Hansard, 1989-03-03

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 Bernard Chen (Pasir Panjang GRC) - from 25th February to 1st March, 1989. Dr Tay Eng Soon (Eunos GRC), Senior Minister of State, Ministry of Education - from 28th February to 1st March 1989. Dr Wang Kai Yuen (Bukit Timah) - from 2nd to 24th March, 1989. Mr Eugene Yap Giau Cheng (Mountbatten), Senior Parliamentary Secretary to the Minister for Trade and Industry and the Minister for the Environment - from 3rd to 10th March, 1989. Encik Sidek bin Saniff (Jalan Besar GRC), Senior Parliamentary Secretary to the Minister for Education - from 5th to 9th March, 1989. Mr Choo Wee Khiang (Marine Parade GRC) - from 5th to 11th March, 1989. Encik Abbas Abu Amin (Pasir Panjang GRC) - from 6th to 7th March, 1989. Mr Heng Chiang Meng (Cheng San GRC) - from 11th to 15th March, 1989. Mr Charles Chong (Sembawang GRC) - from 13th March to 30th April, 1989. TAN SOO KHOON Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the date stated: 21st February, 1989 (i) Endangered Species (Import and Export) Bill; (ii) Probation of Offenders (Amendment) Bill; (iii) Destitute Persons Bill; (iv) Statutes (Miscellaneous Amendments) Bill; and (v) Immigration (Amendment) Bill. TAN SOO KHOON Speaker Parliament of Singapore

asked the Minister for National Development whether the Public Works Department will construct a road divider along Simei Road and install a traffic light at the junction of Simei Road and Simei Street 1.

Mr Speaker, Sir, the Public Works Department will build the road divider and signalize the junction of Simei Road/Simei Street 1 by July 1989.

Mr Speaker, Sir, may I ask the Senior Minister of State whether in building the road divider and installing the signalized traffic lights provision can be made for a U-turn at the junction of the traffic light.

I will ask the Public Works Department to look into this request.

asked the Minister for Education how many more primary and secondary schools will be built in Changi Constituency.

Mr Speaker, Sir, the Ministry of Education has no plans to build new schools in Changi Constituency as the existing number of schools is adequate to cater for the demand.

asked the Minister for Home Affairs if he will give a full account of the latest crime situation in Singapore.

Mr Speaker, Sir, compared to 1987, seizable offences for 1988 increased by 5,490 cases or 10.9%. Not all categories of crime showed an increase. Robberies decreased slightly from 1,681 cases in 1987 to 1,674 cases in 1988, a slight drop of 0.4%. Number of rape cases also decreased from 99 in 1987 to 96 in 1988. Murder showed an increase of four cases from 50 to 54. Property-related offences of housebreaking increased by 985 cases or 32.7% in 1988. However, the rate of housebreaking remained low at 35 per 10,000 dwelling units. Motor-vehicle theft increased by 184 cases or 3.9% over 1987 figures. Despite this increase, 68% of all the motor-vehicles reported stolen were recovered in the same year. The rest of the increase in seizable offences is due to theft, assault, mischief and outraging of modesty. Singapore's crime rate of 207.4 per 100,000 population for serious offences of robbery, housebreaking, murder, rape and vehicle theft compares favourably with those of other countries. For example, Hong Kong has an overall crime rate of 356.3 per 100,000 population. Police will continue to fight crime by upgrading their investigation and intelligence systems, and promoting crime prevention measures and public education programmes in the community. The increase of property offences of housebreaking and motor-vehicle theft reported last year highlights the importance of the need for the public to take crime prevention measures seriously and to cooperate with the Police to fight crime. In this context, it is heartening to note that in 1988, 765 persons who committed serious offences were arrested through assistance rendered by the public.

Sir, may I ask the Senior Minister of State how many of these offenders are foreigners, in terms of percentage?

I do not have the figures of offenders who are foreigners arrested last year. Yes, there were foreigners who were arrested in Singapore for committing certain crimes but the figures are not with me at the moment.

asked the Minister for Labour (a) how many Central Provident Fund members have set aside the minimum sum on reaching the age of 55 years since the inception of the Minimum Sum Scheme in January 1987; and (b) what action will he take to safeguard the value of the minimum sum of $30,000 from erosion by inflation.

Mr Speaker, Sir, the Minimum Sum Scheme was implemented on 1st January 1987. As at 31st January 1989, a total of 8,427 CPF members have set aside the minimum sum in cash when they applied to withdraw their CPF savings upon reaching 55 years of age. Of these, 344 have deposited their minimum sums with approved banks, 557 have bought annuities and the rest have left their mini- mum sums with the CPF Board. Another 8,700 members have pledged their minimum sums in the form of properties. Members may recall that when I announced the Minimum Sum Scheme in 1986, I informed the House that the minimum sum of $30,000 would be reviewed periodically to ensure that its real value is retained. Over the past two years, the Consumer Price Index has risen by about 3%. To maintain the real value of the minimum sum of $30,000 at 1986 prices, it has to be increased by 3% to $30,900. The increase will take effect from 1st April 1989. CPF members who reach 55 years of age on or after that date will, therefore, be required to set aside $30,900 instead of $30,000. Those who own properties can pledge their properties in lieu of setting aside the minimum sum. The amount that members can withdraw monthly from the minimum sum from the age of 60 will correspondingly be raised from $230 to $237 per month, an increase also of 3%. This higher withdrawal amount will come into effect from 1st April 1994 when the cohort of CPF members who reach age 55 on 1st April 1989 reach age 60 and withdraw their first monthly instalment. Those who join the Scheme before 1st April 1989 will draw down their minimum sums at the rate of $230 per month when they reach 60 until 1st April 1994, when the instalment will similarly be increased to $237 per month. These withdrawal rates will apply to the minimum sums left with the CPF Board or deposited with approved banks. For those who have used their minimum sums to purchase approved annuities, the monthly instalments will be according to the terms of their annuity plans. For a married couple who are both CPF members, the minimum sum will likewise be raised from $45,000 to $46,400 and the monthly withdrawal amount from $345 to $355 per month. The new minimum sum of $30,900 from 1st April 1989 will also apply to the Approved Investments Scheme. CPF members must therefore have at least that sum in their CPF accounts or in the form of properties before they can invest part of the CPF balance in trustee shares or gold. Henceforth, the minimum sum will be similarly adjusted every one to two years to preserve its real value. It is expected that such adjustments will be small. The public will be informed through the mass media.

