Mr Speaker, Sir, I am greatly honoured to be given this opportunity to move the motion of thanks to the President. Sir, I beg to move, That the following Address in reply to the Speech of the President be agreed to:- "We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the First Session of this Parliament.". Singapore has made impressive socio-economic progress over the last 25 years. We have succeeded because under the PAP Government, we have got our fundamentals right. What are these fundamentals? They are meritocracy, a free-market economy, racial harmony and industrial peace, maximising our human resources and equal opportunities instead of equal rewards. The PAP Government has also ensured that every Singaporean is guaranteed certain rights, such as subsidised education and health care. Most Singaporeans enjoy subsidised housing as well. And the Government builds public facilities and infrastructure for the common good. Our market-oriented economic policies and the ability to attract foreign investments have created many new jobs - and better paid ones. Every Singaporean, therefore, has the opportunity to earn a decent income. A free-market economy is necessary for economic development. As we have seen from the historic events of the past few years, with the collapse of communist and even socialist governments, no nation can afford to isolate itself from market forces any longer and hope to survive, let alone prosper. It is like a marathon. The result of the communist system is a levelling down, causing people to plod along at an equal pace. The free-market system enables everyone to run as fast as they can, and reap the rewards accordingly. Obviously, when that happens, the nation's competitiveness reaches its maximum. In Hong Kong, for example, everyone knows that they have to fend for themselves. That is why Hong Kong is so competitive. Singapore has, therefore, increasingly adopted market-oriented policies. And this gradual re-direction has not been made so much out of choice, as out of necessity. The only way for a small nation like Singapore to prosper is to compete with the rest of the world to produce the goods and services that people want. That means we have to do better than them. A friend from the shipyard industry, who just came back from Hong Kong, told me that the shipping companies there are now going to China for ship-repair. Their prices, compared to ours, are dollar for dollar. That means more than three times cheaper. And if they time the arrival of spare parts well, the repair will not take much longer than ours. So if China is catching up with us, we better run faster. This is not to say that we are advocating an everyone-for-themselves society, like Hong Kong, and that we have abandoned the practice of providing certain social guarantees. That would bring about many social ills. Using the analogy of a marathon again, in the free-market situation, there will be those who run much faster and those who run slower and find it difficult to catch up. What we do is to help the slower runners run faster without holding back the faster runners. The result is then a levelling up. This is not easy. We certainly cannot do it by redistributing income. That will cause us to lose talented people and undermine their will to achieve. Singapore is perhaps unique among nations in its ability to fuse market-oriented strategies with fundamental social assurances. Despite its growing market orientation, the measures to help those who are falling behind remain very much in place, if not expanded. As has been the case since independence, no Singaporean today will be deprived of the basics of life, in terms of housing, health care, education or equal employment opportunities. But at the same time, the Singapore Government does not believe in giving handouts. If an able-bodied person chooses to remain unemployed when jobs are readily available to him, the Government will not resort to giving him welfare handouts as in other countries. This would not only demean his dignity by depriving him of the right to employ himself usefully and make a contribution to society, but, even worse, it would weaken his will to work. The result of all these sound policies has been a rapid increase in standards of living for Singaporeans in every sphere of our lives, a visible transformation of our society. Even President Yang Shangkun of China marvelled at the quality of our HDB flats. And yet Mr Chiam claimed that the average Singaporean is not as well-off now as he was in the 70s. Mr Speaker, Sir, the key question as we enter the Next Lap is to what extent we wish to manage the various spheres of human activity based on free-market forces and meritocracy, and to what extent we should help those falling behind to level up so that the gap between the top and bottom will not be ever increasing. Ideally, as a society progresses, one would hope that the need for ever present safety nets will eventually disappear. Superficially, one might be naive enough to think that this need is far less in Singapore than it was, say, 20 years ago. But we do not live in an ideal world, and such an assumption is dangerous and ultimately quite incorrect. While many Singaporeans have become increasingly affluent over many years of economic prosperity, it is equally true that there is still a segment of our society that lives below a level compatible with the level of prosperity experienced by so many Singaporeans. And it is to this group of people in particular that we must cater; for if we fail to do this, the Next Lap will not be run by all. Some may just give up the ghost and become social 'dropouts'. And that can only work to Singapore's detriment in the long term. The President's Address was thus timely and appropriate as much of it addressed