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PERMISSION TO MEMBERS TO BE ABSENT 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: Name From To 1997 1997 Mr Lee Kuan Yew 29 July 29 July Mr David T. E. Lim 3 August 7 August Mr Chay Wai Chuen 4 August 7 7 August TAN SOO KHOON Speaker Parliament of Singapore
ORAL ANSWERS TO QUESTIONS - SPURIOUS INVESTMENT SCHEMES - (Protection of Singaporeans) asked the Minister for Finance if any steps are being taken by his Ministry to protect the average Singaporean from spurious investment schemes, such as those offering huge returns from ordinary agricultural products; those operated by bucket shops churning investors' money and biting off big chunks of "commission" for that churning; and wild claims of investment value made by time-share resort sellers.
ORAL ANSWERS TO QUESTIONS - SPURIOUS INVESTMENT SCHEMES - (Protection of Singaporeans) Mr Speaker, Sir, Government is aware of the problems posed by the unregulated soft commodities firms which trick Singaporeans into investing in commodities by promising them very high returns on their investments. The Commercial Affairs Department investigates and prosecutes operators of spurious investment schemes, especially if they have the intention to defraud. In addition, Government is studying the possibility of using legislation to regulate such activities. The Ministry is also looking into the relevant legislation with a view to regulate time-share resorts. One possibility is to make it a statutory requirement for promoters of time-share schemes to issue a statement disclosing various information to members of the public in the same way that promoters of other investment schemes are currently obliged to do so.
AFFORDABLE BUS SERVICES asked the Minister for Communications (a) whether he will consider giving more rebates to poorer Singaporeans to make basic bus services more affordable for them and (b) whether the Government will give more subsidies to provide the infrastructure and capital stock of public bus services so that bus services can remain viable yet affordable to the average commuter.
AFFORDABLE BUS SERVICES Mr Speaker, Sir, in answer to Dr Toh's question, let me first of all say that our bus fares today are affordable. They remained unchanged between 1982 and 1990, and they increased only modestly after 1990. Average fare increase between 1990 and 1996 was 1.3%. The CPI increase over the same period was 2.6%. The fare increase was below CPI, and CPI in turn was below the increase in wages over that same period, which was 7.4%. So the increase in fares has been way below the increase in wages. In the recent fare revision approved by the Public Transport Council, bus fares were revised upwards by between 5 cents and 10 cents for commuters who use cash. There was no fare revision for commuters using fare-cards on airconditioned services. This constitutes about one-third of bus commuters. So one-third of bus commuters were not affected by the recent fare revision. As for MRT, only the single-trip cash fare was adjusted upwards by 10 cents. Again, those who opted for fare-cards were not affected, and this constitutes about 70% of MRT passengers. Even as we strive to provide a wide range of public transport options for our commuters, we will continue to ensure that basic fares remain affordable. The Public Transport Council has recently adopted a framework to ensure that any future bus or MRT fare increases will be in small, regular and controlled steps. From 1998, fare increases will be capped at no more than inflation plus 2% for the next three years. There is therefore no need for a special bus fare rebate. On the issue of Government subsidy for scheduled bus services, our bus operators have been able to keep bus fares affordable because of strong Government support over the years. Besides providing the roads and expressways for the buses to travel on, the Government also bears the cost of bus infrastructures, such as bus interchanges and bus stops. The bus operators pay a nominal rent of $12 a year for each bus interchange. The bus operators only need to pay for their maintenance. In addition, the Government helps scheduled bus operators keep their cost low by exempting their buses from COEs and imposing low vehicle taxes. Last but not least, the Government has taken various steps to improve the operating environment for scheduled buses. By controlling the vehicle population, by implementing road pricing and establishing bus lanes, scheduled buses are able to move quickly and reliably, thus saving the bus operators valuable time and money. The bus companies have therefore been viable under this operating environment with minimal fare increases over the years.
