlike pensions and gratuity payments which are statutory expenditure chargeable directly to the Consolidated Fund, the ex-gratia payments are not provided for under the Pensions Act or related legislation. They have to be met from funds voted by Parliament under the Pensions head of expenditure. As to the comment made by the Member for Punggol about the statement issued together with the announcement of the Singapore Allowance, I regret, Mr Speaker, Sir, that I am somewhat mystified at his emotional response to the one sentence which explained the technical grounds for making the change. If it has conveyed the feeling which he seems to express, then I would tender my apologies, but it was certainly not intended in that way. It was merely introduced to explain the reasons why the pension payments could not be varied but that, on compassionate grounds, even though the inflation over the intervening period was not large, an adjustment upwards of the Singapore Allowance was permitted.

Sir, I thank the Hon. Minister for his kind reply. I do not think the apology was necessary anyhow. But I would like to ask him whether the Civil Aviation Authority, which is now in charge of the Changi Airport, could not redeploy these 59 DREs, as stated by him, and at the same time meet such an expenditure.

Mr Speaker, Sir, I cannot speak on behalf of the Civil Aviation Authority. I have to assume that the retrenchment action was taken after due consideration of its impact but I would certainly convey his sentiment to the Authority.

Mr Speaker, Sir, in view of the assurance from the Minister for Finance, may I seek leave to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $3,330,000 for Head W ordered to stand part of the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1985 to 31st March, 1986. Question, "The sum of $3,330,000 shall be supplied to the Government under the head of expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1985 to 31st March, 1986 contained in Paper Cmd. 4 of 1986", put and agreed to. Resolution to be reported. Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker, Sir, I beg to report that the Committee of Supply have come to a certain resolution. Resolution reported - "The sum of $3,330,000 shall be supplied to the Government under the head of expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1985 to 31st March, 1986 contained in Paper Cmd. 4 of 1986."

Mr Speaker, Sir, I beg to move that Parliament doth agree with the Committee on the said resolution.

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

Mr Speaker, Sir, I beg to move the Motion standing in my name under item No. 2* in the Order Paper. *The Motion reads as follows: That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to that Act be varied by deleting the figures "$478,300", "$39,000", "$2,123,700", "$388,900" and "$29,600" in the second column and substituting the figures "$440,000", "$38,400", "$1,806,000", "$342,700" and "$359,300", respectively. Sir, it is proposed to reduce the provisions for the Privy Purse and Salaries of personal staff to $440,000 and $1,806,000 respectively. The reduction in provision for the Privy Purse is mainly because a contingency provision for the NWC wage increase is not required. The decrease of $317,700 in provision for Salaries of personal staff is largely due to a reduction of 24 posts on the Istana establishment. The allocation for Entertainment is reduced marginally by $600 because of lower anticipated expenditure on receptions. A sum of $342,700 is required to meet Expenses of the Istana household. This is a decrease of $46,200 and is due to lower expenditure on public utilities. These reductions are partly offset by an increase in allocation for Special services from $29,600 to $359,300. The increase in provision is for replacement of a vehicle. It is, therefore, necessary to vary the provisions in the Schedule to the Civil List as follows: for "The Privy Purse" from $478,300 to $440,000; for "Entertainment allowance" from $39,000 to $38,400; for "Salaries of personal staff" from $2,123,700 to $1,806,000; for "Expenses of household" from $388,900 to $342,700; and for "Special services" from $29,600 to $359,300. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, as I understood the Minister, the provision for "Special services" is increased from $29,600 to $359,300, an increase of $329,700. I see, of course, that there is a reduction of $402,000 for the sums provided for other purposes. Now, I heard the Minister say that the increase is for the purchase of a vehicle. Would he elaborate on this? What is this vehicle that is going to be bought that will cost the taxpayers $329,700? Because I see that in previous years, the "Special services" have been reduced year after year, but this year we are asking for an increase of $329,700.

Mr Speaker, Sir, the additional fund required is for the purchase of a replacement vehicle for the President, whose present Rolls Royce, I believe, is over 20 years old and is beyond economic repair.

May I ask whether it is really necessary that we should have a Rolls Royce? I know the Queen of England perhaps rides in a Rolls Royce. But is it necessary that we should also follow their practice?

Mr Speaker, Sir, it is not necessary but, in the case of the Singapore President, it is a matter of judgment what we should provide him with.

Question put, and agreed to. Resolved, "That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 52), resolves that the Schedule to that Act be varied by deleting the figures "$478,300", "$39,000", "$2,123,700", "$388,900", and "$29,600" in the second column and substituting the figures "$440,000", "$38,400", "$1,806,000", "$342,700" and "$359,300" respectively."

Resolved, "That the proceedings on item 3 on the Order Paper be exempted at this day's Sitting from the provisions of Standing Order No. 1." - [Mr S. Dhanabalan].

3.50pm

Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1986 to 31st March, 1987. My Budget Statement this year will be somewhat different from those of previous years. For one, it has been more than a decade since a budget has had to be presented to deal with a severe recession. For another, it will be shorter. This is because, unlike in previous years, Parliament has already debated at great length on the state of the Singapore economy and the recommendations of the Economic Committee. I, therefore, propose only to highlight the salient points of the Economic Committee's Report and elaborate on the measures which the Government intends to take in the next financial year to help us pull through the present economic recession.