"to provide for the issue from the Consolidated Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April, 1989 to 31st March, 1990", recommendation of President signified; presented by the Minister for Finance (Dr Richard 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, 1988 to 31st March, 1989", recommendation of President signified; presented by Dr Richard 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 provide for the payment into the Consolidated Fund of moneys from the funds of certain statutory corporations", recommendation of President signified; presented by Dr Richard Hu Tsu Tau; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Resolved, That notwithstanding the Standing Orders, the First Supplementary Main Estimates of Expenditure for the Financial Year 1st April, 1988 to 31st March, 1989 (Paper Cmd. 6 of 1989) and the First Supplementary Development Estimates of Expenditure for the Financial Year 1st April, 1988 to 31st March, 1989 (Paper Cmd. 7 of 1989) be taken today. - [Dr Richard Hu Tsu Tau].

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

First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1988 to 31st March 1989, contained in Paper Cmd. 6 of 1989. No notice of amendment has been received. Question, "That the sums stated for the heads of expenditure shown in the schedule on page 6 of the Paper stand part of the Estimates," put and agreed to. Question, "That the sum of $173,677,540 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 6 of 1989", put and agreed to. Resolution to be reported.

First Supplementary Development Estimates of Expenditure for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 7 of 1989. No notice of amendment has been received. Question, "That the sums stated for the heads of expenditure shown in the schedule on page 2 of the Paper stand part of the Estimates," put and agreed to. Question, "That the sum of $287,135,500 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 7 of 1989," 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 certain resolutions. Resolutions reported - "That the sum of $173,677,540 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Main Estimates of Expenditure for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 6 of 1989." "That the sum of $287,135,500 shall be supplied to the Government under the heads of expenditure for the public services shown in the First Supplementary Development Estimates of Expenditure for the financial year 1st April, 1988 to 31st March, 1989, contained in Paper Cmd. 7 of 1989."

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

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

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, this Bill was introduced last year as part of the Government's continued fight against corruption. It was referred to a Select Committee which recommended a few amendments after hearing representations. The Bill, however, lapsed as a result of the dissolution of Parliament for the 1988 general elections. The present Bill before the House is a re-introduction of that Bill as amended by the Select Committee. During the Second Reading of the Bill last year, Members will recall that we had a full debate during which I explained the rationale and outlined the provisions of the Bill. I shall therefore not go over the same ground as the provisions of the 1988 Bill, with a few exceptions, have not been amended by the Select Committee. I will only deal with a few of the changes recommended by the Select Committee and which are incorporated in the Bill which we have today. Sir, the Bill empowers the courts to confiscate the disproportionate and unexplained assets of persons who are convicted, or deemed to be convicted, of corruption offences and to restrain the disposal of these assets before the conclusion of proceedings against such persons. However, the Bill will not extend to persons convicted, or deemed to be convicted, of a corruption offence before the Bill becomes law and comes into force. The Select Committee had therefore amended clause 3 of the Bill to make this clear. Another amendment is clause 5 of the Bill. It incorporates an amendment made by the Select Committee to ensure that any assets of the defendant forfeited, or previously forfeited, under section 13 of the Prevention of Corruption Act will not be included in the court's computation of the value of benefits of corruption when making a confiscation order. In other words, the quantum will not include whatever was forfeited under section 13 of the Prevention of Corruption Act. Another substantive amendment is new clause 23 which was made by the Select Committee. It concerns confiscation proceedings against deceased absconders. Confiscation proceedings against deceased absconder will be instituted or continued against his estate or personal representatives or his beneficiaries but the confiscation order will not be made against them personally; it will be made against the estate. Subsections (3), (4) and (5) of clause 23 have also been inserted to avoid any possible injustice which could result from the application of the presumptions in clauses 4 and 5 of the Bill. Clause 4, subsection (4) deems a person to have benefited from corruption if he holds, or has held, any assets disproportionate to his known sources of income and which cannot be satisfactorily accounted for. Under clause 5, these disproportionate and unexplained assets constitute the benefits of corruption. But as there may be situations where the personal representatives or next-of-kin are unable to rebut the presumptions in clause 4, subsections (4) and 5, the scope of a confiscation order is now restricted to only those disproportionate and unexplained assets acquired by a deceased defendant within six years before his death. Thisperiod of six years ties in with the statutory period of limitation for commercial transactions. As in practice, banks and other financial institutions retain records for at least this length of time, the personal representatives and next-of-kin should be able to obtain the necessary proof to rebut the presumptions. Clause 24 of the Bill, also recommended by the Select Committee, empowers the court to dispense with service of documents on absconders who cannot be found. In conclusion, Sir, let me reiterate what I said in this House last year, that this Bill will provide us with a new and more effective weapon to combat corruption. Furthermore, the principles in the Bill are not entirely new. As hon. Members will see from the comparative table annexed to the Bill, the provisions, with a few exceptions, are modelled on the provisions of the United Kingdom Drug Trafficking Offences Act 1986 with appropriate modifications and adaptations for our purpose. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I rise to support the Corruption (Confiscation of Benefits) Bill. Sir, this Bill was debated in the last Parliament. The Bill was further examined and reviewed by the Select Committee. There were only three submissions made to the Select Committee. I see that there are no major changes to the original Bill, except where it was necessary to clarify and amplify the spirit and intention of the Bill. Sir, credit must go to our Government for the pains taken to ensure that Singapore remains corrupt-free. Efforts like this on the part of the Government should be openly and expressly applauded by Singaporeans. Many may say that this is expected of the Government. But is it true in reality, in actual practice? We all read of the sad experiences of many countries. How many governments are as willing and prepared like ours to nip the problem in the bud? It requires tremendous conviction and courage to self-regulate, to keep our system clean and effective. That is why Singapore remains today a fair and just society. Our government officials should take pride that they are able to look others in the eye and act independently and unwaveringly for making decisions that best serve the interest of Singapore and Singaporeans. Besides the Government, all Singaporeans should make very clear their stand against corruption. Singaporeans should unequivocally demonstrate their desire for a strong, clean and effective government, that we want honest and morally upright leaders and officials in government. The ability of our people to differentiate between good and bad, right and wrong, the deserving and the undeserving is critical. It is only when the Government and the people work in concert that we are able to rid corruption and dishonesty from happening in Singapore. Sir, we hope that our economy can continue to grow and that we are able to enjoy more surpluses year after year.