(Paper Cmd. 2 of 1997) Order read for consideration in Committee of Supply [5th Allotted Day].
(Paper Cmd. 2 of 1997) Head I (cont.) - Resumption of Debate on Question [28th July, 1997], That the sum to be allocated for Head I of the Main Estimates be reduced by $10 in respect of Code IA 1500. - [Mr Chay Wai Chuen]. Question again proposed.
(Paper Cmd. 2 of 1997) Sir, before we adjourned yesterday, Mr Chay Wai Chuen asked whether my Ministry has any plans to introduce other port operators when PSA is corporatised. Sir, the bulk of PSA's container business is in transshipment cargo. In this area of business, PSA is not a monopoly. It has to face very keen competition from other ports in the region. This external competitive pressure has kept PSA on its toes up to now and it will continue to do so after corporatisation. The singular objective of PSA must be to meet the challenge of external competition. The Government has no plans at the moment to license other port operators to compete internally with PSA. But the Government will reserve the right to introduce more port operators. There will be no exclusivity clause when PSA is corporatised. Should the situation change and internal competition become necessary, the Government will license other operators to compete with PSA. I turn now to the queries from Mr Goh Chee Wee concerning ALS and COEs for taxis. Mr Goh requested yesterday that we allow taxi drivers with the ALS/RPS licence to charge their passengers a fixed fee for entry into the CBD or for travelling through an RPS gantry. Currently, taxi drivers are not required to purchase this licence. If somebody wants to take a taxi to enter the restricted zone, he has to pay $2 or $3, whichever the case is, for the daily licence. However, if the taxis already possess the licence, they are not allowed to charge passengers extra. This is due to the current manual road pricing or ALS system which has its limitations. One such limitation is that it is not able to charge per entry or per pass which is the fairest way of charging for usage. Ideally, taxis entering the restricted zone should pay per entry if they are doing so on their own accord or if they are carrying a passenger, then the passenger should bear that charge. This will be possible with the ERP. In the transition from now till then, I think there is a case to be made for allowing taxi drivers to recover the cost of the ALS or the RPS licence from their passengers. So I would suggest to Mr Goh that he put up a proposal to the PTC for its consideration, based on the principle of cost recovery. Mr Goh also asked whether we can fix the COE price for taxis. I am not in favour of this proposal. The Vehicle Quota System (VQS) has allowed our vehicle population to grow at an average of 3% per annum since 1990, while at the same time keeping congestion under control. For the VQS to work, we have to apply it without exception to all vehicles, including the taxis. Like other vehicle owners, transport operators and companies, taxi operators must bid for addition of taxis to their fleet. Nevertheless, in recognition of their role as a form of public transport, we have given taxi operators the concession of not having to bid for COEs for the taxis that they are replacing. Instead of the COE, we have allowed them to pay the prevailing quota premium (PQP) instead. So this gives them the certainty of securing COEs when they want to replace their taxis. In addition to this, they only need to pay the PQP for Category 2 vehicles, although most taxis belong to Category 3. I turn now to the question on motorcycle COEs, posed by Dr Toh See Kiat. Dr Toh was concerned that motorcycle COE prices have risen from $1 in 1994 to about $3,000 today, and he asked whether it is affordable. Sir, like all other categories of vehicles, motorcycle COEs are in limited supply. We limit the increase of our total vehicle population to 3% a year, and then we apportion this increase across all the different categories in as fair a manner as possible. Then, finally, we leave it to the market to decide how much each