Hansard, 1989-03-13

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 Philip Tan Tee Yong (Paya Lebar) - from 5th to 6th March, 1989. Dr Augustine H. H. Tan (Whampoa) - from 13th to 16th March and from 20th to 25th March, 1989. Mr Chng Hee Kok (Tiong Bahru GRC) - from 11th to 13th March, 1989. Mr K. Shanmugam (Sembawang GRC) - from 14th to 17th March, 1989. Dr Dixie Tan (Ulu Pandan) - from 11th to 20th April, 1989. TAN SOO KHOON Speaker Parliament of Singapore

asked the First Deputy Prime Minister and Minister for Defence (a) what were the reasons for the crash of the S-211 trainer aircraft near the mouth of Endau River on 9th February 1989; (b) whether the accident rate of the Republic of Singapore Air Force is within the norm as compared with other air forces of comparable size; (c) what measures are being taken to reduce similar occurrences; and (d) whether we have special arrangements with the Malaysian Government for search and rescue operations for accidents of this nature.

Mr Speaker, Sir, an RSAF S-211 trainer aircraft crashed on 8th February this year on a routine training flight. The Board of Inquiry investigating the accident has tentatively concluded that it was caused by a mechanical failure in the fuel supply system of the aircraft. The RSAF accident rate compares favourably with other Air Forces of similar size. To prevent another similar accident, the RSAF has carried out additional checks on the fuel supply systems of all its S-211 aircraft. All the aircraft were found airworthy, and a full flying programme has resumed. The Royal Malaysian Air Force and the Republic of Singapore Air Force have standing bilateral arrangements for Search and Rescue (SAR) operations. So have the Malaysian Department of Civil Aviation (DCA) and the Civil Aviation Authority of Singapore (CAAS). They exercise these arrangements regularly. The Malaysian authorities cooperated fully in the rescue and salvage operations following the accident. The Mersing Police were most helpful at the crash site. The RMAF scrambled a helicopter from Kuantan to assist our pilots, and sent a detachment of armed guards to keep watch over the wreckage. The Kuala Lumpur Defence Operations Room and the RMAF Air Operations Centre processed RSAF flight requests and convoy clearance expeditiously. Mindef and the RSAF are grateful to the Malaysians for this generous assistance.

asked the First Deputy Prime Minister and Minister for Defence whether he will recommend to the President to appoint a Committee from outside the public service to advise whether the position taken by the Government on the judgment of the Privy Council in the appeal by the former MP for Anson is morally and ethically right for a government to take.

Mr Speaker, Sir, the proposal of the Member is absurd. The Government has taken no "position" on the judgment of the Privy Council. It did not have to because it was not a party in that case. Mr Jeyaretnam was charged and convicted of three offences under section 421 of the Penal Code. As a result of those convictions, Mr Jeyaretnam was struck off the roll of Advocates and Solicitors in disciplinary proceedings which were instituted by the Law Society of Singapore. He then appealed to the Privy Council against the debarment. The Privy Council allowed the appeal on debarment. In its judgment, the Privy Council also gave its comments on the criminal convictions. In view of the Privy Council's comments on the convictions, the Minister for Law asked the Attorney-General to advise on the legal implications, if any, for the Government. Members know by now that the Attorney-General advised that the comments on the convictions did not bind the Government and the convictions still stood as they were correct in law. There is therefore nothing further for the Government to decide or to do since Mr Jeyaretnam has not made any application for a pardon.

Would the Minister be able to tell us what reason it was that the Privy Council allowed the appeal of Mr Jeyaretnam?

Mr Speaker, Sir, that will be redundant. We have gone into the judgment of the Privy Council. We have also gone into the Attorney-General's advice on the judgment. It will be repetitious to do so.

Does he agree, Sir, that the Privy Council had allowed the appeal because the Privy Council thought that Mr Jeyaretnam was wrongly convicted?

Mr Speaker, Sir, may I refresh the Member's memory on what the Attorney-General stated in his advice and I quote. He said that he is "unable to agree that the convictions were wrong." He has "reviewed the record of the criminal proceedings." He is "satisfied there has been no miscarriage of Justice." Furthermore, he said that the comments of the Privy Council do not, "in any way remove the element of blameworthiness in the conduct of Mr Jeyaretnam." Mr Speaker, Sir, if I may take the opportunity to ask the Member to also read a very learned, well-researched and scholarly article written by Mr Shanmugam which analyses the Privy Council's judgment and which shows that the Privy Council was wrong in law on a very important and fundamental point of law concerning banking law. For the Member's benefit, I will distribute this critique later in the course of the day.

Sir, I think the Minister has not really answered the question. I think the thrust of the question is whether or not the stand taken by the Government is morally and ethically right. I think that is what the question is all about. It is not a legal answer.

I take it that both he and the Member therefore concede that the judgment ---

No, no. We are not concerned with the conviction. We want you to answer the question. That is all.

This judgment, Sir, is a judgment in a case which binds the parties before it, namely, the Law Society of Singapore and Mr Jeyaretnam. I, as Minister for Law, asked the Attorney-General whether there are any legal implications for the Government. He has advised that the Privy Council's comments do not bind the Government. Therefore, there is nothing really for the Government to take a position. If the Member or the Workers Party or the Secretary-General of the Workers Party feels there is something grievously wrong, unethical or morally wrong on the part of the Government, in not taking a position when it is not obliged to take a position, then the morality of it or the ethics of it can be made an issue by the Workers Party or by the Member in the next General Election if he wishes to. But since the Member has raised the question of morality and ethics, can I ask him or the Member for Potong Pasir to comment whether they think it is ethically right or morally right for Mr Wong Hong Toy and Mr Jeyaretnam to have asked Mr Willie Lim, after the Official Receiver was appointed, to alter a crossed cheque to a cash cheque and asked him to uncross it? Was it right for them to have told Mr Willie Lim that this had to be done to prevent the Official Receiver from obtaining it? Was it right, ethically right, morally right, that by their action neither the Official Receiver nor the Workers Party's creditors received the cheque or its proceeds? We are talking about ethics and morality. Can either of the two Members comment whether it is ethically or morally right?

Sir, the standard answer usually the Minister gives to such a situation is that he can always move a motion in Parliament and we can have a full debate on whether or not Willie Lim was morally right in altering the cheque. But the question at hand before you is whether or not the Government thinks that it is morally and ethically right. The answer is yes or no. That is all. If the Government says that it is perfectly right in going on, ie, taking the stand as it has taken, then just say so. We want an answer from you. You go round the bush. As the Prime Minister says, round the mulberry bush two, three times, you have not answered the question. Just say so, and I will be happy.

Mr Speaker, Sir, the position is very clear.

Yes or no?

If the decision binds the Government, the Government will be bound. The Attorney-General has advised us that legally the decision does not bind us. That is all there is to it.

Dr Lee.

Why does the Minister not just answer yes or no? We know the legal position.

Mr Chiam, it is Dr Lee's turn.

The Government says that it is not legally bound. But does it agree that today, in Singapore, the Privy Council is the highest court that looks after judiciary matters?

The answer is yes.

If it is, therefore, is it wrong of any officer or any Minister to give views contrary to the judgment? We are speaking of the judgment. We are not talking about the details of the case itself.

It was not a case of the Attorney-General giving a contrary view. The Attorney-General advised us and his advice is very clear. The judgment affected two parties, the Law Society and Mr Jeyaretnam. The Privy Council itself admitted that it had no jurisdiction to decide on the convictions. The convictions still stood. That is all there is to it, Mr Speaker.

asked the Minister for Foreign Affairs and Minister for Community Development and Leader of the House whether he will table a motion that this Parliament should review the report of the then Committee of Privileges (Paper Parl. 3 of 1987) and its acceptance by the last Parliament in the light of the decision of the Privy Council in the appeal of the former MP for Anson.

The answer is "No". This is because the motion adopted by Parliament on 30th July 1986 has nothing whatsoever to do with the decision of the Privy Council. The Committee of Privileges was convened to investigate the complaints by the Leader of the House against Mr Jeyaretnam for making unfounded allegations of Executive interference of the Judiciary. The Committee of Privileges, after a full and public hearing, found Mr Jeyaretnam's allegations to be totally baseless and that Mr Jeyaretnam had breached his privileges as an MP. The Privy Council's decision, on the other hand, dealt with Mr Jeyaretnam's appeal against his disqualification following disciplinary action taken against him by the Law Society. It is totally unconnected with the motion adopted by the Parliament.

Would the Minister agree that Mr Jeyaretnam was hauled up because of the so-called allegation of disquiet?

There were many allegations made by Mr Jeyaretnam, Mr Speaker, Sir. If Dr Lee Siew-Choh were to read this Report, ie, the First Report of the Committee of Privileges (Parl. 3 of 1987), he would find all of them there and that the Committee spent six full days in public hearings, televised over TV, and Mr Jeyaretnam showed no evidence whatsoever to substantiate his allegations.

I have seen the TV version and I have also read parts of the Report that he referred to. But would the Minister agree that this "disquiet" is the same word used by the Privy Council and therefore the allegation by Mr Jeyaretnam was not that frivolous after all?

That is a non sequitur argument, Sir. Just because the word "disquiet" appears in both does not mean that they are related. It is quite clear in this Committee of Privileges' Report that all the allegations that Mr Jeyaretnam had put forward were totally disproved.

Although it was disproved, Sir, nevertheless he had been hauled up because he said something about disquiet concerning the transfer of a District Judge and it is all connected, Sir. It is not unconnected at all.

Sir, the Member is just going on and on, repeating the same thing. Is he saying that these allegations are true? If he is, then I think we will look into them again.

asked the Minister for Community Development whether the Government has any plans to prepare our sportsmen for the 1992 Olympics to be held at Barcelona, Spain.

Mr Speaker, Sir, I am replying on behalf of my Minister. As in previous Olympics, the Government, through the Singapore Sports Council, will work with the Singapore National Olympic Council and national sports associations to prepare our sportsmen for the 1992 Olympics in Barcelona. The training and preparation of sportsmen and sportswomen are done by the respective national sports associations. The selection of participants will be done by the Singapore National Olympic Council. The Singapore Sports Council helps in providing, where necessary, facilities for training, sports medical assistance and subsidies for coaching. It is still too early to say how many sportsmen will be selected.

What sort of preparations are being made?

The usual preparations: the selections will be made after the SEA Games, Asian Games and Commonwealth Games.

As a sportsman, I am very unhappy with this kind of answer - "the usual preparations". Our sportsmen go to every Olympics and they are knocked out in the first round. So what sort of preparations are being made? "Usual preparations" is not good enough for me.

Mr Speaker, as a sportswoman, I am aware that much discipline goes into the preparation and selection of sportswomen or men for any competition. I believe the procedure is correct. Only those who excel in SEA Games, in Asian Games and in Commonwealth Games will have proven their ability, and we can then look into the kind of training they will need for the next Olympics.

Sir, if the Minister had said that they have been combing the schools for talent or to prepare certain sportsmen in some areas of sports, I would be happier. But at the moment, they get nothing.

Mr Chiam, can you ask your question? What is your question?

No, I still have not got an answer. "The usual preparations" - what kind of answer is that? That is not an answer.

Mr Speaker, we are a very small nation.

No excuse.

In the same way as we do not produce geniuses every day, it would be difficult to produce Olympic medallists every day.

The following Question stood in the name of Dr Koh Lam Son - 5. To ask the Minister for Communications and Information what the Public Transport Council proposes to do to satisfy the need of residents living in Housing and Development Board estates closely to Mass Rapid Transit stations, such as the Telok Blangah Heights/Drive Estates, for a direct feeder-bus service to the MRT stations.

Question No. 5, Sir.

Mr Speaker, Sir, I am answering on behalf of my Minister. Sir, I will convey to the PTC for its consideration the Member's suggestion for a feeder-bus service for residents in Telok Blangah to the MRT stations. PTC will study its feasibility and viability together with the bus operators. In the meantime, I shall be happy to help the Member to liaise with the bus companies to see how bus services in his constituency can be improved upon.

The following question stood in the name of Mr Chng Hee Kok - 6. To ask the Minister for Labour if he will extend the Central Provident Fund minimum sum topping-up scheme to include the purchase of a Housing and Development Board flat for parents.

Question No. 6, Sir.

Mr Speaker, Sir, under the CPF Topping-Up Scheme, CPF members are allowed to top-up the minimum sum accounts of their parents with their CPF savings or cash. The objective is to provide those parents who have little or no CPF at age 55 with some minimum funds to live on after age 60. There are two main conditions for the scheme: Firstly, the children must retain double the minimum sum in their own CPF accounts after they transfer some of their CPF savings to their parents' accounts; and Secondly, they can top-up no more than the difference between the minimum sum and their parents' CPF balances at age 55. Any extension of the Topping-Up Scheme must comply with these requirements. CPF members are allowed to retain their minimum sum in the form of properties. Therefore, I see no objection if parents, whose CPF minimum sum accounts have been topped up, decide to do likewise. There will be a charge on the property to ensure that the minimum sum is returned to the parent's CPF account if the property is sold. Upon his death, an appropriate share of the minimum sum will be returned to the CPF accounts of those children who contributed the funds. I have asked the CPF Board to finalize the details of such an extension to the Topping-Up Scheme. I see no difficulty if the parent has reached age 55 as required under the Topping-Up Scheme.

