Hansard, 1998-03-09

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: NameFromTo 19981998 Mr Lim Swee Say6 Mar8 Mar Mr Lim Boon Heng6 Mar8 Mar Mr Peter Chen7 Mar8 Mar Mr Davinder Singh9 Mar13 Mar 16 Mar19 Mar Encik Ibrahim bin Othman12 Mar13 Mar Dr Tony Tan Keng Yam14 Mar25 Mar TAN SOO KHOON Speaker Parliament of Singapore

The following Question stood in the name of Mr Chiam See Tong - 1. To ask the Minister for Labour whether, in the light of the economic down turn and the possibility of more workers being retrenched, the Government has taken any steps to retrain workers, who are retrenched, for alternative jobs.

Question No. 1.

There are presently several Government-supported schemes to assist retrenched workers in enhancing their employability. Under the Skills Redevelopment Programme (SRP) funded by Government and managed by the National Trades Union Congress, employers who recruit retrenched workers could apply for training grant to upgrade the skills of the workers so that they could meet the needs of the new jobs. The SRP is targetted at less educated workers in their 30s and 40s, who may face greater difficulty seeking re-employment. Government's support is up to 80% of course fees to be paid by the Productivity and Standards Board (PSB) from the Skills Development Fund (SDF) and up to 70% of absentee payroll subject to a maximum of $4.20 per trainee-hour, paid by EDB. Sir, I have been informed that to date, 1,230 workers have gone through or are undergoing certifiable training under the Skills Redevelopment Programme. Of these workers, more than 50% are above the age of 40 and approximately 70% have below Secondary 2 education. Assistance is also granted to the retrenched workers under the tripartite "Back to Work" Programme launched in September 1996 by my Ministry together with the Productivity and Standards Board, the National Trades Union Congress and the Singapore National Employers Federation. The assistance includes helping the retrenched workers find suitable jobs and encouraging employers to employ retrenched workers through a training grant which enables the workers to undergo Core Skills and Job Skills Training. Core Skills Training includes confidence building, personal effectiveness and basic computer literacy. The training is fully supported by the SDF which provides a flat grant of $350 per trainee including an allowance of $100 to each trainee to help defray his meals and transport expenses. Job Skills Training is for the purpose of helping the workers to acquire specific skills required for the jobs. For such training, SDF will provide enhanced funding up to 80% of the course fees for external training programme or $4 per trainee hour for on-the-job training. Sir, in anticipation of more retrenchments in the coming months as a result of the regional financial crisis and slowdown in the economy, my Ministry has recently set up a Tripartite Panel on Retrenched Workers comprising representatives from the EDB, NTUC, SNEF, PSB and my Ministry itself to assist retrenched workers seek re-employment. The Panel will also encourage employers to take advantage of available training incentives to improve the skills of their workers during the lull period. Workers, on the other hand, are urged to take training and skill upgrading seriously so that they can remain employable especially during an economic slowdown.

As I understand from the Minister, 80% of the cost will be funded from the Government. Is it the intention that the retrenched workers should bear the 20%?

Mr Speaker, Sir, under the SRP which is targetted at the older and less educated workers, we have identified workers who may be retrenched and who need alternative jobs. The programme is available to them while they are still being employed by the existing employer and, as a result, with Government's support, 80% of the cost of retraining them for some other jobs would be borne by Government, while the other 20% would be borne by the existing employers. If they are already recruited by a new employer, the new employer can take up the other 20% of the cost.

May I ask how much of this has been brought to the notice of the workers?

Mr Speaker, Sir, I think the SRP is a very well publicised programme. Since December 1996, when it was first launched by the National Trades Union Congress, they have done a lot to publicise the programme, ie, the benefits and advantages of participating in the programme. In fact, if the Member had taken the trouble to read the NTUC News dated 6th March ---

I do not read it!

I think the Member should from time to time read it to keep himself apprised of the good work that is being done by the NTUC and the massive effort that the NTUC has been involved in in trying to help the workers. There are a lot of details in the report and they are all publicised. It is also duly reported in the media what NTUC has been doing to help workers to upgrade their skills. In fact, I would like to mention that in this report of 6th March, it was stated that they have signed up quite a large number of employers under the new phase to launch further Skills Redevelopment Programme for their workers and currently, a total of 76 companies are participating and 5,000 workers are involved in the scheme.

asked the Minister for Trade and Industry what measures already exist, and what additional measures are needed, to safeguard against the occurrence of a massive blackout like that which recently affected Auckland, New Zealand.

The cause of the recent cable failures in Auckland, New Zealand, has yet to be established. According to some reports, they were probably caused by the abnormal drying up of the soil surrounding the cables due to the prolonged hot and dry summer. Consequently, heat could not be conducted away from the heavily loaded cables fast enough. The cable temperature could have risen well above its design specifications, leading to the cascading cable failures. Such form of cable failure is unlikely in Singapore as PowerGrid Ltd, the electricity network operator in Singapore, has instituted the following measures: (a) Firstly, PowerGrid has built a strong transmission network. For example, the CBD network is supplied by multiple 230 kV sources and is interconnected to provide contingencies to take care of unforeseen cable failures or damages. (b) Secondly, PowerGrid's 230 kV transmission cables are installed with backfill designed to ensure efficient heat dissipation and avoid thermal overloading. (c) Thirdly, with advances in technology, Distributed Temperature Sensing (DTS) cables are now available which enable real-time monitoring of the actual cable temperature. PowerGrid has installed such DTS cable on a 400 kV cable and will be installing it on two additional 400 kV cables and future 230 kV cables. PowerGrid has a rolling 10-year development plan to expand and renew the network to meet Singapore's electricity demand in a reliable, secure and timely manner. For example, PowerGrid is currently developing a new 230 kV substation at Peng Nguan Street to reinforce the network in anticipation of the CBD's rising demand in the years to come.

asked the Minister for Communications whether he will defer the implementation of the Electronic Road Pricing (ERP) system after 1st April 1998, in view of the current difficult economic conditions which will impact local businesses.

Mr Speaker, Sir, road pricing is a major pillar in our long-term strategy to keep our roads free-flowing. Our roads are our economic arteries. If they get clogged, transport costs will go up, businesses will lose time and money, and the productivity of our workers will suffer. Road pricing has been implemented in Singapore since 1975 with the Area Licensing Scheme, and recently with the Road Pricing Scheme on our expressways. It has been successful in managing the traffic on our roads. But more needs to be done because on one hand our vehicle population is growing, yet on the other hand our land area remains constant. The Electronic Road Pricing (ERP) will replace both the ALS and the RPS schemes. It is more flexible, more efficient and in the long run, more cost effective. It marks a shift in emphasis, from charging for vehicle ownership to charging for usage. It will encourage more judicious usage and keep our roads congestion free. There is no reason to delay the start of ERP on 1st April because of the current economic situation. In fact, the current slow-down should spur us to implement policies to strengthen our advantages, like our transport system, in order to maintain our economic competitiveness. The ERP and the new vehicle tax structure revealed on 4th March serve this objective. The new tax structure and the package of ERP rebates benefit most motorists in general and businesses in particular. For example, Additional Registration Fee (ARF) for tourist buses will be reduced from 55% of Open Market Value (OMV) to 5% of OMV, Registration Fee (RF) for goods vehicles will be reduced by as much as $13,000, and ARF for engineering plant vehicles will be waived. The annual road tax of most commercial vehicles will also be reduced substantially, by as much as $2,000. Where taxes have been increased, we will phase in the increase over three years. To help businesses adjust to the ERP system, we will phase-in the ERP charges for all commercial vehicles over the next three to four years. In effect, many vehicle owners will pay lower road pricing charges than what they pay today. Commercial vehicle owners and fleet operators will benefit even more if they exercise their ingenuity and discretion. They can reduce their ERP bill by planning their routes and scheduling their delivery times carefully, and pooling transport resources where possible.

Sir, may I ask the Minister whether his Ministry has done any studies or comparison for companies that are involved in the transport trade, ie, companies that are going to use a lot of vehicles for transportation? What would be the impact of the ERP on the total expenses before and after the implementation of the ERP programme?

Mr Speaker, Sir, for companies that are involved in transport and logistics like freight forwarding, there will be a substantial reduction in their upfront cost as well as in their road tax. But on the other hand, the ERP will add cost to the usage of the roads. How much additional costs they will incur as a result of ERP is difficult for us to say because it depends very much on their usage. But ultimately, ERP is a tool for us to help businesses to readjust the way of doing business and to encourage them to use the roads more judiciously, as I said. In the long run, if they succeed in doing so, it will even be more beneficial to them. Indeed, companies like the bus companies and the taxi companies have already started to make use of technology, to make use of new ways of operating their business in order to adjust to the ERP. In so doing, they will reap not only the full benefits of the upfront tax reductions but they will also help to reduce their ERP bill.

May I also ask the Minister that since the ERP programme is going to be revenue neutral over the longer term, in effect, would it not actually be loading more onto companies that have to be involved in the transport trade compared to what they are now, because they are even now loaded against in terms of usage? But after the implementation of the ERP, the loading could even be heavier.

Mr Speaker, as I said, if everything remains the same, if transport companies continue to run their business in the same way without making any adjustment, then the answer is yes, there would be additional cost to them. But this is precisely the reason why we are implementing a new system which is charging for usage rather than charging for ownership. Because there is now a rebalancing of the structure and there is now a shift of charges from ownership to usage, there will be, at the very beginning, upfront savings for these companies that the Member talks about. It is now a question of how those companies adjust their business in order to try and keep as much as possible of those savings that have been given to them.

Will the Minister agree that motorcycles are used by the working class and people with low incomes to get to work? In view of the possible pay cuts, even in basic pay, and their loss of income, why should the Ministry not consider deferring the implementation for motorcycles at least, until the situation improves?

Sir, the Member obviously has not read the newspapers or the LTA webpages, in the same way that he has not read the NTUC News. I would recommend that he does so before he asks this question, because if he had, then he would realise that in fact 90% of the motorcyclists, with the phasing in of road taxes and with the ERP rebates that will be given to them in the first few years, will actually either be paying lower road taxes or no road tax.

Sir, can I ask the Minister whether the Ministry has done any survey on the impact on the cost of goods and services to consumers with the implementation of ERP?

Sir, we have not done any detailed surveys on the impact of ERP on goods and services. But the Ministry of Trade and Industry has given us an indication that, all things being equal, there will be a marginal impact on the cost of doing business. Indeed as a result of the massive tax rebates that have been given to businesses, particularly businesses involved in transportation, freight forwarding and so on, hopefully there will be some passing back of those savings to the consumers.

Sir, since the Minister intends to implement the system anyway, can I can ask why do we not bring the implementation date forward to the 1st April? The scheme has already started to create a lot of confusion to the motor traders. Since we plan to implement it, why do we not implement it on 1st April?

May I ask the Member what confusion he is talking about?

Especially in the area of commercial vehicles, with the registration fee coming down by a drastic amount, a lot of companies that have placed orders for vehicles are waiting or cancelling their orders. This has actually created problems for motor traders, and there is a wait-and-see attitude. In my opinion, since we have decided to implement the scheme, we could bring forward the implementation date.

Sir, the package of tax reductions and the introduction of ERP was done as a total package. In other words, the implementation of ERP is actually going to be effective in a very small way on 1st April, a very small way, but in a more widespread way from 1st September. Therefore, the LTA formulated this package of measures to also be effective from 1st September. As regards motorists holding back their purchases, as far as those who already have COEs in hand are concerned, what I would term old COEs, there is really no reason for them to hold back their purchases because those with old COEs will not be allowed to register their vehicles under the new tax regime. That would be unfair to those who have already registered using the old COEs. Old COEs already available have to be used to register vehicles using the old tax regime. So there is still business to be done. As regards people holding back purchases of new vehicles, the Motor Traders Association and other parties have made representations to the LTA. The LTA is now studying these representations and it will consider these views and an announcement will be made one way or another very soon.

Sir, is the Minister aware that motorcyclists will eventually pay higher charges for road usage? The fact is that they will have to pay much higher road tax after the phasing in of road tax after five years. In view of the motorcyclists' income, is the Minister of the view that the system is equitable to them?