The causes of the present recession have been well documented in the Economic Committee's Report. Externally, we have had to contend with a slowdown in international trade as a result of growing protectionism as well as structural changes in global demand and supply conditions affecting key sectors of our economy. The low and falling commodity prices which adversely affected the growth of our ASEAN neighbours have also resulted in less trade and tourist arrivals for us. Internally, profit margins have been steadily eroded as wage costs outstripped increases in productivity. This has been aggravated by a sharp decline in construction and related activities following the completion of major private sector projects and the scaling down of our public housing programme. The basic thrust of the Government's response to these problems has been elaborated by the First Deputy Prime Minister and I shall not repeat them. I would, however, like to emphasize that we do have considerable control over internal factors. Measures to reduce cost can and have been taken. We have among other things suspended payroll tax, cut skills development levy, and reduced CPF contributions. This will restore the international competitiveness of our firms and traders to a considerable extent. We can supplement these measures by striving hard to increase our productivity and the quality of our products and services. In essence, how we overcome the internal problems depends on ourselves and the sacrifices we are prepared to make. The external factors we have little control over. We are a price taker in world markets. How we fare will depend on the world economy in general and the US economy in particular. The recent fall in world oil prices will hopefully quicken the upturn in activities expected for the US and other industrial economies. Restoring economic growth must be the priority for the coming financial year. But while we tackle our present problems, we must not lose sight of longer term issues, in particular our future place in the world economy. Industrial Development Our industrial development in the years ahead will depend on the pace of auto- mation, and, increasingly, on research and development. The present level of R&D expenditure is not high, accounting for only 0.6% of our GNP in 1984, although it has actually more than doubled since 1982. This increasing trend should be encouraged to continue. More specialized research-oriented institutions along the lines of the Institute of Systems Science and the Institute of Molecular and Cell Biology must be established. However, this is only feasible if we have the necessary manpower. In this respect, the National University of Singapore (NUS) and Nanyang Technological Institute (NTI) should not let up in their efforts to train and acquire a wider pool of scientific experts. The Government will continue to assist by providing tax incentives and R&D grants to encourage private firms to undertake applied R&D activities. I will elaborate on this further when I come to the section on tax changes. The structural changes accompanying the rapid rate of technological innovation in the developed countries will impact significantly on our future industrial development. Foreign companies that are currently automating their plants and operations will have insufficient resources to undertake any new investments overseas. Moreover, given the increased productivity from automation, there will be less economic advantage in establishing new facilities abroad simply to take advantage of lower wage costs. It is, therefore, all the more critical that our manufacturers continually upgrade their operations and diversify their products. They should be more outward looking and seek out opportunities overseas. Being a small economy, we can never provide them with a big enough domestic market for them to survive and thrive. Trade Development Until the industrialized countries restore the health of their economies and increase employment, protectionism will continue to be rife. Last year, we were not spared. There was no letting-up in countervailing duties and anti-dumping investigations on our exports. Our best defence is to increase our productivity. At the same time, we must be nimble and adapt to changes in world markets and in demand and supply. For example, third country trade in commodities such as crude oil, rice, sugar and other products is estimated to be worth some $45 billion annually. Countertrade is another area which will grow in importance. A recent study has estimated that countertrade currently accounts for between 8% and 10% of world trade. Firms must grasp the complexities of these new trading activities quickly and translate them into realizable gains. It has been observed time and again that our entrepreneurs are not as quick to sense changes in demand and tastes and keep in step with these changes. It has been said that if a new product is showed in Japan today, it will be on sale in Hong Kong tomorrow, (the very next day) and Singapore stores will only have it the following week. Our traders must be much more aggressive in their marketing strategies. They must know who their competitors are and what their consumers want. The Trade Development Board (TDB) will spearhead the Government's drive to expand and seek new markets for our traders. More export promotion activities will be devised and tailored to meet the needs of local exporters. The TDB will also help disseminate information to traders so as to assist them in penetrating non-traditional markets such as Latin America, Africa and South Asia. Greater efforts will be made at the same time to expand our traditional markets closer to home. The Government will also minimize trade restrictions, simplify trade documentation and weed out bureaucratic red tape. Ultimately, however, it is the drive and the business acumen of our manufacturers and traders that will determine whether they succeed in the world. Financial Services The demand for financial services in this region