"to amend the Customs Act (Chapter 70 of the 1985 Revised Edition)", presented by the Minister of State for Finance (BG George Yoon-Boon Yeo); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Road Traffic Act (Chapter 276 of the 1985 Revised Edition)", presented by the Minister of State for Communications and Information (Mr Mah Bow Tan); 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 36 of the 1988 Revised Edition)", presented by the 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.

"to amend the Economic Expansion Incentives (Relief from Income Tax) Act (Chapter 86 of the 1988 Revised Edition)", recommendation of President signified; presented by the Minister for Trade and Industry (BG Lee Hsien Loong); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

12.53 pm Order read for Resumption of Debate on Question [3rd March, 1989], That Parliament approves the financial policy of the Government for the financial year 1st April, 1989 to 31st March, 1990.". - [Minister for Finance]. Question again proposed.

Mr Speaker, Sir, I rise to support the motion on the Budget Statement. In a flash, it seems, we have emerged from the recession relatively unscathed. In two short years, we reversed the performance across all sectors of the economy. The fiscal measures taken have yielded positive results. The decisions made were proven correct. The economy is now reinstated to its robust growth and full employment. As it turned out, the recession was shortlived, the anguish of unemployment now largely forgotten as we surge forward beyond recovery into a healthy pace of economic expansion. The recession was a real litmus test to our collective instinct for survival. We surmounted the recession not by the Government acting on its own in making fundamental changes to its fiscal policies. We overcame the recession because we had, what I call, the tripartite symbiosis - the combination of effort by, first, a Government not flinching from taking unpopular but crucial decisions to ensure the long term survival of our nation; second, a people pragmatic in choosing their options wisely when faced with a crisis even though they may have to endure painful sacrifices in the short term as trade-offs for long term gains; and third, the private sector willing to respond to Government measures in undertaking risks by committing capital to expand output thereby creating jobs and generating economic spin-offs. What we lack in size and resources, we make up for through this unique chemistry of symbiosis involving the Government, the people and the private sector. It was this winning combination that we counted on in regaining our economic strength. We pulled together and we made it safely and quickly through the recession. As we now enjoy the happy moments of better economic prospects, let us remember the salutary lessons of the recession and, in particular, the powerful combination in strength of the Government and the people in working together to face any common threat to our national well-being. Who knows, we may need to count on it again as old problems are solved and new ones emerge, sometimes unexpectedly! We should count our blessings that we have done well for 1988. First, it was fortuitous for us being a non-oil producer, that average crude oil prices have been low in 1988. Adjusted for inflation, oil prices have been much lower than at any time since the early 1970's. The lower price of oil has helped to constrain inflation and has given impetus to world economic expansion. For Singapore, which has to import its entire energy needs, a low oil price is a good reprieve and represents one less variable in the growth equation. For many cost-conscious Singaporeans, the most direct impact has been their savings on domestic PUB electricity bills. I am not sure if many realize this. Second, external demand was very strong. For three years in a row, strong external demand actually provided the main impetus for our economic growth. At the same time, our fiscal measures helped to reduce production costs. This gave our exporters a price advantage in an international market that fortunately stayed buoyant. We were well poised to meet market demand as the OECD economies continue to do well and our international competitiveness remained strong. Let us remember that even if we had stayed trim on cost, we could never have turned in a strong growth if the world market had softened and there was no demand for our products and services. A post-recovery Budget, which is what I call this Budget, is sometimes worrisome to the private sector. The fear is whether measures introduced in previous Budgets to reduce the cost of doing business would be retained. I note that the Finance Minister has tried to allay such fears by keeping the tax on utilities and telephones suspended on non-domestic users, by allowing the 50% property tax rebate for industrial and commercial property to continue for another year, and by not increasing SDF levy nor widening its collection net. It is my honest opinion that even with these concessions, costs will go up in 1989. One key cost component is labour cost. The National Wages Council will be deliberating on its wage guidelines for this year. I do not want to prejudge what NWC will recommend. But let us remember we are in a tight labour market regime and labour as a commodity has to be paid its market price. The private sector will have to be more astute in managing their costs through relentless automation and mechanization and better organization of work. The Finance Minister has also announced in the Budget Statlement that there will be susbtantial salary revisions for the key services in the civil service. He mentioned on television last Tuesday that the revisions will not be made across-the-board but will be applied selectively and only to the higher echelons of the civil service. I am not against paying civil servants their market worth. But to apply this adjustment only to selected groups of civil servants in the higher echelons and in chosen services is tantamount, by implication, to telling the lower echelons - we can do without you. Do not forget that in absolute numbers, those in the lower grades take up the majority in the public service. With a demoralised civil service at the junior levels, there can be chaos and pandemonium which we can ill-afford to have. Every pyramid has its base. So too in the hierarchical structure in the civil service establishment. Without an equally motivated lower echelon, the civil service cannot function effectively, no matter how well paid your top civil servants are. We should also not denigrate junior officers in the civil service simply because of the less intellectual nature of the jobs they perform. We have to recognize that everyone has his station in life. Given the opportunity and the proper environment, I am sure all officers in the civil service will want to excel in their work and get ahead with their civil service career. Let us not create the disparity and deny junior grade officers better salary treatment. The Government must regard any junior officer, no matter how junior he is, as part of the civil service team. I therefore hope that the Finance Ministry can consider making the salary revision applicable to all officers across-the-board in the civil service. The proposed 1% cut in the company tax rate, though a small token reduction, signals the importance which the Government attaches to our company tax rate remaining sufficiently competitive to attract and retain investors. At the same time, as a country with an open economy and our growth dependent mainly on people resources, our tax burden should never be allowed to be so high that it discourages human initiative and enterprise. For these two reasons, both the top marginal tax rate on individual income and the company tax rate were reduced to the same level of 33% a few years ago. Now that the company tax rate has been reduced to 32%, the same argument of equalization remains. It will be confusing to the taxpayer if his highest effective rate of personal income tax is once again above the corporate tax rate when the Government has in past years been arguing for, in fact has introduced, equal rates for company and individual income taxation at the top bracket. With due respect to the Finance Minister, there are two other inconsistencies which I need to point out: First, the wife relief. This has been raised to $1,500. But it defeats the purpose of encouraging wives to work because the relief is only available to those wives are not working. Working wives cannot claim this relief. Instead, if personal reliefs were increased, then working wives will also benefit from this as they will normally elect for separate assessment. Second, taxation on non-residents. The Minister has clarified that the tax rate applicable to non-residents (including individuals) is 32%. This appears to favour the non-resident more than the resident individuals. I have gone through the Finance Minister's budget statements for 1986, 1987, 1988 and for this year, 1989. He has given fair warning since 1986 on the need to introduce some form of consumption tax. With due respect to the Finance Minister, his thinking has changed over the years, from a broad-based consumption tax now to a consumption tax to be applied selec- tively on consumption items. The Finance Minister argued in his budget statement in 1987 and I quote: 'I would like to reiterate that a broad-based consumption tax will only be introduced if the revenue shortfall is substantial and a permanent deficit inevitable.' Members may know that we suffered an overall deficit of Government revenue over expenditure in 1987. Because of higher revenue collection and lower development expenditure, we enjoyed a surplus of $3.8 billion in 1988. I presume partly for this reason, the Finance Minister is satisfied that our healthy financial position does not require additional indirect tax revenue to finance expenditure. I have made a quick calculation of the proportion of tax revenue due to direct and indirect sources. The data show that over the years, indirect tax revenue as a percentage of total tax revenue has in fact been rising while the share of direct tax revenue to total tax revenue has been dropping. In 1985, the proportion of direct tax to tax revenue was 65%, indirect tax 35%. In 1986, direct taxation was 58%, indirect taxation 42%. In 1987, it was 56% direct, 44% indirect. And in 1988, 54% direct tax and 46% indirect tax. This shows that the proportion of tax burden is increasingly borne by the consumer. So in effect, without the formal introduction of a broad-based consumption tax, indirect taxation alone is already contributing to almost 50%, precisely 46%, tax revenue. What need is there to introduce more consumption taxes? The facts do not bear out the justification to widen the scope for introducing other forms of selective consumption taxes. The Finance Minister may want the additional tool to raise tax revenue in a difficult year but the best answer to increasing revenue is not by raising indirect taxes but by making the business environment more conducive for making good profits and in exercising prudent economic management. Our best insurance for a sound economic future is to spend within our means and to keep healthy reserves. 1.07 pm

( In Mandarin): Mr Speaker, Sir, the budget this year is very encouraging. It continues to follow the spirit and principles of the previous budgets. It continues to maintain the growth of our reserves without upsetting the balance of our income and expenditure. At the same time, it will serve to boost up our effort in promoting a healthier development of our society in the best possible way. I support this budget and I shall give my views and suggestions on it. First, the budget increases the tax reliefs on maintenance of parents and on the wife. This shows the positive attitude of the Government in promoting Asian values. The family is the core of the society and the nation. When a family is consolidated, the society will be stable and the country will be peaceful. When a family is not in harmony, it will destroy social order and the peace of the country. In recent years, the Government has been stressing this point now and then. And now we see that the Government is not only preaching the theory but also putting it into practice by encouraging the actual implementation of this concept. However, by Government's effort alone it is not enough. Consolidation of the family should be on a national basis. It calls for the full participation of all the people, and this concept should be deeply ingrained in the thought of our people. The schools should also help in strengthening the education of the students on this aspect. Community organizations should also actively help to promote this spirit and thought through various activities and turn it into an all-nation campaign in order to thoroughly and fully instil and inculcate this thought in our people. Second, this budget fully reflects a spirit of human compassion, an example of which is shown in the increase of tax relief for maintaining disabled children. In recent years, there has been the general trend of Singaporeans towards materialism, personal enjoyment. Human relationship is on the decline. Compassionate attitude is declining. This will adversely affect social cohesion. We should not allow this trend of social behavior to continue. The budget seeks to encourage compassionate considerations among our people. The more important thing is whether all relevant departments, social organizations and educational institutions have actively taken more positive meaures to promote better human relationship and compassionate consideration for others in our prosperous society. This should call for our further pondering. Third, the Government's proposal to reduce the stamp duty on the transfer of houses under $150,000 shows that the Government is trying to raise the quality of life of our middle and lower-income classes. It also shows that the Government is concerned for the welfare of these people. At the moment, all the HDB flats are under $150,000. So, it can be said that this will benefit all HDB dwellers and will be a tangible encouragement to these people to improve their living environment and conditions. This is also a necessary step to facilitate Singapore's more speedy evolvement into a middle class society. Fourth, the abovementioned measures taken by the Government to show its concern for the middle and lower-income groups of people are gratifying and much much appreciated. But the tax proposed in the Budget on over $40 per month PUB consumption is a cause for concern. According to my understanding, although over 50% of account holders have PUB consumption lower than $40 per month, there are over 40% of consumers who will be affected by this tax. What we are worried about is that this may presage further consumption tax by the Government. I do not oppose consumption tax in toto. If this tax is imposed on luxuries, liquors and tobaccos, not affecting the livelihood of the people, then I will agree to such taxes. But if this kind of taxes is imposed on the consumption of daily necessities and will affect the livelihood of our low income people, causing them greater burden, and will also hinder our people from evolving into a middle class society. I will not agree to such taxes. This therefore calls for our further consideration before any action. Fifth, according to the budget, since May 1987 the Skills Development Fund has laid emphasis on the training of general workers. This is a good move in this direction. Singapore is gradually developing into a high-tech commercial and industrial society. The training of our general workers in skills will lay a sound foundation for this development. But the training sponsored by the Government is on the basis of recommendation by the employer. This policy would result in certain oversight, because mainly the big companies and big organizations can afford to recommend the workers for such skill development training. Small employers could not respond actively, for the reason that they have very few employees. If they recommend any employees to receive such training, then their business would be affected. In Singapore, there are about 60,000 such small businesses, each of which employs fewer than 10 persons. The employees employed by them numbered some few hundreds of thousands. So I wonder whether the department concerned would take the necessary steps to solve this problem. Perhaps you may consider allowing the workers who are interested to be trained without the need for them to obtain their employer's recommendation, provided the training they receive would be relevant to their work. Sixth, the budget proposes that high level civil servants' remunerations will be increased so as to make them comparable with those paid to managerial talent in private enterprises. I do not oppose the increase in their remunerations, but when revising their remunerations, the following factors should be considered. High level civil servants have secure jobs, high prestige and great powers. Their decisions can even affect private enterprises. Whereas employees of private enterprises do not have such advantages. Particularly when there is economic recession or merger of companies they usually would bear the brunt of the impact, and they certainly run the risk of retrenchment. In the meantime, now that our economy is on the upturn, when we are adjusting the remunerations of our high level civil servants upwards, we should not forget our partners, the lower rungs of workers, who had during our economic recession voluntarily frozen their salaries or reduced their wages to help turn round our economy. They similarly have greatly contributed towards promoting our economic development.