The Ministry has looked at the position of motorcyclists very carefully because we realise very well that people who own motorcycles are people who generally belong to the lower income group and who need to use their motorcycles for business. The fact is that more than 80% of motorcyclists today do not pass through any ALS or RPS point. This finding is based on surveys as well as on the sale of ALS and RPS coupons. In other words, 86% of motorcyclists do not pass through any of these points. What that means is that any rebates and any tax savings that will arise as a result of this package will be beneficial to them. It will go straight to their pockets because they do not have to pay anything upfront. Secondly, another 10% of motorcyclists pass through the ALS or RPS points once. So, if we implement ERP and if the rates are more or less the same as what they are today, again, there is really no difference from what the situation is today. And any rebates that they get will also go straight to their pockets. So it is the very small group of people, about 5% or so, who use the RPS and ALS very often, yes, they will have to incur higher cost. But as I said, this is the purpose of the road pricing scheme. This is the purpose of electronic road pricing which encourages people to save and penalises people who use our roads during congested hours more heavily. It is precisely for that reason that we are implementing ERP. It is not to make the scheme revenue neutral for each and every motorist or motorcyclist. Therefore, it is incumbent on companies and motorcyclists to now relook at the way they are doing business. That is the whole idea of the scheme. It is not meant to be a painless scheme for everybody. If that were the case, we might as well not have implemented it, because this scheme is meant for people to change their driving habits. But in the formulation of the scheme, we have taken pains to make sure that the pain for motorcyclists is minimised, and we have done so in several ways. We have looked at the PCU ratings. We have looked at how motorcyclists should be taxed in relation to cars. We have taken the smallest number to compute their road tax. We have looked at small motorcycles as opposed to big motorcycles. We have looked at the motorcyclist who owns a 200 cc motorcycle and below and taxed him differently from somebody, say, who owns a Harley Davidson, and we phase in the increases, if any, over three years. All this, taken together with the road tax rebate and phase-in, means that effectively 99% of motorcyclists actually do not pay any more taxes. In fact, if you look at the calculations which we have done, motorcyclists owning vehicles below 350 cc actually will pay zero road tax over the new few years. Five years later, they would have adjusted. But, as I said, this scheme is not meant to be a standstill for motorcycle taxes. That I must admit.

Sir, if I may revert to the Minister's reply to my question on delaying the implementation of the ERP for motorcycles, would he agree that his answer is really no answer? Because in the case of road tax, they might probably have already paid or it may not be due for some time. But in the case of ERP, it is a present-day charge, that they keep paying every day when they have to go through the gantry.

Sir, as I have already indicated, the majority of motorcyclists, in fact, over 80% do not pay. 10% pay once, which they are already paying today. So the Member is talking about the 5% of motorcyclists who use it regularly. As I explained to his colleague, Mr Low Thia Khiang, it is up to the motorcyclist himself to start to readjust his way of operation. If you are a motorcyclist who use the congested roads in the CBD five times, 10 times or 20 times, why should the rest of the motorcyclists who do not use the roads have to pay? Why do they not get the benefits?

They may need to go through it.

If he needs to, then he pays for it.

Sir, as a follow up to my earlier question, if the school bus operators were to increase their charges unnecessarily, what action would the Ministry take?

Sir, the school bus operators will also not incur higher taxes. They will also incur lower taxes; again, as part of the total package. So there is really no reason for them to increase any of the bus fees, for at least this year and the next few years.

Sir, would the Minister agree that eventually the motorcyclists will be paying more than what they are paying now? With the phasing in of higher road tax for the motorcyclists, what is the rationale for phasing in a much higher road tax scheme than at present?

Sir, basically, when we did this exercise, we started off with a blank sheet of paper. I said in Parliament, and I said to the Motor Traders Association and various interest groups, that this is an opportunity for us to start off from basics, to see how different types of vehicles, different sizes, different cc, different seating capacity, how much each vehicle should pay for using our roads and for causing wear and tear of our roads. We started off with a blank piece of paper. We did not look at the existing tax structure. How much should a big car pay as opposed to a small car? How much should a bus pay relative to a motorcycle and so on and so forth? There is a whole range of vehicles registered on our roads today, 680,000 of them, ranging from very small 100 cc bikes, all the way to very heavy goods vehicles, the semi-trailers and so on. We are starting off, as I said, with a blank sheet of paper. We are looking at the right tax that each vehicle should pay based on (1) traffic considerations; and (2) based on what I would call social equity considerations, meaning if you drive a bigger car, you should actually be paying a higher tax than a smaller car. If you ride a bigger motorcycle, you should be paying more than a smaller motorcycle. We put all these things together and we came up with a basis for charging different vehicles. In the process, we realised that for some vehicles, they should be paying lower tax, eg, goods vehicles. For other vehicles, they should be paying higher tax. For example, motor-cycles. Motorcycles' tax has not been changed for decades. Some of them pay $20 a year in tax, which also has not been changed for decades. But that is where we are today. How do we go from where we are today to what each vehicle should rightly pay based on traffic and social considerations? For all those who are going to pay less, there is no problem. It is a question of charging the new rate for them and they will enjoy the savings. Good luck to them. But those who are paying more, we have taken the decision that we will phase in these increases where there is an increase, and the motorcyclists belong to this category that they will have to pay higher road tax. That is a fact based on their contribution to road usage and other considerations like social equity and so on. So a 1600 cc bike or a 1200 cc bike will pay $620 a year instead of $300 a year for those big luxury bikes. A 400 cc bike will pay $180 a year instead of $80 a year, an increase of $100 a year. The smallest bike, say, the Honda 125 cc , instead of paying $30 a year, will have to pay $100 eventually. So motorcyclists should be paying $100, $180 and $620 relative to other vehicles on the road. That is how we derive the new tax structure. To minimise the pain and to phase in the increases, we have done it over three years. On top of that, we are giving the ERP rebates. You put all these things together, as I said, the net result is that motorcyclists and many other vehicle owners will over the next couple of years actually be paying less road tax than what they are paying today. Of course, yes, this will be phased in. Motorcyclists will have to adjust to these increases over three years in paying the new taxes. But that is because, as I said, under the new tax regime, this is what they should rightly be paying. We have not adjusted the tax rates for many, many years. This is the overall review that we are undertaking and this is the net result of that review. But we have recognised that motorcyclists belong to several different categories. The bulk of the motorcyclists in Singapore are 200 cc and below. For them, we are actually charging them a tax which is less than what they should actually be paying. So we have also shifted that downwards. For 1000 cc bikes and above, we have made no adjustments. No special consideration for them. They are paying the correct taxes for motorcycles relative to cars. So with these adjustments, with the phasing in, and with an appropriate choice of the PCU unit, we believe that we have adopted a fair, consistent and rational basis for taxes for motorcycles as well as for all other vehicles. This is the total package that we are implementing together with the ERP.

Mr Speaker, Sir, may I seek a clarification from the Minister for Communications regarding revenue neutrality for this exercise. I read from the Minister for Finance's Statement that overall the Government expects to achieve revenue neutrality for this exercise in about eight years. Is this the target set and whether in fact the new charges levied will be reviewed and increased or decreased depending on the target set in terms of eight years? Also on the question of revenue neutrality, whether in fact that should be a target by itself or whether it cannot be based on a formula of net gain for road users if traffic usage on the road is under better control.

When we formulated the new tax structure, we had to have some idea of what revenue impact this would have because we are talking about changes in not only annual road taxes but also upfront taxes. In establishing the new regime, we took into account the basic principles, which is what I explained in Parliament earlier where we are shifting taxes from ownership to usage, where we are taxing cars, buses and motorcycles relative to road usage, where we are talking about giving concessions to public transport vehicles and so on and so forth. But the most important principle for us was the last principle of revenue neutrality. Because without that principle we are not able to arrive at numbers. We can only talk about principles, but we have to arrive at new numbers, new taxes, for different classes of vehicles. It is not a target. It is an indication of what our intention is for this exercise, ie, it is not an exercise to raise revenue, but it is an exercise in changing the way we use and charge for the use of our roads with the intention that this new regime will keep our roads free-flowing. On that basis, we have made the shift. We have reduced upfront taxes. We have put it into ERP and usage charges. But how much to charge? We have to get the calculations done. That calculation was done on that basis of revenue neutrality over a period of five to eight years. Why five to eight years? It is because the current estimate is that with this new package, we will be revenue negative for the next five years, which the Finance Minister has said, to the tune of slightly over $1 billion. So $200 million negative every year, even taking into account the increased ERP revenues. How is it going to be neutral? It is going to be neutral if we can, and I certainly hope we can, issue more COEs. Because one of the benefits of this scheme is that we are able to, if we can spread the load and get motorists to use the roads less, actually increase the allowable COEs over and above the 3%. If that happens, then the additional revenues and the additional taxes as a result of that will help to offset this package. But it is not a target. The ERP charges will be levied based on traffic conditions. It will not be based on revenue consideration.

Sir, the LTA has declared that one of the objectives of the ERP is really to free up the school bus market and that there will be more competition so that there will be no possibility of cartels fixing prices at unreasonably high levels. It appears that ---

Order. Dr Toh, are you making a speech or asking a question?

I am coming to the question, Sir. It appears that the private bus owners have now indicated that they are not interested in coming into the school bus market. Will the Minister care to enlighten us on this?

I am not aware of what the Member has said just now that they are not interested in coming into the market.

asked the Minister for the Environment whether his Ministry will consider giving a grace period of, say, 6 months to a year before levying the proposed penalty of $2,000 in violation of the recent ruling governing the use of giant joss sticks.

Sir, last October, I had indicated that the control measures in terms of size, number of giant joss sticks, and the distance from buildings could be put in place, and this was widely reported in the media. My officers then proceeded to work very closely with the various bodies in preparation for these control measures. They held discussions with 7th moon festival operators, temple management and grassroots organisations. My officials also met with members of the Singapore Religious Goods Merchant Association last October to inform them of the Government's plan to impose restrictions on the burning of giant joss sticks. These bodies have therefore been given adequate notice. The new control measures took effect from 1st March 1998, as announced.

Resumption of Debate on Question (27th February, 1998) [Allotted Day],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 1998 to 31st March, 1999. ". - [Minister for Finance]. Question again proposed. 1.10 pm