the needs of the less socially mobile, of those who are increasingly concerned about the rising costs of living, and to help them level up to progress. The Edusave scheme, the new Housing and Health Care programmes are more than 'expanded safety nets'; they are investments in our people. If one examines these measures carefully, the underlying principle is always one that will generate returns rather than incur losses for the nation. That is why the Government has stated categorically that it will only subsidise investments such as education and infrastructure, but not consumption expenditure, which will not be sustainable in the long run. Let us look at the simple example of the cost of water. We can either make people pay in full for what they use, or subsidise. But if we subsidise, the money still has to come from the people - in the form of taxes. If the consumption is the same in either circumstance, then it does not matter whether we subsidise or not. But will consumption actually be the same? I think not. It is obvious that when water is subsidised at lower rates, people tend to use more. That in turn means that more taxes would be needed because of the increase in consumption. And that means we are actually less well-off. Subsidising consumption will encourage spending and waste. It will also create demand for more. That is not good for us. I was therefore surprised to read recently that a writer to the Forum page actually called on Singaporeans to spend, spend and spend to prime the economy. That is precisely what the Americans have been doing. Look at where they are now. Do we want to deplete our savings and reserves unnecessarily? However, many Singaporeans are fearful of the Government's intention to privatise statutory boards such as the PUB and Telecom. They fear that these companies will want to make profits and that therefore prices will escalate. These fears are not totally unfounded. If the intention of the Government is to enable these statutory boards to be subject to market forces and function as efficiently as possible, then perhaps corporatisation is sufficient. Why do I say that? In privatising, it is natural that shareholders expect the company to make profits. Otherwise, why would they want to buy the shares? In corporatising, the ownership is still with the Government, which owes it to the people to keep prices low, while not incurring any losses. When the provision of these services is monopolistic, this is all the more crucial. This is especially important when the functions of these statutory boards are to provide basic necessities of living. Any savings that can be passed on to the people may not mean much to the higher income group, but to those in the low income group, it means a substantial amount. Sir, privatisation and the introduction of a consumption tax can help us to develop a more efficient economy. There is no denying that. Privatisation generates competition and hopefully brings prices down. Consumption tax, with a corresponding reduction of income tax, encourages production and discourages over-spending. But these measures may result in greater income disparities. We must be careful that this is not allowed to occur to such an extent that the resulting social tensions become a destabilising factor. At this point, I would like to quote from a 1975 Confederation of British Industry report entitled "The Responsibility of the British Public Company". It reads as follows: "While law establishes the minimum standards of conduct with which a company must comply ..., a company like a person must be recognised as having functions, duties and moral obligations that go beyond the pursuit of profit and the specific requirements of legisation." This code of conduct should be embraced by all enterprises and individuals. In this way, social tensions will be minimised and our society will become more closely knit. Mr Speaker, Sir, let me now turn to the various measures contained in the President's Address. On education, I am glad to note that we are now helping students in the non-independent schools to level up without pulling back the development of the independent schools. The modifications in the Edusave scheme are the manifestation and result of Government consulting and obtaining feedback from the people. For instance, in a Feedback Unit dialogue I attended sometime ago, some suggested giving scholarships to independent school students because some families might not want to apply for financial assistance due to their pride. I think awarding scholarships is significant because we will then be sending a strong signal to all students that if they do well, they will be honoured. I am glad that scholarships are also extended to non-independent school students. Sir, Dr Lee Siew-Choh, the former NCMP in this House, in his speech on the debate on the last President's Address, commented on the Edusave scheme, and I quote from Hansard [Vol. 57, Col. 168]: "If the intention is indeed to help students, would not the funds be better channelled to improve education in general and to better equip and update all schools, so that every student will be better served with a more rounded education?". Similar views have also been expressed by others. The Edusave scheme will now make annual grants to Government and Government-aided schools. These examples, plus many others, show that the Government is indeed interested in people's views, even if they are from the Opposition, and will incorporate them if they help. How then can some people accuse the Government of insincerity? Why should they be angry when the Government does not adopt their suggestions? This is simply not fair to the Government. Sir, the fast pace of change in our economic development has left behind a large number of mature