Mr Speaker, Sir, the budget unveiled by the Minister is a commendable one. It is, however, different from many previous budgets ones in that it contains no shocks, certainly not those speculated by car owners and car dealers alike. Nor has it attracted many adverse response and in some respects could even be considered generous and innovative in our context. Sir, as Chairman of the GPC for Community Development, I am particularly heartened by the reliefs provided to bolster to the family and alleviate some of the burdens of supporting children, the aged and handicapped dependants. The package of incentives and reliefs will be welcomed by families and in line with our stress on the importance of families as a building block of our society, a point made earlier by Mr Chin of Aljunied GRC. I am, Sir, especially appreciative of the incentives provided for modifications at the workplace to help disabled workers. It is a bold step and I hope that employers will respond positively to this incentive so that it will make it easier for our disabled to be employed and to get around in their place of work. It also dovetails Government's policy of making the disabled as self-sufficient as they can be and thus give them the dignity and respect due to any human being. It may be long overdue, Sir, but it is a step in the right direction, and I sincerely commend to the Government and to employers to look into the question of increased and easy mobility not only for our disabled but also for our elderly citizens in a wider and a more comprehensive perspective. Let me, Sir, come back to income tax reliefs. The increased relief for disabled handicapped dependants from $750 to $2,500, a three-fold increase, seemed very generous at first glance. But I wonder, Sir, just how many households would benefit from this, given the proviso that such dependants do not earn more than $1,500 a year, which is only $125 a month I would have thought that if we were to achieve the twin objectives of helping families with handicapped dependants and encourage the disabled to be more self-supporting, the ceiling for annual income could have been much higher. Should we peg the income ceiling too low, it would, be more beneficial for some families to keep their handicapped dependants unemployed than breaking this ceiling and hence become ineligible for relief, which is $1,000 higher than the disabled income's ceiling. The other, Sir, is the relief for wives. I am sure the Minister has heard of comments many times before that the raising of this relief from $1,000 to $1,500 is indeed too low. Sir, I do understand that we want to encourage more women into the labour force but there are also those who, either out of choice or out of necessity, remain at home to take care of their families, and their role is no less important in keeping the family stable and well taken care of. As for the relief for aged parents, I am personally glad that it has risen by 150%. This will go a long way to encouraging children to take care of their aged parents. But, Sir, what about those with parents who do not live with them but who nevertheless continue to support them.? I know that this matter has been raised again and again before but I believe that this is one way of encouraging children to live with their aged parents. However, I personally have cases brought before me, and I believe also brought before many MPs, of parents out of necessity having to live away from their children but are supported by the latter. It is not that they do not want to live together but circumstances determine that they live apart. It would therefore appear unfair to their filial children to be penalized by the living-together ruling before they can be allowed relief from their income taxes for supporting their aged parents. I do not think, Sir, that allowing reliefs for such children will result in many ensuring that their aged parents live away from them. But in all, Sir, I think it is fair to say that the budget now before us is a fair one, and I support the motion.

Mr Speaker, Sir, I rise to support the motion on the budget statement for the financial year 1989 by the Minister for Finance. This budget has given a great increase in the tax relief for parents, children and the handicapped dependants. This proves that the Government is putting into practice its promotion of traditional cultural values. It also shows the support of the report by the Adivsory Council on Family and Community Life. As a member of this Advisory Council, I fully appreciate the Government's efforts in promoting the family as a basic unit of society as well as taking care of the aged and the handicapped. The efforts in promoting moral values in the nation is most commendable. In the budget, the incentive to encourage those who can afford to have more children should have the effect of turning the population trend. The reduction in property tax and stamp duty is to further enhance the Home Ownership Scheme. It will enable our people to have better housing not only in the HDB flats but also in private residential properties. This has the effect of reducing the financial burden of the home owners and it will also encourage the revival of the construction industry. The company tax will be reduced from 33% to 32% by 1990. Although this is just a token reduction of 1%, the action shows the Government's concern and it will be appreciated by the private sector. The budget statement states that there will be a 5% consumption tax on domestic use of water, gas and electricity if it exceeds $40 per month. This measure shows the consideration of the Government for the poor whose monthly PUB bills are normally below $40. For the middle class and above, it serves as a reminder to them to support the Government's "Save Energy" campaign. The Government is also considering increasing substantially the pay of key civil servants. I am happy to note that this will also be extended to our Ministers. I am in the private sector and therefore I fully understand the difficulty of employing good and talented people. Among the managing directors whom I know, their salaries are much much higher than our Ministers. The contributions of our Ministers who serve the nation are equal, if not beyond those of the key civil servants. The efforts they put in are reflected in their graying and receding hairline. Some people may think that Ministers entering politics should be regarded as a kind of devotion. Therefore, the salaries in the Government and those outside should not be compared. However, this is unreasonable. There is a Chinese saying which says: Yu yeow mar er how, yu yeow mar er chow tze chow, which means that you want the horse to run fast and yet you are unwilling to feed it with more food. This shows the unfairness of some people who want the best from another and yet are unwilling to give him the equivalent. Singaporeans must understand that to have an efficient, good and clean Government, the salaries of the Ministers must be equivalent to the amount of work they put in. In conclusion, Mr Speaker, Sir, I would like to support the motion standing in the name of the Minister.

Mr Speaker, Sir, many people say this year's budget is a good and painless one. There were little surprises and indeed the only surprise was what did not happen, the absence of any fiscal measures to curb the rapid growth of our car population. I say this year's budget is a prudent one, caring but cautious. It is a "pro-family" budget as well as one aimed at maintaining our international competitiveness and fostering economic growth. Sir, I would like to discuss briefly three subjects mentioned in the budget, and they are the long-term CPF rate adjustment, civil servants' salary and fiscal incentives for the family. Sir, our economy has performed extremely well last year. Many Singaporeans were able to secure jobs, earn good incomes and enjoy a higher standard of living. Can this happy growth scenario last forever? Unfortunately it cannot. We live in an interdependent world. Our economic health depends too much on the external economy. Moreover, for social and political reasons, we cannot rely too much on foreign labour for growth. The Government has therefore forecasted a more moderate growth of 6-7% for this year. This is a realistic forecast given the constraint to growth posed by our limited manpower resources and the tight labour market situation. Sir, the world economic outlook is one of cautious optimism, if I may put it. Upward pressures on inflation and interest rates in the developed economies have begun. Economists are already forecasting a slowdown in growth next year. The latest first quarter 1989 survey of business expectations carried out in Singapore suggests a slowdown in economic growth this year. Sir, with this slower growth economic outlook, I would like to sound a word of caution. I suggest the Government deliberate carefully any efforts to try to quickly restore cost as a result of sacrifices made by Singaporeans during the recession years. We must continue to watch our international competitiveness. The Government has announced a long-term CPF contribution rate of 40% and that the employer's CPF contribution rate will be raised by 4% with a corresponding reduction in employee's CPF contribution rate of 2% in July this year, subject to our economic performance in the first quarter of this year. Sir, I appreciate the concern shown by the Government to try to restore CPF rates, but I believe it may not be proper to try to base the decision on whether or not to increase the employer's CPF contribution rate by 4% merely on this year's first quarter economic performance. Given the openness of our economy, it could slow down in subsequent quarters as quickly as it has picked up in recent quarters. With a slower economic growth outlook for the rest of this year, the proposed 4% increase in employer's CPF contribution rate appears on the high side. Sir, another significant development, and this has been brought up by various speakers before me, is the pressure on wages in the next few months given the very tight labour market situation. There are just too many jobs chasing after too few job seekers. The proposed increase in civil servants' salaries may have an impact on wages in the private sector. This upward movement of wages, if we are not careful, could price us out of the international markets. We must try to avoid a repeat of what happened in the recession in 1985. Sir, given this scenario of a slowdown in economic growth and wages spiralling upwards, I urge the Government to consider increasing the employer's CPF contribution rate by only 2% instead of 4% this year. If moderate economic growth could be sustained in the following three years, the rate could be increased by another 2% each year in 1990, 1991 and 1992 in order to bring it to the long term level of 20%. At the same time, reduce the employee's CPF contribution rate by 1% per year in the next four years. These changes will be more gradual and, barring a serious economic recession, I believe our economy should be able to absorb these cost increases without seriously affecting our competitive position internationally. Sir, I would like to move on to the next subject which is the much talked about civil servants' salary revision. I support the need for the public sector to have its fair share of brains and talents, particularly in the key services like the Administrative Service. Presumably, the proposed increase in salary is to try to match the salaries of key civil servants with those in the private sector and to also try to motivate and retain talents within the service. Sir, whilst I agree we must adjust the salary of civil servants we must be careful not to try to match it dollar for dollar with the private sector. The civil servant enjoys job security and his salary is seemingly less dependent on his individual job performance. The private sector executive's income fluctuates between good and bad times. He could even be fired if the organization fails or he makes a wrong decision. This seldom happens in the civil service. As regards the need to motivate and retain young talents within the civil service, particularly the Administrative Service, I personally doubt if the proposed revision in salary will be totally effective in trying to prevent a brain drain to the private sector. Many young and promising civil servants view upward mobility in the civil service as being limited. The top civil servants, the Deputy Secretaries and the Permanent Secretaries, are all very young, in their 30s and 40s. Moreover, with the Government's aim to try to reduce the size of the public sector, promotional prospects for these young civil servants may be limited. To resolve this problem of brain drain and to perhaps widen the talent pool from which to select and groom young and potential civil servants, I would like to suggest that the Government consider recruiting mid-career executives from the private sector for key services, including the Administrative Service. I believe the Government has not done this before. It has a policy of promotion from within. Perhaps it is time the Government reviewed this policy and widened its net to try to tap private sector talents. Finally, Sir, I move on to the last point, and that is, fiscal incentives for the family. I fully support the various tax incentives introduced to try to foster closer family unity and ties, encourage Singaporeans to have more children and to look after their aged and dependent parents. These are steps in the right direction. However, these fiscal incentives by themselves are not enough. As a further measure to encourage Singaporeans to have more children and to look after their dependent parents, may I suggest the Government review the levy on foreign maids. Keep the levy at the present level of $160 per month. Try not to increase it by another $40 in July this year for those families which engage foreign maids to help look after their aged dependants, aged parents and their children. In conclusion, Sir, I think the Budget before us is a good one. I support the motion moved by the Minister for Finance.

( In Mandarin): Mr Speaker, Sir, I welcome the Budget for the coming financial year. Many people describe this budget as a family budget because it is of benefit to the families. Tax relief for a disabled child is increased from $750 to $2,500, for the maintenance of an aged parent the relief is increased from $1,000 to $2,500, for the wife from $1,000 to $1,500 for the first, second and third child from $750 each to $1,500. If I may express these figures in percentage terms, the rates of increase of the above tax reliefs will be 230%, 150%, 50% and 100%. Therefore, the rate of increases is very considerable. In addition, there is the rebate on the fourth child. The idea is to encourage parents who have the financial ability to produce the fourth child. All these measures will be able to reduce the economic burden of the families generally. Therefore, they should be welcome. But how big an effect will it be on encouraging marriage and producing more children? I think we have to wait and see. When the couple consider whether to produce more children or how many, I think they will generally consider three factors. The first factor will of course be the economic position of the family; the second, the problem of care for the children; and the third relates to the question of concept of more children. In encouraging procreation of more children the tax relief can only contribute a little towards this. The main factors that greatly affect our demography and the rate of procreation are generally the urbanization, westernization and modernization of the society and the general rising of educational level of women as will as the full employment condition in addition to other factors prevailing in the society. There is the change of concept in regard to family and procreation. It is not easy to turn the tide of this long-term trend. From the long term point of view, we should start from education and the gradual revival of the traditional family concept to avoid being replaced completely by the trend of extreme individualism. The traditional family concept contains the system of cultural values and thought about personal cultivation, disciplining of one's family and the governance of the country, defining each individual's position and role in relation to the whole society and vis-a-vis the other individuals. On the other hand, I would remind the Chinese who are the great majority of the population that it is very important and necessary for them to increase their procreation rate. According to the latest statistics in 1988 the increase in our population was about 1.5%. According to different ethnic distributions, we can find out there were very great differences in their birth rates. The increase in Malays was 1.86%, Indians, 1.52% other races, 2.4%. Whereas in respect of Chinese, the population increase was only 1.4%. But the Chinese are about 76% of the total population. Therefore, the rate of increase of the Chinese population has a decisive effect on the total rate of population increase as a whole. If it is desired to achieve an ideal level of rate of increase in total population by maintaining the balance in population increase of the various races, then the Chinese population increase rate must be raised, that is to say, the Chinese must increase their procreation rate. The Statistics Department recently has issued statistics on the birth rates of various races. It is shown that even last year - the Chinese generally regard last year, the dragon year, as a propitious year - the Chinese birth rate was trailing behind the other races. According to per thousand birth rates, the birth rate for Malays was 23%, Indians, 21.7% and Chinese, only 18.9%. Even in the dragon year, the result was like that. It certainly would be a cause for concern. Last year, the propitious dragon year, the increase in births of Chinese could be only a momentary phenomenon and the same manifestation may not occur again. Not long ago, according to the Acting Minister for Health, our birth rate this year may decrease by as much as 20%. But if the Chinese birth rate and propulation were to continue to decrease, then it will have very adverse effect on our total population and society. The greatest problem is the rapid aging of our population. At the moment, people over 60 years old number some 8% of our total population. At this rate, when we reach the year 2030, 40 years later, the aged population will be 26%. If the Chinese do not procreate more or decrease in population, then the aging of population will certainly speed up. This will greatly affect our economic ability in future. At the moment, those who are economically active, compared to those who are inactive like the retired, the ratio is about 8:1. After some 40-50 years, the ratio may be 2:1. Therefore, I hope the Chinese community will pay serious attention to this problem of population and procreation and seek out some measures to remedy this situation. We should not look to the propitious animal years of the Chinese zodiac system in which to procreate and we also cannot depend on the Government's tax concessions alone to procreate. Otherwise, the problem of our population will be the more serious. On the other hand, the Government also cannot depend only on taxation policies to encourage procreation, because the effect will be very limited. I hope the Government will resort to other more active measures as well to help, such as propaganda and education and the setting up of more creches and to improve services in the creches to gain the confidence of parents to create more viable conditions for the families to be more confident in procreating more in order to turn round the trend of decreasing birth rate.