Mr Speaker, Sir, this year's Budget is a difficult one. One main reason is that because of the region's financial turmoil and the resultant economic slowdown, there is much public expectation of the Budget. The second reason is that while the region is indeed in turmoil, Singapore has held up quite well. We are not in a recession. At least, not yet. Hence, the Government cannot portray a picture of doom and gloom, and talk ourselves into a recession. In fact, the most striking feature of the Budget is what it is not! Unlike many other countries in the region, ours is not a crisis Budget. It does not have the word "crisis" written all over it. For the purpose of gathering views and reactions from the business community, our GPC for Finance and Trade and Industry had meetings with members of our Resource Panel, representatives of the International, Chinese, Malay and Indian Chambers of Commerce, and trade associations such as the Singapore Confederation of Industries, Singapore Association of Small and Medium Enterprises, Singapore Hoteliers Association and the Singapore Retailers Association. They have given us very valuable feedback and I wish to thank them. First of all, the various groups have suggested that there should have been pre-Budget consultations, in addition to the post-Budget meetings. This is a good suggestion. I feel that the relevant Ministries should consider this idea of having pre-Budget feedback meetings with selected industry groups. On our own, our GPC has decided that we shall conduct pre-Budget meetings for next year's Budget and convey the views received from the industry groups to the appropriate Ministries. The main message we received from our meetings with the various industry groups is that, while it is not unwise for the Government to be prudent and cautious, they would have liked to see a more stimulative Budget. They are disappointed that the Budget does not offer enough measures to help companies to cut costs. The Government has predicted the 1998 GDP growth rate to be between 2.5%-4.5%. However, many people in business felt that the economic slowdown is already here, and many individuals and companies are facing severe financial difficulties. The reaction is that the Government has chosen to adopt a wait and see attitude. The reality of the situation is that difficult times have arrived. Many companies are facing the double blow of shrinking business and credit squeeze. The Government should not adopt a reactive stance, but rather a proactive one. Most prefer the Government to take a bolder and anticipatory approach by introducing more serious measures now to help revive the economy. I share their views. To verify and substantiate their positions, the Singapore Confederation of Industries (SCI) and the Singapore Chinese Chamber of Commerce and Industry (SCCCI) have conducted surveys among their members. The results they obtained was that about 60% of SCI members and 54% of SCCCI members (in both cases more than 50%) felt that their businesses would be badly affected this year. The same reaction is more or less felt by the man-in-the-street. People are concerned that with the economic slowdown, their take-home pay will be smaller. Some are fearful of the prospects of retrenchment or prolonged unemployment. To make matters worse, some are faced with the problem of higher family expenses and other costs, such as higher interest costs for mortgage loans. When people tighten their belts, the contraction effect will ripple through the economy. The slowdown will be further aggravated. What the business and ordinary people are saying is: why not recognise the problem now and introduce stimulative measures immediately. The comforting point is that the Minister for Finance has specifically said that he would introduce off-Budget measures, whenever necessary, to tackle problems that may arise or when the economy worsens. Mr Speaker, Sir, allow me to elaborate on some specific measures which I feel the Government could have considered or introduced in this year's Budget or consider them as off-Budget measures. For the individuals, the following measures could have been looked into: Higher income tax rebate Many people are puzzled why the Government has reduced the income tax rebate from 10% to only 5% this year. The resultant higher tax payable means that people will have less disposable income. They will spend less, which in turn will affect the retail and other consumer trades. Lower consumer spending means that the slowing economy will be further depressed. The retail industry has been facing poor business in the last three years, and the outlook for them for the next one to two years would not be better. In contrast, during the mid-80s recession, the Government actually gave a 25% rebate on income tax in the 1986 Budget. I presume the objective then was to offer various tax reliefs to individuals and companies to help stimulate the economy. We wonder why the Government took the reverse tack this time round. Why not retain the 10% level of rebate? Better still, if it can be increased to 15%. Relief on mortgage interests In the recent budget announced by Hong Kong's Finance Secretary, a new tax relief of HK$100,000 (approximately S$20,000) was introduced to help individuals get tax reliefs for their interest payments on mortgage loans. This tax relief was welcomed by the Hongkongers as it was targeted to help the "sandwiched" or lower-middle income earners who are faced with high interest costs for housing loan mortgages. As Singaporeans are also facing the same problem of rising interest rates on their housing loans, I would like to propose that the Finance Minister could consider a similar tax relief for interest payments on mortgage loans. This tax relief will be of great help to the younger families. Residents of HDB estates may have less need for this relief as they get loans from the HDB at low preferential rates. For young families that recently ventured to purchase private properties, they will benefit from this tax relief. Moreover, while they are paying substantial income taxes, they are not enjoying the rental and S&C rebates given to HDB dwellers. I would like to urge the Finance Minister to consider introducing this tax relief as an off-Budget measure, when necessary. As for the measures that can help the business sector, I have the following suggestions: Reduction in JTC/HDB rentals The Government has decided to freeze JTC/HDB rentals. While companies are relieved to hear this, they would have liked to see an actual reduction of, say, 10 to 15% in the rentals. Although it could be argued that the impact of the reductions would be minimal on a company's overall costs, I would say that any savings would be helpful during difficult times. Reduction in CPF contributions In the 1986 Budget, the Government made a 15% point cut in employer's CPF contribution, by suspending the 4% contribution to the Special Account and a massive 11% cut to the Ordinary Account. For this year's Budget, I feel that the Government could have considered a cut in the employer's contribution to the Special Account. I agree that it will not be wise at this juncture to cut the employer's CPF contributions to the Ordinary and Medisave Accounts. Otherwise, the reduction in the CPF contributions to these Accounts will adversely impact the employees' needs for housing and medical expenses. However, a short-term cut of the 4% contribution to the Special Account will not affect the employees' CPF receipts which are meant to meet their housing and medical expenses. The amount of savings to the employers from this 4% cut to the Special Account will be substantial and, in fact, will offer them much relief. My GPC members will have other suggestions to add to those above. Development of local talents Mr Speaker, Sir, I wish to move on to another topic that I feel is also very important. It is on the development of local talents. The Government has announced its intention to source for foreign talents to supplement the local pool. Singaporeans can understand the objective as commendable, as it will help Singaporeans to achieve a higher plane of growth. Especially during this period of turmoil in the region, there will be a large number of capable and hardworking foreign professionals, R&D personnel and technicians who wish to seek employment in Singapore. We shall benefit from their contributions if we can attract them to come and work here. However, Singaporeans are concerned about the competition from these foreign talents. The answer, I feel, is that while we wish to attract foreign talents, we must not forget to develop and maximise the potential of the locals. Therefore, I support the provisions in the Budget to continue to spend substantial sums on education and training. Naming of the bond-breakers Every Singaporean is a rare resource. The Government has set up several scholarship schemes to send our best students overseas to study. Upon their return, they can better serve the country. While we frown upon scholars who broke their bonds, the statutory boards, such as the EDB, should not have publicised the names of these bond-breakers. Students break their bonds for various personal reasons. Many successful local leaders, including MPs such as myself, have broken our scholarship bonds, but we continue to work and serve in Singapore. I object to publicising the names of the bond-breakers because it is an insensitive move that could lead to the alienation of the entire body of scholarship holders, their families and friends. Worse, if these scholars chose not to return to Singapore, there will be a greater loss to the country. In addition, such a callous practice does not jell with the image of an enlightened Government and a cultivated society. Moving ahead - Striving for a speedy recovery The current meltdown of the regional economies offers many lessons. As stated by Mr Claude Smadja, managing director of the World Economic Forum, every government in this region has to learn how to deal with a new animal in front of us, which is "the Global Economy". He said that because of the new information technology age, with instantaneous flow of information and funds world-wide, the New World Order demands constant up-to-date information with transparency of rules in the operating countries. Singapore has stood up very well to the test of the turmoil as we have an efficient, effective and honest Government with a high level of transparency of rules. The regional turmoil demonstrates that countries with less transparency of rules have suffered badly by the massive erosion of confidence and outflow of both foreign and local funds. There are threats, but the current regional turmoil also offers many opportunities. It is said that there will be abundant investment opportunities in the companies in the region around us. However, we must remember that major MNCs from Europe and America are also thinking of capitalising on the situation. They have large cash hoards, and will be scouting around for good buys in the region. In addition, there will be other healthy and strong regional companies which will also be looking for good investments. One disadvantage we are facing is that the Singapore economy and the local firms are pulled down by the famous or infamous contagion effect. We have to rapidly revive the domestic economy and restore confidence. We should pick ourselves up as quickly as possible. We must take this opportunity to move ahead - while the companies in the region are still trying to regain their balance but have not gained a foothold. I wish to quote a prominent local businessman who puts it graphically in Hokkien: "Pak lang puat lok long kow, goon nang em tang teh yi nang puat lok gi". It means, in English, "Our neighbours have fallen into the drain, we should not be careless and jump into the drain ourselves". I feel that instead of trying to walk gingerly across a plank to cross the drain, the Government should help to put out as many spring boards as possible, to enable Singaporeans and local companies to leap over the drain. To be able to source for investment opportunities in the region, our companies must first be able to get their shops at home in order, build cash reserves, then they can venture abroad. Conclusion Mr Speaker, Sir, may I conclude by congratulating the Finance Minister for preparing and presenting such a detailed and comprehensive Budget. Having heard the many feedback from the ground, I cannot help but to urge the Government that it is not time to be faint-hearted, it is not time to hesitate. The Government must watch the situation very closely, and have regular dialogues with industry groups and local organisations. When the need arises, off-Budget measures should be introduced before it is too late. Let us put on our spurs. The first runner off the mark will win the race. The early bird catches the worm.

Mr Speaker, Sir, thank you for allowing me to join in the debate on the Budget proposed by the Minister for Finance. Sir, last year, during the Budget debate, many Members made a call to the Minister to address issues related to the cost of doing business in Singapore and in particular, to give more consideration to the manufacturing sector and to the small and medium enterprises. At that time, when the interim Budget was announced, the business community did express the difficulties they were facing, but we were all hoping that this year, when the full Budget was announced, all their concerns would have been adequately addressed by an all-rounded Budget. While I can understand the Government's long-term vision and plan to make Singapore the financial and logistics hub in this region, I feel the Minister missed out a few very important sectors of the economy, especially the manufacturing sector, small and medium enterprises, the tourism and the retail sectors. The biggest disappointment, in my opinion, is that the Minister did not do much for the manufacturing sector which contributes about 25% to the Singapore GDP. This and the other sectors I have mentioned, have seen continual pressures for the last two years and are expected to be badly hit this year when the full effect of the regional crisis is felt by our businesses and our companies. So, in my opinion, the Budget is narrowly focused in the areas that the Government wants to grow and I am sure the intention is not to shrink the other important sectors. I, therefore, would have expected a telescopic focus from the Minister, looking at the bigger picture rather than a microscopic focus that ignores those sectors that fall outside the scope of focus. Sir, I feel that there is a perception gap between what the businesses in Singapore are seeing and what the Government has projected for the next one year. In his speech, the Minister stated that the electronics sector in the west, particularly in the USA, is set for recovery and growth and therefore he expects that the electronics-manufacturing sector in Singapore will grow. However, many companies, including large multinationals, are seeing the exact opposite. In fact, the semiconductor industry, which is one of the largest components of the electronics sector, is starting to see book to bill ratios coming down, which means that orders are coming down. Similarly, the disk drive industry is seeing a slowdown. The Commerce Department in the USA recently published, just a few days ago, figures that showed a drop of about 2.6% in January for electronic products shipped out of the USA. Factory inventories were also up by about 0.1%. I therefore am a little worried that we may not be aligned and hence the Budget may have been drawn based on statistics that may not be up to date, especially in this fast changing environment. The Government has projected a 2.5% to 4.5% growth for the Singapore economy. In my opinion, although this may turn out to be so for the overall economy, certain sectors of the economy may, in fact, go into recession later this year. This may happen in the manufacturing sector, especially for the electronic products area. The retail and tourism sectors are set to see one of the worst times in the last 10 years. What should the Government have done? In my opinion, the Minister for Finance could have been a little more proactive to anticipate a possible sudden downturn rather than waiting to react when it happens. In this environment of rapid changes, why should we wait for a crisis to happen? We must have learned from our neighbours that when it starts to fall, it will be too late to reverse things. As Mr Leong Horn Kee has stated, there are surveys done by the Chambers of Commerce and also the Confederation of Industries that about 50% to 60% of businesses expect to see a drastic fall in sales and profits this year. Also in the last few days, from the newspaper reports, we have seen very disappointing corporate results. So in my opinion, the Minister could have given the benefit of doubt to the businesses and the feedback that they have given about the tough times ahead. It is my contention that at worst, we over stimulate the economy a little should the situation not be as bad as predicted and at best, we could have avoided a crisis by acting very early. In either case, Singapore would have gained tremendously should the Budget have been more generous in helping businesses address competitiveness and the regional crisis issues. Although the Minister mentioned the possibility of off-Budget measures, I hope that he can clarify how fast he would be able to react and how will this be done. Businesses need to be assured that the help will come on time when they needed it most. Manufacturing Sector, SMEs and Regionalisation Drive - The Cost of Doing Business Sir, the cost of doing business in Singapore becomes an even more critical issue as the currencies of our neighbours have devalued and thus making these countries more attractive for investors because of the cheaper land and labour costs. I therefore feel that the Budget did not adequately address these issues and in particular, it did not address the needs of the manufacturing and the small and medium enterprises sectors, as I have pointed out earlier. I do not know the rationale for the lack of attention to these sectors, but I fear we may be giving the wrong signals to current businesses and potential new investors as to the importance they have to our overall economy. While the overall economy has slowed down and as competition from our neighbours increases, business costs in Singapore still remain high. As our neighbours become more competitive and increase their focus on the sectors of the economy which we are neglecting, they will be successful in attracting investments that otherwise could have been brought into Singapore. Worse, we may see flights of investments out of Singapore to our neighbouring countries. The small and medium enterprises form an important pillar of our economy, employing a large percentage of our workforce. The regional crisis has a bigger impact on them because these companies get jerked around due to their smallness. These companies need special help, especially for those who have regionalised in the last few years. While there are many Government schemes to help them, the feedback that we have got from most of them is that these schemes are so complex that they just give up trying to apply. We need to be more organised in helping the small and medium enterprises more effectively. Currently, I feel that the bigger companies, especially multinational companies, are the ones that truly benefit from these schemes. In the area of regionalisation, once again, I feel that the Government has been too quickly distracted by its narrow focus on a few sectors. Our long-term directions should still be to regionalise and to further develop the second wing of our economy. I therefore expected more to be done to encourage regionalisation, especially this is a good time for bargain investments in our neighbouring countries. Therefore, the lack of new initiatives in the Budget to encourage regionalisation was a let down. Furthermore, for companies that had already regionalised in the last two years, the regional crisis has badly impacted them in terms of loss of value of assets in the neighbouring countries as well as due to inability to collect debts. I was hoping for some temporary relief measures to such companies to tide over these tough times, such as provisions for losses in computing their taxes here in Singapore on a group basis. Sir, I would like to refer the Minister for Finance to an article that appeared in the Straits Times on 28th February 1998 that analysed why the Taiwan economy was able to weather the regional turmoil while strong economies like South Korea and Malaysia collapsed. In the final analysis, among other things, two of the most significant reasons are, first of all, the competitiveness of the Taiwan economy is due to the manufacturing sector and, in particular, the electronics and the semiconductor industries which have grown from a mere 2.5% in 1990 to 37.5% of the economy in 1997. Secondly, Taiwan was focused on many small and medium sized businesses rather than conglomerates or big companies, thus giving the economy flexibility compared to other countries who were focused on its large companies. While I am not suggesting that we emulate the Taiwanese economy, I do believe that there are many lessons that we can learn from them and apply to Singapore. Strong Dollar/Rising Interest Rates and Financing Problems Sir, today, while the Singapore dollar has depreciated only slightly against the OECD currencies, those of our neighbours have drastically devalued. Therefore, more than before, the strength of Singapore dollar becomes a bigger issue in attracting investments and in competing in the export of our goods. I believe that Singapore needs to re-assess the level at which our dollar should be, compared to other currencies around the world. We also need to moderate interest rate increases which have gone up about three times in the last six months. Banks are also tightening credit financing, thus making it very difficult for businesses that can still grow and be successful in the long term in getting loans. With losses made worse by the regional currency crisis, many companies are facing short-term cash flow problems. In this area, I would like to urge the Finance Minister to consider providing temporary measures to help those countries that are willing to restructure and by independent assessment are companies capable of growing and competing effectively in the world markets. These are companies which are facing transient problems, not permanent problems, and they need to survive through the next two years or so. I would like to make one suggestion, and I will be talking about the details when we discuss the various Ministries, and that is, to provide an equivalent to an IMF bailout package that was offered to Indonesia, for our own businesses here. This package can be in the form of bank loans with some Government backing. Others include various types of rebates that have already been mentioned. The temporary measures need not be handouts, but one-off type assistance that will not impact the long-term measures or policies of the Government. Property Sector This is one area where I feel that the Government has done too much. As I recall, the general tone of our Government policy has always been that we should let market forces decide the property prices. However, in the last few years, I have noticed that many incidences of Government interventions where sometimes we tempered with the demand and sometimes we tempered with the supply in a seemingly uncoordinated and piecemeal manner resulting in the sector being jerked around many times. I would like to encourage the Government to go back to the principle of `letting the market forces decide' and to be involved in only setting general directions and fundamental strategies and then let go. While we have made mistakes in the past in allowing asset price inflation in Singapore and hence property prices being out of control, and while I can understand the undesirable impact on our economy if the property market bubble bursts, I hope that no new measures would be put in to prop up the market. In May 1996, we had put in measures to remove speculations in the property market. The objectives should not change now. We should never allow speculation in land scarce Singapore. These measures must therefore stay even if prices slide downwards a little more. I would like to quote Mr Chiang Pin-Kung, not in Mandarin but in English, the Chairman of the Taiwanese Council of Economic Planning and Development, who said "A lot of money borrowed in South-east Asia went not into manufacturing but into the stock and property market", when he analysed the causes of the regional turmoil. In conclusion, Sir, while we know of people being unhappy of the income tax rebate being reduced by 5%, I would like to highlight that a majority of Singaporeans got many other rebates like rental, utilities and S&C rebates. I am sure this will help many of them, as we know about 70% of Singaporeans do not in fact pay income tax. The other area that I would like to compliment the Minister is in the area of development expenditures that have gone up this year. This reflects the long-term thinking of the Government and willingness to invest in our future. We will see the results many years from now. I would like to conclude, once again, by urging the Government to be more pro-active and not reactive in determining policies, as this Budget has indicated. In this case, we cannot wait for companies to collapse before we step in. The accelerated loss of confidence if this happens cannot be easily recovered as we recently learned from what happened to our neighbours. While I applaud the Government for focusing on the finance sector for our long-term good, I feel that we should not have neglected the other important sectors of our economy. I hope the Government will show more signs to substantiate its commitment in making manufacturing and services the engines of growth for our economy.

