Mr Speaker, Sir, it is an honour to be given this privilege to move the motion. 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.". Mr Speaker, Sir, 65% of the voters voted for the PAP in the last general election, reversing a trend of the previous three general elections, a trend which the opposition had been counting on to carry them into Parliament in greater numbers. Instead, the election saw opposition parties humbled and decimated, so much so that the SDP, the main opposition party in the last Parliament, is no longer represented in this House. The PAP's success is based on its record of good Government. Singaporeans have found their standard of living improved for the past five years. In his 1992, 1993 and 1995 National Day Rally speeches, the Prime Minister had reiterated that Singaporeans' assets would be enhanced during his tenure. A series of asset enhancement programmes such as HDB upgrading and share ownership were introduced, benefiting a large majority of Singaporeans. Our booming economy has raised our per capita GDP to US$28,500, placing us amongst the top 10 countries in the world. Real wages have increased by 4-5% per annum over the past five years. Propelled by the increasing income, the appreciation of our homes over the last five years was unprecedented in Singapore's history. As inflation has been low and our currency remains strong, our purchasing power has increased dramatically. The Institute of Management Development, a Swiss business school, has ranked Singapore equal with Japan in terms of purchasing power parity. With such a strong record, it was no surprise that the voters supported the PAP. Mr Speaker, Sir, the results reflect the trust and confidence the people of Singapore have in the Prime Minister and his Cabinet. As we are poised at the threshold of the new millennium, our people have given the PAP a renewed mandate to lead them into the 21st century. They have endorsed the vision of the PAP Government for this term of Parliament, namely, Singapore 21, with its five pillars: create wealth, share success, invest in the young, care for the old, and build ties. Mr Speaker, Sir, Singapore's competitive advantage lies in our ability to figure out how to organise ourselves more efficiently and effectively than others. The process is simple. We identify where we are. We determine where we want to be. Then we implement a gap-closure plan to get there. Nothing fancy, just a step-by-step systematic approach. While the recipe is simple, to implement it nation wide requires strong leadership, clear minds, focused and consistent execution. Being simple, it is also a recipe that others could copy. A good example is our Operational Headquarters strategy which has been quite successful in attracting multi-national companies to establish their OHQs here. Malaysia adopted the same strategy and has succeeded in attracting several major MNCs, including the software giant Microsoft, in direct competition with Singapore. We welcome other countries to emulate us. We support their effort to improve the standard of living of their people. The world will be a better and safer place if our neighbours are also prosperous. Still, Singaporeans should realise that competition will become even stiffer in future. Now that Singapore is amongst the richest economies in the world, the question is how do we continue to enlarge the economic pie and raise the income of our people. We may be rich in terms of per capita GDP but Singapore cannot be considered a developed country as we lack depth in R&D and other capabilities that will ensure continued demand for our goods and services. Being rich also means that the cost of doing business in Singapore is now comparable to those in the developed countries. In a recent dialogue session of the Feedback Unit, chaired by Dr John Chen, on the President's Address, the high cost of doing business in Singapore was a main concern of the participants. They reflected that high office rental is one of the main components. Secondly, the use of the pricing mechanism by the Government to achieve policy objectives, for example, COEs, is another factor that causes the cost to rise in Singapore. Their concerns are also reinforced by the recent slow-down in our economy. The economic growth for the first quarter of 1997 was a slow 3.8%, with manufacturing registering a minus 6.7%, the third quarterly decline in a row. By economic definition, in fact, manufacturing should be in recession. While this is partly due to weak global demand, increasing business cost is definitely a contributing factor. Mr Speaker, Sir, the message is quite clear. While we must continue to become more efficient, that is no longer enough. In many areas, we are already rated No. 1 in the world and have reached the point of diminishing returns. Consider, for example, the much acclaimed baggage delivery system in Changi Airport. Already we have achieved the target of delivering the first bag on the belt when the first passenger reaches there. There is little strategic value to do this any further. The Government's strategy here is to move our economy up the technological curve. The National Science and Technology Board is provided with ample funds. Good progress has been made, and more remains to be done. Let us look at the number of Research Scientists and Engineers (RSEs) per thousand in the workforce, a statistic commonly used to gauge a nation's strength in R&D. In the five-year period from 1990 to 1995, the number of RSEs increased from 27.7 per thousand to 47.7 per thousand, an increase of 72% or an annual growth rate of 12%. Still, we are 13% behind the UK, 18% behind Germany, 36% behind the US and 41% behind Japan. Even amongst the NIEs in the Asia Pacific region, we are 17% behind Korea and 22% behind Taiwan. We are also investing in our IT infrastructure, including Singapore One, a $80 million project involving 31 companies. The spread of the Internet is probably the most important event in the post-industrial revolution. With more and more information accessible on-line, the future belongs to those proficient in surfing the Net. Only those tapping the resources on the Net will discover new business opportunities. Thus, it is most heartening that the Government