( In Malay): Mr Speaker, Sir, the Budget this year has two important objectives. Firstly to give impetus to the country's economic growth and, secondly, to encourage family life and procreation. The people have received the Budget well and welcomed the additional incentives introduced to encourage procreation, the care of aged parents and handicapped dependants. I support the Government's policy to encourage the people to have families and, for those who can afford it, to have more children. The tax rebates for the third and fourth children are a response to the Government's population policy which was introduced by the First Deputy Prime Minister about two years ago. Parents eligible for these incentives would certainly be able to use the extra money that they will gain therefrom to provide a little more comfort for their families. Mr Speaker, I would like to pose a few questions to the Minister for Finance on the tax rebates allowed. First, the relief for parents, which has been increased to $2,500. The question is: could a person be eligible for this relief even if he does not live with the parent? The present rule requires such persons to live with their parents. But we know that there are many who support their parents through monthly contributions even though they do not live with them, for various reasons such as that their parents live with some other members of the family and so on. The second question concerns the rebate for third and fourth children which is limited to 12 years. My question is: why is it limited to 12 years and not until the child completes full-time, formal education, that is, until the completion of his secondary and tertiary education? Thirdly, regarding the rebate for a fourth child born after 1st January 1988. My question is: why only for those born after 1st January 1988? Many people feel that the special tax rebate of $20,000 for five years and relief of $1,500 should be given to all dependant fourth children. The reason is that the fourth child, whether he comes from a higher income family or a lower income family, would one day make the same contributions to the country even if they were born before the date. Mr Speaker, Government policies should be fair to the majority of the population. The Government should not have policies which tend to show discrimination to any particular sections of the community, especially to those of the lower-income group. As an example, a rebate of 15% of the wife's income is given for the birth of a fourth child in lieu of maternity leave. This, I think, is not advantageous to mothers who do not earn high incomes. The ones who benefit most are mothers who earn high incomes who would surely be already in the position to have more children. Mothers, whether they belong to the high-income or low-income category, all contribute to the country, which really needs their services in terms of employment. So in order to be fair to all, I feel the Government should allow maternity leave for third and subsequent children. Mr Speaker, where family life and working mothers are concerned, a number of questions need to be answered. Firstly, what can we do to encourage our people to have families and to have more children if they can afford it. Secondly, how can we encourage more women to remain working even after starting a family. And thirdly, what facilities can we offer men who have working wives. I feel the relevant Government policies should fulfil the desire of the people to have families as well as answer the questions I have posed earlier. The participation rate of women in employment is only 48%. If we want more women to remain working, we must provide more facilities for them. These include more creches, kindergartens and schools, maternity leave and, if possible, special leave for fathers, etc. Much has been said about this by my colleagues in this House. I do not wish to repeat what has been said. But let me focus our attention on one matter which we need to consider, and that is, how we can establish a comprehensive parent education programme to ensure better family life. In other words, how we can assist parents to enhance their family life. Mr Speaker, the family is an important institution in any community. Peace and stability in the community depend on the stability of every family within the community. Having made achievements economically, achievements in material terms, we should focus attention on non-material areas. The happiness and security of the family are things that deserve our total concern. Clearly, we must give attention to the issue of parental education programmes to enable parents to build a happy family life. Parents have a major task in the education of their children. This is a lifetime task. The happy family life that we seek must be built on the foundations of love and care amongst its members. They must also be prepared to sacrifice for their family to ensure the happiness of the family. Mr Speaker, I would like to call upon the Government, beside giving incentives to parents to have more children according to their means, to give attention to the quality of community life through family education programmes. A happy family life is the foundation for a peaceful, prosperous community and nation. Mr Speaker, I support this year's Budget.

Mr Speaker, Sir, 1988 has indeed been a good year for us. Singapore chalked up a strong 11% growth. The Finance Minister was in a generous mood. He gave tax incentives to the industrialists, the family man and woman, the handicapped and the property owners. We have done well, and practically everyone gets some reward from the Minister. The only group that was generally penalized by the Minister was the smokers. I would call this year's budget a "rewarding budget", particularly for the family man. There is good reason for us to be proud. Singapore is probably one of the few countries in the world which managed a "double surpluses" status, that is, with a balance of payment trade surplus and a government budget surplus. On the balance of payments, Singapore attained an overall trade surplus of $3.3 billion, with surpluses being achieved in both the Current Account and the Capital Account. On the Government budget, we recorded an overall $4.3 billion total revenue surplus in 1988. What is more remarkable is that this surplus is attained after paying for a very hefty $5.2 billion worth of Development Expenditure. Looking at these achievements, Sir, there is much reason for us to be sanguine. In terms of economic performance, I would say that Singapore has scored a double distinction or double honours. In comparison, we are all very well aware of the perilous situation in the US. They are faced with the contrary situation of a problem of a double deficits. They are confronting the problem of a balance of trade deficit as well as a government budget deficit. Sir, while there is much cause for us to be smug, I would like to sound a note of concern on two aspects: (1) The decreasing number of capital projects we have in Singapore; and, (2) In our flush of high achievements, there is an increasing lack of tolerance and scorn for failures, creating an over-achievement oriented and pressurised environment. I note from the Budget Statement that the Government's total development expenditure as a percentage of the GDP has dropped from about 12.6% in FY87 to 10.8% in 1988, and down to 8.2% for FY89. Many of the major public sector projects such as the MRT, roads, expressways and public housing have been completed. Unless the public and the private sectors can dream up other useful large scale projects, then Singapore may have to be faced with the prospect of only moderate expansion in future. Our people may have to be aware and accept, and be contented, that the previous spectacular growth of past years would not be easy to come by from now on. Because we are caught up in this phenomenal growth in the last 2 1/2 decades, our success can be taken too much for granted. Very strong competitive pressures are being built up in all aspects of our life, for example in the schools, in the workplace and even among siblings at home. Perhaps we should try to find ways not to emphasize too heavily on achievements but to find ways of how we can make our people more tolerant to failure. Last week, we read in the newspapers about the very bright boys and girls who scored 10 straight A's in the "0" level examinations. We are extremely proud of these young boys and girls. But in the process of publicising these outstanding achievements, we should not forget that there are thousands who simply scored B's, C's and D's. But indeed we are also proud of them because they had tried their best in their work. Sir, I am not advocating a move towards a more relaxed atmosphere, and that significant achievements be scorned. What I feel is that we should have an environment where, while achievements and excellence are properly recognized, there also should be some higher level of tolerance for failures. We know well that in the Western countries, like the US, businessmen who have operated failed ventures do not carry any stigma with them. After their failures, they just simply pick up the pieces and start all over again. In Singapore, there are already some symptoms or manifestations of an over-pressurized environment here. Two trends are of some concern. The first is that more and more people, both young and old, are turning to religion and seeking solace in the spiritual domain. The second is that some young professionals are getting increasingly tempted to emigrate to other countries where they perceive, whether rightly or wrongly, that they can lead a less demanding life or perhaps even a more rewarding life in those countries. These trends are issues worth deserving our detailed analysis and close monitoring from now on. Perhaps the challenge in the future for the Government is not so much to build more imposing edifices such as the Raffles City and the like, or to chalk up more spectacular growth. The challenge should be for the Government to devote more time and resources to non-physical projects. Attention has to be devoted to the finer things in life, more gracious living, art and culture, sports and care for the less privileged and the aged. The final objective is to devote more effort to develop a more tolerant society and a more vibrant environment for all of us to live in. Sir, now I would like to turn to just one final subject, ie, tax deduction for CPF contribution. I do sympathize with the Finance Minister on his desire to prevent the use of CPF contribution as a form of tax shelter. Hence, he has decided that CPF contribution is only tax deductible up to 40% of the annual ordinary wages. I would like to ask the Minister whether he would consider allowing certain categories of professions to be exempted from this rule. There are certain industries which depend on bonuses and commissions to remain trim and competitive. They are usually trades like the stockbrokers, dealers and salesmen. They are offered minimum base annual salaries but enjoyed substantial bonuses and commissions during good performing years. Their businesses are quite cyclical. Therefore, during difficult years, they have to stay trim and competitive by only offering very low base salaries. Hence, I would like to ask the Minister whether he could review the need to impose this 40% rule for such category of workers where high bonuses and commissions is a norm for them. Sir, may I conclude by expressing my support for the Government's financial policy for the year 1989/90.

Thank you, Mr Speaker, for allowing me to join in the debate at this stage. Sir, I am sure Singaporeans are gratified that the economic recession is truly over and the economy is strong again. I am heartened to note that this year's budget is geared not only towards meeting our economic but social objectives as well. This is necessary as Singapore becomes more developed. Tax relief to help with the burden of taxpayers with children and aged parents is long overdue. But it is better late than never. Sir, the group of people who will benefit will be the taxpayers, ie, the middle class which comprise fortunately the majority of Singaporeans. But what about the lower-income group? They pay little tax, if any, and would therefore not benefit from the tax incentives. The budget has therefore not addressed the problems of the lower-income. Moreover, the two new consumption taxes on PUB bills and telephone charges will be felt by them. Incidentally, should not consumption tax start with luxury items? Sir, I know it is the long-term goal of the Government to enable the lower-income group to catch up with the rest of society. And I recognize that this should not be achieved through handouts which will lead to our downfall. However, I feel that the Government can farm and implement appropriate programmes to achieve this goal and I would like to take this opportunity to suggest a few. First, I strongly support the call made by the Member for Kebun Baru during the debate on the Agenda for Action last year to set up an advisory council to study in detail the problems of the lower-income group. I am sure such a committee will be able to come up with good recommendations that the Government can imple- ment to help the lower-income group to upgrade themselves. Second, I would like to suggest that the Government implement a free tuition scheme for the children of the lower-income group. This can be organized with the assistance of the grassroots organizations or other social welfare organizations. Tuition is a way of life for the majority of Singaporean children and is taken for granted. But this may not be so for the children of the lower-income group. By farming this scheme, the children of our lower-income group will be given equal opportunity with other children and hopefully will do just as well. Sir, many of the workers in the lower-income group may be reluctant to go for skills upgrading after working hours because they could be holding a second job in order to supplement their income. I would like to suggest that the Government look into possible ways of providing time off and sponsoring workers from the lower-income group for training and upgrading their skills. Just as monetary and leave incentives are given for working mothers to encourage procreation, I feel that support given to the lower-income group in this manner will help them tremendously. My last suggestion pertains to the older workers in the lower-income group. I would like to ask the Government to consider offering this group of people the option to continue working beyond the retirement age to enable them to have an income for a longer period. Next, I would like to speak on the tax rebates to encourage procreation. But before I continue, I would like to declare my pecuniary interest as an obstetrician. Bringing up a child is costly and any assistance is welcome. The budget emphasizes the importance of the family and will help working mothers who have the financial burden of hiring maids, foster mothers or putting the child in child care centres. The enhanced tax relief for working mothers and the tax rebate of $20,000 for the fourth child are most welcome. Certainly, those couples who are contemplating on the fourth child will be relieved. But what about the fifth child? In my opinion, since the underlying principle of the tax rebate is to encourage parents who can afford more to have more, the tax rebate should be extended to the fifth or even subsequent child. I would like to raise three questions for the Minister. First, how would he compute the tax rebate for a working mother who is expecting twins in the third pregnancy? Will she be entitled to a rebate of $40,000 spread over 10 years? Second, would the Minister give an assurance that those who adopt the new policy in good faith will not lose out in the future when policy changes have to be made? This is important because some people are apprehensive whether there will be a reversal of policy once the population goals are met. Third, will the Government also consider removing another discrepancy between the third and fourth child incentives in also allowing the fourth child to have priority for primary school entrance? Sir, tax incentive is one of a number of measures to encourage mothers to have three or four children. And despite this, a mother may choose to have fewer children because deciding to have a child is a very private matter and fiscal incentives alone cannot play the decisive role. It certainly will not have the same influence on our Singaporean mothers as the mythical dragon. Sir, the tax rebate in lieu of maternity leave for the third and fourth child has to be examined further. Presumably, this would allow mothers to go on unpaid maternity leave without suffering a financial setback. If this is the case, the rebate is insufficient and should be extended to cover up to eight weeks' of salary as this is the normal maternity leave period. Even with this adjustment, I am concerned that many private companies may still not grant unpaid maternity leave because of shortage of manpower, high work load or the difficulty of finding temporary replacements. Some mothers may also be reluctant to take the unpaid leave in order to have more savings. The result is that mothers having the third or fourth child will have very little rest before and after the labour period. And I wish to remind the Minister here that maternity leave is granted to mothers in the first place for health reasons. Eight weeks is the minimum period for recovery and recuperation from labour, especially if the delivery is by Caesarean operation. Sir, it appears that we have forgotten the role played by the husband in deciding the third and fourth child. We should also look into ways where we can encourage the husband to view this positively. More important than tax incentives may be the incentives of having more time to care for the children. I would encourage the Minister to consider providing more generous paternity leave and perhaps a 5-day working week. I have come across families where the mother is unable to have another child because the father refused it. In many instances, Singaporean men still have the final say in such matters. Finally, Sir, I am cheered by the increase in the personal relief for aged parents and handicapped dependants. However, I would like to point out that as it is more difficult and costly to look after a handicap dependant than an aged parent, I would have thought that the personal relief for the handicap dependant should be relatively more.