(In Mandarin): I welcome the Budget presented by the Finance Minister. It calls for tripartite cooperation among the business sector, the Government and the people to overcome the financial crisis before us. At the same time, I would like to commend the Government for granting rebates and a whole series of assistance for the businessmen to overcome the present difficulties brought about by the currency crisis. To the South-east Asian countries, 1998 is going to be a very difficult and painful year. The political factors in the countries around us are uncertain and their economies are still very unstable. In such circumstances, I am of the opinion that this Budget is prudent and balanced. It could ensure the orderly development of our economy. However, I personally feel that in this Budget, the Government appears to be too optimistic about the impact of the regional financial crisis on Singapore. According to information I gathered from my friends in the business sector, the impact of this crisis is far reaching. Recovery is unlikely in the next one to two years, especially for the small and medium enterprises (SMEs). These people feel that the impact this time is much greater than what is being reflected in the statistics of the Government. Therefore, I fear that the Government has not sent a clear signal to the people. It may well give them the wrong impression that the regional financial crisis is merely a "flu" to the people. Although the Finance Minister has indicated that if the economy should suddenly take a downturn, the Government will consider taking off-Budget measures to cushion the problem. Because the Government has all the resources to deal with any unexpected event, many Singaporeans feel that the Government should give a more definite and specific indication on how it will deal with this crisis, in terms of the impact and the long lasting effect on our economy, and take more comprehensive measures to prepare for any rainy days ahead. This is better than taking some temporary measures only when something has gone wrong. Prevention is better than cure. I feel that under the able leadership of the Government, we will be able to take more positive measures to deal with this crisis. In the long-term interest, the Government has provided more for the education of our young, a substantial increase by some 30%. I am very happy about it because despite the present economic uncertainties, the Government has not overlooked the long-term investment for the long-term interest of our country. I think this is very good. The Government is always emphasizing the fact that our only natural resource is our talented people. For this reason, more money should be devoted to education, training and opportunities for the upgrading of our people. We must ensure that our education system remains world-class, to develop and nurture our young talents. At the same time, the Government wants to recruit more talents from all over the world to develop Singapore into an oasis of talents, with foreign talents supplementing our local talents, to ensure that we remain in front, to deal with the challenges ahead of us. To show its support, the Government has granted double tax deduction for recruitment cost incurred by companies which recruit professionals and experts from overseas. The Government is also committed to studying how to improve the "heart-ware" simultaneously with the improvement to the hardware, so that the imported talents can integrate into the Singapore society, thereby remaining permanently in Singapore and make a contribution towards the development of Singapore. This intention is good and well thought of. But I think that while it is good to introduce foreign talents to Singapore, we should also make the best use of our local talent pool. While attracting foreign talents, if we overlook the problem of brain-drain from Singapore or if the problem is not properly dealt with, it may give rise to negative results. The people may get the wrong impression that the Government is adopting a double standard in this kind of situation, and unintentionally undermine the confidence and self-respect of our local talents, thereby causing them to migrate to other countries. This will be a serious loss to Singapore, where our human resource is very precious to us. Recently, three scholars who broke their scholarship bond had their names published by the EDB and NCB. This practice has indeed shocked the public and created a controversy. There were a few articles written by the readers and published in the Lianhe Zaobao over the past few days on this matter. Of course, it is not right for overseas scholars to break their bonds. We should take measures to review the situation. But to publish the names of the bond breakers in order to achieve a deterrent effect, is something really worth re-considering. To the public, the breaking of bonds is only a breach of contract. It is not a criminal offence per se. It should be dealt with according to the terms and conditions in the contract or the bond. If payment has been made for breaking the bond, including the interest incurred and perhaps some form of penalty or compensation, then the matter should be closed. EDB and NCB have chosen to publish the names of the bond breakers in the newspapers and this seems to rank them among the criminals. I think this is unreasonable and unfair. I would like to quote from the article published in the Lianhe Zaobao. Mr Loo Ching Koon said in the article that we should consider four key issues: Firstly, on what basis are the scholarships established? Secondly, why are the recipients of scholarships required to sign a bond? Thirdly, what are the reasons for them to break their bonds? Fourthly, why the names of the bond breakers have to be published? Will this be a practice from now on and do the bond breakers still need to pay compensation for breaking the bond? I believe the purpose of setting up scholarships is to develop our talents, so that they will return to work and contribute to our society. The article also says that we should be magnanimous by looking at the world as a whole and to understand that there are rapid changes whether in terms of concepts or in terms of technology. We cannot remain static all the time. If we stay where we are, we will be lagging behind and will eventually be eliminated. We will not be able to compete in the world. We should change our attitude towards scholarships and the scholars. The EDB spokesman has also pointed out, as reported in the Lianhe Zaobao on 27th February, that in future, applicants who come from well-to-do families will be asked probing questions on why they are applying for the scholarship when they can well afford to go on overseas studies on their own means. I think this will worry the well-to-do families. They feel that scholarship is different from bursaries. Applicants apply for scholarship on their own merits in fair competition. If they are selected, they are selected on the basis of merit, not on the basis of poverty or wealth. Regardless of their family background, so long as the children have good results and good merit, they are eligible to apply for scholarships and they should be treated equally. They should not be discriminated against and they should not be subjected to such acute and probing questions. If we consider the family background of the applicants in awarding the scholarships, then it will lose the true meaning of these scholarship awards. Our scholarships should not be turned into bursaries or study loans. The way the EDB and NCB handled the matter of these three bond breakers is very regrettable indeed. It gives people the wrong impression that while, on the one hand, we are talking about attracting foreign talents to come to Singapore to work and to settle down by giving them all kinds of privileges, on the other hand, we are punishing our own local talents just because they break their bonds, by publishing their names and shaming them in public. I think this will lead to a centrifugal tendency among our local talents, causing them to stay away from Singapore. They may just remain overseas for good. This will be against Singapore's motto that human resource is the best resource that we have. It is also a waste of our investment in education. Today, the free flow of talents is a world-wide trend. All countries are competing for the best talents to work for them. Therefore, we should become more enlightened, more flexible in handling the question of overseas scholarships. In last year's budget debate, I mentioned that the number of years for a bond should be reviewed for overseas scholarships so that our best talents can be attracted to stay here. Now, with this practice of shaming the bond breakers, I feel that a lot of our young talents will turn to scholarships offered by overseas universities, many of which are provided without any bonds attached. Therefore, we should review our terms of the bond to make them more attractive. For those who return after completing their courses of study under the scholarship schemes, so long as they come back to Singapore to work for the country, whether they work for the Government or in the private sector, I think it is acceptable. As Mr Leong Horn Kee has already mentioned, he himself had broken the bond but he is still serving Singapore. So if you feel that this is too liberal, then we should consider shortening the period of the bond. After two years of service in the ministry or statutory board concerned, I think they should be allowed to serve in another capacity, as long as it is in Singapore. I think this arrangement is better, because the eligible candidates will not be compelled to go for overseas scholarships and stay overseas. If the scholars want to extend their study period overseas, they should also be given more flexible arrangements so that they will be able to complete their higher studies before coming back to Singapore to serve. I hope the Public Service Commission would take the lead in studying this issue together with other Government agencies. I think this will have far-reaching effects when we enter the 21st century. I also hope that the Government will pay special attention to the attitude of senior Government officers. When they announce certain policies or when they receive feedback which are contrary to the Government policy, they seem to be very bureaucratic and very arrogant. When members of the public reflect the views of the people, the senior officers should not stick to their own views and become very discourteous to Members. I think this is wrong. They must not forget that Members of Parliament are representatives of the people. They must speak for the people. The senior Government officers are Government servants. So they should not put the cart before the horse. They should not think that they are Ministers and they are masters of the people. It will be very regrettable if they think so. I hope the Government will pay attention to this. Finally, in this budget, the Government has decided to grant an across-the-board 5% income tax rebate and to increase the interest for the Special Account in the CPF. There are also rebates for public utilities, SC&CC to help the people to overcome their difficulties. All these show that in the face of the economic uncertainties, the Government can still continue to care and share with the people, especially the lower income group. I am very happy about this. I hope that in the midst of a financial crisis, the Government should continue to encourage the people to go global. In Chinese, the two words for crisis are wei ji, literally meaning: danger and opportunities. So long as we are careful and prudent in handling the situation, the dangers can be reduced, the opportunities can be increased. We must seize the opportunities and this is very important. I support the Budget.