will continue to expand, considering that the Asia Pacific Region has been identified as a high growth area in the coming decades. Financial services, identified as having potential for growth, centre around fee-based activities,such as fund management, and new financial instruments, such as financial futures. Fiscal incentives have been implemented to encourage the fund management industry, and these will be augmented by further incentives which I will shortly announce. The Singapore International Monetary Exchange has progressed satisfactorily and currently lists four financial futures contracts. Later this year, a stock index futures contract will be introduced. SIMEX is also expected to introduce options trading early next year. On the domestic front, steps will be taken by the Government to develop a fixed rate securities market so as to pave the way for companies to raise fixed rate funds. In the equity market, the resolution of the problems currently facing the local stockbroking industry and the introduction of a new Securities Industry Act will mark a new chapter in the annals of our stock market. The corporatization of the industry has begun with the big four local banks gaining membership on the Stock Exchange of Singapore. This increased institutional participation will strengthen the industry and help regain investors' confidence in our stock market. Later this year, the unlisted securities market is expected to begin operations. This will provide an avenue for companies with good potential for growth, but which are unable to obtain a listing on the main board because of their limited track record, to raise capital. A necessary prerequisite for further growth in any financial market is a sound and stable financial system. Therefore, in pursuing a strategy for growth, we must not lose sight for the need for uncompromising prudential standards. We will continue to monitor and maintain such standards. The Property Market The Property Market Consultative Committee (PMCC) was formed to look specifically into the ills of the property sector. They have identified three major causes of the present slump, namely, unpredictable demand, excessive supply and a loss of market confidence. They have made a number of recommendations to nurse the property market back to health. These proposals are now under active consideration by my ministry. While property value will generally rise, given the scarcity of land in Singapore, one should expect it to peak and trough in accordance with the economic cycles. In time, the property glut will be absorbed. I would nevertheless like to assure the House that the Government will not do anything to aggravate the situation. Manpower Development The development strategy of many newly industrialized countries has shifted from the cheap "sweet-shop" type labour policy to one of cheap but high quality skills. We must, therefore, prepare ourselves for the competition. How have we fared so far? Are our workers better educated? Do they have the expertise necessary to cope with technological changes? The proportion of professional, technical and skilled manpower has risen steadily from 13.6% in 1980 to 16.2% in 1985. At the same time, the proportion of production and related workers, and transport equipment operators declined from 38.8% in 1980 to 36.3% in 1985. This is mainly due to greater automation and mechanization in factories and speaks well for our drive towards higher productivity. Despite our progress in education, our workforce is still less educated than those in the US, Japan and even Taiwan. Presently, only 5% of our total workforce have tertiary education compared to 19% in the US and Japan and 6% in Taiwan. At the bottom end, about 53% or more than half our workforce have no education or at most primary level education compared with 15% in the US, 35% in Japan and 45% in Taiwan. We must therefore continue to upgrade the education level of our population. This is a necessary prerequisite for future growth as industries increasingly automate and mechanize. There is a limit to the number of graduates and skilled manpower that we can ultimately produce in the long run. Given a declining population growth rate,our workforce is expected to increase by only 1% per annum by the year 2000. It is, therefore, crucial that we educate each individual to his or her maximum potential. What we lack in quantity we must make up for in quality. It is essential that employers realize that they carry the main responsibility for upgrading and retraining workers. The workers must also play their part by being willing to attend retraining and upgrading programmes. Only then can we hope to improve our productivity and be prepared for the next phase of our growth. Concluding Remarks Over the last two decades we have made considerable progress - from a low wage, low skilled, low value-added economy to one based on higher skills and higher value-added. Despite the present setbacks and the urgency to implement measures to restore the health of the economy, we should not ignore the need for a longer term perspective. In the short term, the Government has and will continue to take measures to overcome this recession. We will continually monitor the economic situation - both domestic and abroad, and prepare for the worst. We must regain our competitive position by ensuring that costs are minimized and red tape cut. In the long term, we must all work together to maximize our potential. New investments must be found and the entire economic environment must be made favourable to business and enterprise. The Government will continue to provide efficient infrastructure, educate and train our population to its fullest potential, and assist private enterprise to identify and seize new opportunities. In this regard, the Economic Committee's Report is timely. It has identified a number of growth areas which we will do well to exploit. If we do so and deal with the present recession correctly, we will be well placed to take off again.