Mr Speaker, Sir, I rise to speak in support of the financial policy of the Government for the financial year 1st April 1989 to 31st March 1990. It is a good budget, Sir, because we are able to take advantage of the buoyancy of the economy, and make considerable progress towards our long-term goals, both economic and social. The role of the public sector has been laid down by the Minister in the budget in no uncertain terms. The revenue and tax measures for both private companies and individuals are constructive and prudent, and essentially prepare us for the future. The need for greater procreation is emphasized and the importance of the family unit is upheld. The corporate sector has been assured that the Government will closely monitor the cost of doing business and help it stay competitive internationally. The budget shows us very clearly where we are in our economic development, where we should be heading to, and what steps and direction we should take to get there. It is heartening to see that we are moving towards a more robust economic system which is more efficient, resilient and better able to react and respond quickly to external factors and retain our competitive edge. Sir, I would like to take this opportunity to comment on a few measures proposed by the Minister in his budget. First, let me touch on the issue of tax deduction for contributions to CPF and other approved funds which the Member for Thomson has also touched on. At present, an individual enjoys tax deduction for obligatory contributions to the CPF or other approved funds. These contributions are made monthly and comprise two parts: first, 36% (12% from the employer and 24% from the employee) of his or her monthly ordinary wages not exceeding $6,000; and the second part, 36% of his or her additional wages not subjecting to any limit. It is therefore possible for a high-wage earner to take advantage of this statutory requirement, for tax purposes, if his or her additional wages can be made artificially large compared to the monthly ordinary wages which are then kept at $6,000 or below. To prevent the use of CPF contributions as tax shelters, the Minister has proposed that, in the case of additional wages, deduction will be limited to the statutory CPF contribution from additional wages not exceeding 40% of the annual ordinary wages. Sir, with the existing CPF rule, a person who uses CPF contributions as tax shelters would have a large amount of additional wages close to his gross annual income. By gross annual income, I mean the sum of annual ordinary wages and additional wages. With the introduction of the new rule, assuming his gross annual income remains the same, he will have to restructure his wages to make his additional wages to be 40% of his annual ordinary wages so as to maximize his tax deductible CPF contributions. This means that his additional wages have now reduced to about 28.6% of his gross annual income. And all his additional wages qualify for tax deductible CPF contributions. There is no doubt that the new rule is effective in preventing tax shelters. However, it does not distinguish between those who are deliberately exploiting the tax loophole and those who are not. The new rule affects significantly anyone whose income pattern is such that they have large additional wages compared to their annual ordinary wages. Therefore the normal wage earners, such as the salesmen, are likely to be unfairly penalized. They are likely to pay more tax compared to another person having relatively higher monthly ordinary wages but the same gross annual income. This is unfair and may have a dampening effect on our flexi-wage policy. Sir, the problem arising from the new rule lies in the fact that annual ordinary wages are used by the Minister in the budget to determine the maximum additional wages which enjoy tax deductible CPF contribution. I propose that the gross annual income be used and therefore, instead of 40% of the annual ordinary wages being the ceiling of the additional wages which enjoy tax deductible CPF contributions, we should perhaps use somewhere between 25-30% of the gross annual income. The reason why I say 25-30% is that if we use 28.6% (the figure that I mentioned earlier) my proposal is no less effective than the Minister's in so far as preventing tax shelters without unduly penalizing the normal wage earner. Furthermore, if an individual's bonuses amount to 4.8 months or less, CPF contribution on all his bonuses will be tax free, which is the same as what the Minister has proposed. However, if an individual has more than 4.8 months of bonuses, then the ceiling of the additional wages which enjoyed tax free CPF contribution will not be restricted to 4.8 months but higher. At any rate, it is always pegged to 28.6% of the gross annual income. Sir, my proposal has the advantages of being fairer to everyone, as simple as the Minister's and not capping the portion of CPF contributions from the additional wages. Sir, before I change the subject I would like to ask the Minister one more question which I think is of concern to some people, that is, under his proposal, whether there will be obligatory contribution to the CPF from those additional wages in excess of 40% of the employee's annual ordinary wages which will be assessed to tax. May I turn briefly to the subject of property tax on non-HDB owner-occupied residential properties. Depending on the year the annual value was assessed, the present system gives different concessionary taxes to different properties. It is good that the Minister has proposed that a standardized tax rate of 4% of annual value be adopted. I would like to seek the Minister's clarification as to whether the annual value of all the properties will be updated and standardized? How the 4% has been decided and how much more revenue will be generated as a result of this change? In conclusion, Sir, notwithstanding what I have said, there is no doubt that it is a good budget and I support the motion.

Order. I suspend the sitting and will take the Chair again at 2.55 pm. Sitting accordingly suspended at 2.23 pm until 2.55 pm. Sitting resumed at 2.55 pm

Debate resumed.

( In Mandarin): Mr Speaker, Sir, one of the themes of this year's budget statement is implementation of the social policy through taxation policy, to encourage people to procreate and to look after the aged parents and the handicapped dependants. Under the new taxation policy, Government has decided to raise the tax relief for wives and children and rebates for aged parents and the handicapped dependants have also increased somewhat. All these new measures are a reflection that the Government has attached importance to the family unit as well as to reducing the burden of the people. I welcome the Government's move. Another measure that is worth mentioning is the incentive policy to encourage procreation. In 1987 the Government announced that a mother who gave birth to the third child will be entitled to a $20,000 special tax rebate. And in order to further encourage procreation the Government has extended this incentive to the fourth child. In principle the Government hopes that such a fiscal policy will be able to encourage people to have more babies. However, I feel that the tax incentive for the third and the fourth child would not be sufficient and effectively encourage people to have more children. As a matter of fact, very few people would like to have children just for the sake of money, especially to have the third and the fourth child. To have children and the trouble of bringing up children cannot be measured by money alone. In order to encourage people to have babies, we have to start from education and publicity, and instill among the young people the correct concept of marriage and having babies so that they will understand the benefits of starting a family early. The problem Singapore society faces is not whether the mother should have the third or fourth children. The crux of the problem is that there are many single men and women who are not setting up family units. They do not get married. Another trend which is a cause of concern is late marriage, that is to say, more and more people get married late, especially those highly educated men and women, particularly the women, more stay single, and they get married late. We need only to look at the statistics to understand the problem. In 1977 the average marriage age for man was 27 1/2 years. In 1987 it had risen to 29 years. For women, the average age was 24 in 1977 and it reached 26 years old in 1987. For women who have their first baby the average age was also rising with years. Now women get their baby between 25 and 29 years old. Of course, the various races vary in this matter. For example, most Chinese women have their first baby between 25 and 29 years old. Whereas the Malay women have their first baby between 20 and 24 years old. However, the general trend is late marriage and late births. I feel that if we want to make use of taxation to encourage people to have babies, then the Government should formulate a comprehensive across-the-board policy and and not go in a piecemeal approach. The Government should first encourage people to get married early, then to have babies early, followed by more babies. We should go about this step by step and not putting the cart before the horse. Just ask the question, without getting married, how are they to have the third and fourth child? Therefore, I would like to make a recommendation to the Minister for Finance and the Minister for Health that a complete review should be made on the present incentive scheme and formulate a comprehensive and drastic policy to encourage people to get married early and have babies early through tax incentives and other methods. For example, they can get tax rebates if they get married within a certain age range. Just now, I have said that merely using the monetary incentives is not the most effective way to encourage more births. Under the present circumstances, the Government hopes to use all kinds of methods to encourage people to have babies. However, if they want to use the taxation policy then the policy should be thorough in order to be effective. Mr Speaker, Sir, another issue I would like to raise is the suggestion of major salary revision for civil servants. The Minister for Finance announced that the Government has accepted the recommendations made by the Civil Service Careers and Scholarships Committee and that it is prepared to launch a major revision of civil servants' salaries in order to attract talents to the civil service. Without doubt, if the Government wants to carry out its national policies effectively, then it should have a core of talented and dedicated civil servants. On the principle of market supply and demand, to adjust salary accordingly is only right. If the Government wants to attract talents into the civil service, so does the private sector. Unless the Government also works on the principle of supply and demand and revise the salaries accordingly it will not be able to attract talents and capable people into public service and those who are serving at present may also leave their posts in time. However, what I would like to emphasize is that the timely revision of salaries should not be confined to the people in the upper echelon only. With economic growth, our demand for various types of workers has been increasing and private sector is also attracting people with their high salaries. Government should also adjust salaries on supply and demand principle of those lower civil servants. In implementing our policy, we should adopt a consistent stand. What I am concerned about is not only the revision of salaries for these low grade civil servants. What I am concerned is the salary revision for the lower income workers as a whole. In the private sector, in order to attract managers and senior staff, they are prepared to pay high wages to attract talents. If the wages and salaries offered are not attractive enough then they are prepared to increase these salaries in order to attract those who are qualified. And among themselves, companies often compete through pay offers to attract talents. However, when dealing with the general low grade workers, some employers have adopted a different attitude. The salary scale for certain work is terribly low and therefore they are not able to recruit Singaporean workers. But these employers do not abide by the market forces in adjusting and increasing the pay to attract workers. Instead they go to the Ministry of Labour to make a complaint that they cannot get local Singaporean workers. They ask for permission to recruit cheap foreign workers. I hope, whether in the private sector or in the public sector, in formulating salaries, whether it is senior staff or junior staff, they should adopt a fair, reasonable and practical attitude. Mr Speaker, Sir, in this year's budget, there is no increase on road tax as was rumoured in the market. However, in the last few months, there was a rumour that the Government intended to raise the road tax and therefore sparked off a wave of panic buying, especially on the 3rd March when the Minister announced his budget and the few days before that, such scrambling for new cars has reached a panic situation, as car buyers tried to beat the announcement of car price rise by registering their cars before that. Because of the increase in sales, many car companies have sold out their cars. There is no stock and certain people insisted on booking the cars and paying the money first before taking delivery in order to register these cars at the ROV. I feel that such phenomenon was caused by rumours but in the final analysis it was caused by the Government's policy. Up to now, the Government has been using taxation to curb car increase and thereby increasing car prices all the way so much so that buying a car has now become a form of investment to the motorist. In the whole world, only Singapore people treat car buying as an investment. After a certain number of years, the car will increase in price. This is unique in the world and is ridiculous. And it is felt that increase in road tax is no solution to curb increase in car population. Such policies are also likely to bring about adverse effects. I believe that the Government is also considering other measures, for example, by imposing levy on the usage of inner city roads but up to now we do not know what measures the Government will take. In his budget, the Minister did not mention the increase in road tax. However, whether such taxes will be increased or not in future, we still do not know. We do not know whether the Minister for Communications has any trick up his sleeves. He is not here. I hope the Minister will announce his stand in these two days of debate and declare what measures Government will take in order to allay the fears among motorists. Otherwise, such mad rush for cars will continue. Lastly, I would like to talk on the impending consumption tax. The Minister announced that the Government will gradually and by stages implement such taxation. Of course, I hope that since the Government's financial position is sound, there is no need to levy such taxes to increase revenue at present. However, if the Minister for Finance intends to levy such taxes as a matter of principle, I would suggest to the Minister that he should be cautious in order not to cause hardship to the lower income group. We know that in our present income tax system those who earn more pay more taxes. Those who earn less pay less. However, with consumption tax, it is different. No matter how much you earn, you pay the same amount of tax if you buy items which carry such taxes. Therefore, the implementation of consumption tax will have a greater effect on the lower income group. I would urge the Government to exempt such taxes on common daily necessities in order to avoid increasing the burden for the general public leading also to inflation. When implementing such tax, I would urge the Government to be prudent and to take into consideration the plight of the lower income group.