has announced a $2 billion IT plan for schools. Our citizens' proficiency in the use of computers will ensure that Singapore will remain in the forefront and ahead of the competition. Even in R&D, high cost is a deterrent. Several US R&D operations in Singapore have closed down over the last several years and relocated their R&D operation back to the US, citing high cost. The recent shut-down of Apple Design Centre is a good example. As cost increases, we no longer can depend entirely on MNCs to develop our R&D capabilities. We need more home-grown companies, such as Creative and Aztech. We need more young men and women to take up science and engineering to produce the next generation of techno-entrepreneurs. Here, Sir, we face an uphill task. Young people are naturally attracted by the financially more rewarding careers. In all modern economies, the closer one's job is to the management of large sums of money the better is the pay package. Old favourites like lawyers and doctors are still very popular, with fund managers and remisiers increasing in favour. Young people are also choosing accountancy, business studies and shying away from the technological areas like computer science, engineering, manufacturing and other technical disciplines. Yet they need to be convinced that science and engineering are also rewarding career choices. In terms of pay, this choice should be as good as being a lawyer, doctor, remiser or a financial analyst. Yet, the Government has limited the number of new lawyers and doctors through various administrative measures implemented since 1993, thus ensuring that these professions will continue to enjoy high income levels. On the other hand, the Government has been generous in granting Employment Passes to foreign engineers and software professionals to satisfy surging domestic demands. While this enlarges the pool of talents, it will also increase the competition in these careers and moderate the wages. Are we sending mixed signals to our young? Though technology is important, we should not ignore the opportunities in other sectors of our economy such as financial services, legal services, life sciences and medical services. Here, I found the views expressed by Ms Ho Ching, CEO of Singapore Technologies at the 31st AGM of the Institute of Engineers on 17th May 1996 quite enlightening, especially her views on the supply of doctors and lawyers. She proposed that if we consider the region as a catchment area for our medical services, then the previous assumptions in arriving at the demand and supply balance of doctors in Singapore could be thrown out of the window and the number of doctors could be increased. Coincidentally, Sir, the Minister for Health has announced on 25th May 1997 that NUS will increase the annual intake of medical students from 150 to 180 next year and to 200 the year following, citing existing shortage till the year 2000. Mr Speaker, Sir, if we look at the American economy that sustains a high income level, we will discover that its cultural exports such as clothing, footwear, food, music and movies are very strong. Singapore should explore similar opportunities too. In this respect, I am glad to note that the Government has set up a Committee on Singapore's Competitiveness involving two Ministers and one Minister of State as well as many titans from the industry. The long term strategies charted by this Committee will be our roadmap for growth. The cornerstone policy of our Government to share success is each citizen's right to purchase heavily subsidised HDB flats twice in a lifetime. Other asset enhancement schemes such as the various HDB Estate Renewal Programmes like Interim Upgrading Programme, Main Upgrading Programme and Selective En-bloc Redevelopment Scheme are also well received by the people. This home-ownership programme has brought about a stakeholder society in Singapore. The percentage of home-ownership in Singapore is the highest in the world, something no other society has been able to emulate. In a way, the home-ownership programme has been overly successful. MND released a survey that showed that 35% of those who changed flats downgrade to roll-over and realise their substantial capital gain in the form of cash. Some used the money for retirement and for their children's education. I think no one will quarrel with that. However, others used their capital gain for consumption like buying a car and going for vacation. Besides being unwise, this behaviour is against the intent of the HDB housing progamme. Thus, the new measures to cut HDB waiting time, namely, longer time bar and new resale levies, are timely. However, almost every Singaporean is affected by these new rules. I hope the Minister for National Development would be compassionate in dealing with those HDB applicants who are caught in a financial bind as a result of these new measures. Mr Speaker, Sir, the President has said that our education programme is already very good but we can do better. How? By increasing the information content or teach our young to be more creative. Already, parents are telling me that the pressure in primary school is getting greater and greater. They told me that they must employ tutors for their children. If they were to leave their children to depend entirely on the instructions in the classroom alone, they would not make the grade. I understand that the Minister for Education is reviewing this very question. Presumably, as a result of the high stress, some Singaporeans are weighing immigration as an option to a slower paced society. This is reflected by the Master Card survey conducted in June 1996. The survey shows that one in five middle-income Singaporeans wish to migrate to another country. Of those who express so, 38% choose Australia. While this could be just a wish, it also goes to show that the anchor of a fair number of Singaporeans to the soil could be loosened in a crisis. The President has advised us to expect rough weather. Where would the squalls come from? We do not have to look far afield. The recent furore raised by Malaysian political leaders over one single statement in the affidavit filed in the Tang Liang Hong's case showed that the bilateral relationship between our two countries is a