Mr Speaker, Sir, I wish to give my full support also to the Government for the introduction of this Bill. Though rather late in the day, nevertheless it is better late than never. The press frequently gives publicity to cases of corrupt practices by those holding high office who are already drawing high salaries, very handsome salaries, and by those in high society who are already fabulously rich, like bankers and tycoons. These are the people, Sir, who are insatiable in their craving for money. For them, it would appear that the more they have, the more they want. From this, it can be seen also, Sir, that high salaries and high incomes do not necessarily make a person honest. The difficulty connected with corruption of course, Sir, is detection. As is well-known, corrupt practices are often not discovered or, if they are discovered, they may be discovered only after a long long time. Nevertheless, the provisions in the Bill should serve as a fairly strong disincentive to the would be corrupt or to those who are tempted to enrich themselves or further enrich themselves through corrupt practices to think again. Such a Bill might have been effective enough, Sir, I think to keep people like Phey Yew Kok and Teh Cheang Wan to the straight and narrow path. I, Sir, have not had the benefit of reading the Select Committee Report because I never knew about it and I never knew about the previous arguments in this House. I am a bit puzzled, Sir, by clause 3 and the explanatory statement given at the and of the Bill. Clause 3(1) says "convicted by a court before the commencement of this Act", at line 10. In other words, this Bill will apply to all the people, except those who were convicted in a court before the commencement of this Act. That is how I understand it, Sir. But the explanatory statement says that the Bill will apply, except for those who are "deemed to have been convicted before the commencement of the proposed law". Maybe there is a difference; maybe there is not. But to my mind, when a person is deemed to be convicted, it does not necessarily mean that he has been convicted in court. Of course the Minister could explain, because I like to know whether such a clause would apply to people like Phey Yew Kok. Sir, clause 23 says that only assets acquired within six years before death may be confiscated. As I have already indicated, Sir, corrupt practices might have been going on for more than six years without being suspected or discoverd. Today, the Income Tax Department investigates people going back to 12 years. So why cannot the same apply to cases of corrupt practices? As much of the ill-gotten gains should be returned to the State or to the people, I suggest that the figure "6" should be changed to "12" years.

Mr Speaker, Sir, I rise to support the Bill. I have only one point to raise with the Minister. This relates to the subject of properties which are pledged to financial institutions. We are an international financial centre. A great number of properties are pledged to financial or banking institutions for raising funds. If a property pledged with the banks should be confiscated under this particular Act, I think the bank or the lending institution will be placed at a disadvantage. I do not think the Bill has adequately addressed this point. I think it will be very difficult for a lending institution to find out from the person who is taking a loan whether the property he is pledging to the bank is the subject of a possible corruption case. I do not know whether the Minister will like to look into this.

Thank you, Sir, for allowing me to join in the debate. Sir, I rise in support of this Bill. Corruption as a way of life must never be allowed or ever to take root in Singapore. We have seen for ourselves how many third world countries, though endowed with abundant natural resources, their people remain poor and economic development could not get off the ground, all because of corruption which is rife in those countries. Sadly, Sir, the culture of corruption seems more prevalent in Asian countries than in the West. We can learn something from the West in their high standard of honesty, in particular the English-speaking countries. Some hon Members : No

In our schools, I think we should teach our children to attain absolute honesty as a value. Ultimately, it is the education that will wipe out corruption from our society if it is possible. Sir, I see that the Government means business. This piece of legislation really has got teeth. It even ensures that no corrupt person can benefit from his corruption even after death. It just only makes me wonder whether those people who are intent on being corrupt will or will not put their money elsewhere before they are caught. I just wonder why this law is introduced only after the death of the former Minister for National Development in December 1986, and not earlier. Sir, the Non-Constituency Member, I think, he was afraid that the late Mr Teh Cheang Wan will get away with his benefits. But I do not think so. As I said, this piece of legislation has got teeth. And under Part IV, the definition of "absconded persons" is very wide. Clause 21 (1) says: 'For the purposes of this Act, a person shall be taken to be convicted of a corruption offence if the person absconds in connection with the corruption offence and any reference in Part II to the defendant shall include reference to such a person.' Sir, it is a novel piece of legislation as far as I can see. There is definition of what an absconded person means. Clause 21 (2) says: '... a person shall be taken to abscond in connection with a corruption offence if whether before or after the commencement of this Act -

Sir, I thank the hon. Members for their support of the Bill and I will deal with some of the points which have been raised. First, Dr Lee Siew-Choh sought clarification on clause 3 and the explanatory statement. He could not understand the reference "deemed to have been convicted". In order to explain that, I must first explain that there are provisions in the Bill to deal with confiscation of unexplained and disproportionate assets of persons who have absconded or persons who have died after investigations have commenced. And the provisions which Mr Chiam referred to lay down certain conditions which, if fulfilled, would lead to a presumption as set out in clause 21, "a person shall be taken to be convicted" in those circumstances. That is how you have a reference in the explanatory statement to "deemed to have been convicted". Let me explain clause 3. Members will recall that last year in the House as well as in the press and also in the representations made to the Select Committee, considerable concern was expressed over what was felt to be retrospective application of provisions. This has been taken into account to some extent by the Select Committee in clause 3. The effect of clause 3 is that the provisions of this Bill will apply to corruption offences which take place before or after the commencement of this Act. In other words, investigations could have started, the offence could have been committed before the coming into operation of the Act, provided the person has not been convicted before the coming into operation of the Act. If the person has been convicted and because of the presumption provision of "deemed to have been convicted", then that retrospectivity does not reach a person who has been convicted before the coming into operation of this Act. But if the person has not been convicted, if investigations started before the coming into operation of the Act, and the conviction has not taken place yet, then it will apply. That is how the Select Committee has dealt with this situation.

Sir, can the Minister say whether this applies to Phey Yew Kok?

The question as to whether this applies to Phey Yew Kok is obviously a legal question which the CPIB will have to take up with the Attorney-General's Chambers after this Act comes into force. But if I may say so here, Mr Chiam was wrong in thinking that the 6-year cut-off period applies to Mr Phey Yew Kok because my reading of that clause 23 is a specific reference to persons who have died. In other words, the effect of death on proceedings is a provision which applies to persons who have died.