person is prepared to pay for that COE in different categories. So if you ask: are motorcycle COEs affordable? I guess the answer depends on who you ask. But the fact is every month, all motorcycle COEs are taken up and there are many others who are in the queue. Are they expensive? Again, it depends on who you ask. But let me just point out that at today's prices, the motorcycle COE is less than 10% of the COE price of the smallest car category, the Category 1 car. Yesterday I pointed out that traffic engineers advise us that a moving motorcycle on the road will occupy something like 70% road space of a moving car. On that basis, in terms of relativity, you could argue that motorcycle COEs are not expensive relative to other types of vehicles which use our roads. Finally, of course, I must point out that the revenue from COEs is used for the public good, to build infrastructure, to build new MRT lines, LRT lines, for the benefit of all Singaporeans, including the lower income group. Nevertheless, I take note of Dr Toh's concern for the small motorcycle owners and we will take this into account when we review the motorcycle tax structure. Dr Toh also suggested that we try out the pay-as-you-bid system for COEs. He mentioned that car dealers are pushing up COE prices in order to squeeze out parallel importers. First of all, I think we need to remind ourselves that whichever system is used for tendering, whether it is the lowest strike price method that we are using today or whether it is the pay-as-you-bid system that has been suggested, COE prices are ultimately determined by supply and demand. If the demand for cars, or motorcycles for that matter, outstrips the supply, then the prices will go up, and vice versa. In the short history of the COE, we have seen several cycles of boom and bust, where prices had gone up and then come down fairly sharply. Our analysis of the COE bidding shows that the majority of the successful bids cluster around or close to the lowest successful bid. If you are interested in some numbers, around 70%, 80%, sometimes 90%, or even more of the bids are within plus or minus 20% of that lowest successful bid. So they all cluster around that bid. Therefore the pay-as-you-bid method may not necessarily lead to lower COE prices which, I believe, is the reason why many people are clamouring for this method. I have announced yesterday that LTA will be releasing information on the quotas, instead of a year-to-year basis, two years at one go. And this is to allow vehicle owners to better plan their purchases. 12.45 pm So, before we consider switching to other methods, for example, the pay-as-you-bid method, I think we need to rethink carefully how the COE system works. The price of COEs is determined by supply and demand. We had many experiments. We had many changes to the quota system. We had curbed transferability of the COEs. We had changed the rules to stop double transfers. What did all these results show? There has been no permanent impact on prices. The quick fixes have only had a transient effect and demand will remain high so long as the economy is strong, so long as people have confidence in the future. And when that is the case, in a situation where we necessarily have to restrict the supply of COEs, prices will continue to remain high. But having said that, the way to moderate COE prices is really to maintain a steady supply of COEs, as high a supply as our roads can take. That is the long-term sustainable way to moderate COE prices. And how do we intend to do this? As the White Paper on land transport has set out, if ERP is successful in controlling traffic congestion and if we can get more people to make use of public transport, the less congested our roads will be and the more we can relax on the ownership, the more COEs we can release. By increasing the supply, we will be able to moderate COE prices. Again, let us concentrate on that because that is the long-term sustainable solution to moderate COE prices. Sir, may I now ask my Minister of State to reply to the rest of the questions in this cut?
