Mr Deputy Speaker, Sir, this is a remarkable budget in three ways. First, it is remarkable because it is simply a continuation of the economic journey set by the Economic Committee in 1985. The fact that there is little need to change course shows that our economic growth set in 1985 and reinforced in 1986 and 1987 has been the correct one. Sir, may I request and hope that all future budgets be like this - uneventful, unexciting and, in fact, taken as a matter of fact; because such reaction means that the economic and financial planning at our national level is far-sighted and has anticipated future problems and difficulties and has solved them before they become recognized as such. Sir, secondly, it is remarkable for its promise of a new system, for its promise to set targets for Government expenditure, to better monitor and to better account for these expenditures and at the same time to use the performance measurement system to ensure the effectiveness and the efficiency of major Government programmes. Knowing the difficulties of such a system even in small companies, I know that the will and effort needed to move an immense organization such as the civil service is a huge one, and I would like to congratulate the Minister on his courage to promise such a programme even before it starts. Thirdly, Sir, it is remarkable because of the promises of higher taxes and rates in the coming year. Here I would like to say that the budget, besides being a management tool of Government's financial affairs, is also a statement of intent of the Government in respect to its economic management of the country. That is the reason why all of us in the nation look forward to the budget every year. Sir, such a statement should as far as possible reduce uncertainties and at the same time provide predictability on the Government's plans and actions in the coming year. May I add that at this time when businesses are faced with a greater amount of uncertainty than before, this is especially needed. Hence, not to provide predictability and reduce uncertainty is bad enough. But, Sir, for the budget to contain sources of uncertainty certainly takes the cake. So what are these sources of uncertainty? To my mind, the three major items are the CPF rates, the SDF levy and the property taxes which the Minister has said will be reviewed during the course of the year. Sir, does he not know that his comments create uncertainties in respect of statutory cost of doing business in Singapore? Between the space of a year, why is it that important that these changes should be made in between budgets? Why does not the Minister say that in view of the longer term uncertainty facing us, any proposed change will only be made at the next budget? Will it make such a big difference, Sir, to Government coffers or to long term planning of the economy if changes to these rates and taxes were to be made at the next budget? Or does really a space of six to nine months really make all the difference? If not, why not give a greater amount of certainty to the business community? Why not state clearly that changes will only be made at the next budget? I strongly urge the Minister to do so. Sir, I would now like to come to one of my favourite topics on the budget which is the budget presentation, both in form and substance. The form, Sir, I must admit has improved substantially through the years. It is now easier to understand what each Ministry wants to do and the funds needed for them. The modified system promised by the Minister, I believe, will bring better presentation in form in the years to come. For that, I thank the Minister in making life a bit easier for us. The substance, Sir, I am afraid leaves room for improvement. This lack of substance is not only misleading but actually dangerous; for upon this the Government sets its economic policies and thus affects everybody in the country. In fact, Sir, I would even like to add that if the Government is a company it would have been brought to court its misleading presentation of accounts. Let me illustrate what I meant by "misleading". Sir, in the budget the fiscal year 1987 expenditure included the one of debt servicing payments and the purchase by the Government of URA and JTC land banks. But, Sir, are these actually expenditures, or are they not simply intra-public sector transfers? The one of debt servicing payment is to MAS, to adjust the huge advance deposits CPF has with the MAS. The purchase of land is to pay for the land belonging to URA and JTC; land which these two organizations acquired from the public at 1973 prices, a power given to them in the first place by the Government itself. To say that these are expenditures now and group them together with salaries and the like is, Sir, really stretching the imagination. Sir, when the Minister says that a long term budget policy objective is an overall balanced budget, I am sure that all Singapore supports this policy. I am sure that Singaporeans will be willing to pay more taxes, whether directly or indirectly, to ensure a balanced budget if the Government needs more funds to spend for the public good and if it wants a balanced budget. But, then, Sir, what do we mean by "balanced"? Balanced because of actual expenditure? Or balanced by padding intra-public sector transfers as expenditure? Sir, let me use a simple hypothetical example to illustrate. Assume