Sir, may I just clarify? Is there not also in law the presumption of death if after seven years, nothing is known of a person from people who should know of his whereabouts?

Sir, we are talking about this Act. Under the provisions of this Act, his earlier assertion that the 6-year period applies to Mr Phey Yew Kok is not correct. Whether or not there are other principles of law, as I said, is a legal question which will obviously be taken up. Mr Chng Hee Kok asked about safeguards for banks or financial institutions who have, I guess, an encumbrance over a certain property. I would like to assure him that this matter is taken care of in the Bill. I would like to refer him specifically to clause 8 subsection (3)(a)(ii) where in computing the value of property (other than cash) any other person who holds an interest in the property, it shall be the market value less the amount required to discharge any encumbrance on the interest. I am advised by the draftsman that that provision would take care of that. I may also refer him to clause 16(4) which says that the powers exercised by the court shall be exercised with a view to allowing any person other than the defendant or the recipient of any gift to retain or recover the value of any property held by him. So a combination of clause 8 (3)(a)(ii) and clause 16(4), I believe, would meet the Member's concern. On Mr Chiam's point about Ministers being required to give an undertaking, this is not a new point. It has been raised in this House before by Mr Jeyaretnam and Mr Chiam and it has been fully discussed and answered by the Prime Minister on two occasions, I recall, in March 1985 and January 1987. And as he said, the Prime Minister made it clear that every Minister has to file a declaration of his assets with him and explain the reasons because when an allegation is made the authencity or veracity of that document is the basis for the investigation. As to making the declaration public, it was also touched on by the Prime Minister who explained the problems involved as to making it public-the question of privacy and how it would make the problem of getting good men to stand as candidates even more difficult. But if Mr Chiam is serious and he wants to pursue this, then by all means we can have a full debate on it. He can file a motion and we can debate the matter. But before he does so, I think he should refresh his memory on the debates which have already taken place in this House. He mentioned that this was a novel Bill. It is novel in so far as it is made applicable to corruption. But the principle that a person must not enjoy his ill-gotten gains is to be found in the legislation of quite a number of countries in other contexts, principally seizure of assets in drug trafficking, and the main Bill on which these provisions are based is the Drug Trafficking Bill in the United Kingdom and to some extent the Proceeds of Crime Act in Australia. I believe I have answered the main questions. The fact that this Bill has come after Mr Teh Cheang Wan's death should not give the impression that nothing is done about Mr Teh Cheang Wan. As Members know, civil proceedings have been instituted by the Attorney-General against the estate of Mr Teh Cheang Wan for the recovery of the total sum of $1 million and these proceedings are alive and pending. But as explained last year in this House, because of the principle of retroactivity, the provisions of this Bill cannot be used against Mr Teh Cheang Wan. Notwithstanding that, the provisions in the existing law are enough basis for us to proceed against Mr Teh Cheang Wan's estate.

Mr Speaker, Sir, the Minister said something about the CPIB taking up wih the Attorney-General's Chambers for clarification of the reading of the Bill. Since there is some doubt at the present time when the Bill is being introduced, why can't the Minister now ensure that there be clarity and that there be no doubts whatsoever as to what our intentions really are?

Well, then there will be no job for lawyers in the first place! But this is a Bill on principles. Applications of the Bill to specific cases, present or future, is a separate matter to be decided on the facts, the circumstances, on the evidence available of a particular case. I do not think that this House is the proper place to prejudge any such questions.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. [Prof. S. Jayakumar]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order. I suspend the sitting and will take the Chair again at 3.40 pm. Sitting accordingly suspended at 2.54 pm until 3.40 pm.

Sitting resumed at 3.40 pm

Resolved, "That the proceedings on item 3 on the Order Paper today be exempted at this day's sitting from the provisions of Standing Order No. 1" [Mr Wong Kan Seng].

3.41 pm

Mr Speaker, Sir, I beg to move "That Parliament approves the financial policy of the Government for the Financial Year 1st April 1989 to 31st March 1990".

In my last Budget speech, I announced a recovery across all sectors of the economy, with the exception of construction. Overall in 1987, we registered a better-than-expected growth rate of 8.8%. However, I was more cautious in my outlook for 1988. The world was then lingering in the sombre shadow of the worst stock market crash since the Great Depression. The US index of leading indicators which had been shown to precede activity in our own manufacturing sector, was then on a downward trend. Even our surveys of general business expectations in the manufacturing and services sectors reflected a possible slow-down in 1988. As it turned out, however, expectations of a post-crash recession dissipated as the US economy continued on its longest post-war expansion into the sixth consecutive year. Even the major OECD and regional economies continued to perform well. Today, I am glad to note that the broad based expansion of the Singapore economy had continued into 1988. Overall, the economy grew at a stronger pace of 11% in 1988, the highest annual growth in this decade. Most major sectors did better in 1988 compared with 1987. Construction continued to decline by 5%. As in 1987, strong external demand was the main impetus of growth, contributing 90% of the growth in total demand. Total exports of goods and services rose by 29%, compared to 11 per cent in 1987. Non-oil domestic exports and total re-exports grew by 41% and 35% respectively. Our strong international competitiveness, particularly in manufacturing, enabled us to benefit from the buoyant OECD and regional economies which are our key export markets. Domestic demand also expanded by 7%. This was due to the strong 13% growth in private consumption expenditure and the 27% increase in private fixed capital formation. Our competitiveness, EDB's promotional efforts, and favourable external developments such as the strong Yen, boosted foreign investments. Manufacturing investment commitments totalled a record $2 billion in 1988. As a result of the strong economic growth, 65,900 jobs were created in 1988, mostly in the manufacturing sector, compared with 66,000 jobs in 1987. But many of the jobs in manufacturing went to foreign workers. It was the increase in foreign employment that enabled us to exceed the long term growth rate of 4 to 6%. The contribution to overall growth from productivity was 4.4% while local labour contributed 3.8%. Foreign labour contributed the remaining 2.8%. However, the strong inflow of foreign workers carries a high social and political cost, especially in the longer term. To prevent excessive dependence on foreign workers, policy changes, including increases in the foreign worker levy, were announced in November.