(Paper Cmd. 2 of 1997) Sir, Dr Toh See Kiat yesterday asked if the Government's efforts at promoting information technology and telecommunications will be more focused by combining the agencies involved into a single entity. We do not see the need at present to combine the agencies into a single body as these bodies are coordinating the strategies well. The successful launch of Singapore One by Prime Minister Goh at Asia Telecom 97 in April this year is an example of inter-agency cooperation and coordination. Five agencies have pooled together their resources, their varied contacts and expertise to bring together the world's foremost players to participate in the Singapore One project. Info-communication is an example of the increasingly multi-disciplinary nature of modern technologies. Our competitiveness will be best served by our ability to coordinate and offer multiple one-stop services. Dr Toh mentioned the recent telecommunications service disruptions and asked if they could be due to a lack of investment in infrastructure. Let me assure this House that Singapore does not suffer from a lack of investment in telecommunications infrastructure. Singapore has consistently ranked highly in country comparisons of telecommunications infrastructure. In the last five years, SingTel invested $3 billion in Singapore's telecommunications infrastructure and it will continue to invest heavily in the years ahead. The Ministry of Communications and TAS take a serious view of service disruptions as they affect the economic and social activities of the nation. Hence, we have in place a stringent penalty framework against operators found responsible for service disruptions. The framework encourages the operators to constantly provide reliable services and to be more proactive in improving the resiliency of their networks. However, modern telecommunications systems are very complex. There may be situations where the service disruptions occur but are not due to the negligence of the operators. On the network outages brought up by Dr Toh, TAS has investigated every one of them very thoroughly. In the incident involving SingTel's CDMA trials, TAS' investigations revealed that the causes of the disruptions were due to negligence on the part of SingTel and its sub-contractor. SingTel Mobile was fined for its negligence. In the other cases, investigations revealed no negligence on the part of the operators. Apart from being fined, both SingTel Mobile and its sub-contractor had apologised publicly. TAS is currently working with the operators to institute preventive measures to reduce the potential of such problems and further improve the resiliency of the system. Dr Toh also asked whether Singaporeans will have Internet II. The Government adopts a technology neutral stand in licensing service providers. The service providers are best able to determine for themselves the type of technology or means that best meet customers' needs and give them an edge over the other competitors. This means that Internet access service providers have to consider and invest in the latest relevant technologies, including satellite or other delivery means, to provide the most innovative and best value-added services. The Government will help facilitate the introduction of such new technologies with its R&D and investment grants. The promotion of Singapore One by the Government to jump-start the development of a nation-wide multimedia broadband network is an excellent example. Singapore One will facilitate the introduction of Internet II. Sir, Dr Ho Tat Kin has asked about the security of our cellular phone system. TAS and the phone operators are keenly aware of this threat. They have taken appropriate measures to combat such illegal activities. For obvious reasons, it is not possible to go into details about what these measures are.
(Paper Cmd. 2 of 1997) Sir, may I clarify some questions with the Minister? The Minister has said that the motorcycle COEs are one-tenth of the COEs for cars. I wonder if the Minister would agree that per cc, actually motorcycle COEs are more expensive than car COEs, and there is this concern. I wonder if the Minister could assure the House that when we have COE bids, there is no sham demand created by parties that are interested in creating an impression of big demand. From the written answer, I saw, for example, there have been bids as low as $1 and $2 for cars. This points to frivolous bids to create a frenzy of demand. Is this being looked into? And for the Minister of State, my question is that Internet II requires a big pipeline and Singapore One may just be a trickle to fill up that pipeline. Are there perhaps plans to work with our ASEAN compatriots to, for example, fill up this pipeline so that together ASEAN can become a giga hub for Internet?
(Paper Cmd. 2 of 1997) Sir, Dr Toh made the point that on a per cc basis, the COE prices for motorcycles will be lower than for cars. Sir, as I explained at length yesterday, the intention of the road tax structure in the future is to base it on the apportionment of the cost that will be incurred by that particular vehicle, say, a car or a motorcycle which uses the road space. The intention is to move away from a basis like engine capacity to something more relevant to congestion, for example, the size of the vehicle. In this case, PCU will be used as a proxy for the size of a vehicle and cost of congestion. So with that intention in mind, I think the comparison of the taxes of motorcycles and cars on per cc basis would not be very relevant. As far as sham bids are concerned, I am not exactly sure what he means by "sham bids". But if I take the point that he has raised that there are bids of $1 for each of the vehicle categories, I have supplied the information to Dr Toh. If he looks at the chart, he will see that for every category and every month, there are always one or two bids of $1 or $2. So I will not regard this as sham bids in the sense that he has mentioned of creating unnecessary or false demand. These are just people who are trying their luck hoping that, by some extraordinary fluke that month, nobody will be bidding and he will be able to get a COE for $1.