(In Malay): Mr Speaker, Sir, although the economic turmoil in the world has not seen its end as yet, the Budget presented by the Minister for Finance, Dr Richard Hu, has been able to provide the people with a number of reliefs and rebates which are very well received, particularly those that touch or concern their pockets. Although the amounts may be reduced such as the 5% tax rebate which is appreciated by the people who are appreciative of the efforts of the Government, I think in giving the reliefs and rebates, perhaps there might be a more equitable means which we can apply to ensure that those who truly need the rebates and reliefs receive the assistance provided. I am referring to the rebates given for the greatest majority of Singaporeans who live in public housing. As announced by Dr Richard Hu, the Government will be granting rebates to HDB flat owners, including those who live in the larger flats, ie, 4- and 5-room flats. The 4-room flat owners, for instance, will be receiving all the rebates except rental rebates, and this is appropriate because there are no rental 4-room flats. 5-room HDB flat owners will be receiving the S&C rebates. In my opinion, a fairer and more equitable means, although it might be more complicated, would be to give the rebates based on the per capita income of each family, and not on the flat size. This will enable us to provide a better means of assistance to those who truly need them. I do not mean to say that we should not provide rebates to those who earn higher incomes. They should be entitled to such rebates. But I think a more accurate picture of ascertaining the financial ability of Singaporeans would be through their per capita income. Surely, we realise the ability of Singaporeans to own cars when we notice that our public housing estates are always congested with cars owned by the residents in the area. These vehicles include not only the small cars such as Mazda 1.5, etc., but also luxury cars such as Mercedes and BMW. These luxury vehicles can also be seen in 4-room flat precincts in our public housing estates. So a relief based on per capita income is more appropriate as a criterion for providing rebates to Singaporeans. The second point I would like to raise is on the personal income tax relief. This concerns the relief provided to those who are looking after their parents and disabled siblings. In our effort to encourage children to continue to look after their parents, we should perhaps also extend the relief to the four parents, ie, one's own parents and parents-in-law. In this way, we will be helping to prevent and reduce misunderstanding between parents and parents-in-law because they are given equal attention by their children and children-in-law. The same relief can also be given not only to just one's own disabled siblings but also disabled siblings-in-law and relatives who are unable to go out to earn their own living. I believe this will go a long way towards strengthening family values among themselves, whether between parents and their own children, or between parents-in-law and relatives in the family. Sir, another point I would like to touch on is our state of preparedness in facing the economic turmoil in this region. We have often heard how the people in neighbouring countries are forced to scramble in order to obtain their daily necessities such as rice and sugar which obviously have fallen far short in supply. I believe the Government has taken the appropriate measures to prepare ourselves for any possibility of the economic situation getting worse. But what are these measures? Can these measures ensure that in Singapore we will not be faced with a shortage of basic necessities? Finally, I would like to touch on the Government's support for the training of our workers so that they can continue to compete in this challenging world. In my opinion, it is necessary for the Government to provide as much financial support as possible to ensure that our workers will continue to be able to compete. In this respect, we all realise that Malay workers form the largest group of workers who are lacking in skills. I fear that the concerns which have been raised about structural unemployment recently will affect more Malay workers. If more financial support could be provided for this purpose, I believe more active efforts can be carried out to assist this group of workers. Sir, I support the motion. 2.05 pm

Mr Speaker, Sir, I rise in support of the financial policy of the Government. Sir, Fortune magazine in its 12th January 1998 issue featured "The 100 Best Companies to work for in America". In this feature, there are a number of characteristics which make the 100 companies good employers. First and foremost, these companies work hard to retain their best workers. Employees talk of their companies as fun places to work. These companies exercise flexibility and balance the employee's work and family. Money, though important, is not the criterion why employees remain in those organisations. In short, these corporations accentuate the positive and place a premium on their employees. Talent is a very valuable resource in the 100 best companies to work for in America. Contrast this with what we do in Singapore. In Singapore, we say very much the same thing. In the Finance Minister's Budget, he speaks of "human talent has always been our most precious resource, and will become increasingly critical as we develop into a knowledge-based economy". He went so far as to offer double tax deduction for approved relocation and recruitment expenses for hiring talent from abroad. In other words, there is a Government subsidy for bringing in foreign talent. This, I support. Yet, Sir, on the very same day, on the front pages of our major newspapers, two Government agencies, the EDB and NCB, announced the names of three scholars who terminated their bonds. Their crime seems to be that they have decided to return the monies they have spent in their academic pursuit. They terminated their contracts and returned the monies with interest and penalties. No Government subsidies here, but a rather heavy penalty for being talented. Have we been too harsh? Contrast this approach with that of the 100 best corporations in America. The manner in which this issue was handled, one cannot help but feel sorry for Mrs Janet Yee, the mother of Hector Yee, one of the scholars named. As a mother who sees her son's future being potentially ruined, she has every right to use the word "wicked" on these two organisations. Her very interview reported in the Straits Times on the same day made the agencies looked vindictive and small. How have we come to this? In the joint statement, the EDB and NCB claimed that naming those who terminated their bonds is not to shame these scholars. This sounds disingenuous. If splashing the names of scholars in such statements is not meant to shame or scare other scholars from thinking or doing likewise, then what is the very purpose of doing so? It may be argued that the use of terms such as bond-breaker and breaking bond are emotional terms similar to law-breaker and breaking the law. Anything you break cannot be right. Perhaps it is calculated to be so. Singaporeans take a serious view of names being flashed by those in authority. In the context of bond termination, surely the purpose must be to strike fear. In the Straits Times of 1st March 1998, page 3, the heading of the box article was headlined "THE NAME SHAME". Here, it is the press calling a spade a spade. Let me quote two of the interviewees. One said "Singaporeans are afraid of embarrassment, so publishing names is like the Corrective Work Order". Another comment "EDB's and NCB's actions would turn people off. They are using it as a threat. But if the future employer trusts you, this measure is ineffective". Sir, the operative phrase is "if the future employer trusts you". Singapore is a small country when it comes to the work place. It is not uncommon to hear of employers who shun from employing Singaporeans who have incurred the displeasure of Government or Government agencies. Although this perception is not true, employers do not wish to take chances on doing the wrong thing. Hence, public naming of scholars has very deep repercussions. We can understand Mrs Yee when she said that she is afraid that her son may not come home - home to an uncertain future. Some form of disapproval can be expressed, Sir, in the case of those who terminated their bonds, but have we gone too far? In the joint statement, EDB and NCB stated, and I quote, "Accepting a scholarship implies a moral responsibility to work with the sponsor upon graduation". Certainly, scholars do have an obligation other than legal to serve their bonds. We cannot encourage scholars to terminate their bonds. Moreover, a scholarship in Singapore brings much honour and prestige to the scholar and the family. Hence, terminating a bond must bring with it some dishonour. At the same time, with this very heavy handed approach, is there not a moral responsibility on the part of these Government agencies to protect Singaporeans like Hector Yee, Teo Hoon Ping and Huang Yian Teik, whose crime is to incur the wrath of some Government officials? They do so by returning monies advanced to them - and this action is contemplated in their contracts, and then have themselves shamed. This is not in the contract. Some form of displeasure must be attached to those who terminate their bonds. However, when a Government agency uses the moral argument, it must remember that it owes a higher moral duty through its sheer size, influence and clout not to overuse its power on individuals it comes into contract with. The exercise of moral responsibility is never meant to be one sided. Hence, I agree with Tan Sai Siong of the Straits Times when she said that two wrongs do not make a right. In the Straits Times of 1st March 1998, it was reported that in the case of the PSC, only 4% of the scholars terminated their bonds in the last five years. The URA has reported in the same article that none of its overseas scholars terminated their bonds - a very enviable record. Obviously, Sir, the PSC and the URA must be doing something right. Why is the situation so different in the EDB and the NCB? Sir, going by press reports, perhaps these two organisations should examine their attitudes and inflexibility of approach. Personally, Sir, I have an experience which lends weight to this point. On 12th October last year, I made a public speech against naming of scholars who terminated their bonds. This was reported in the Straits Times and Zaobao on 13th October 1997. In that address, Sir, I suggested that whilst the Government was trying hard to bring in foreign talent to increase our talent pool, shaming scholars ran counter to this objective. We should instead increase the number of scholarships by anticipating the small number who may terminate their bonds. Moreover, Singapore has the financial resources to do so. The other reason I gave then was that as long as the scholar continued to contribute his services to Singapore, as my friend, Mr Leong Horn Kee, has mentioned, the country has lost little. Whether in the private sector or public sector, a scholar can contribute to Singapore's growth. Sir, this did not go down well with EDB. I was invited to a breakfast meeting in January this year with the most senior officers of EDB and NCB. I was shown a draft statement of their intention to name three scholars who terminated their bonds. Amongst many things said to me at this breakfast meeting, the most senior gentleman in the group accused me of sharing the values of these scholars and he said that if I shared the values of these scholars I should resign from public office. In other words, a civil servant telling an MP to resign. Despite this, Sir, I tried to keep a cool head. I tried to debate the issue but to no avail. We must always be on the lookout for such intolerant attitudes, especially of some in the apex of Government. We cannot value human resource if we are not able to win over those who do not see our point of view. I bring up this episode not with personal affront, but with sadness because today the PERC Report says Singapore has one of the best civil service in this part of the world. Termination of scholarship bonds should not be encouraged. Significant resources other than money have been invested in those scholars. In some cases, the award of the scholarship enables the scholars to gain admission into the most prestigious institutions overseas. As the large majority of scholars do serve their bonds on completion of their studies, the situation is probably not getting out of hand. Even though the regional economies are in turmoil, I believe that the demand for talent will continue. Hence, there should be a review of this issue. There must be more creative solutions to this problem. Firstly, since we are on the lookout for talent, the Government should allocate more financial resources for scholarships. As an example, a million dollars will see to at least five scholars a year. Secondly, perhaps we should consider providing scholarship loans which may be converted into service bonds. Such a scheme, which comes with a small `penalty' like a longer bond period, will give the scholarship holder the flexibility of making up his or her mind after a few years of studies, bearing in mind that the scholar has taken up a scholarship at a very young age. If the scholar chooses to continue further studies, then the loan must be paid up. If the scholar chooses to return and serve a Government agency, the bond is of a longer duration than the norm. Thirdly, the terms of the bond should be liberalised further. The recent announcement of a shortening of the period is a step in the right direction. Lastly, perhaps there should be a class of scholarships with bonds which may not be terminated. In other words, the bond must be fulfilled. The period may be shortened further. This latter scholarship will go some way towards addressing the concerns of those Government agencies which have earmarked the scholars for certain positions in the establishment. There are many ways to vary the terms of employment to achieve our objective. In conclusion, Sir, in the wider context of increasing our talent pool, nurturing talent and attracting talent from abroad, the public shaming of scholars who terminate their bonds must not be part of the grand design. Putting such scholars on the same class as road bullies, Corrective Work Order offenders or those who choose to use our lifts as public toilets is not in the best interest of Singapore. The natural progression, I ask myself, is that if this does not work, what will EDB and NCB do? Perhaps the next logical step is to paste the faces of scholars on lift landings. Sir, I think we need more creative solutions, and I think we are better than the loan-sharks.