The state of the economy today is totally different from what it was when the Government implemented various cost cutting measures in 1986 to help bring the economy out of the recession. The expansion in 1984 was largely fueled by the boom in the construction sector which accounted for only 10% of the economy, but contributed one-third of GDP growth. This was unsustainable. Growth is now more broad based with manufacturing and services providing the twin engines of growth. Our challenge now is to sustain the economy on a path of steady, balanced and sustainable growth. To do so we cannot artificially depress costs as that would distort the price mechanism and result in misallocation of resources. At the same time, we need to be vigilant over our competitiveness. We must not push the economy into a recession as a result of loss of competitiveness. For an open economy like Singapore, competitiveness is vital. Barring a world wide recession, we will continue to grow if we remain competitive.

With these principles in mind, we have tailored our policies to fit our economic recovery. Last year, the uncertainties of the stock market crash prompted the Government to move cautiously in adjusting the concessions granted on Government rates and statutory charges in 1985 and 1986. Fortunately, a world recession did not materialize. Our economy recovered and enjoyed above average growth. We cannot sustain a growth rate of over 10% in the long term. The Government has made the necessary policy adjustments. We will continue to act circumspectly, and give full consideration to the effect of new policies on our international competitiveness. Long-term CPF Rate Adjustment We have increased CPF contributions incrementally towards the long term contribution rate of 40%. We have also announced that the employer's CPF contribution rate will be raised by up to 4% and the employee's contribution rate reduced by up to 2% in 1989, subject to the economic performance of the first quarter of 1989. By giving early notice of the adjustment, the Government hopes that both employers and employees would take the higher CPF rates into account when negotiating their wage settlements. Foreign Worker Levy The robust growth last year and the tight labour market saw a strong inflow of foreign workers. In manufacturing, more jobs went to foreign workers than to locals. To dampen the demand for foreign workers and to prevent them from growing beyond what is necessary to maintain a buffer, the foreign worker levy was increased to $220 with effect from 1st January 1989, and to $250 per month with effect from 1st July 1989. The maximum dependency ratio for foreign workers has also been reduced from 50% to 40%. Skills Development Fund With the shift in Skills Development Fund focus to worker training since May 1987, there has been a marked increase in the training of rank-and-file workers. SDF will continue to invest in worker training so that we will be able to keep up with the rapidly changing skill requirements to meet technological changes. Based on current SDF levy collections, there are sufficient funds to meet projected SDF disbursements this year. Therefore, it will not be necessary to increase the SDF contributions in 1989.

Overall growth in 1988 would have been higher if the manufacturing sector had not slowed down to 9% in the fourth quarter, from about 20% in the first three quarters. The slow-down was confined to the manufacturing sector, due mainly to external demand factors such as the world wide over-capacity in the disk drive industry and lower demand in the petroleum industry. The latest, first quarter 1989 survey of business expectations, suggests that the slow-down in manufacturing will continue into the first half of 1989. Respondents to the survey from the services sector were also less optimistic about business prospects in the first half of 1989 than in the last survey. We believe that the growth in 1989 will be slower than in 1988. Due to resource constraints, our long term growth rate is still expected to be between 4% to 6%. Moreover, the general consensus is that while a world recession is unlikely in 1989, world economic growth will be slower. The policy adjustments announced in November 1988 on CPF and foreign workers were made on the basis of slower growth. Our estimated growth for 1989 is between 6% and 7%, closer to our long term growth rate of 4 to 6%, and also to what the other NICs expect for 1989; South Korea, 8.5%, Taiwan, 7% and Hong Kong, 6%.

I shall now move on to the Budget for the coming financial year.

In formulating the annual budget, we have been guided by three basic objectives. First, the need to maintain an overall balanced budget over the long term. Second, to continue investing for the future. Third, to foster growth of the private sector. In order to meet these policy objectives, we must ensure that the share of national resources taken up by the public sector is contained and gradually reduced in favour of the private sector. Growth in the recurrent expenditures of Ministries and statu- tory boards will have to be kept to a minimum and this means that the quality and efficiency of public services will have to be maintained through higher productivity and better use of existing resources. Development expenditures for building up our economic and social infrastructure will continue to be supported and this will require continued investment in physical infrastructure, education and manpower training.