that a budget calls for the spending of $20 billion. Hence to balance a budget the Finance Minister would have to raise $20 billion. Sir, that is fine. But then what if in the expenditure side of the budget there are transfers treated as expenditure. Surely, then, This is no longer the situation of a balanced budget but more of a surplus budget. Sir, if a real example is needed, let us look at the two items of the so-called expenditure which I mentioned earlier. The actual amounts of the items are not shown. But if one were to look at the comparison of the revised fiscal year 1987 with actual fiscal year 1986 expenditure in page 39, Annex I of the Budget report, one can see that both items have increased by a total of $3.6 billion. If only the increases of these two items are taken out of expenditure and properly classified as "intra-public sector transfers", the fiscal year 1987 revised revenue expenditure of the Government would be a surplus of $948 million and not a deficit of $2.7 billion as presented. Surely, Sir, this is an entirely different picture altogether. That is why over the last two years I have called for a better accounting system to reflect more accurately and realistically the revenue and expenditure of the public sector. Sir, I said "public sector" and not Government Ministries because over the years Government Ministries have spinned off certain functions which are of a public administration nature to statutory bodies. The accounts of these bodies such as HDB, JTC, URA, MAS and the like, need to be consolidated to show a more comprehensive picture of the revenue and expenditure of the public sector. Sir, only when we are shown such consolidated accounts, can we then really see whether the Government needs more revenue or is, in fact, having too much revenue. Sir, I now come to the more specific items of the budget. The SDF levy. Sir, I agree with the Minister's comments on the need to give more emphasis to training of our workers. However, Sir, I would like to maintain that training is as much a responsibility of the Government as it is of employers. Already, as the Member for Whampoa has said earlier this morning, statutory cost of doing business is high in Singapore, certainly much higher than in Hong Kong. As such, I would like to urge the Minister to consider a proposal that was actually presented in the newspaper, that of, transferring the payroll tax from the consolidated revenue account to the SDF. Both the payroll tax and the SDF levy are similar taxes on employment. It is strange that the Government with its constant budgetary surpluses and emphasis on improving the quality of our human resources should continue to tax employment of the nation's only resource. Sir, the payroll tax should be abolished or, if not, the proceeds should be transferred to the SDF. Alternatively, to show that it shares the burden of training our workers, the Government can also consider the following: (1) To fund the SDF on a dollar-for-dollar basis, ie, to contribute an amount equal to the levy collected from companies. (2) Perhaps even to direct the foreign workers' levy to the SDF. Foreign Worker's Levy Sir, as the economy improves, demand for foreign workers in the non-priority sectors will increase. While I agree that we should not in the long run be dependent on foreign workers, in the short run I am afraid that we still need them. Despite the best wishes of the Government policy makers and officials alike, the increased automation that is needed to reduce dependency on foreign workers will take time, especially when those affected are mainly the locally owned small and medium-sized enterprises. Sir, their problem is not so much the level of the levy per se but the fact that they are simply unable to obtain approval for foreign workers. Often they simply cannot get enough Singaporeans for various jobs and are prepared even to pay a higher levy to obtain foreign workers, ie, if they can obtain approval for them. I believe the present system for the foreign workers is much too rigid. As the Minister has said in his address, we must be flexible. Sir, I would like to follow up on the two-tier system proposed by the Member for Chong Boon. I would like the Minister to consider perhaps a tender system for foreign workers in the non-priority sectors. It will be similar to a two-tier system but instead of an arbitrary higher levy, the amount of levy should be left to market forces. The principle of the marginal cost of an additional worker would determine whether it is worthwhile for each and every company to bring in a foreign worker or to employ a Singapore worker at higher costs or even to move more rapidly to automation. The foreign workers issue actually highlights the greater demand for labour. We should not simply focus on foreign workers in this respect but also perhaps on other ways of encouraging greater utilization of Singaporeans and our present workforce. In this respect, Sir, may I suggest two ways in which the Government can perhaps help to attain this objective. The first one is the lower CPF rates. To encourage housewives and those prepared to work part-time, the Government should consider increasing their take-home pay. For them, the current take-home pay after deductions, especially for CPF, is simply not enough. For these people, they do not need that much money in their CPF because chances