Mr Speaker, Sir, I now turn to the FY 86 Budget. The Budget Document for the financial year 1986-7 has already been circulated to Members. Members will note that several changes have been made to the format of this year's document. Previously, in addition to the main Budget Document, a Memorandum on the Budget was submitted alongside. This year the two have been merged into one unified document. I have also taken cognizance of Members' request for a more meaningful comparison of estimates. For this reason, the estimates for FY 86 are now compared with the corresponding revised FY 85 estimates and not with the original budget figures. The objectives of this year's expenditure budget are two-fold: (a) To restrain the growth in recurrent expenditure. (b) To stimulate the economy through increased development expenditure. Total Government spending in FY 86 is estimated to be $22.06 billion, about $5.94 billion or 37% higher than the revised FY 85 expenditure. More than 60% of the total budget allocation for FY 86 is for development. As a proportion of GDP, Government expenditure is expected to rise sharply from 43% to nearly 60%. This is largely due to a substantial increase in provision for development expenditure, including loans to HDB for the purchase of land required for public housing. Excluding the funds for HDB land purchases, the expenditure to GDP ratio will rise from 35% to 43%. The allocation for recurrent expenditure in FY 86 is $8.54 billion, about $1.41 billion or nearly 20% more than the revised FY 85 recurrent expenditure. The increase is due to higher public debt servicing and pension costs, and a sharp rise in the Government grant-in-aid to HDB. If this latter item is excluded, the recurrent expenditure for non-Defence Ministries and Organs of State will show a small increase of around 1.4%. Public debt servicing costs are projected to increase by $1.01 billion or 68%. This is largely due to interest payments on new domestic loans that are expected to be raised in FY 86. Pension payments are expected to go up by $33 million or 22% because of the large number of retirees. The grant-in-aid to HDB is increased by nearly $496 million. Following the recent change in HDB's accounting system, the HDB accounts reflect more accurately the difference between the market value of land required for public housing and the lower value used in setting sales prices of flats. The grant-in-aid to HDB is increased to reflect this subsidy. Excluding the grant-in-aid to HDB, the operating expenditure of the non-Defence Ministries and Organs of State is projected to drop by $130 million. Expenditure by MINDEF is expected to be $176 million lower than in FY 85. This decrease is partly offset by a slight increase in of $46 million in expenditure by the other Ministries and Organs of State. A provision of $3.23 billion is set aside for the operating expenditure of the non-Defence Ministries and Organs of State. Of this, $1.80 billion or 56% is used for Expenditure on Manpower, $0,50 billion or 15% for Other Operating Expenditure, and $0.93 billion or 29% for Grants, Subsidies and Other Transfers. Expenditure on Manpower is projected to increase by $54 million or 3%, much lower than the average annual increase of 16% over the FY 80-84 period. The moderate increase is due to the wage restraint policy and reductions in the authorised staff establishment. These reductions are possible as a result of higher productivity, implementation of mechanization, automation and computerization schemes, organizational reviews and changes in work procedures. Over the FY 80-85 period, the permanent establishment of the public sector, including the self-financing statutory boards, increased by more than 10,000 posts. The public sector's share of total employment also increased. A large part of this increase was due to the expansion of the tertiary and technical education institutions and the stepping up of the public housing programme. Our current public sector employment to population ratio is relatively high. Singapore's public sector employment to population ratio in 1984 was 5.3%, as compared with 3.0% in Japan, 1.6% in South Korea and 3.4% in Hong Kong. The recession and fall in revenues make it more pressing to contain increases in establishment levels and manpower costs. Government has, therefore, decided that the permanent staff complement of Ministries and Statutory Boards should be reduced by 10% from the current level over the next five years. The 10 per cent target will apply to existing programmes and can be achieved through normal attrition, and more selective recruitment, plus increases in productivity. Manpower requirements for new services will be considered separately. A comprehensive programme of manpower scrutinies will also be instituted in the public sector. The scrutiny programme will involve the critical examination by each Ministry and statutory board of its activities. The scrutinies will determine whether particular activities are necessary and if so whether they could be done at lower cost and with less manpower. Alternative means of achieving objectives including "privatization" of selected services will be examined. I must reiterate that the 10% staff reduction can be achieved through normal attrition and more selective recruitment without the need for retrenchments. Every attempt will be made to retrain and redeploy redundant staff to other areas. Government has accepted the Economic Committee's ? recommendations that the employers' CPF contribution rate be reduced and that there should be no increase in overall wage costs in 1986. With effect from 1 April 1986, the employers' CPF contribution rate in the public sector would be reduced to 10% in the case of non-pensionable officers and to 6% in the case of pensionable officers. The half-month incentive payment will also be suspended. The suspension of the half-month incentive payment will mean a 4% reduction in the wage bill and this will offset increases arising from annual salary increments. Overall, the reduction in CPF rates and suspension of the incentive payment will result in a total savings of about $230 million in Government's wage bill. Apart from manpower costs, Other Operating Expenditure of Ministries and Organs of State is also projected to fall by $34 million or 6%. This is due to stringent control by Government departments of operating costs. Discretionary expenditures, particularly those which will result in a leakage overseas (eg overseas travel) will be reduced significantly. A modest increase of $26 million or 3% is expected in expenditure on Grants, Subsidies and Other Transfers, the bulk of which is to finance the operating deficits of the tertiary and technical education institutions, aided schools and other non-self-financing statutory boards. The low rate of increase reflects the wage restraint policy and tight control of operating costs. Total development outlay for FY 86 is estimated to be $13.52 billion, an increase of $4.53 billion or 50% over the revised FY 85 expenditure. Expenditure on public housing, education and economic services takes up $12.39 billion or more than 90% of the development budget. As I mentioned earlier, part of the increase in development outlay is due to the provision of loans to HDB for the purchase of land needed for public housing. Even after discounting these loans, development expenditure in FY 86 is expected to register a very substantial increase of $1.91 billion or 33%. The sharp rise is due to the accelerated implementation of major infrastructural projects. Apart from projects included in the FY 86 development budget, Ministries and statutory boards are expected to implement other new projects costing nearly $1.19 billion in total. These new projects are in the final stages of planning and when implemented can be expected to inject a further $0.37 billion in development expenditure in FY 86 alone. A sum of $8.81 billion, equivalent to 65% of the budgetted development expenditure, is set aside for the public housing programme. The bulk of this provision is to cater for the purchase of land required for public housing. The allocation for economic services is $3.23 billion or 24% of the development outlay. Of this, $2.37 billion is for land reclamation, development of industrial estates, the Mass Rapid Transit System, roads and other infrastructure. Loans and capital assistance grants totalling $0.75 billion will be extended to industrial and commercial enterprises. The development budget for education and manpower training is $0.35 billion. This is for the school and junior college building programme, expansion of the National University of Singapore, Nanyang Technological Institute, Singapore and Ngee Ann Polytechnics as well as vocational and industrial training institutes.