The FY89 Budget reflects the good progress made in achieving our long-term policy objectives. An overall budget surplus is projected. Capital investment levels will be maintained and more funds channelled towards education and manpower training. Government expenditure as a proportion of Gross domestic product and the manpower establishment as a proportion of the total workforce will be reduced, but without any sacrifice in the quality of public administration. Total Government spending is projected to rise from $11.81 billion in FY88 to $12.63 billion in FY89, a 7% cent increase. As a proportion of GDP, total expenditure would drop from 24.4% to 24.1%. Of the projected outlay of $12.63 billion for FY89, recurrent expenditure accounts for $8.31 billion or 66% and development outlays for $4.32 billion or 34%. Recurrent expenditure is projected to increase by 835 million or 11%, marginally lower than the 13% average growth over the FY83-87 period. About 31% of the increase is due to Defence requirements. Recurrent expenditure of the other ministries will go up by $328 million or more than 9% to reach $3.73 billion. Of this, $l.85 billion or 50% is for Expenditure on Manpower, $0.80 billion or 22% for Other Operating Expenditure and $1.07 billion or 28% for Grants-in-Aid to statutory boards and other institutions. Expenditure on Manpower is projected to rise by $29 millon or 1.6%. The relatively low increase is due to the reduction in manpower costs of the Ministry of Health following the restructuring of the Singapore General Hospital. Excluding the Ministry of Health, the manpower costs of the other ministries would go up by $88 million or 5.9%. The increase is due to filling of essential vacancies, normal salary increments for existing staff, and contingency provisions for possible variable bonus payments and an increase in the employers' CPF contribution rate. The total authorized manning level of ministries and government-funded statutory boards will be reduced by more than 2,720 posts or 2.4%. The reductions are due to the deletion of long-standing vacancies and implementation of mechanisation, automation and computerization schemes, organizational reviews and changes in work procedures. The majority of ministries will be able to maintain zero-growth in their actual staffing level. The total manpower estblish-ment for FY89 would be slightly more than 111,700 posts, some 3,000 posts or nearly 3% higher than the long-term zero-growth target of 108,700 posts. While there are establishment decreases in most ministries, staff increases are supported for critical areas such as schools, junior colleges and the courts where there are clear shortages and redeployment from other areas is not possible. Other Operating Expenditure is projected to rise by $113 million or 16%. The increase is due to expansion and upgrading in the education sector, strengthening of civil defence capability, and the expansion of public sector R&D programmes. Grants-in-Aid to statutory boards and other institutions will go up by $186 million or 21%. A significant part of the increase is to meet the deficit incurred by Singapore General Hospital (Pte) Ltd on subsidized patients. The balance is largely to meet the higher operating deficits of the tertiary and technical training institutions whose enrolment will increase and also due to a new provision for operating subsidies to town councils. Expenditure on pensions is expected to rise by $22 million or 9.3% to $264 million because of the larger number of retirees. Debt servicing costs are project to rise by $225 million or 16%. The increase is mainly to meet interest payments on new domestic loans. Development expenditure is projected to be about $4.32 billion in FY89 - almost the same level as in FY88. The projected outlay of $4.32 billion includes a contingency amount of $336 million for new development projects that are likely to be approved and implemented in the course of FY89. A further contingency amount of $100 million has been set aside for R&D projects of ministries and statutory boards. The long-term plan is to increase Government outlays, recurrent as well as capital, on R&D to about 1% of GDP. Excluding the contingency amounts for new projects and R&D, development expenditure by ministries would drop because of the completion or near-completion of major development projects such as the MRT, roads and expressways, and the reduced scale of public housing construction. The share of total Government expenditure and of GDP taken up by capital investment has been declining in recent years. From 38% of total expenditure in FY87, development expenditure is expected to fall to 37% in FY88 and to 34% in FY89. As a proportion of GDP, the drop is more significant. The development expenditure to GDP ratio in FY89 would be about 8.2% as compared to 12.6% in FY87. The decline is of some concern as the private sector might not be able in the short term to make up for the reduction. My Ministry is, therefore, giving priority to bringing forward the implementation of major new development projects of ministries and statutory boards to make up for any investment shortfalls. Of the projected total outlay of $12.63 billion in FY89, statutory commitments such as pensions and debt servicing costs take up about $l.9 billion or 3.6% of GDP. The relative shares of GDP taken up by the various ministries will not change very much in FY89. A significant exception would be the Ministry of Education whose share will increase from 3.5% to 3.8%. This reflects the high priority Government places on investment in education and training to provide the skilled manpower needed for a growing and increasingly sophisticated economy. The Ministry of Trade and Industry's share of GDP is also expected to increase substantially, from 0.5% to 0.9%, because of stepping up of industrial promotion and assistance activities. Our aim is to ensure that total Government expenditure does not grow as a percentage of GDP. In particular, the share of GDP taken up by recurrent expenditure must be trimmed, but at the same time high standards of public services maintained. Ministries will have to ensure that there is no let-up in efforts to improve productivity. Redundant activities and red tape must be eliminated. There must be better use of manpower and more extensive computerization and mechanization. Where it is cost-effective, services should be contracted out or privatized. The Management Services Department (MSD) of my Ministry will help other ministries improve their productivity and cost-effectiveness. MSD will be expanded and will assist ministries set up in-house management services units to review and improve systems, procedures and regulations. The new block vote budget allocation and control system which has been introduced recently will enable ministries to better manage their resources. The new system provides considerable flexibility to ministries in using funds and deploying manpower to achieve their targets. Regular performance monitoring is a key aspect of the new budget control procedures. Members will notice that the format of the budget document presented to this House has been modified to include workload and performance indicators of major programmes of the ministries. The additional information should, I believe, help Members when they discuss the budget requirements of ministries in the Committee of Supply.

For the Government to implement national programmes properly, the Civil Service and Statutory Boards must have dedicated and able officers at all echelons. Top civil servants carry heavier responsibilities than any private sector executives. They must be of equal calibre, if not more capable than top bankers, lawyers or industrialists. A fair share of the most talented university graduates must join the Civil Service each year. The actual Civil Service manpower trends in recent years, however, cause grave concern. With high economic growth, private sector incomes have risen rapidly, but the Civil Service has not kept up. The Administrative Service and some of the Professional Services have found it particularly difficult to recruit enough fresh talent into the service. Many promising young officers have left for the private sector. This problem is not new, but it has grown acute since the last pay revision exercise in 1982. A Committee on Civil Service Careers and Scholarships, chaired by the Minister for Trade and Industry, has been studying these issues since November 1988. The Committee has proposed that, as a fundamental principle, the public sector should match its salaries and promotion rates to the practice in the private sector as closely as possible. The Civil Service can and should offer able young men and women joining it careers no less challenging and rewarding than the private sector. There is no reason why the Government should not pay civil servants the market rate for their abilities and their responsibilities. It can afford to, and doing so is only being fair to the officers concerned. Although salary is not the only factor influencing the career choices of young graduates, it is clearly a major factor. Able young people opting for public sector careers should not have to make large financial sacrifices. If they do most will simply not join, and those who are already in service will leave. The Committee has therefore recommended substantial salary revisions for the key services, particularly the Administrative Service and to a lesser degree the Professional Services. The Government has accepted these recommendations. The Minister for Trade and Industry will announce the details in a statement to the House during the Budget session.