Mr Speaker, Sir, the official GDP forecast for this year has a very wide range, 2.5% to 4.5%. This is understandable because of the uncertainties in the regional environment. However, there is a large difference between a growth rate of 2.5%, and that of 4.5%. This difference in growth rates could be translated into significant differences in retrenchments, in bankruptcies and in economic hardship in general. There are four main features of this year's Budget. First, it is a conservative budget aimed at achieving a small surplus. Second, there are no major tax cuts. Third, there is an increase in development expenditure. And fourth, there are tax incentives to promote the development of specific industries, particularly in the finance sector. I agree that the budget surplus should be reduced during a year of projected economic slowdown. This is in part due to the increase in development expenditure from 6.3% of GDP in fiscal year 1997 to 7.5% in fiscal year 1998, which is entirely appropriate at this time, for three reasons: to continue our efforts in improving our medium to long-term economic capabilities; to take advantage of cheaper prices, for example, in land reclamation; and in light of the expected slowdown in private fixed capital formation, to boost investment expenditure by means of public sector capital formation. The current emphasis now is to further develop the financial sector, without at the same time reducing the importance of manufacturing, and the fiscal incentives offered for such activities as fund management are in line with this strategy. However, the most significant aspect of the Budget is that there are no major tax cuts to stimulate the sagging economy and to help businesses. The business community has expressed disappointment regarding this, particularly since the recently announced Hong Kong budget contained a wide range of tax cuts, including a reduction in the corporate income tax rate, a freezing of most government fees, a reduction in property tax and in stamp duty on share transactions. And all this when the forecast for the Hong Kong economy is 3.5%, which is exactly in the middle of the range forecasted for Singapore. I agree that there is no need for major tax cuts, but provided growth is within the upper half of the range. If, indeed, the growth rate this year is about 4% or even higher, then a reduced, small budget surplus with no major tax cuts is entirely appropriate. A 4% growth rate will mean that some companies will be forced to downsize, retrench, merge or adopt drastic consolidation measures. But that is part of commercial risk. There are upsides and there are downsides in business. Businesses experienced a very good bull run since 1987. And these two years - 1998, maybe 1999 - can be viewed as a consolidation phase after 10 years of uninterrupted solid growth. However, if the growth rate for the economy is heading towards 2.5% or lower, then I do believe that the Government should adopt more measures to stimulate the economy. In other words, the Budget can remain as it is. But where I differ with the Government is the threshold for the activation of off-Budget measures to stimulate the economy. The Minister for Finance seems to imply that major stimulus initiatives will only be contemplated if there is an actual recession, ie, a decline to negative growth. I would argue for a higher threshold. In other words, a positive but low growth rate of 2.5% or below should be sufficient to implement further off-Budget measures. There are two reasons for doing so. First, I do not see the need to go through a 2.5%, or even a 2% growth this year, because it would be due largely to the contagion effect of the Asian financial crisis, and not to weaknesses in our own domestic economic fundamentals. Yes, I agree, and I quote, that "our tax rates remain competitive and no major tax changes will be made against a background of declining revenue collections and rising development expenditures." But no amount of competitiveness in tax rates and rising development expenditures can solve the immediate business problems of high interest rates and low demand, and possibly, the inability to collect trade credit from neighbouring countries; and because businesses are in trouble, employees get retrenched. Second, the Minister has further stated that it is important to have a budget surplus in order to continue building our financial reserves. I totally agree with this philosophy. But I see no harm in further reducing the surplus this year, in order to bolster the economy. To put things in perspective. The estimated revenue loss of the 5% income tax rebate is $130 million. The revenue loss from the 15% property tax rebate for commercial and industrial properties is estimated to be $145 million. Suppose these rebates were to be doubled, in other words, you have a further 5% income tax rebate and a further 15% property tax rebate. The additional revenue loss would be less than $300 million. The estimated budget surplus is $2.68 billion. In short, as the Minister has said, we have enough resources to activate further off-Budget measures. The off-Budget measures that the Government could adopt to stimulate the economy and help businesses include: a corporate tax rebate, a further individual income tax rebate, the granting of further concessions in property tax, for example, in the form of rebates, reduction of stamp duty, or a rebate, for property purchases and share transactions. Needless to say, the magnitude of the cost-cutting off-Budget measures will depend on the severity of the downturn. The more severe the downturn, the greater the cost-cutting measure. There is yet another aspect to consider, and that is, when would these off-Budget measures occur? Would they be implemented fast enough? Or would it be a case of too little, too late? The Minister has stated that "the situation will be closely monitored." This is of utmost importance in the next few months. Mr Inderjit Singh has alluded to a perception gap between the Government's forecast on the one hand, and the views in the business community on the other. By the time the first quarter economic results come out, it could well be too late. The Department of Statistics might need to work doubly hard to churn out monthly statistics fast enough in order that the Government can keep track of the pulse of the economy. In addition to hard statistical data, extensive and frequent consultations with various sectors of the business community are in order, so that the Government is ready to act, when necessary. Let us not be caught flat-footed again, as we were in 1985. Regardless of whether off-Budget measures are implemented or not, the Government should implement an immediate freeze on public sector cost increases. Government rates and fees are one important component of business costs. Consider, for example, the unit business cost index of manufacturing. It is noteworthy that of its three components (unit labour cost, services cost and Government rates and fees), it is the Government rates and fees component which has increased the fastest since 1988. While the unit business cost index as a whole has increased by 26%, Government rates and fees, which include property tax payments, increased by 93%, or nearly doubled since 1988. While businesses are all scrambling to cut costs this year, Government charges should not contribute to costs. In as much as wages still constitute a major portion of domestic cost, the NWC recommendations this year become even more important in cost determination. The decision to freeze the salaries of Ministers and top civil servants was a significant gesture in this regard, both politically and as a signal for caution and restraint in wage increases this year. The Government's estimated budget invariably errs on the conservative side. In other words, except for 1996, the actual budget surplus, since the new system of accounting was published from 1990, has been larger than the estimated budget surplus. In today's context, this is not a welcome trend. The economy does not need any additional fiscal contraction from larger-than-anticipated budget surpluses. I would urge the Government to be more accurate in its budgeting this year. If the economy grows faster than anticipated in the budget planning and revenue increases, then the Government should correspondingly increase expenditure. Otherwise, actual budget surplus could well be 2.5% or even 3%, well above the estimated surplus of 1.7% simply because of budgeting inaccuracy. It has occurred since 1990, except for the year 1996, and I would urge the Government that it does not happen for this particular year. My last point is that one of the major lessons that we can learn from this slowdown is the need to develop resilience in the face of international economic shocks. The current slowdown is a painful reminder that there is no guarantee of economic growth in any economic system, whether capitalist or planned. The global economy will continue to exhibit cycles of booms and recessions. It will also occasionally be subject to shocks, which by definition are unanticipated. The Singapore economy has experienced an economic slowdown only twice since independence - in 1975, where growth was 4.1%, and in 1985, with a growth rate of -1.6%. The world recession which began in 1974 worsened in the first half of 1975. The OECD growth rate for 1975 was -2�%. World trade in real terms declined by 12% in 1975, and the volume of imports by OECD countries fell by 10%. And yet in spite of the world recession, the Singapore economy grew by 4.1%. This was in large part due to the diversification of the economy. While manufacturing declined by 2%, the services sectors, in particular, transport, storage and communication; and finance and business services sector, provided 88% of the growth in GDP in 1975. Similarly, in this current economic slowdown, it is expected that those sectors with final output destined for the US and Europe, namely, manufacturing will fare better than sectors which are regionally-oriented, namely, services such as tourism, retail and healthcare. The lesson we learn from this comparison is the importance of diversification, in terms of sectors and markets. Just like an investor, an undue concentration in any one sector or market could cause us to be vulnerable to upturns and downturns in that sector or market. In this context, I am happy to note that the Minister for Trade and Industry has announced that we would continue to emphasise the continued development of both manufacturing and services as twin engines of growth. Within each sector, there should also be sufficient diversification in terms of industries and export markets in order to develop resilience in our economy. In 1985, the world economy grew by 3% as did the growth in world trade. The US economy slowed down compared to 1984, but still grew by 2.4%. In other words, in 1985, the external environment was not unfavourable. But in spite of that, Singapore suffered a recession. One main reason was because of the 43% increase in unit labour cost during 1980-1984 which caused an erosion of competitiveness domestically and this coincided with the slump in external demand in the key oil and marine-related industries. In addition, fiscal policies had a contractionary effect, and there was a slump in the property market. The lesson we learn from the 1985 recession is the importance of sustaining domestic competitiveness. The 43% rise in unit labour cost in 1980-1984 was one major factor which tipped the scales and caused the recession instead of a mere slowdown as occurred in 1975. In short, the recipe for developing resilience is sustained competitiveness combined with diversification. To conclude, while I agree with the main thrust of the Budget, I hope that the Government will indeed not hesitate to respond with off-Budget measures if the need arises. I also hope that the Government will not consider 2.5% growth too high to activate such off-Budget measures. There is no need for us to suffer unnecessarily this time around.

Mr Speaker, Sir, I rise to support the Budget. The Budget emphasises on education and our educational system is moving towards creative thinking and creativity. Yet there can be no creativity if discussions are not done in a gentlemanly manner with opportunities to speak up and alternative viewpoints sought. It is in this context that I want to seek clarification from my Parliamentary colleague, Mr Chng Hee Kok. Mr Speaker, Sir, I would like to ask Mr Chng Hee Kok whether he would like to confirm what he told me outside this House sometime ago that the Chairman of EDB asked him on these points: (1) that he should resign because as a Government MP, he should not disagree with this Government policy of naming bond-breakers; (2) that other MPs who disagree should also resign; and (3) that the EDB Chairman stormed out of the meeting. Can I ask Mr Chng Hee Kok to clarify?

Mr Speaker, Sir, essentially I agree and confirm what my colleague, Dr Tan, has mentioned. Actually, on top of that, he (EDB Chairman) mentioned two other points. Since this subject has cropped up, I should mention that when he showed me the statement, he threatened that my name would be put into the statement because I supported those three named scholars by speaking publicly against the issue. My name was supposed to be included in the statement. He also suggested that I should send my speech (the speech which I made on 12th October 1997) to him for vetting. I want to assure Members of this House that in all my years as a Member of Parliament, no Minister or office-holder has ever asked me for my speech before I speak on any subject. I told him that I have never offered my speech to any Minister of this House for vetting, Sir.

Mr Speaker, Sir, I am not being personal. I just want this House to be clear on why I think this exchange should be made known to Members of this House as this involves a top administrator and elected Members of this House and it touches on areas of creativity, leadership and alternative views. Mr Speaker, Sir, I listened to Chng Hee Kok's encounter with the Chairman of EDB with shock and disbelief. As an elected Member of this House, I cannot be a bystander.

Order.

On a point of order. I am not intending to circumscribe Member's right of free speech. In this House, Members can bring up any subject. In the Minister's Budget Statement just two Fridays ago, he was elaborating the Government's financial policy and outlining the Government's Budget and these are important issues for debate in this House. I think we should confine our debate to the Budget Statement and at other times, raise a motion to have it fully debated as to whether or not we should publicise the names of the bond-breakers. I think there is another appropriate occasion to do so. We should not use these two precious days for debating bond breakers because there are 45 MPs wanting to speak. With 45 MPs squeezing into two days and if we just divide by the number of hours that we have, I think each MP will have very little time to speak. I am sure all 45 MPs want to have their say and express their views. But I would suggest that they keep their focus on the Budget.

What is your point of order, Mr Wong?

The point of order, Sir, is that we should confine our debate to the Minister's Budget Statement and this subject about the EDB bond-breakers and the Member's exchange with the Chairman of the EDB should be fully debated on another occasion.

The subject of bond-breakers of EDB scholars has actually been touched upon by two previous speakers and I have allowed it. Under the circumstances, it is not wrong for Dr Tan to continue with the point that he is making. But I would suggest to Dr Tan that he should confine it as much as he can within the context of the financial statement of the Minister. Dr Tan, you may proceed.

Thank you, Mr Speaker, Sir. I think this subject is important because we are allocating funds to the various Ministries and organisations, and of course, Singaporeans would like to know the funds we allocate to these organisations. They must also be accountable to this House whether in terms of their financial performance or the way they handle matters, and I still strongly believe that I have a right to speak on this matter. Mr Speaker, Sir, as I said, as an elected Member of this House, I cannot be a bystander when my Parliamentary colleague is insulted in this manner. I cannot allow the episode to pass by without expressing my concern. I suppose my Parliamentary colleagues would have done likewise. We are the representatives of the people. We are here in this House to air the views and concerns of the people. Many of us in this House have spoken strongly against the Government policies. We were reprimanded by the Ministers and we were taken to task even by the Prime Minister, but we are still not embarrassed because we have spoken out honestly and frankly what we believe in and also to let the Government know how the people at the ground feel. Despite our differences in views, we were never asked by the Prime Minister to resign. In this instance, my Parliamentary colleague was offering a view that was different from the EDB Chief and because of this, he was asked to resign. His reasons are: (1) he is a Government MP; and (2) naming bond-breakers is a Government policy. Let me state my stand on bond-breaking. I think it is not gentlemanly and should be discouraged, but not by naming them in public. Mr Speaker, Sir, I have to continue because I have to paint the picture to this House why this subject is important. After he asked Chng Hee Kok to resign, he stormed out of the meeting. Should a man of his standing do such a thing to an elected representative who refused to agree with his views? I do not think our Prime Minister has ever done that. It is not a gentleman's behaviour. We want to build a more civil society and we must behave like one. To add insult to injury, he wants Chng Hee Kok to let him know the names of those MPs who share Chng Hee Kok's views and he does this by way of a letter, signed not by him but by his Head of Human Resource Division, a Mr Timothy Sebastian, asking these MPs to meet and discuss with him. Since he has already concluded that those who disagree should resign, there would have been no civilised discussion. And I presume the MPs will be told off, similarly, the way he told Chng Hee Kok, and the demand for their resignation will be asked. Let me read the letter that was faxed to me by Chng Hee Kok: `Dear Mr Chng, Your meeting on the 19th January 1998 with our Chairman Mr Philip Yeo refers. During the meeting, the issue of scholars terminating their scholarships was discussed. It was also mentioned that there are other MPs who have differing views from our Chairman on this issue. Our Chairman would like to meet with these MPs to hear their views and further discuss the issue with them. In this connection, we would appreciate if you could let us have the names and contact details of the relevant MPs so that a meeting can be arranged.' Mr Speaker, Sir, has he the right to summon MPs for a meeting to answer to him why they disagree? Is he getting too big for his shoes? And this is not the first time he has displayed such an attitude towards elected leaders. Mr Speaker, Sir, when I discussed this with my Members of Parliament, I was shown a copy of a newsletter called Pioneers of Computing where he was featured as IT champion. In this interview, he had expressed views contrary to Government policy. For example, he questions Government upgrading of our HDB flats. He is quoted as saying, and I quote him: "We spend millions of dollars renovating HDB apartments for people. What for?" In other words, he disagreed with this major Government policy. No one asked him to resign. Yet, he wants Chng Hee Kok to resign and other MPs to also resign. On what matter, on a minor issue - a departmental issue on bond-breaking. He obviously has his own views as to who should lead Singapore. I quote: `When we were a young country in the 1960s, we were creators, Lee Kuan Yew, Howe Yoon Chong [referring to all in the frontbench]. Now, we have the era of the CFOs. [I will explain what "CFO" stands for.] This is where Singapore is right now. Now we have to see if we go up or down.