minefield. Most Singaporeans find that the intensity of the emotions expressed by the Malaysians far outweighs the gravity of the statement on the crime rate in Johor Baru. Most Singaporeans of the post-independence generation are puzzled. On the other hand, for older Singaporeans, we know that this is a manifestation of the historical baggage resulting from the separation of Singapore and Malaysia in 1965. Mr Speaker, Sir, we are usually accused of being insensitive to their feelings every time Malaysian politicians find fault with us. Apparently, they place a high premium on being sensitive to the feelings of others. I would like our Malaysian friends to realise that we Singaporeans too have feelings and emotions. I am particularly unhappy over the perennial threat to cut off our water supply. Those Malaysian politicians calling to cut our water supply, regardless of the status of the person, were given extensive coverage in their media. I wonder whether the people of Malaysia understand the impact of such talk on the psyche of our people. Yes, Singapore is short of water while Malaysia is blessed with abundance. If not tapped, much of the water we import from Malaysia would have flown into the ocean anyway. Water is an accident of geography that we Singaporeans are handicapped with. We are not ungrateful to our neighbour for supplying the water. But it is a gratitude that would be better expressed on a foundation of friendship and trust. Singaporeans are sick and tired of this threat. Most of my constituents will support the proposed water rate increase to conserve water. As we all know, for Singaporeans to support price increase will show the resolve of our people in this very matter. We see water pipes on the causeway carrying water to Singapore. What we do not see is a virtual pipeline conveying large sums of money Singapore tourists and investors spend in Malaysia. The Malaysian Tourist Promotion Board's figures showed that in 1995, Singaporeans spent a total of $4.3 billion ringgit in Malaysia, about 50% of the total tourist spending. Malaysian leaders should realise that after their public display of anger towards Singapore, Singaporeans will instinctively avoid Malaysia. It is partly due to concerns for their personal safety but, mostly, I am glad to note that it is a closing of ranks among Singaporeans. Malaysia will probably one day become affluent enough not to be bothered whether Singaporeans spend money in Malaysia or not. Until then, Malaysian political leaders would have to consider this factor when it comes to choosing their words as it does not pay to use Singapore as a bogeyman. Since our independence in 1965, we have evolved along different paths as the Malaysians. While the Malaysians still conduct their politics along racial lines, the PAP Government has built a multi-racial society based on meritocracy and equality. We, Singaporeans, are very proud of our way of life. No Singapore leader would be able to command the respect of Singaporeans and remain our leader if he were to adopt an appeasement policy towards Malaysia, even for something as crucial as water. Our Malaysian friends should realise this and abandon their expectation of a dominant relationship over Singapore. The sooner they come to this realisation, the sooner could we build a stable and balanced relationship between our two countries. Better relationship is something that we all are hoping for given our geographic proximity and historical ties. Mr Speaker, Sir, when sudden squalls hit, only those with the courage and experience could weather the storm. Our post-independence generation has no experience of the trials and tribulations leading to our separation from Malaysia. As such, they lack the ballast to stay the course. As recent events demonstrate, relationship between two countries could plunge off a steep cliff without warning. How do we mentally fortify our people against such eventuality? Our young should be taught the forces shaping the birth of our nation that predates 1965, including the tumultuous years between 1963 and 1965, the racial riots, and our righteous call for a just and equal society. We should transmit to our younger generation the experience of those who have lived through these events. In this respect, the Government has taken the right step when our Deputy Prime Minister, BG Lee Hsien Loong, launched the National Education Programame for younger Singaporeans on 17th May 1997. The National Education Programme aims to foster in our young a sense of identity and pride of being a Singaporean. They must understand Singapore's unique constraints and vulnerabilities. When the post-war baby boomers' generation starts to retire, Singaporeans will enter into a period of rapid aging. As we cannot build enough old folks' homes to cater for our old, the only feasible way to take care of them would be to continue to accommodate them within the community they live in. For those without families, we need to build a stronger community support system. We must also look into opportunities for the successful among us to extend a helping hand to the needy. The Government has already identified the Community Development Council (CDC) as the vehicle to achieve these goals. Two full-time Mayors, Dr Ow Chin Hock and Mr Eugene Yap, have been appointed. By the end of this year, CDCs will be established in every constituency. With the CDCs, we will be progressing forward to fulfill the other two pillars of Singapore 21, namely, to care for the old and to build ties. Singapore is a unique place. We have built a robust society based on the principle of meritocracy. We have strong leadership, a society without corruption. Today, we have the financial resources accumulated over the past 32 years to build a highly creative and dynamic society in future. This Parliament will be the one which ushers Singapore into the new millennium. We will face new challenges and unexpected crises as we enter into the 21st century. As this Government implements programmes to fulfill our vision of Singapore 21, we will build a prosperous and at the same time a more caring society. We shall overcome any hurdles as we march towards the future provided we remain a united people. Question proposed. 12.58 pm