I now turn to Government's revenue position. Tax revenue for FY89 is projected to increase by 14% to $7.9 billion over the revised FY88 collection of $6.9 billion. The increase is due to the better than expected performance of the economy in 1988. Consolidated revenue for FY89 is also expected to rise to $10.3 billion, an increase of 5% over the revised FY88 estimate. Taking into account the budgeted expenditure for FY89, an overall surplus of $639 million is expected. This happy position is the outcome of a buoyant revenue position and prudent expenditure policies pursued over the past years. Although our fiscal policy is to achieve a balanced budget each year, this should not preclude us from generating budget surpluses in good years. 1988 was a good year which saw the economy recover fully from the recession of 1986. We expect that 1989 will see the beginning of a new phase in our economic development as we move into a period of more moderate growth, representative of a more mature economy. Even at these lower rates of growth, Government intends that sufficient revenue from taxation and other sources be collected to cover recurrent and development expenditures in future years without the need to draw down on our reserves. Direct taxation will remain a major source of Government revenue. However, high taxes do not necessarily mean more revenue because beyond a certain level, they stifle initiative and effort and drive businesses to more hospitable shores. Countries around the world have come to recognise this and have lowered direct taxes to create an attractive fiscal environment for investment and effort. This year, there is some scope for sharing the gains of a buoyant economy with the private sector. However, I would point out that our corporate tax rates are still competitive and the economy is not in need of a stimulus, so that any adjustment will be modest and largely aimed at off- setting some of the cost increases that the corporate sector has had to absorb in the past year. It will also be in line with Government's philosophy of taxing the factors of production as lightly as possible. Domestic demand remains strong and increased consumer spending may exert upward pressure on prices and demand for services, thereby aggravating an already tight labour supply situation. There is therefore no immediate need to adjust personal tax rates, which are already low compared to most other countries. Instead I propose to augment certain income tax reliefs designed to support Government's policy of encouraging family formation and procreation and to ease the cost of home ownership. In previous Budgets, I have mentioned that in the longer term, we will need to introduce some form of comprehensive indirect tax on consumption to complement our system of direct tax on income. Such a broadly based consumption tax will provide a stable source of revenue which is less sensitive to economic fluctuations. The revenue from it will become necessary if we had to reduce direct taxes to remain internationally competitive, or if the Government has to increase its expenditures substantially, for example on health or social services. In determining what sort of comprehensive consumption tax will best suit Singapore, whether a Value Added Tax or a general sales tax, we will need to consider its effects on all income groups, and on our exports and tourist trade. So far, such a consumption tax has not proved necessary because economic growth has been strong, tax revenue has been buoyant, and expenditures have been kept well under control. However, as future growth is likely to be lower, and competition for investments and markets is bound to intensify, I believe we should begin now to put into place a framework of indirect taxes. The Government does not expect to draw large sums from them for many years but if and when larger revenues are needed, the system will already be well established. I am proposing to take the first step in this direction this year, by partially restoring certain consumption taxes, such as the taxes on Public Ulitities Board and Telecoms bills, which were suspended during the 1985 recession. We will also actively examine the scope for introducing other forms of selective consumption taxes. With this note, I will now turn to the tax changes proposed for FY89.

Corporate Income Tax I propose to reduce the corporate tax rate from 33% to 32%. This is a modest reduction, but is indicative of the direction in which corporate taxation will move if economic conditions allow. It will also ensure that our corporate tax structure remains one of the most competitive in the world. The 32% tax rate will take effect from Year of Assessment 1990. As a corollary to the reduction, any dividends paid on or after 1st January 1989 would carry a credit of 32%. The revenue loss is expected to be $55 million a year. I now move on to other corporate tax changes. Withholding Tax Exemption on Swap Transactions As financial markets become more internationalized, corporate borrowers have access to various innovative financial instruments and arrangements to reduce their borrowing costs and exposure to fluctuations in interest and exchange rates. One such financial arrangement is swaps. These transactions have gained importance in major financial centres such as London and New York. In order to enable banks in Singapore to be competitive in providing financial packages to their international customers, I have decided to exempt such transactions from withholding tax provided:- a) the transactions are carried out between Asian Currency Units and non-residents; and b) the transactions do not involve the Singapore dollar. I hope that with this concession, banks in Singapore would be able to offer their clients such facilities at competitive rates. This measure is part of the Government's efforts to further develop our capital market. It will take effect from 1st April 1989. Extension of One Year Accelerated Depreciation to Other Automation Equipment The 1982 Budget Statement provided for the one year accelerated depreciation allowance to be given to capital expenditure incurred on the purchase of robots and other types of automated equipment. This has so far only been extended to robots, CAD/CAM and certain other office equipment. In line with our current automation thrust, as well as to take into account technological advances made in the area of automation equipment, I have decided to extend the one year accelerated depreciation allowance under section 19(A)(1A) of the Income Tax Act to a number of other automation equipment. These include the following: - Automated Machining Equipment - Automated Guided Vehicles - Automatic Testing/Inspection Equipment - Automatic Retrieval and Insertion Devices The concession will apply to all capital expenditure incurred on qualifying equipment during or after the basis period for the Year of Assessment 1990. Tax deduction for computer equipment donations to approved educational and research institutions To help upgrade and maintain the quality of training in Information Technology, I propose to allow deduction for the donations of computer equipment by companies to approved educational and research institutions with effect from Year of Assessment 1990. This scheme will be administered by my Ministry. Tax Incentives for Building Modifications for the Disabled To facilitate the employment of our disabled, I would like to encourage employers to make modifications to their working environment so as to accommodate disabled workers. In this respect, I am prepared to consider allowing a once-off deduction against income for expenditure incurred in building modifications to cater for the disabled. In order to minimize abuse, such deductions would, however, be subject to a maximum of $100,000. This incentive would take effect in respect of modifications undertaken from 1st January 1989.