I now move on to the Government's revenue position. The impact of the many tax concessions announced since last year's Budget will be clearly felt on FY 86 Consolidated Revenue. A rebate on property tax for commercial and industrial properties has been granted. Taxes on gas and electricity charges have been suspended. The Government has also reduced or removed various customs and excise duties in the course of the year. These measures are estimated to cost the Government $488 million in revenue per annum. A summary of these measures is being distributed to Members as Appendix I. (Cols. 441 - 442) Taking into consideration these concessions as well as declining revenues because of the recession, the FY 86 Consolidated Revenue is projected at $8.66 billion. This is a further drop of 3.3% compared with FY 85's revised estimate of $8.95 billion and FY 84's revenue of $10.06 billion. Appendix I - SUMMARY OF FISCAL INCENTIVES ANNOUNCED IN 1985 WHICH AFFECT THE CENTRAL GOVERNMENT BUDGET (Cols. 441 - 442) This year's accounts are complicated by the inclusion of land transactions between HDB and Government. Both revenue and expenditure accounts are affected. After allowing for these accounting changes, the Government's overall financial position for FY 86 is expected to be in deficit by $3.22 billion. This is more than double the revised deficit estimate of $1.25 billion for FY 85. These deficits will be financed by drawdowns on our reserves and by domestic borrowings as I do not intend to introduce any new taxes or levies this year. At this point, I would like to reassure Members that the taxes which have been temporarily suspended will not be reimposed for as long as it takes the economy to regain its vigour. Government will also not burden the private sector with unnecessary statutory costs. In particular, we will monitor how Government charges impact on our international competitiveness. Of course, our revenue needs depend on our expenditure plans. In the longer term, I expect Government expenditure, particularly development expenditure, to decline. Much of Singapore's infrastructure is already in place and can be expected to stand us in good stead for many years to come. The public housing programme is reaching a plateau while road construction is nearing its limit. Our strategy in the past has been to rely on economic growth to bring in sufficient revenue to meet Government's expenditure needs. As a result, rising incomes for companies and individuals have led to the growing importance of income tax as a source of revenue. Income tax collection yielded 33% of total revenue in l985 compared to 25% in l