Mr Speaker, Sir, I rise to support the motion. Sir, I lend my full support to the three budget policy objectives set out by the Minister for Finance, namely, the need to maintain an overall balanced budget for the long term; second, to continue investing for the future; and third, to foster growth of the private sector. In this respect, I support the Government's policy of supporting staff increases in the critical areas such as schools, junior colleges and the courts while the majority of other ministries will be maintaining zero growth in their staffing. However, Sir, I would like to seek the Minister's clarification regarding his intention to reduce by more than 2,700 posts or 2.4% of the authorized manning level in ministries and Government funded statutory boards. How many of these posts are due to the deletion of long-standing vacancies? How many will actually be retrenched and what level of staff are they? What is the profile of these workers? Can they be retrained or given alternative jobs? How many will end up being unemployed as a result of this exercise? I am of course not expecting any exact figures but just a good guesstimate. Sir, I would like now to turn to the problem of manpower shortage which I believe is prevalent both in the private and public sectors, as a result of, firstly, the mismatch of the type of workers needed, and secondly, there is a real or absolute shortage of available manpower. The mismatch has arisen because the demand is for young female production operators in the factories, while we have a pool, albeit a small pool of middle-aged and more elderly males and females who are available for employment. Sir, the Minister has highlighted a record $2 billion manufacturing investment commitment in 1988. This is something that all Singaporeans can be proud of and the Ministry of Finance and the Ministry of Trade and Industry should be commended for this. However, as the Minister has stated, the majority of the jobs in manufacturing (65,900 jobs) went to foreign workers. Whatever local labour that was available was soaked up and supplemented by foreign workers. However, with each new factory being set up, there is also an increased demand not only in the production line (consisting largely of foreign workers) but there is also an increase in demand of the staff at all levels, eg, receptionists, stenographers, and other office staff, accountants and other infrastructural staff. What is the result? The result is that many small and medium-sized industries are facing an acute shortage of staff. Furthermore, these are the very industries that are not allowed to employ staff on work permits or employment passes. Furthermore, as a result of the increased number of foreign workers, the foreign worker levy is being raised, thus aggravating the shortage of manpower. I would like the Minister to comment on this problem. Are we tackling the problem at the right end? Did we allow the opening of too many factories in 1988? Was there too rapid a growth? Should we also not review the work permit policy so that both the foreign investor and the local entrepreneur can benefit? I agree fully that having a large number of foreign workers carries a high social and political cost. However, what is the solution now? There are some jobs that just cannot be automated and manpower is required. There is a mismatch of available labour. Perhaps the Minister can enlighten us on this. Sir, I would next like to turn to the question of property tax. On 26th February 1986, the First Deputy Prime Minister referred to the question of property tax rebates. He said, and I quote: 'A rebate of 30% on the present property tax rate of 23% has been given for both owner-occupied and let-out industrial and commercial properties, vacant lands, including lands under development and let-out URA, HDB, and JTC properties. This 30% rebate will be deepened, with effect from 1st July 1986, to 50%, and extended to 31st December 1988. The additional rebate of 20%, however, will be given only if it is fully passed on to the tenants.' Sir, the Finance Minister has generously extended this rebate scheme for another year till 30th June 1990. However, we are all aware that there are many instances where rentals of commercial properties have increased by as much as 100%. It would seem that the initial spirit of the rebate, that it be passed on to the end-user, that is the tenant, is breached. Will the Minister comment on this and look into this problem? Can a mechanism be set up whereby tenants can bring this to the attention of his Ministry? Finally, Sir, consumption tax. Sir, this subject has been debated extensively previously. It is reassuring to hear from the Ministers that in the implementation of the tax, "its effects on all income groups, and on our exports and tourist trade will be considered. However, Sir, I would like to bring up another point for the Minister's consideration. If the cost of essential and luxury items is raised above that of our neighbouring countries, will it not result in Singaporeans doing their marketing and shopping elsewhere? Would this then not be counter-productive? Thank you, Mr Speaker, Sir.

Sir, I rise to support the motion and wish to congratulate the Government for having delivered, with the support of the people, one more good year for our country. And if I may add, may the PAP Government continue to deliver more good years for Singapore. Sir, 1988 is indeed a good year; a vintage year as the wine merchants would put it. The economy grew by 11%, the highest growth rate in this decade. Many received unprecedented or substantial bonuses. The hotels are almost full. Orchard Road is crowded with shoppers. Talks of wage increases are in the air, and Hon. Ministers and senior civil servants are expecting or can expect a pay rise. My purpose, Sir, is not to dampen this happy mood, but just wish to add a note of caution. In the midst of this prosperity, we must not be lulled into a sense of complacency nor forget so quickly the lessons of the 1985/86 recession. Sir, we are a small, open and indeed vulnerable economy, very much dependent on external trade and demand. The Minister for Finance has himself told us that the strong external demand was the main impetus of growth in 1988, contributing 90% of the growth in total demand. We are very much dependent on the world economy, particularly the economic health of the OECD countries. If the United States of America have a chill, we might catch a pneumonia. We must therefore, Sir, monitor the economies of the OECD countries, watch out for protectionism, follow closely the multi-lateral negotiations, for example GATT, and the economic summits of the G7 nations. Things can go wrong. Protectionism could raise its ugly head or there could be a banking crisis or wild fluctuations in the stock exchanges of the world. Sir, some factors are beyond our control but we should prepare for the worst by further diversifying our economy and be less dependent on particular industries, for example, the electronics industry. We must also watch out for developments in neighbouring countries, as these developments would have, I believe, an impact on our economy. The health of Dr Mahathir is of immense interest to observers of the Malaysian scene, and there is endless speculation on the power equation and the issue of succession. And who should succeed President Suharto in Indonesia? Or what about the baffling behaviour of the Thais over the Cambo- dian issue? The Thais seem to bend like the bamboo, sometimes even before the wind is blowing. In short, we should ever be mindful that the economic cream could go sour any time. Sir, for a small nation, in effect a city-state, we have no choice but be tied up into the global economy. Indeed, with our high saving rate, local surpluses and the internal labour constraints, we should think even more of exporting our capital and services to the world. SIA and the "Singapore Girl" are our best success story in this field. But more tax and other incentives could be employed to encourage Singaporeans and Singapore-based companies to venture overseas. The tax system should also make it worthwhile for them to bring their profits or income back to Singapore. We have talked about the Swiss standard of living. But we should emulate the Swiss who work overseas and export their services in sectors like hotel management. Sir, have we identified the areas for export of services? What steps, I wonder, are being taken to encourage highly-skilled Singaporeans to work and live abroad? Many, I suspect, are not prepared to work overseas, and some are deterred by the disruption to their families and their children's education. But as the economy develops, this is an avenue for further development. And I believe the Government should examine problems in this area. In terms of budget surplus, we must commend the Government for its financial prudence and wise stewardship in running up surpluses far exceeding its own conservative estimates. We definitely cannot complain about this. And we know that the money is being put aside for rainy day. Nevertheless, I believe that a reasonable portion of this surplus could be used creatively for the betterment of all Singaporeans, particularly for investment in education. I know that much is allocated to education, but much more could be done, for example, upgrading facilities in existing schools, building more junior colleges and accelerated implementation of single-sessions in all schools, especially primary schools. We should also think of how we can share some of our prosperity with our citizens who earn much less, for example, more flexible home- ownership schemes, and more generous bursaries for all levels of education. Finally, Sir, a word about the consumption tax. The world-wide trend is towards consumption tax, and so it is inevitable that it will reach our shores. But many are thankful that it is not implemented extensively this year. My plea is that as the Government deliberates on further measures, spare a thought, Sir, for the lower income groups and consider the impact of consumption tax on their everyday life. To them, Singapore may become less and less affordable. Sir, I support the financial policy of the Government.

( In Mandarin): Mr Speaker, Sir, the Minister for Finance delivered his Budget Statement on 3rd March. This Budget Statement has three basic objectives: (1) To maintain a balanced budget for the long term; (2) To continue investing for the future; and (3) To foster growth of the private sector. When we review 1988, we find that the performance of world eocnomy has been very good. In the OECD countries, there was 4% growth; America, 3.8%; and Japan 5.8%. By the end of 1988, the forecast for had not materialised. In face, the growth in Singapore had reached 11%. For the last few years, Japan's rapid economic growth was fast catching up with the United States. In June last year, the G-7 countries met in Toronto (Canada) and the Japanese Prime Minister put up a very creditable performance. He announced that his foreign aid planned for the next five years amounted to US$5 billion. On the other hand, the US twin deficits, in the balance of trade and the budget, increased tremendously, gradually losing her image as the greatest economy of the world. Now the US government has adopted policies to promote her exports and reduce imports. There are many eminent economists in the United States. Many of them have won Nobel Prizes, and they have got MBA courses in Business Administration in the universities. And they have trained a large number of graduates who can analyze problems. However, their productivity and economic efficiency has declined. The views of the economists have been divergent. I remember mid-December last year Prof. Friedman published an article in the Wall Street Journal saying that the twin ddificit was not a grave problem. He said that after World War II, for a number of years the budgetary deficit in percentage terms had been greater than the present one. The question was to allow the private sector to invest according to the demand of the market to stimulate the economy. Secondly, according to him, the trade deficit meant that there was s surplus in capital account. A lot of Japanese capital flowed into the US market buying up properties and bonds in the US market. This reflected the confidence of foreign investors in the US economy. Therefore the trade deficit is not a serious problem to US although it is so to many Third World countires. In Japan, the rising Japanese yen has made the Japanese to focus attention on cost reduction and productivity gains whilst they adapted themselves to the new situation. They chose to maintain market share and have not raised the prices of their goods following a rise in the exchang rate. For example, from 1985 to 1987, there was an increase in the exchange rate between Japanese yen and US dollar to the tune of 65%. Yet the export price of Japanese cars to the US had increased by only 26%. The appreciation of yen has led many Japanese to venture out of the country to invest in other countries, especially in South-east Asia, making use of the lower cost of the region to enhance their competitiveness. Therefore, to many Asian countries Japan has replaced US as the major economic power in the world. Let us look at the Budget Statement. One of the objectives is to maintain a balanced budget. This move is correct, because in many Third World countries, even in many developed countries, there have been huge deficits in their budgets. The revenue generated was not enough to cope with the ever increasing expenditure because social welfare and medical costs have been enormous. In time their reserve's dwindled and their treasury is depleted. Foreign debts multiply. However, Singapore does not need a credit balance each year. If the expnditure is incurred on infrasturcture, such as an inproved telecommunication network transportation, airport facilities and environmental hygiene, then it is beneficial to Singapore in our development plans as a regional business and financial centre. A short-term deficit in the budget will not be a problem. The second reason is that the statutory boards in Singapore have maintained their surpluses year after year. This can be made use of to make up for a short-term deficit. In considering the public sector's financial position as a whole, the statutory boards should be included. There is a close relationship between manpower training and our future. I am happy to see that the budget for the Ministry of Education has increased from 3.5% to 3.8%. This is laudable. The BEST programme is very important. More than 116, 300 people have enrolled for these courses since the beginning. I would like to know how many of them are non-citizens, and if they return their countries eventually, then the training effort would have been wasted. Last year's Skills Development Fund outlay was about $61 million and training opportunities were created for 200,000 people. I am glad to note that more than half of the outlay was for training of workers whose monthly wages were less than $750, whereas in the past, the training had been concentrated on the middle level supervisors or managers. However, I would like to know, out of the $61 million, how much of it was spent on people whose income was less than $750 per month. Another feature of this year's budget is the promotion of certain social policies through taxation. Last year, I requested the Minister for Finance to give greater tax relief to taxpayers with handicapped dependants. The minister turnd down my request. One of the reasons he gave was that it was difficult to define "handicapped dependants". However, he was not very emphatic when he turned down my request. I felt there was still hope. I am pleased to note that this group of people who have handicapped dependants, brothers, sisters or children will have their income tax relief increased from $750 to $2,500. However, on further analysis, we find that the relief for ordinary children has been increased to $1,500. Therefore, the difference between the relief for normal children and for handicapped children is only $1,000, and the actual rebate may only be a litle over $100, assuming that taxpayers pay about 12% to 15% income tax. We know that families with handicapped children spend very much more than this amount on medical expenses, especial care, transport and education. Moreover, it is a very heavy mental burden to look after children who are handicapped, and if the families are not particularly well-off the quality of care would not be adequate. Therefore, I would like to suggest that the tax relief should be given according to the individual need. For example, if the medical expenses are very high, the quantum of tax relief should be applied with some flexibility. The last point I would like to touch on is the tax rate on owner-occupied properties which will be reduced from 23% to 4%. However, we know that in some cases the effective tax on old properties has been less than 4%. Therefore, the tax rate has increased, not decreased, I wonder if the Minister agrees with this viewpoint.