You must get rid of these people. These people should never be allowed to be No. 1, because they are not creators.'

Mr Speaker, Sir, you judge for yourself. Is this not a reference to the present leadership, as no more than uncreative CFOs, which stands for chief financial officers? Earlier, in his interview, he equates CFOs as bean counters. Are our Ministers bean counters? Is the naming of bond breakers a Government policy? No, it cannot be. It is a departmental policy. As Members in this House must have read in the papers that even PSC, the body that awards prestigious scholarships, is not naming the scholars. Therefore, he is not being fair to Mr Chng Hee Kok, and was hiding behind the Government to push his own view and belief. He then has the audacity to ask Mr Chng Hee Kok to resign as an elected MP and, as I said, on what issue? A minor issue, a different approach to management of bond breakers. Mr Chng Hee Kok's electorate, those who voted him in, will be wondering why they have to lose their MP. Maybe the EDB chief should go to Mr Chng's constituency and explain to the constituents why their MP should go. He talked of a lack of leaders with creativity in his interview with Pioneer IT. I think Members must read this. It is a very important paper and I will ask the Clerk of Parliament to circulate this later on. And I quote him: `They are preoccupied with auditing, counting, making sure that every chair and table is there. They are so preoccupied with the material part, they forget that the most important is the creative part, the people.' Mr Speaker, Sir, all that is well said, but you ask yourself: how to be creative when the leader of a company has no room for differing views? All this talk of creativity in that interview is just lip service. Sir, this is a serious matter, because I see his action as an affront to the office of the elected Members of this House, by a member of the Administrative Service. May I ask the Minister what he intends to do? Sir, I support the budget. I am very impressed by the Nominated Member's discussion on the budget. She did a very good job. And I am sure we support our Finance Minister's budget.

Mr Speaker, Sir, there would not be any bond breaking in my speech! This year's budget is oriented towards strengthening and elevating Singapore's position as a premier international financial centre. Whilst the countries in the region are struggling with the crisis of confidence in the banking and financial sectors, Singapore is in the enviable position of keeping our credibility and reputation intact. There is strong confidence in Singapore's banking system and the viability of the financial services industry. Even then, we are not spared from the ill effects of the meltdown in the regional economies. The international financial community is a very important constituency. Our Government recognises this and tries to address the issues and concerns of the foreign fund managers and foreign players in the international capital markets. Some regional countries have blamed their sad state of affairs on "international conspiracy" of the currency speculators that started and fuelled the currency crisis. If indeed there are areas that foreigners can create problems on the domestic economy, we have to be careful that the rights of Singaporeans to decide their own destiny are not jeopardised. Singapore is already a very open economy. Foreigners are already owning assets and shares in Singapore. These foreigners will next want to seek control over "blue chip" Singapore banks and companies which are strategic to our national interest. We ought to ensure that the foreigners do not take over control of key sectors of our economy which pose dangers and security risk to our country. We should continue to open our economy so long as there are benefits to be obtained from as diverse a group of foreign investors as possible. Singapore has taken active steps to support our neighbours. We hope to help restore confidence and bring the economies of our neighbours back to an even keel. We have not been very successful so far because of domestic circumstances, but the message and signals from Singapore have been clear. Singapore wants to be helpful during this period of currency turmoil. Our national interest and prosperity is tied to that of our neighbours. Singapore's line of credit under the IMF programme to Indonesia shows our Government's resolve to help in Indonesia's stability, progress and development. The sooner that the countries in the region recover, the better it is for all of us. A stable and prosperous ASEAN is indeed beneficial to all. Sir, the main thrust of this year's budget is to prepare Singaporeans for the tough years ahead but, more importantly, to prepare ourselves for the recovery that will come, with Singapore emerging even stronger than we did in the aftermath of the 1985 recession. How long this economic slowdown will take, no one can predict because of the volatility and uncertainty of the situation. One thing is certain: the recovery will come. What is needed is for us to continue with the prudent long-term policies. Singapore, under the PAP Government, has consistently pursued sound policies with strong fundamentals that provide for the long-term good of our people. We are prepared and stand ready for difficult times ahead. The Government has once again placed top priority in education. The hefty 30% increase provided for expenditure on education is very significant as it constitutes 3.6% of GDP and one-fifth of total Government expenditure. The investment in education has always been proved to be worthwhile. The high standards of education given to our young has paid handsome dividends in the quality of our manpower. Our well-educated and hard working workforce has given Singapore the competitive edge and contributing to strong economic growth and development. However, the Government could have given working adults more financial help to encourage them to pursue continuing education programmes. In difficult times, many employers are not likely to provide additional funds for training and development of their officers and staff. Company training tends to suffer during times of belt tightening and cost containment. Also, there is likely to be more retrenchments this year and those who are out of work could go for further training whilst looking for alternative employment. Perhaps the Skills Development Fund could review its policy to be more generous in providing the necessary help to employers and individuals who seek to attend training courses to upgrade themselves and enhance their competencies to remain employable and perform their jobs better. During this period of economic slowdown, many Singaporeans would be losing their jobs through retrenchment because companies are facing financial difficulties. We have, therefore, to be judicious and impose stringent standards when approving the employment permits for foreigners who want to work and settle down in Singapore. In fields where local talents are in short supply, for example, in information technology and telecommunications, there would be less repercussions. But it is still vague as to what constitutes "talent". Should we allow the employers only to decide? Are our bureaucrats competent enough to assess the true foreign talent? The Public Service Commission scrutinises all top talents that join the civil service. Is there not a need for an independent panel set up under the Ministry of Manpower to ensure that the foreign talents employed in the private sector are indeed assets to Singapore? We want to be fair to Singaporeans in the competition for suitable employment and that the foreign talents selected are indeed of very high quality for the long-term good of Singapore. A few years ago, HDB sold shops and hawker stalls to the sitting tenants. In recent times, the businesses of these shops and stallholders have been adversely affected. With the economic downturn and the decline in business, the higher interest rates have made it difficult for some businesses to service the loans from banks. Is there any way in which the Government could help to alleviate the situation of affected owners of HDB shops and hawker stalls? Will HDB continue with its sale of shops programme in the new areas? At the macro level, the general economic situation appears satisfactory. However, at the individual firm level, there are serious challenges and difficulties faced by our small and medium-sized businesses. The manufacturing and services sectors employ a large number of workers and contribute a substantial amount to our GDP. The Minister for Finance has indicated that there would be off-budget measures to tackle the specific problems of the different sectors. I hope that timely measures would be taken for if they come in too late, many otherwise good businesses that we wish to help would have gone asunder and would have become casualties. We have to try our very best to save as many jobs as possible. I think jobs will be important in the coming years. Sir, I support the motion. 3.00 pm

Mr Speaker, Sir, thank you for allowing me to join in the debate. The regional economic crisis is certainly taking its toll on everybody. We are facing a period of uncertainty. Indeed, this is so even to predict the economic outlook for Singapore in the months ahead. It is therefore prudent for the Minister for Finance in his Budget Statement to have said, "we are keeping a tight lid on operational expenditure". In this context, Sir, it is a good opportunity for us to redouble our efforts at efficiency and economy. I would like to draw attention to this in terms of healthcare cost in the future and the need for its containment. The continual escalation of healthcare cost, real or apparent, is of much concern to most Singaporeans today. And, although our country has not faced excessive hikes in healthcare cost, as in the United States, for instance, we need to be prepared for cost-related problems to contend with. This is especially so in terms of secondary-level and tertiary-level healthcare requirements. Sir, this is as good a time as any to review our system and look for ways to contain further rapid increases in healthcare cost and to maintain the high-quality care we now have. There is no simple solution. We should be prepared to re-evaluate our present system with a different mindset and be prepared to tackle the problems with new perspectives and through multi-approach ways. What follows are some aspects in our system that merit our immediate attention. 1. There should not be plans for more new restructured general hospitals for a while yet; we certainly have sufficient of them now. Building more new ones will only cause further duplication of the various disciplines which frequently leads to wastage of resources. Sir, the likes of our existing restructured general hospitals are both expensive to build and expensive to run. A small country like ours should not need any more of them. We should, however, look into building more community hospitals instead. They will be cheaper to build and definitely cheaper to run. These hospitals will be much needed to treat the increasing numbers of elderly sick who usually require longer hospitalisation because of chronic illnesses. These community hospitals will be more accessible and more suited to provide better and cheaper care to the chronic sick. If we have sufficient beds to cater for these chronic sick, we will not waste the expensive acute beds in the general hospitals. 2. There should be enhanced collaboration amongst healthcare personnel and increased cooperation between the various restructured general hospitals. This is important for prevention of excessive duplication of under-utilised facilities and personnel. Wastage of resources in terms of equipment and of doctors and other personnel becomes significant when we have multiple centres for each and every speciality or discipline. The problem of finding medical staff to run all the general hospitals, especially when we are continually facing shortages of trained manpower, can become insurmountable. The fact that there is just not enough case material in some of the specialities or disciplines to go round at any one time compounds the problems. Mr Speaker, Sir, competition for excellence is desirable, but "fighting" for patient-load is not. 3. We should look for more practical and prudent ways to integrate and tap all sectors of our available healthcare facilities. We should induce the primary level care providers to cater for the increasing numbers of the elderly and the chronic sick. Perhaps they can work more closely with the hospitals in share-care schemes and remunerated by the Government in a reasonable and controlled manner to ensure affordability. The advantages from such schemes would be the significant savings on cost, the decreased demands on the hospitals in terms of beds and medical staff, but more importantly, the positive effects of having patients continuing to stay in their own homes with their loved ones. Thus, some sort of managed-care scheme between the general practitioners and the Government may be the way to go. 4. Preventive medicine as the key to maintaining good health in any population cannot be over-emphasised. This, therefore, is one area we can ill-afford to cut back on. Instead, we must seek out all avenues to help the healthy maintain their well-being for as long as possible. In the long run, it will be the ministry of continuous and concerted efforts in promoting preventive medicine that would contain the escalating cost of healthcare. Mr Speaker, Sir, this is especially so when there are increasing numbers of elderly folk. Now, for this group of citizens, I would like to again suggest that for the best results, "preventive care" should be started as soon as possible and through centres utilising a "total-care" concept. In other words, these Centres of Activity for Retired and Elderly (CARE) should cater for the physical, the mental as well as the social well-being of each elderly. For the general population, I would like to suggest that we increase mass public education on preventive healthcare and enable easier access to regular health screening tests. We have to reach out to the people and increase their awareness for this need. 5. The attitude and the mindset of our people in relation to affordable healthcare in Singapore has to be reviewed in the light of our increasing affluence and expectations. And, if we have to address the need for change in order to cope with a litigious public, it is likely that affordable healthcare may be jeopardised. When doctors and other healthcare providers are given to over-investigating and to over-treating the patients because of pressures from patients and because of fear from litigation, healthcare cost must increase and affordable healthcare, as we know it, will be impossible. Sir, I feel that we are very fortunate here in Singapore. We have the means to afford a world-class healthcare service for our people. Indeed, we do have an abundance of what the medical world can offer and we do have some very good hospital facilities. Let us make sure we get the mileage from them. With that, Sir, I support the annual Budget Statement.