(Paper Cmd. 2 of 1997) Sir, Dr Toh See Kiat is right. There is tremendous synergy if we can inter-connect several networks together. In this regard, the Government is actively promoting and encouraging this regional connectivity among the ASEAN countries and even further afield. But of course whether we can connect with the other countries' network or national information infrastructure (NII) depends on whether they are ready. We know that countries throughout the region are developing their own NII and therefore efforts are ongoing to try to bring the network together. For his information, Singapore One is currently in discussion with Thailand on an Internet broadband network linkup following PM's recent visit to Thailand.
(Paper Cmd. 2 of 1997) I beg to withdraw my amendment. Amendment, by leave, withdrawn.
(Paper Cmd. 2 of 1997) Amendment No. (3), Mr Chay.
(Paper Cmd. 2 of 1997) Sir, I am not moving the amendment.
(Paper Cmd. 2 of 1997) Amendment (4), Mr Chay.
(Paper Cmd. 2 of 1997) Sir, in view of the answers given by the Minister yesterday on the Electronic Road Pricing, I am not speaking.
(Paper Cmd. 2 of 1997) Mr Chew Heng Ching is not here. Mr Goh.
(Paper Cmd. 2 of 1997) Sir, I beg to move, That the sum to be allocated for Head I of the Development Estimates be reduced by $10 in respect of Code IA 5100. Sir, I would like to raise the question of impact of ERP on taxis. Again, I would like to declare my interest as a Director of Comfort group. Sir, when the ERP is implemented, it is only logical that the taxi commuters be required to pay in full the ERP charges on top of the taxi fares. A number of issues need to be resolved. For instance, how would a taxi driver charge the commuter for the ERP charges that he has incurred while on the way to pick up the passenger in response to a telephone booking? I would request that the LTA seek the views of the taxi operators and attempt to address all the anticipated problems before the implementation of the ERP. I would also request that the ERP for taxis be introduced in phases so as to lighten the burden of the drivers and the commuters as they adjust to the new system. To begin with, concessionary ERP charges could be imposed on taxis instead of the full rate applicable to normal vehicles. I hope the Minister would consider these suggestions.
(Paper Cmd. 2 of 1997) Sir, I am not speaking.
(Paper Cmd. 2 of 1997) Sir, since I have some time left in this cut, may I, before I reply to Mr Goh Chee Wee on the question of ERP, take this opportunity to enlighten the House about some data that have been gathered on the Road Pricing Scheme. I am doing this because I realise that there have been some comments from the motoring public about the introduction of the Road Pricing Scheme on the various highways and expressways recently, particularly on the CTE. So I beg your indulgence on that. 1.00 pm Sir, after we introduced the RPS on our three expressways - the CTE, PIE and ECP - the traffic speeds increased dramatically, especially on the East Coast Parkway and the Pan Island Expressway. For the CTE, we did not get it quite right the first time. So we had to make subsequent modifications. But after the modifications, the traffic speeds have picked up. Conditions have improved. I realise that many people have commented that road pricing merely shifts the congestion away from the expressways to somewhere else. Or it shifts the congestion from RPS hours to either before or after. And in both cases, they wonder what is the point of it all. I have asked the LTA to conduct traffic surveys before and after the RPS was implemented, and let me just share with Members some of the results of the survey. For the three expressways, about 7,000 or 16% of the motorists using the expressways stopped using these expressways during RPS hours after introduction. 7,000 represent about 16%. About 3,000 or almost half of them switched to alternative roads, major bypass roads, as a result of which, of course, the major bypass roads have become a bit more congested. The rest of them either changed their journey times before or after the RPS hours, or they switched to minor roads, or they went on to public transport, MRT and buses particularly. For example, the express buses that were introduced on the CTE showed an increase of about 40% in ridership just after they were introduced and today. So that is encouraging in that people are shifting. The increase in MRT ridership has not been as dramatic but it has also been steady. Other options that they have taken would be car pooling and perhaps some people would have abandoned their trips altogether. So it is encouraging to see these results, because this is exactly what the road pricing scheme has sought to achieve, not to move everybody away, but to move those people who would find it marginally not worth their while to pay the $2 to take the CTE, the ECP or whatever. It has, therefore, changed the travelling pattern of motorists,. It has encouraged them to take alternative forms of