Thank you, Mr Speaker, Sir, for giving me this chance to participate in the debate on the budget statement. A lot has been said already about two peculiar features of this budget. One is that it is painless and, second, that it is a family budget. Incomparison with the 1987 budget which could be described or nicknamed as a procreation budget, this year's budget could be called a family budget, because it highlights the responsibility of the family towards the young and the old, the well and the disabled, and it also addresses some of the problems faced by working mothers. In joining my colleagues in this House, I too welcome the tax incentives for the building modifications for the disabled. These incentives are long overdue and perhaps still not quite enough in some environments where a lot needs to be injected in order to make those environments barrier-free for the disabled. One obvious example that comes to my mind is the Kent Ridge Campus of the National University of Singapore. I think the amount of tax incentives will not really be adequate at all to help change that environment to be barrier-free for the diabled. Nevertheless, the fact that we begin to recognize the need, is timely and, as I said, to some probably a bit overdue. I also welcome the raising of the income tax relief for the handicapped dependants who are the siblings or the children of the taxpayer, and also for the aged parents. Like the Member for Siglap, may I urge the Minister for Finance to consider a little more flexibility in varying the condition that the aged parents and the disabled sibling must be living together in the same household as the taxpayer. The reason is that there are circumstances under which it may not be quite possible for the taxpayer to live together especially with a disabled sibling. Such a case actually came to me recently at a Meet-the-People session. A young lady has been the sole earner of the family supporting of her aged parents who take care of a mentally disabled son, ie, her younger brother. She recently got married. She moved out and she found that she could no longer be entitled to this tax relief for supporting her disabled sibling. Cases like this deserve flexibility of consideration giving income tax relief. As far as the procreation incentives are concerned, the raising of the normal child relief for the first, second and third child and extension of this to the fourth child reflects more realistically the cost of rearing children and will certainly help towards encouraging bigger family size. The enhanced child relief for the second, third and fourth child continues to be given to working mothers only. While this may be a positive factor in encouraging working women to have more children as well as ensuring working mothers would remain in the workforce, I think the emphasis on working women is to the disadvantage of women who drop out of the labour force in order to take care of the young children. Theoretically, this woman can still benefit from the special tax rebate for the third or the fourth child. But the families which are most likely to benefit from the full rebate are those in the higher income groups, ie, women who do not work but whose husbands earn high incomes are likely to benefit most, to the fullest, from this special tax rebate. Therefore, by comparison, women who belong to the lower income groups and who drop out of the labour force to take care of the young children would be at a disadvantage. The finacial problems faced by women from the lower income groups are real and these are the people who need the additional income most. With the wife relief being raised from $1,000 to $1,500, there is a bit of recognition for the work of women at home which is unpaid. In view of the fact that the lower income groups actually need this wife relief much more and to a more substantial amount, perhaps the Minister for Finance could consider raising this wife relief for women who stay at home in order to give their unpaid work at home, especially in taking care of young children, a bit of recognition. Of course, in the final analysis, we all realize that financial incentives are only partially effective in encouraging procreation. This House has debated at length other measures including child care centres, part-time work, flexi-time work. All kinds of measures can be taken to encourage women to have more children as well as to stay in the workforce. I would not dwell on this now as I am sure other Members of the House would talk about these measures under the individual Ministries. Let me just say that apart from financial incentives as well as supportive measures, the Government should consider placing more emphasis on public education in order to change the attitudes of our population towards family life, parenthood and marriage. The 1989 budget is distinct perhaps, thirdly, by a radical departure from the past in terms of the block vote allocation system. Certainly, such a decentralization would increase the operational efficiency of the individual Ministries or units. At the same time, the new system clearly places more responsibility on the already powerful top civil servants in the individual Ministries. I hope that the individual Ministries and the officials, in their sometimes over-zealous pursuit of maximum efficiency in a narrow financial sense, would not incur political and social costs which are external to the particular Ministries. It is arguable that one such example is the recent increase in tuition fees at the NUS and NTI. I realize this issue is not particularly within the purview of the Ministry of Finance and probably the Minister for Finance will refer me to the Minister for Education later on. But let me take it as an example of where the considerations of one Ministry may have spill-overs onto the entire country in terms of having not only economic but also social and political costs. And therefore I wish to urge the Minister for Finance, being in the position of watching the budget in an overall sense, to be careful about allowing individual Ministries to tread on grounds which might have this kind of external costs. The raising of tuition fees for NUS and NTI came as a great surprise to many people. I think to use the word "bombshell" is probably not an over-statement. The fees at NTI and NUS were raised only in 1987, ie, two years ago. And to appreciate the magnitude of the present increase, one should not just compare the proposed tuition fees for this year beginning July 1989 with that which were raised in 1987 as shown by the tables presented in the Straits Times of 8th March. One should actually make a comparison between what is going to be effective in July this year, 1989, with what was immediately obtaining before the 1987 increase. For Accountancy, Commerce, Arts, Social Sciences and Law students, the fee charged in 1986 and 1987, before the 1987 increase, was only $1,200. But the proposed fee now is $2,600. So the increase is, in fact, not 30%. If you only take the two years, 1987-88 compared to 1989-90, the increase will be 30%. But if you go back to the fee structure just before the 1987 increase, the three years will give you 117%. Of course, one may argue that you should average out the increase over a number of years and you should not, say, take three years back or four years back and make it out to be such a big increase. Let me finish this comparison by going over the other two faculties. For Architecture and Building and Engineering Science, the increase will be 158% over the last three years. For Medicine and Dentistry the increase will be 454% over the last three years instead of 85% only. The point I want to make is that there are students who enrolled in 1986/87, who are still going through these courses and have not finished. In other words, they would have been struck by the fee increase twice, and to them the increase was actually 117%, 158% and 454% and not 30%, not 29%, not 85%. For this cohort of students who enrolled earlier on, and would have made budget calculations when they entered the University, they suffer a tremendous hardship. No one disputes the fact that tertiary education is heavily subsidized. No one disputes the fact that students who graduate from the University or from the NTI are a very privileged minority in the population and therefore they should bear not only part of their educational cost but should also be paying back what they get from society and the taxpayer's money after they graduate. That is why in the case of Dentistry and Medicine there is this bond that they must serve for five years after graduation. Mr Speaker, Sir, I suppose I should let the House know that I have two children who are attending NUS but I do not speak as a parent who can afford this fee raise. I am speaking on behalf of those who cannot afford the fee increase. So for families who made their calculations before their children entered the University, they are hit by this fee increase twice within the last three years and this really comes as a big surprise. It is said that they can apply to the Revolving Loan Fund from the Ministry of Education from which they can draw and cover up to half of the tuition fees. The second half they can apply from other loans at the University or at the NTI. But the upper limit to these other loans is only $2,000. And the actual amount a student would obtain is not necessarily the maximum. That depends on the financial circumstances of others including how many applications there are for these loan funds. So other means must be found to help the students who are caught in the financial bind and I think there is need for the University to raise the amount, the upper limit of this $2,000 loan, to help the students caught by this increase. The justification given for the sharp increase in tuition fees is the rise in the operational expenditure at. If we read the figures given in the Straits Times on the 8th March, it is noted that between 1987 and 1988 and 1989 and 1990, the total operating expenditure of NUS and NTI increased from $231 million to $351 million, that is a rise of 52%. Whereas the recovery from tuition fees would rise from $28 million to $62 million, that is a rise of 121%. So what has happened is that there is a higher cost recovery from the students themselves. If this trend continues, I am afraid university education will become more and more the privileged of the privilege few who can afford it. This trend must somehow be alleviated and means must be found to help students along in meeting this part of their expenses. As for foreign students, nobody would disagree with the argument that foreign students should pay more than local students. This is fair and this is just. And at the University level, there has always been a quota, a limit on the number of foreign students so that we can benefit, from their presence, students can mix with students from other kinds of background, other nationalities, and they can benefit from this multiplicity of cultural and national backgrounds. The quota, on the other hand, limits the number of places taken up by the foreign students. But the hefty rise in tuition fees for foreign students, doubling what they were paying two years back, will cause a loss of goodwill among foreign students who come from our neighbouring countries. We must not forget a lot of the close relationship we have enjoyed with our neighbours can be attributed to the fact that Singaporeans and Malaysians and other people from Asean have shared common educational backgrounds, common educational ties. If the foreign students from now on find it impossible or very difficult to meet our tuition fees, they would not come. Or those who can afford them may find it relatively more attractive now to go to universities in other countries where there would be a greater range of courses, where they may stand a chance of settling down after their graduation. To that extent, we will be losing the very valuable past educational ties that we have been sharing with people from our neighbouring countries. Sir, I think this is a consideration which the Government probably has thought about deep and hard. It has come to this conclusion after weighing the pros and cons. But I am afraid opinion on this matter is going to be divided. So with that, may I urge the Minister for Finance. In having implemented this new system of budget allocation, not to give up his role as an overall watchdog of how individual Ministries spend and raise money, but to make sure there would not be foreseeable external economic, political or social costs to the nation. 3.56 pm

Mr Speaker, Sir, I rise to support the motion. May I also join my parliamentary colleagues in commending the Minister for Finance for a very well-balanced budget which has provided relief to families in their care for the aged, the disabled and dependant children. Sir, it is indeed a budget which is set to further strengthen the family support system and I hope that the budget will in future consider this direction if we think the family is a basic unit that needs to be strengthened. In doing so I forsee that it will lay further foundations to strengthen the family's capacity to support members who are dependent. Sir, whilst the budget can be said to be a good one, there are a number of areas which require further review and careful implementation. We need therefore to look at what is our future direction in terms of policy for revenue generation. Is our policy going to de-emphasize direct taxation and move towards indirect taxation? And if the latter is the case, then I assess that it will have implications not only on consumer behaviour but also implications for the working class. Firstly, Sir, a key concern which requires close attention is the implementation of consumption tax on goods and services. In the context of Singapore, we do not have a large consumer base to generate sufficient revenue from consumption tax. We have only a population of 2.6 million and I project that we will have to tax almost all essential goods and services in order to generate sufficient resources for our budget. Therefore, if consumption tax is to be imposed on a wide number of goods and services, it will increase the tax burden of the working class. It will also stifle our tourist trade and make our goods and services less attractive in comparison to those in our region. Revenues will be indirectly lost as it will dampen both domestic and foreign demands for our goods and services. Singaporeans may go across the Causeway to buy their essentials. Today we see during weekends thousands of Singaporeans going across the Causeway to buy their essential goods. Therefore, if the direction is towards taxing more essential goods, the exodus will be greater and it will be less tenable for us. Sir, such a consequence is not unlikely. So, I hope that the Minister will be more selective in imposing future consumption tax and exclude levy on basic essential goods. This will, in fact, allay the concern of the average working class families. Sir, we must not forget that at least about 60% of the population are earning salaries of less than $1,000 a month, and it is this large consumer base that we have to address the question. Sir, secondly, in our effort to encourage families to have more children, we have not fully directed our attention to finding solutions to child-care problems facing working mothers. I note that incentives alone do not lessen the burden of our working mothers. We must look beyond this question of incentives. Incentives may be good. It does help to relieve the working mothers of their financial burden. But we should look at the question of creating a good infrastructure for child care and support. Sir, we have to focus on mothers with less than three children. The current tax incentives do not have any impact on the middle and lower income working mothers with less than three children. They form the main bulk of our working mothers. In order to alleviate the financial burden of child care of these families, it would be attractive to increase the enhanced child relief for the second and third child below 12 years old to 20% and 25% respectively; at the same time a special rebate of $10,000 should be considered for a newborn second child. I stress that if we are really serious in wanting to increase the number of childbirths, we should give a good booster to enable higher procreation which would solve the problem of a declining population growth. Sir, to encourage procreation, there is a need to set up more child care facilities to cope with the growing demands of working mothers in the future. It would be useful to consider at least a $25,000 tax relief deduction from income for a period of four years for private child care operators or employers who wish to set up new child care centres. This will provide an incentive for those who intend to promote private child care centres. I urge that further incentives for supporting the employers and private child care operators be looked into quite seriously. Thirdly, Sir, the disabled workers, unlike normal workers, are generally at a disadvantage with regard to wages. They are in a lesser position to bargain for wages comparable to normal workers. Besides this, they have to spend more in getting to work than for a normal person. Sir, in recognition of such a situation, they merit a personal tax relief of $2,500 which will perhaps in some way help to relieve their burden in terms of expenses on transportation. The child relief that is provided, ie, the $2,500 which is provided for the disabled child, does not in any way help the disabled worker. Fourthly, Sir, families who look after the elderly sick or disabled parents deserve more financial relief. This is because caring for the elderly sick incurs additional financial burden. An additional $2,500 should be accorded to the family caring for the aged sick parent who normally needs more medical attention and nursing care. Sir, with a population which is aging, more parents are likely to become aged sick and, in order to encourage more families to look after their elderly sick parents, I see that there is a crucial need to review how families caring for the elderly sick could be supported. Sir, in conclusion, I hope the Minister will look into further ways in strengthening the family support system and implement the consumption tax only on non-essential goods.