972. This was despite the fact that individual tax rates have been reduced four times and tax rebates given twice since l

978. The future revenue position, however, is not so certain. Already, the drop in company profits has reduced income tax collections from $3.4 billion in FY 84, to about $2.8 billion in FY 85. In addition, the three-year accelerated depreciation allowance introduced last year is expected to reduce taxable profits further. The recently announced reductions in company and individual tax rates will further erode this revenue. However, these cuts are vital to the Government's longer term strategy to stimulate economic growth. High taxes stifle initiative and enterprise. They also blunt our competitive edge. It is therefore necessary to reduce taxes to as low a level as we can possibly sustain. However, prudent financial management is essential in an open economy without natural resources. This Government is therefore committed to avoid getting into a permanent budget deficit. On this, I hope I have the support of all Members of this House. Much will, of course, depend on the economic situation and the actual Budget position in the years ahead. But there may come a time when we need to look for new ways to raise revenue. The First Deputy Prime Minister has already announced that some form of consumption tax is being considered. It is intended that we begin to put into place this year, the machinery needed for the collection of consumption taxes. An early start is necessary as we need time to evaluate alternatives and instal the administrative ? machinery. Already, the proposal has sparked off keen interest and quick response from Members of this House and the public. I am well aware that consumption taxes will be unpopular. They are seen to be unwieldy, inflationary and bad for tourism. Whilst some aspects of these claims are undoubtedly true, my Ministry officials who are studying the issue will make every effort to ensure that the less desirable side-effects are mitigated. Nonetheless, the need for consumption taxes must be seen in the larger context of Singapore's economic imperatives. If Singapore is to survive as an economic entity, its productive sectors must be competitive. As direct taxes are lowered to meet competition, a point may be reached when consumption taxes will have to be brought in to provide a compensatory source of revenue. Tax Changes I now move on to details of tax changes which were announced by the First Deputy Prime Minister in Parliament last week. I shall also deal with some of the other recommendations of the Economic Committee. Individuald Income Tax In order to provide immediate relief to taxpayers, the Government has decided to give an across-the-board exceptional rebate of 25% on personal income tax for Year of Assessment 1986. Revenue loss is estimated at $250 million. For Year of Assessment 1987, I have decided to revise the personal income tax rates downwards. With your permission, Sir, I would like to table a schedule showing the revised rates (Appendix II) (Cols. 443 - 444). Appendix II - REDUCTION IN PERSONAL INCOME TAX RATES WITH EFFECT FROM YEAR OF ASSESSMENT 1987 (Cols. 443 - 444) Members will not that the top marginal rate has been brought down to 33% in line with the cut in the company tax rate whilst the lowest marginal rate has been reduced to 3.5% Under the new rates, taxpayers will enjoy a tax reduction of between 16.3% and 21.7%. As Members will also note, I have given a larger tax reduction to the middle-income group whose chargeable income falls within $15,000 to $100,000. This group currently bears nearly 50% of the total individual income tax burden. This should further motivate our skilled workers and young professionals to work even harder and earn more. But I have not forgotten those in the lower income brackets. On top of the reduced rates, I intend to increase the rebate on the tax payable on the first $10,000 of chargeable income from 10% to 15%. This will further alleviate their tax burden. The revenue loss as a result of the reduction in tax rates is estimated at $193 million per annum. I would like to reiterate that the Government will strive to lower income tax rates whenever possible. Being an open economy, dependent mainly on our human resources, we must never allow our tax burden to be so high as to become a ? disincentive to work and enterprise. Company Income Tax The reduction in company tax rate to 33%. with effect from Year of Assessment 1987, will increase after-tax yields. The Government feels that a 33% tax rate, when compared with the rate in other countries, is sufficiently competitive to attract and retain investors. I would, however, like to assure Members that we will continue to monitor our position and company tax rates will be reduced to meet competition whenever this proves necessary. Property Tax A rebate of 30% on the property tax rate of 23% is presently given in respect of the following properties: (i) All industrial and commercial properties, (ii) Industrial and commercial lands which are vacant or under development, but including residential lands owned by development companies, and (iii) Let-out URA, HDB and JTC properties. As announced by the First Deputy Prime Minister, the rebate will now be deepened to 50% from 1 July 1986, and extended for a further two years until end 1988. Property owners are expected to pass on the additional 20% rebate to tenants, as in the previous exercise. I now propose to introduce three additional changes to the property tax system. First, with effect from l July 1986, all lands under private development will be fully exempt from property tax. The exemption will apply from the time construction begins to the time that TOL is granted. Details of the scheme are being worked out between my Ministry and the Ministry of National Development and these will be announced shortly. Second, I propose to allow a change in the method of assessment of property tax for hotels. Presently guest rooms, restaurants and function rooms in hotels are assessed based on industry-wide indices such as occupancy rate and tariff averages. This has led to some rigidity in the system. For example, if the occupancy rate of a particular hotel falls, this is not accompanied by a reduction in the property tax payable unless the occupancy rates of other hotels also fall. Consequently, a hotel with low occupancy ends up paying more than its due share of property tax, whilst one with high occupancy ends up paying less. I have, therefore, agreed to allow property tax on guest rooms, restaurants and function rooms in gazetted hotels to be assessed based on actual annual gross receipts. The property tax will then more accurately reflect the actual tariff and occupancy rate of each hotel. With effect from l July 1986, their annual value will be pegged at l5% of gross receipts from room sales. Similarly, the annual value of food and beverage outlets in these hotels will be pegged at 5% of their gross sales. The other parts of the hotel, such as management offices, shopping arcades and carparks, will continue to be assessed using the present method of assessment. I am also pleased to say that the Inland Revenue Department is looking into the feasibility of extending this method of assessment to other properties where it is appropriate to do so. Third, to ease the cashflow of all property owners, I propose to allow payment of property tax by monthly instalments. This will take effect from l July 1986. Instalment payments will, however, only be allowed through GIRO, including Inter-bank GIRO. This is so as not to increase the cost of collection. To sum up, the above property and individual income tax concessions will result in a further loss in revenue of about $440 million in FY 86. The projected $3.22 billion FY 86 Budget deficit can therefore be expected to widen ? further. Investment Allowance The Economic Committee has recommended the introduction of a 30% across-the-board Investment Allowance for expenditure on capital equipment and machinery. The Committee feels that this will encourage continued investments in plant and equipment. My Ministry does not disagree