are, especially for housewives, they have spouses working full-time. Why do not the Government encourage them by reducing their CPF contributions, say, 10% instead of the current 25% of their wages? Sir, on overtime rates, under the current Employment Act, the overtime rates are fixed by law - 1(r) times the normal rate for overtime work on normal working days and two times the normal rate for overtime work on rest days. These laws were fixed at a time when perhaps there was unemployment rather than over-employment. There was over-supply of labour rather than shortage of labour. They were also fixed at a time to prevent exploitation of workers by the employers. However, Sir, times have changed. Today's industrial relations situation in Singapore is such that exploitation of workers in Singapore in this manner is practically nil. Trade unions will have little difficulty coping with such types of exploitation by employers. Furthermore, the employment situation has changed drastically, from unemployment to shortage of labour. Any employer who tries to exploit his workers by underpaying them will very soon find himself short of workers. But such a system legislated for a different period becomes a source of inflexibility in today's economy. There are companies, especially those in the retail trade, where the employers and employees are willing to accept overtime rates different from those prescribed by legislation but are prevented from doing so because of the law. Either the employee does not want to work overtime at the prescribed rate because it is too low or the employer cannot afford to pay prescribed rates because it is too high. So why the need for this inflexibility? Why not let the market decide? Let it be between the company and the unions to decide what sort of overtime rates that should be paid. I would thus like to urge the Minister to consider giving more flexibility to willing (and, Sir, here I stress the word "willing") employers and unions to negotiate on the overtime rates they deem best for their companies. It will encourage the greater usage and utilization of overtime and thus effectively increasing the labour pool. Incentives for overseas investment. I welcome the Minister to include approved overseas investment as part of the venture capital incentive scheme. It will certainly help our investors to venture more into areas overseas beneficial to Singapore in the long run. However, I would like to urge for some modification to the scheme itself. The scheme is a good one but not good enough. It does not go far enough to encourage investment. Allowing tax deduction for losses only at the point of sale of the approved investment or presumably liquidation is simply not attractive enough. A company normally makes an investment during good times. Hence, a deduction at the point of investment will be a better incentive. After all, one needs profits for the tax deduction to be effective and good times are usually associated with profits. "It never rains but pours" is a maxim common in business. It is because businesses are generally more affected by macro factors such as recession and poor business environment. Hence, allowing deductions at the time of the loss would not be attractive as that would be the time when investors have little income to take advantage of the deductions. Furthermore, Sir, I believe the incentive, as presently structured, may have a negative impact because tax deduction is only allowed when losses are realized. An investor may, in order to take advantage of the tax deduction, try to dispose of the investment at the first sign of problems and not try to work through it. I would therefore like to urge the Minister to be bold and allow deduction at the time of investment. If this is too much, then perhaps he can consider a period of, say, three years for the write-off. After all, Sir, these investments need to be approved and therefore the final say is really in the hands of the Government. Export promotion. I would also like to commend the Minister for encouraging export of our services. However, Sir, services is not just computer software, information technology, medical, accounting, consulting and the like. Within manufacturing itself, there are many activities considered as services. Permit me to illustrate. In the garment trade, for example, many of our companies are contract manufacturers, ie, they produce well-known brands on behalf of the brand owners, brands such as Lee, Wrangler, Levis, Esprit, etc. Everybody knows that the greatest profit margin is in the ownership of these brands and not in the manufacturing of the product itself. Yet, Sir, to establish a brand takes many years of hard promotional work and much cost. Surely, it will be worthwhile to encourage the promotion of local brands overseas as in the long run this will fit into the fabric of our economic structure. We do not have to go too far to look at examples. Witness the Japanese then and now the Koreans on the promotion of their brands. They were not interested in producing products for the Western companies but instead they tried to build up a host of Japanese and Korean brands. The success is being seen today. I would therefore like to urge the Minister to consider a double tax deduction scheme for expenses incurred in the overseas promotion of Singapore's own brands and names. Sir, I support the motion.