workers who have missed the opportunity of a good education in earlier days. They find it very hard to adjust to new circumstances. Independent schools and Edusave cater only to their children's future. But they need help now to earn a better living. We must step up our assistance to them in upgrading their skills. There is also an urgency in constantly training and retraining our workers. The rapid shifts in technology will dictate that all products, be they high-tech or low-tech, be increasingly produced with high-tech processes. Unless our workers are constantly trained and retrained, new high-tech processes cannot be adopted. However, many employers are not interested in training their workers because they take a short-term view of the immediate costs. Some workers may not want to attend training during working hours because of loss of income. In view of the urgency of skills upgrading, and the fact that both the companies and the workers will benefit from it, perhaps the National Wages Council, being a high-level tripartite body, should widen its scope and make specific recommendations on training such as the average number of days for training per employee per year and employer's expenditure on training. Sir, HDB is doing a good job in building better and better flats in the newer housing estates. The upgrading programme will also give an all-round improvement in the living environment for many HDB residents. I have seen the pilot upgrading project and am confident that the programme is workable. HDB residents should seize this opportunity to increase the value of their flats. Many shopkeepers, however, are unhappy over the increase in rentals for HDB shop premises. They are against using the highest successful bid as a yardstick for determining rental in a particular town. Some areas, such as those closer to an MRT line or a bus stop, could attract business more successfully than those that are a distance away. In fact, in my constituency, Hong Kah North, and within the same neighbourhood, some shops in a particular sector have changed hands three or four times in a period of 5 to 6 years. A 30% across-the-board increase without consideration of such factors is therefore unfair. Many shopkeepers find it very difficult to make ends meet as rentals already account for 30% to 50% of their operating expenditure. The rent increases will thus erode their profit margins, thus hindering their efforts to modernise. Fearing further rental hikes in future, many shopowners also express their desire to purchase their shops as soon as possible. It is excellent that HDB has decided to sell most of the shophouses to the tenants at market values with a discount. HDB should determine the market values fairly and provide loans at affordable terms to shopowners. Sir, the subject of Health Care is close to everybody's heart. No nation in the world has found the solution for containing ever increasing health care costs. If they have, it is most likely to be at the expense of health care quality. Many developed countries are experiencing serious difficulties in meeting health care demand. We are trying our best to tackle our problems without falling into the pitfalls which others have experienced. We should ensure that the subsidised rates for Class B2 and C wards continue to be affordable to the low income group. Perhaps the level of subsidy for treatment in these wards should not be fixed and should vary according to the income level of the patients so that the poorer patients will pay even less. That will be a great relief to them. The Medifund scheme is an additional safety net, to help the older Singaporeans who may not have Medisave and those who do not have sufficient Medisave. Obviously, it should only be used to provide for subsidised patients. When welfare schemes are directly administered by civil servants, they often become impersonal. Getting the community leaders involved in a committee to assess applications to Medifund is therefore a good idea. It will certainly improve the image and standing of community leaders and help build a more caring and closely knit community. The promotion of healthy lifestyles is an important recommendation of the Review Committee on National Health Policies, headed by Dr Aline Wong. It will greatly help us in our search for a long-term solution for our health care problems. A healthy nation maximises the potential of its people. The best way to keep medical costs in check is to get people to stay healthy. A healthy lifestyle would also increase people's chances of leading longer, happier lives for their own sake and that of their families. The policies to support this major national effort must necessarily be multi-faceted, affecting people's lives at school, in National Service, at the workplace, and even at home. It would require the cooperation of teachers, parents, Government officers, employers and unions. To motivate an individual to keep fit and stay healthy, knowledge about how one's own lifestyle will affect one's own health is absolutely necessary. Therefore, awareness must first be created. The role of the mass media in this is essential. The Government should also ensure that regularly updated health information be made easily accessible to all. The Ministry of Education has announced its Trim and Fit (or 'TAF') scheme for students in schools and tertiary institutions. I am sure we will continue to hear from more Ministries and organisations on their health promotion programmes. The achievement of all these goals will not be easy. It will require many years of constant effort. As a nation, we have managed to overcome obstacles more daunting than these before. It is crucial that we also succeed in this most worthwhile endeavour. Sir, I beg to move. Question proposed.