with the need to stimulate capital investment. However, we feel that the existing capital allowances are more than adequate. From Year of Assessment 85, capital expenditure incurred on all plant and machinery could be written off in three years. In addition, equipment such as computers, robots and automation equipment can be fully written off in one year. We must allow the effects of these incentives to work their way through the system, before we consider new ? concessions. The investment allowance proposal also has substantial revenue implications which must be carefully studied. It will alter the base of deductions for the computation of taxable profits and can affect income tax revenue collections permanently. It is for these reasons that we have not supported the proposal. The EDB, however, administers an incentive scheme whereby investment allowance of up to 50% of capital expenditure can be enjoyed on investments in certain plant and equipment. As earlier announced, the EDB will be more liberal in granting allowances under their scheme, particularly to trading and service companies. Fund Management The present tax incentive scheme for fund management confers exemption from Singapore taxes on investment gains from funds managed on behalf of non- resident investors by approved fund managers in Singapore. These fund managers need to have Asian Currency Unit (ACU) licences and must be approved by the MAS for purposes of the scheme. In addition, the fees they earn are taxed at a concessionary rate of 10%. To enjoy the incentive, however, the funds have to be invested in overseas markets. The feedback from fund managers is that it is difficult for the fund management industry in Singapore to thrive if local stocks and shares are not included in the scheme. Specialized fund managers who do not possess ACU licences have also indicated that they would like to participate in the scheme. In view of this, I have decided to extend the incentive scheme for fund management to include: (i) Investments in local stocks and shares, and (ii) Fund managers who do not have ACU licences ? but are approved for the purpose by MAS. This will take immediate effect. The scheme essentially removes any Singapore tax liability that may arise as a result of the non-resident having his funds managed in Singapore. As before, the incentive will be confined to non-resident investors. Presently, these investors are required to make a signed declaration of their non-resident status. This will no longer be necessary. Instead, the fund managers will have to affirm the non-resident status of their clients. Investment management is one area which Singapore can develop effectively. We have the necessary financial infrastructure and an efficient international telecommunications network. Singapore is also well placed to service regional investors seeking world markets and global investors seeking regional investments. I am sure that these additional incentives will facilitate further growth of the fund management industry in Singapore. Post-Pioneer Incentive Pioneer incentives have been an important and useful tool in attracting high-value added investments to Singapore. Companies presently enjoying pioneer status pay no corporate tax. However, upon expiry of their pioneer period, they are taxed at the full corporate tax rate. This can lead to difficulties of adjustment when the full tax rate is levied. To ease the transition, the Expansion Incentive scheme will be suitably modified to enable such companies to enjoy an effective company tax rate of as low as 10%. This will encourage pioneer com- panies to continue their operations in Singapore upon expiry of their pioneer status. Details of the scheme are presently being worked out. Tax Deferred R&D Reserve The Economic Committee has identified the promotion of applied R&D as a cornerstone of our policy for industrial upgrading. I have, therefore, agreed to its recommendation that approved companies be allowed to set aside up to 20% of their taxable income as an R&D reserve which will be tax-exempt if spent within three years. Presently available incentive schemes for R&D, that is, the 50% Investment Allowance on capital expenditure and the double deduction on operating expenses, will continue to be granted to approved companies. These amounts will, however, be offset against the 20 per cent reserve. Any part of the reserve remaining after three years will be taxed and interest charged on the amount of tax deferred. This incentive will take effect from Year of Assessment 1987. Venture Capital Incentive In the l984 Budget Statement, the House was informed of an incentive scheme to encourage enterprising local companies to invest in non-traditional areas and new technologies. Investments in these new fields are risky but nevertheless necessary if we are to progress ahead. Under the incentive scheme, a local company can write-off up to 50% of the equity invested in approved venture capital projects if the project incurs cumulative losses over three years. I propose to improve upon the scheme. The investing company may now deduct, up to the full amount of its investment, any loss arising from the sale of shares in an approved project company. At the same time, the approved project company may carry-forward its losses for write-off against future profits. The scheme will also be extended to individuals. These improvements to the scheme will apply to investments made after 1 April 1986. Other details are being worked out by my Ministry in consultation with EDB and these will be announced soon. Future Incentives The Government agrees with the Economic Committee that companies should be encouraged to establish their operational headquarters in Singapore. It also supports the recommendation that foreign income, particularly from the export of services and third country trading, should be taxed at a reduced rate in Singapore. I have asked my officials to study the most appropriate fiscal measures to promote these activities. Details are being worked out and will be announced expeditiously. The Economic Committee has also made a number of other tax recommendations. These relate to incentive schemes of one form or another. We recognize that incentives are still useful and necessary at this stage of our economic development. At the same time, I should emphasize that our intention isto eventually move towards a broad based low-tax regime. My Ministry will consider the other tax recommendations in the light of these ? considerations. Conclusion Finally, Mr Speaker, Sir, we are in the midst of a severe recession. My priority in this Budget has therefore been economic recovery. Expenditure plans and tax changes were structured with this in mind. Not surprisingly, I have focussed primarily on the business sector. I have also paid special emphasis in the tax incentives to areas where there is good market potential overseas. I believe that once growth returns to those sectors of our economy which trade with the world, prosperity will be restored to those sectors that do not. Despite what the Government is doing, much of the success of our policies will depend on the world economic situation, over which we have little control. We should therefore not be overly sanguine about the pace of our recovery. However, I see no cause for despondency either, as there is much that we can do to help ourselves. We have excellent infrastructure already in place, adequate financial resources and negligible foreign debt; a very comfortable position from which to face adversity. What we now need is for all Singaporeans to join together in launching the next phase of our economic development. I am certain that we will be able to overcome our temporary setbacks. We often forget that we started with very little. Since Independence, we have been fortunate and able to build up a significant inheritance for the next generation. The evidence is all around us. This was in no small measure due to a dedicated Government that could mobilize a committed people. I feel confident that a younger generation, led by a younger leadership, will be equally successful. Mr Speaker, Sir, I beg to move.