transport or, as I said, perhaps even not making that particular trip at that particular time. Another criticism that I have heard quite frequently is that this is another scheme for Government to generate revenue. Let me give the House some facts. When we extended the RPS to the CTE and the PIE in May this year, we gave away $36 million in road tax rebates. We expect to collect between $6 and $8 million in RPS fees. These are all annual figures. In other words, there is a revenue loss of about $28-$30 million a year. Let me say that if indeed this is a scheme to generate revenue, this is a very funny way of collecting revenue. The Minister for Finance is not here. I do not think he will be very pleased with me if I were to tell him that this is a scheme to collect revenue and I implement it in this way. Essentially, what we are saying, and what we are doing, is that we are giving money back to the motorists. And we are telling the motorists, "Please spend it in a way that you think is best for your own situation." And indeed urging them not to spend it on the ERP if they can help it. So let me repeat once again that this scheme is a scheme to manage congestion, and it is not to generate revenue. I now turn to Mr Goh Chee Wee's point about ERP for taxis. Yes, the ERP will affect all vehicles, including taxis when it is implemented. We will take into account the special circumstances of the taxis, in the sense that with radio charge, with radio phone bookings and so on, they will have to operate in a certain way. But I am reassured by the fact that the taxi companies have already taken some steps in this direction by changing their mode of operation, by introducing satellite booking systems and so on in order to help their taxi drivers to cope with the changes as and when it happens. But let me assure Members of this House that we will take the views of the various users into account. For example, in the case of taxis, we will phase in the ERP charges for taxis. Whether there will be concessionary charges or not, I think we will have to look at it in the overall context of the road tax revision for taxis. The same thing will apply for scheduled buses and also for commercial vehicles, because they do play an important role in our economy. What we will do is that we will phase in the ERP rates for these vehicles as well. This would help them to adjust to ERP. Sir, I expect that there will be some initial uncertainty and unhappiness when ERP is implemented. I can quite understand this because, after all, we are talking about changing people's behaviour, and we all do not like change. We do not like to change because it is difficult and disruptive. But I submit that we have to make these moves, because if we see problems ahead and we see the possibility of a crisis, we have no choice but to change. It is the same as somebody who suffers a heart attack. If he does not change his lifestyle, he does not change his habits, then I think the chances of him enjoying a quality lifestyle will be seriously jeopardised. The question is, of course, whether we are facing a crisis now. We see many examples of cities in other countries which they do nothing or they do something but it is too late, and they are faced with gridlock. Major roads are seized up. People and goods do not move or move very slowly, if they do. So I submit, let us do something now. Let us not wait for a crisis because experience tells us that by then, it may be too late or the solution may be even more painful. I close this answer by reminding Members that our transport policy is not only about COEs, ERP and so on, painful though these may be. They are part and parcel of a total integrated package, a package which includes building of new roads, new expressways and the building of new MRT and LRT lines. It includes continual improvements in bus services, taxi services and so on. All these measures come together. They come in a package. They are inter-related. One does not work without the other. For example, if you are talking about improving public bus services, then we have to manage congestion on the roads, which means road pricing and bus lanes, although motorists will find this inconvenient. And we cannot manage the demand for cars if we do not improve public transport. So Members will realise that we have to do both together. I ask Members of this House and the motorists to take a long-term view and to support all these measures in order that we can build a long-term sustainable quality transport system for ourselves.
(Paper Cmd. 2 of 1997) Sir, the Minister has been very persuasive in his answer. I think the man-in-the-street does have this dilemma that the price of the RPS forces or at least gives him the message that he must get off the CTE, PIE and so on, and move on to the other streets or use public transport. But he says, "You ask me to take public transport and you increase public transport prices. So what message are you really giving me?" Could the Minister respond to that, please?