Mr Deputy Speaker, Sir, I wish to support the financial policy moved by the Finance Minister. Sir, I would like to offer some observations and comments with regard to the Budget Statement given by the Finance Minister. It is a question of jargon whether the Minister termed some charges to be tax revenue or non-tax revenue. In the eyes of the taxpayer, what matters is what he is charged. Whether it is foreign maid levy or taxes on motor cars, this tax is what matters to them because what is given up in taxes or levies he has a reduced disposable income. As much as the nation and the private sector need information for prudent financial management, I think we owe it to the individual taxpayer to give as comprehensive and complete an information as possible. There are gaps in the Budget Statement on some items - the question of motor cars and certain proposals with regard to property tax on HDB flats. I thought it would have been better if the individual taxpayers have all this information at one go rather than to let them have on a piecemeal basis and to let them guessing and speculating because they also need and want to budget their own personal expenses. Sir, I would like to talk on the subject of pensions because I have not heard any Member speaking on this. I think pensions could be a very large expenditure in the longer term because, as we have heard from the Finance Minister, the expenditure on pensions is expected to rise by $22 million to $264 million. He did not tell us how large the number of retirees is. The problem of pensions is the unpredictable nature of pensions expenditure. Pensions are based on last drawn salaries and it is not quite possible for us to plan the long-term liability if we continue to expend on pensions as is currently done, ie, from revenue and expenditure. In fact, there ought to be a reserve provided for long-term liability and there ought to be the advanced provision taking into account such things as the age structure, the number of people under the pension scheme and what is the last drawn salary likely to be because the amount can increase fairly dramatically. It is opportune for us to consider this, Sir, because the Government has indicated that they wish to review the salaries of key civil servants who most probably are people under the pension scheme. I would suggest that instead of providing for a large supplementary benefit in the form of pensions when civil servants and Government officials retire, it might be better to provide them while they are in active service. This will also address the issue that there are disparities in the retirement benefits or pension received which differ from the year in which one retires. Sir, a related matter is the Minister's indication that there will be a limit on tax deductions. I am aware that statutory boards provide for special pension funds for statutory board employees and the contribution to the pension fund could be very high, much higher than the limit imposed by the new policy. What is likely to happen is that without any increase in salary, because of the statutory provisions, senior pension officials in statutory boards are likely to pay higher income taxes because the contribution to the approved pension fund exceeds the statutory limit. The next item on the tax deduction for CPF contribution is of course in relation to the Government's desire to encourage flexi-wage policies. The limit of 4.8 months is a bit too low considering that we certainly want to encourage companies to have lower operating costs and to reward their employees on the basis of bonus payments and that they are rewarded by linking their rewards to that of company performance. The next item, Sir, is that on consumption tax. Previously, there was the tax of 10% on water charges in excess of $20 per month. Now it is 5% on combined PUB charges in excess of $40. Arithmetically, it is correct because both pay $2 if the minimum is reached. But arising from this conversion, the Government receives an additional tax of $7 million. It appears to me, Sir, that $40 appears low as the minimum limit because I think the bulk of the people who are affected are the low-income earners and it is my plea that in this conversion exercise as much consideration be given to the lower income category. Of course, by the introduction of the consumption tax, we have made our tax system to be more regressive and less progressive and in a more regressive income tax system obviously it hits the lower income category more. Finally, Sir, on the matter of property tax. Though it appears that there would be a reduction on the property tax rate from 23% to 16% across-the-board, I am rather uncomfortable with the announcement that there will be a new system of assessing HDB residential properties. We are aware that the majority of Singaporeans, 86% of Singaporeans, live in HDB apartments. Is it that more of us who live in HDB flats are likely to pay more in the process? It would appear that the well-off who live in private properties, and maybe the foreigners, are benefiting from this reduction in property tax. Notwithstanding the above that I have stated, Sir, I support the motion.

( In Mandarin): Mr Speaker, Sir, the long awaited tax reliefs and rebate for the family and children have now been announced in the Budget. The wife's relief which has not been revised for a long time will be raised from $750 to $1,500. For the subsequent third and fourth births, a family will now enjoy a rebate of up to $20,000. These measures will certainly help to reduce the living expenditure of a family. There are people who encourage marriage and procreation. This is correct. For our continued economic development and prosperity, our birth rate must be above replacement level so that with an increased population, we will have enough human resources to carry on with our economic development and nation building. In this respect, I hope that more responsible young men and women will marry and set up their families early. For those who can afford, they should have more babies in order to contribute their share and help the future development of our country. Mr Speaker, Sir, may I add that if we had implemented these increased tax reliefs and rebate concessions in the 1970s when our economy was bouyant, we need not now have to worry about our low birth rate, late marriages, procreation rate not reaching replacement level, aging population and future manpower resources. However, now that the government is giving more concessions to encourage more babies, the question is, will it lead to more blessings? I doubt so. For those who are well to do, there will be no problem. But, for those in the lower income group, the tax concessions may not help them very much. Every parent looks forward to a good education and a successful career for their children. At the same time, they are also worried about their children's study, whether they will be able to overcome the pressures of a highly competitive education system and do well enough to successfully complete their education. With the rising cost of living, more women also have to go out to work to supplement the family's income. Added to these problems, if there are insufficient creches and no maternity leave for the third and fourth child, and with the high cost of employing a maid, I doubt the government's call for women to have more babies would be successful. Government should therefore set an example and take the lead by building more and better creches in all the new towns to enable working mothers to have their children taken care of in nearby well-organized creches while they are at work. Maternity leave should also be granted to working mothers for the third and fourth child. The government should legislate to enable female employees in the private enterprises to enjoy such benefits. Futhermore, we should also allow such companies tax deductions on expenses spent on the creches. This will not only encourage the private sector to set up creches but will also enable working mothers to work with peace of mind therby encouraging them to have more babies and, at the same time, increase productivity and contribute to our human resources and economic progress. Mr Speaker, Sir, the company tax has been reduced to 32% from 33%, a reduction of 1% which is an insignificant figure. Perhaps the Minister for Finance feels that since we had an economic growth of 8.8% in 1987 and a growth of 11% last year, our economy has fully recovered and that a small reduction in our corporate tax is sufficimot as we are still quite competitive. But, our present high corporate tax is uncompetitive compared with other countries in the region and may deter foreign companies from using Singapore as their regional centre for their businesses. From a long term point of view, if Singapore wants to develop a conducive environment for commercial and industrial enterprises, then our company tax must necessarily be further reduced. If we can reduce our corporate tax to say, around 25%, we should be able to attract more foreign companies to Singapore and to promote our country as a regional, commercial and financial centre. Multi-national corporations from countries in the Asia-Pacific region where the political situation is not so stable and where there is a strong currency appreciation resulting in high cost of operating their businesses will relocate their business operations and come to invest in Singapore. To grant one year's tax concession for machinery depreciation on automation is a correct measure. While in fact we are having labour shortage, for our long term interest, we cannot rely too heavily on foreign labour. Therefore, by encouraging the commercial and industrial enterprises to automate and mechanize is the best policy. Industrial automation and mechanization will help increase production and make our goods more competitive in terms of quality and price on the inter-national markets. Just like Singapore, Japan does not have any natural resources, yet she is able to high-tech products such as cars, electronic audio-visual goods, cameras, computers soft and hardware and others. These products are all competitive in quality as well as in price and which have already made inroads into the international markets. Because of their modern production methods such as automation, computerisation in design and manufacturing and high-tech operation techniques, they are able to increase production and yet reduce the cost of the products even in the face of the appreciation of the Japanese Yen. Now they are turning towards even more advanced high-tech and high value-added products such as high grade semi-conductors, electronic calculators, televiews, fax machines, office and electronic equipment and communication systems and so on. These products though very expensive yet are competitive enough on international markets and had earned for Japan some US$91.8 billion in foreign exchange last year. Mr Speaker, Sir, in order to succeed in our industrialization other than having people with knowledge in high-tech and modern commercial and industrial management, we must also have other highly trained creative industrial personnel capable of innovative thinking and production. It is not difficult to train up mechanical and production engineers and also other professional people. But that is not enough. More importantly, we should have talented, creative and innovative personnel who are able to improve on our products and invent new products so that we will be able to achieve new and better technology in order to help our country into an advanced and industrialized nation. Mr Speaker, Sir, the government has allotted $100 million for various government departments and statutory boards as funds for research and development. This is a timely measure and a step in the right direction. We must continue with our efforts to encourage and develop more people with talent who can invent and innovate to come forward. In this respect, government should encourage students in the higher institutes of learning such as the Singapore and Ngee Ann Polytechnics by awarding those students who are creative and have invented some outstanding projects or giving the institutes research funds for such students to venture and complete their inventions. We should perhaps give some invention awards or prizes to those inventors who have made contribtions of inventions in the fields of science and technology, industrial machinery or production techniques in order to encourage such talents. Mr Speaker, Sir, since independence, our economy has progressed rapidly, and our reserves have also accumulated up to $33.3 billion now. Growth in our financial circle, banks and enterprises has also increased much. From the total assets of our four local banks and the development investment by local enterprises for the past five years, the figure for 1984 was $494 million, 1985, it was $232 million, 1986, it was $253 million, 1987 it was $295 million and 1988 it was $348 million on record. There are also many big enterprises worth more than $100 million. We can see from these figures that we have enough local investments and funds to promote the growth of our industries. With the addition of some few hundred sizeable companies under the government, we should have the financial strength and be confident enough to emulate Korea and Japan in forming multi national corporations. The government should encourage and assist local enterprises with poten- tials, good management skills and with strong capitals and the necessary technology to develop into multi-national companies and to even go overseas to progress further into the international markets. This will strengthen our commercial and industrial development and help our local companies make inroads into the international markets. Mr Speaker, Sir, although we do not have any natural resources, we should make use of our well ecucated people and develop our country into a human resource centre. With our experience in economic development and nation building for the past few decades, we have asquired the necessary expertise to support our services. We have developed our country not only into a manufacturing centre and a trading entrepot, but also a centre of scientific innovation and advancement. Thus, we should be able to carry out all these expertise services and advanced programmes and consultation in various fields such as public housing construction and management, port establishment and urban redevelopment, transportation management and telecommunications and in other fields like banking, medical services, etc. We should be able to provide such services to help our neighbours in their economic development and further promote regional economic prosperity and political stability. Mr Speaker, Sir, in the past, we have been developing and building successfully with significant achievements in various fields such as politics, economy, education, defence, urban redevelopment, public transport, industrialization, tourism, port facilities, etc. We have great achievements in various fields and we have been praised by many countries. But we nust not be complacent and take our success for granted. We must continue to work together with concerted effort and vision. We should steel ourselves and be resolute to proceed ahead, and obstacles to develop further and to achieve our goal in our nation building so that our country can continue to progress and our people will be able to enjoy a better livelihood year after year.

With the consent of Mr Deputy Speaker and the general assent of Members present, Question put, and agreed to. Resolved, That the debate be now adjourned. - [Mr Wong Kan Seng].

Debate to be resumed on what day, Dr Hu?

Tomorrow, Sir.

So be it.

Resolved, That Parliament do now adjourn. - [Mr Wong Kan Seng.] Adjourned accordingly at Twenty-seven minutes past Four o'clock pm.

asked the Minister for National Development whether there are any plans to develop the vacant land next to the Potong Pasir Community Centre at Potong Pasir Avenue 2.

The vacant land next to the Potong Pasir Community Centre at Potong Pasir Avenue 2 is a reserve site. HDB normally maintains a number of reserve sites in each New Town. This is to cater for future and unforeseen needs of the community living in the New Town. The site will be developed when a clear use arises.