The Question is, "That Parliament approves the financial policy of the Government for the financial year 1st April, 1986 to 31st March, 1987." In accordance with paragraph (1) of Standing Order No. 84, the debate now stands adjourned. Debate to be resumed, what day?

Monday, the 17th of March, 1986.

So be it.

Resolved, "That Parliament do now adjourn to Monday, 17th March, 1986." - [Mr S. Dhanabalan]. Adjourned accordingly at Thirteen minutes to Five o'clock pm to Monday, 17 March, 1986.

asked the Minister for National Development why the residents at Potong Pasir were not allowed to participate in the 1985 National Tree Planting Day.

There was no Tree Planting Day activity in Potong Pasir Constituency because sufficient number of trees have already been planted in accordance with Parks & Recreation Department's guidelines. Similarly, there were no Tree Planting Day activities in four other constituencies.

asked the Minister for Communications and Information if there are plans to review the bus-fare structure, in view of the pending reduction of operational cost of the Singapore Bus Service.

Bus fares are determined by bus companies. Government's role is to encourage bus companies to operate efficiently and productively and to ensure that fares are reasonable in the light of operational costs. Recent increases in productivity has enabled bus fares to be maintained at the same level since January 1982. Anticipated decreases in employers' CPF contribution and fuel costs will help the profitability of bus companies in the short term. If these reductions are of a permanent nature and are of a level that would permit a reduction in fares, then bus companies should consider a fare reduction at the appropriate time. However, at the moment, these reductions do not appear to be long term. Bus fares cannot be changed frequently because they require a long time for adjustments to be made. Otherwise, passengers and drivers alike will be confused about the correct fares. Therefore, bus fares should be changed only when changes in operating costs are reasonably permanent. To be practical, the change to any fare must be in steps of 5 cts or 10 cts per passenger trip. With more than 700 million passenger trips a year, even a reduction of 5 cts per trip requires long term profitability of bus companies to be in excess of $35 million per annum before this reduction can be absorbed. These conditions are not present at the moment. What bus companies should do is to plough back the extra profit and use it wisely to further improve their services and productivity, and hence ensure that the present fares can be kept at this level for as long as possible, even after operating costs go up again when the economy recovers.

asked the Minister for Finance whether the Monetary Authority of Singapore was aware of the practice of forward trading by members of the Singapore Stock Exchange.

The Monetary Authority of Singapore (MAS) first became aware of the practice of forward trading in January 1985. This arose as a result of information received by the MAS on malpractices within the stockbroking company, Alfa-Pacific. In the course of investigations into the financial affairs of the firm, Alfa-Pacific was found to have over-traded and had poor credit and internal controls. The firm was also found to have entered into a number of forward contracts. This was referred to the Stock Exchange of Singapore (SES) for action. The SES' view at that time was that Alfa-Pacific's forward trading was not against SES rules. MAS had no powers to intervene in changing SES rules, but would have such powers in the proposed new Securities Industry Act which was then being drafted.

asked the Minister for Health if there are plans to introduce a medical insurance scheme through the Medisave contributions.

The Ministry is working with various insurance companies on a medical insurance scheme to cover certain major, high cost medical conditions. This catastrophic medical insurance scheme will complement the Medisave Scheme, and policy holders will use part of their Medisave contributions to pay the prescribed premiums. Details of the scheme are expected to be finalised by the end of this year.

asked the Acting Minister for Labour whether the Government will make provision for retrenchment benefits to be paid to Singapore workers who have been retrenched and to those who will be retrenched in 1986.

The Government does not have to make provisions for retrenchment benefits to be paid to retrenched workers who are not government employees. In the private sector, retrenchment benefits are usually provided for in collective agreements between unions and employers. Over the years, various norms for retrenchment benefits have been established which are accepted by employers, unions and workers. These norms are recognised by the Industrial Arbitration Court. They provide for retrenchment benefits that are related to the length of service of the workers and the circumstances of the company carrying out the retrenchment.

asked the Acting Minister for Community Development what was the total amount of money donated by members of the public towards the construction of the Sennett Community Centre, situated in Jalan Wangi, Sennett Estate.

The former Sennett Community Centre was built in 1976 at a construction cost of $490,000. The Government provided the land and $150,000 for the project. The remaining $340,000 were raised by community leaders and the public. The running cost of the Centre was borne by the Government. The Government has recently completed a larger modern community centre which is situated a short distance from the former Sennett Community Centre. The modern Potong Pasir Community Centre has been built to replace the smaller Sennett Community Centre and the Lorong 8 Toa Payoh Community Centre which is very near the Kim Keat Community Centre. The new centre provides better facilities for residents living in the vicinity including those at Sennett Estate. It was built at a construction cost of $2,414,000. The Government provided the land and $1,707,000 for the building. The remaining $707,000 were raised by community leaders and the public. The Sennett and the Lorong 8 Toa Payoh Community Centres are two out of the 26 community centres which were closed last year as part of the programme to upgrade the community facilities with the construction of more modern centres in the vicinity. With the completion of the modern Potong Pasir Community Centre, the public interest is best served by consolidating public resources in the modern centre which is within easy access to more residents than the old centre at Sennett Estate.

asked the Acting Minister for Trade and Industry whether the Government foresaw in 1984 the impending downturn in our economy.

At the end of 1984, the Ministry of Trade and Industry projected that growth would be reduced from 8% in 1984 to about 5% in 1985. As it has turned out, the downturn has been sharper than we had anticipated.

asked the Acting Minister for Trade and Industry whether the Government has set up a machinery to revive our economy; and, if so, what are the steps the Government has taken to date.

The state of the economy and the measures to revive it have been thoroughly discussed in Parliament in the debate on the Address of Thanks to the President.

asked the Acting Minister for Trade and Industry what is the number of companies and businesses that have voluntarily closed down or been forced to liquidate or have remained dormant for the years 1984 and 1985.

In 1985, 350 companies were wound up voluntarily, 397 companies were forced to liquidate and 9,992 businesses terminated their operations. There are no available statistics on the number of companies and businesses which remained dormant. In 1984, 251 companies were closed down voluntarily, 219 were forced to liquidate and 10,044 businesses ceased to operate. Appendix I - SUMMARY OF FISCAL INCENTIVES ANNOUNCED IN 1985 WHICH AFFECT THE CENTRAL GOVERNMENT BUDGET (Cols. 441 - 442) Appendix II - REDUCTION IN PERSONAL INCOME TAX RATES WITH EFFECT FROM YEAR OF ASSESSMENT 1987 (Cols. 443 - 444)