I move on to individual income tax. As the corporate tax rate has only been lowered by 1%, I do not propose to make any changes to the rates of personal tax as they are already low compared to many other countries. We have a graduated tax scale which starts at 3.5% at the lower end and rises steeply before levelling off at a maximum rate of 33%. This, combined with a scheme of tax allowances, ensures that the better off carries a fair share of the tax burden, whilst adequately rewarding effort and enterprise. In this connection, Members may wish to note that under our system of personal taxes, less than 10% of taxpayers (accounting for some 6.5% of economically active persons in Singapore) pay nearly three quarters of the total personal taxes collected. Instead of adjusting personal tax rates, I propose to revise a number of reliefs in support of family formation and Government's call to families to care for their aged and handicapped dependants. The following reliefs will be revised with effect from Year of Assessment 1990. (a) Relief for handicapped dependants who are either siblings or children of the taxpayer will be raised from $750 to $2,500. This relief will be allowed so long as the handicapped dependant does not have an income of more than $1,500 in the year. (b) Aged parent relief will be raised from $1,000 to $2,500. (c) Wife relief will be raised from $1,000 to $1,500. (d) Normal Child Relief for the first, second and third child will be raised from $750 to $1,500 each. (e) Enhanced Child Relief for the second, third and fourth child below 12 years of age will be raised from the present 10%, 15% and 15% of the mother's earned income to 15%, 20% and 25% respectively. The maximum claim for the Enhanced Child Relief for each child below 12 years old shall also be raised from $10,000 to $15,000. I hope that these increased reliefs will go some way to alleviate the financial burden of families with children, aged or handicapped dependants. The revised reliefs will result in an expected revenue loss of $50 million a year. Procreation Incentives I announced in my 1987 Budget Speech the Special Tax Rebate of $20,000 for newborn third child. To further encourage new births, the Government has decided to introduce a similar Special Tax Rebate of $20,000 for the newborn fourth child born on or after 1st January 1988. In other words, a tax free period of up to five years can be claimed by either the husband or wife, subject to a maximum rebate of $20,000 against their total tax liabilities over the period. This rebate will be available from Year of Assessment 1989. This will remove the anomaly that a woman gets Enhanced Child Relief for the fourth child but not Special Tax Rebate. An additional rebate equivalent to 15% of the wife's earned income will also be granted for the birth of the fourth child in lieu of maternity leave. However, this additional rebate can be offset only against the wife's income tax liabilities and must be absorbed within a period of five years. Normal Child Relief of $1,500 will also be given to the fourth child born on or after 1st January 1988. Tax deduction for contributions to CPF and other approved pension and provident funds Obligatory contributions by individuals to the CPF and other approved pension and provident funds are at present fully tax deductible. To prevent the use of these funds as tax shelters, I have decided that the following changes shall take effect from Year of Assessment 1990. The deduction for an individual's contribution to approved funds, including the CPF, shall not exceed the statutory contributions under the CPF Act. In the case of additional wages, which include bonuses and commissions, deduction will be limited to the statutory CPF contribution from additional wages not exceeding 40% of the annual odinary wages. I also propose that where an employer's contributions to the approved funds and CPF are in excess of the statutory requirements under the CPF Act, or are based on additional wages in excess of 40% of the employee's annual ordinary wages, the employee should be assessed to tax on the excess.

Three major property tax concessions which were announced during my Budget Speech of 7th March 1986 have already been adopted as permanent structural adjustments to our property tax system. These are the exemption from property tax for lands under private development; the property tax assessment on hotels at 15% of gross receipts for rooms and 5% for food and beverage outlets; and the payment scheme of property tax by monthly instalments through GIRO. The 50% rebate on property tax is due to expire on 30th June this year. This rebate scheme, as Members of the House would recall, has been part of an incentive package introduced by Government as far back as 1st July 1985. I have decided to extend the rebate scheme for another year until 30th June 1990. However from 1st July next year, the property tax rate of 23% will be reduced to 16% of annual value across the board. I would like to reassure Members that the Government will continue to monitor closely our property tax system to ensure that it remains competitive. Also, from 1st July 1990, a concessionary property tax rate of 4% of annual value will be levied on all non-HDB owner-occupied residential properties. This will replace the present system of granting owner-occupied concessionary tax under the proviso to Section 6(5) of the Property Tax Act. A new system of assessing HDB residential properties will also be put into place. An announcement on its implementation will be made in due course.

Stamp Duty for Property Transactions At present, all property transactions except stocks and marketable securities are chargeable to stamp duty at the rates of 2% for the first $30,000, 2.5% for the next $20,000 and 3% for amounts exceeding $50,000. To reduce the cost of buying and selling HDB properties and to facilitate upgrading and relocation, I have decided to lower the stamp duty on property transactions (except stocks and marketable securities) to 1% for all properties up to $90,000, 2% for the next $60,000 and leave the rate unchanged at 3% for all incremental values above $150,000. The revised structure will take effect from 1st April 1989. This measure will cost the Government about $44 million per year in revenue. Duty on Tobacco and Cigarettes Duties on cigarettes were raised last year as part of the national effort to discourage smoking. In line with this continuing effort, I propose therefore to increase the import duty on cigarettes by $10 per kilogram to $85 per kilogram. The import duty on tobacco and excise duty on cigarettes will also be increased to $42 and $40 per kilogram respectively. With your permission, Sir, I would like to table Appendix I (Cols. 43 - 46) showing the details of the increases. These increases will take effect from today. (Copies of document distributed to hon. Members). Appendix I - DUTIES ON CIGARETTES AND TOBACCO (Cols. 43 - 46) Taxes on Public Utilities and Telephone Services The suspension of the tax on electricity and gas is due to expire on 31st March 1989. At present, a 10% tax on water charges in excess of $20 per month remain in force. I have decided to replace this from 1st April 1989 with a 5% tax on the combined PUB charges for water, gas and electricity consumed by domestic users in excess of $40 per month. There will be no tax in the case of non- domestic users. With this change, domestic consumers will pay additional taxes of $7 million per year. Similarly, the suspension of the 20% tax on domestic telephone services and trunk call services to West Malaysia is due to expire on 31st March 1989. I have decided to restore from 1st April 1989 a 5% tax on these services for residential subscribers. The suspension will, however, remain for the business subscribers. It is expected to bring in revenue of about $8 million a year.

Our economy has done well in the past year. This is due in no small measure to the willingness of our people to make short-term sacrifices for the longer term. They have accepted cuts in pay and CPF in order to see the economy nursed back to health. The cost-cutting measures put together in 1986 have restored our international competitiveness and put us back on the path of growth. Being a price taker, we must continue to be vigilant in maintaining and defending our competitiveness. Government will monitor closely the impact on businesses when reviewing statutory charges. We must continue to run a tight ship and never allow ourselves to live beyond our means. Hence the Government will continue with its policy of collecting adequate revenue to cover expenditure. At the same time, Government expenditure will be scrutinized closely to ensure that each tax dollar collected is well spent and efficiently employed. An efficient public sector will not soak up valuable resources needed by the private sector. So long as we continue with these policies, we will be well prepared to face the uncertainties of the future. With a people who have shown their resilience and determination to overcome adversities, I am confident we have what it takes to succeed. Sir, I beg to move. [Applause]

The Question is, "That Parliament approves the financial policy of the Government for the financial year 1st April, 1989 to 31st March, 1990." In accordance with paragraph (1) of Standing Order No. 84, the debate now stands adjourned. Debate to be resumed on what day, Dr Hu?

On Monday, 13th March, 1989.

So be it.

Resolved, "That Parliament do now adjourn to Monday, 13th March, 1989." - [Mr Wong Kan Seng] Adjourned accordingly at Twenty-four minutes to Five o'clock pm to Monday, 13th March, 1989. Appendix I - DUTIES ON CIGARETTES AND TOBACCO (Cols. 43 - 46)