Sir, this year, the budget surplus has shrunk to about $2.7 billion, showing that business shall be bad again this year. Last year, all sectors showed a decline, the stock market plummeted, the finance, property, tourism, manufacturing, retail sectors, all declined. Despite the poor business showing, the Government refused to lower corporate tax by one or two percentage points. At the moment, the corporate tax is about 26%. Businessmen expected the Government to reduce the corporate tax by at least one percentage point to 25%. But that expectation was not met. The excuse given by the Government was that it already had reduced the tax low enough and that if the corporate tax were reduced to 25%, Singapore shall be deemed to be a tax haven. I say these are all lame excuses. I think the true reason is that the Government is waiting for the 5-year moratorium for the Goods and Services Tax at 3% to expire next year, and then we will see the reduction of corporate tax. But, of course, we expect an increase in the GST from next year onwards. With the shrinkage of the budget surplus, the Government shall have less money to be transferred to the Edusave account and to Medifund. I hope with this transfer of less money to these two funds, the Government shall not hold back disbursements on these funds, especially to needy pupils and the people who need them. Sir, I can remember that in 1984-85, the opposition were calling for the employees' CPF contributions to be reduced so that they could have a bigger take-home pay. But at that time the Government asserted that the CPF contributions are sacrosanct. They are the workers' salary. They belong to the workers. They cannot be cut. But when the economy went really bad, to a minus 1.6% growth, the Government went back on its word and allowed the employers' component of the CPF to be reduced by a hefty 15 percentage points, from 25% to 10%. Sir, with such a precedent, I believe that workers are worried today. Despite the fact that flexi-wage system has been introduced, they are still worried that the Government shall allow the CPF rate again to be slashed downwards. Doubtless, should the CPF rate be reduced again, the workers shall suffer greater hardship this round because HDB flat prices have risen much higher than those in the 1985-87 period. The financing of these flats is higher today and HDB flat purchasers have to pay much higher monthly loan instalments. I urge the Government to do everything possible and prevent the recurrence of another CPF cut. Sir, another aspect of the CPF is that the Government should allow retrenched workers to draw on their own CPF. I remember that in the 1985-87 recession, the hon. Member for Tampines GRC, Mr Yatiman Yusof, called on the Government to allow a retrenched worker to withdraw $200 per month from his CPF account. I would now suggest that the Government allow retrenched workers to draw up to $300 per month from his CPF savings subject to, of course, the amount of CPF he has in his account. The Government should look into this proposal seriously because the number of retrenched workers shall increase. The expected number of workers retrenched is to be about 15,000 workers and some expect this number to increase to as high as the 1985-87 level of 20,000. Further, a survey recently carried out by two international consultancy firms showed that 62% of our workers' savings cannot last them more than three months should they be out of a job. Another 22% of the workers interviewed said that their savings could last only up to six months. The survey also revealed that most of these workers have low education and they are employed as blue-collar workers. Sir, most of these workers are also not young. There is merit for the Government to allow CPF savings to be drawn out by retrenched workers, especially if there are sufficient funds in their CPF accounts. After all, it is the workers' own money and they should be allowed to use it when they are out of a job and they are unable to find alternative employment or they have dependants to support. It has been announced that the Government is not going to fully keep its election promise to upgrade HDB flats since there is going to be a downturn in the economy. The upgrading of HDB flats programme is going to be slashed down this year from 15 to 10 precincts. The question is: should the economy get worse next year, is the Government going to further cut down on the HDB upgrading programme? I would think so. We have seen the Government going back on its promise before. The problem is that in the last election, the Government thought that the Singapore economy shall be forever on the upward trend, accumulating surpluses year after year, more than $5 billion each year. Under such an illusion, it promised voters that the Government shall carry out upgrading of their flats should they support the Government policies, ie, in plain language, vote the PAP. Well, they have voted the PAP and returned all PAP candidates to Parliament except two. What happens now? One-third of the voters may have to wait a very long time for their flats to be upgraded. The Government tells them now, "The economy is bad. We do not have enough funds." What is surprising is that the Government does not have enough funds in its coffers, yet it made a bold election promise to the people. Indeed, the Finance Minister in his Budget Statement does not think that the upgrading of HDB flats is a priority. The Budget does make special provision for education, defence, economic infrastructure like the reclamation of land at Jurong island, but there is no mention at all of HDB flats to be upgraded on a priority basis, although an election promise was made. The other point is that the Budget also has not mentioned about retraining of retrenched workers. In fact, the Government only spends money on pre-employment training in schools and vocational institutes. The only source of funds for worker retraining is from the Skills Development Fund, which are contributed by employers. The Budget this year has not specifically put any money aside for retraining of retrenched workers. This only shows how caring the Government is for the plight of retrenched workers. I know it is not right to pamper our workers unnecessarily. But in times of economic difficulties, the Government must show some compassion to take care of our workers who are out of job and not rely entirely on the business concerns to retrain our workers. Business people are never altruistic. They are only profit-motivated. As such, they may even take advantage of the economic downturn and use the attract foreign talent policy to employ cheap foreign labour and to train them with skills so that they can take over jobs from Singaporeans. In the end, many of the top-paying jobs in our workforce may be taken over by foreigners - a situation where Singapore workers cannot accept. The income tax rebate this year is only 5% compared to the previous year's when 10% rebate was given. Although the personal income tax rate this year has not increased, the net effect is that Singaporeans are paying more income tax due to the fact that rebates have been sliced by one-half. The 10% rebate should have been maintained because only a small proportion of the population is carrying the bulk of the tax burden. Since there are no tax reliefs this year, the Minister should maintain the 10% rebate. The rebates and grants given to HDB flat dwellers in the 1-room to 4-room flats should be increased by at least one-half. The Government is spending $72 million on these grants and rebates, which is only about 2.7% of the expected accumulated surplus. The Government should double this spending because, firstly, many of the HDB flat dwellers or members of their families may be retrenched. Secondly, these grants and rebates are only sufficient to cover for the increased charges in S&C and the increase in electricity and water conservation rates. The HDB flat dwellers at most shall be put in a neutral position as regards payments for the utilities and S&C charges. They shall not gain by these grants and rebates. If the Government really wants to ease the hardship of HDB flat dwellers, especially the 1-, 2- and 3-roomers, it should double the amount allocated.

Order. I suspend the Sitting and will take the Chair again at 3.40 pm. Sitting accordingly suspended at 3.19 pm until 3.40 pm.

Sitting resumed at 3.40 pm

Debate resumed.

Mr Speaker, Sir, once again we meet in this House to discuss the Government's policies for the new fiscal year and the monetary means they are using to implement their policies. The Singapore Government is a strong believer in the effectiveness of market forces as a means to allocate scarce resources. The pricing mechanism appears to be particularly effective in regulating demand and supply of goods and services, except where there are monopolies, duopolies and cartels. The price mechanism is, in fact, such an efficient tool to modify Singaporean behaviour that its wide use has earned us the dubious reputation of being a "fine" city. Every unacceptable social behaviour has its price, from littering to spitting to smoking in public places. For better or worse, monetary disincentives do hurt our pockets and monetary incentives do cheer up the masses, especially in these increasingly hard times - and Singaporeans have responded accordingly. So we jack up university fees in arts courses so that people will go into engineering; Accident and Emergency clinic charges so that people with non-emergencies will turn to other clinics; and increase taxi fares and Additional Registration Fees so that people who do buy cars really do so because they need to. In this way, we curb high demand for limited resources and channel demand to under-utilised facilities in the national interest and to promote Government priorities, and I think that is a good thing. In so doing, however, I believe we have become too trigger-happy in using price mechanisms. It has become the Jack of all Ministries and Master of all civil servants. Some of these incentives are present in this year's Budget. I am, however, not criticising any of them specifically, but I am merely raising a matter of broad principle. Monetary disincentives are painful but, I submit, not necessarily the most effective measure to deal with certain matters, such as the overuse of services with inelastic demand - some would say that would include A&E services - or to channel university students to do courses in which they have no aptitude nor interest. Policy makers should not just go for the easiest route but should look to more creative, non-monetary options if they wish to modify Singaporean behaviour along the lines of what they have determined are good for the public at large. Money as a policy tool may often be effective but is always uncreative. It can become the panacea and "easy way out" for all sorts of things that Government wants to encourage or discourage. In so doing, we invariably create a very materialistic and, if I might say so, uncouth society where "only money talks", because, in this case, the Government is the unchallenged leader and the trend-setter. Is that good ultimately for our society when we are all trying our level best to produce more volunteers and promote a more civic society? Money is too blunt a tool even if it is effective. We should perhaps ban all Government officials from suggesting direct fiscal solutions till they have proposed at least two other non-monetary options first. If monetary incentives and disincentives are indeed the only justifiable option, we should require our officials and the Government to spend a little more time garnering public support and culling public feedback before the policy is cast in stone. This way, Government is more visibly accountable to the people and public feedback is not seen as merely post-policy (or post-Budget) chipping away at the policy's edges. There will be no more unthinking resort to monetary mechanism as a first, rather than as a last, option. Surely, there must be plenty of alternatives always - albeit these alternatives may require patience, time, gentle persuasion and tedious education efforts. I surfed the Internet discussion groups, for example, during the A&E fees furore and found at least seven sensible non-monetary suggestions on resolving the problem. Even if these methods are time-consuming to implement, we should not totally discount them. Not every policy needs to be implemented overnight and we can explore these options slowly. We took one year to persuade Singaporeans to accept GST. We have six months to educate them on the benefits of the ERP. I know the Ministry of Communications has been working very hard to win support from the public and has been working behind the scene with special groups to justify and fine-tune the ERP plans. Like them, I hope other Ministries will not stinge on the efforts to educate the public on their own future policies. Even with increased A&E charges, it later appeared (as the debate heated up last year) that the proposed increased fees to deter excessive use of A&E for non-emergency cases was actually justifiable because the increases were lower than the costs that the hospitals were incurring. If that were so, why did not the Ministry take them through to the public in the first place, painstakingly perhaps, so as to win the hearts and minds of the public? Why could not they do it upfront rather than as a kind of afterthought? We have an increasingly educated and sophisticated electorate - we must not think that all this explanation is unproductive or wasteful or will indeed go over their heads. Let us all have the benefit of knowing all the deep thinking and sound analysis that went into each Government policy and not just be told to accept unquestioningly the eminent conclusions they have reached. Let us work together towards being a society that responds more caringly and sensitively to matters of Government policy, rather than to always turn to the over-ready financial beating rod. Sir, I support the motion.

Resolved, That the debate on the Budget Statement be proceeded with beyond 4.30 pm and the proceedings thereon be exempted at this day's sitting from the provisions of Standing Order No. 1 until 6.30 pm. - [Mr Wong Kan Seng].

Debate resumed.

Mr Speaker, Sir, this Budget comes at a time of economic uncertainty. It is clear that Singapore will be affected by the regional downturn. It is also clear that the present downturn is unlike any other we have faced, quite different and potentially deeper than what we have seen in the mid-1980s. What is less clear is the extent and duration of the downturn and the particular sectors that will be hardest hit. But also has to be decided which sectors Government will intervene to help and which it will leave to their own means, for better or worse. For those sectors where Government intervenes, the method and extent of intervention have also to be seen. Against this background, the Government has set three priorities: (1) to rally the people; (2) to help resolve the regional crisis; and (3) to plan for the future, so that Singapore will emerge from the crisis stronger than before. Sir, this Budget seems to focus on (3) to plan for the future. It gives a wide range of incentives for newer, emerging industries that Government wishes to foster. For other sectors, the Budget gives less relief than many had hoped for. The Minister for Finance has emphasised that the Government believes there is no immediate need for bailouts and that off-Budget items would be held in reserve if things turn for the worse. This seems a confident and prudent approach. It is an approach that, however, postpones potentially harder economic questions that this present economic crisis may yet require us to answer. When the Government holds other measures of help in reserve, it remains to be seen how well and how timely the Government will read the needs on the ground and shape its response. What we need, at this juncture, is a promise of close monitoring and that the Government would remain open to calls for assistance. In the present Budget, while the emphasis seems to be on incentives rather than bailouts, as I have said, one exception stands out. This is the measure to forgo property tax on land under development. This measure will cost the Government some $200 million in revenues forgone. This is a considerable amount to assist one particular sector, property developers. The last time this measure was taken was in the mid-1980 recession. In contrast, Sir, measures to help other sectors, such as hotels and retailers, are scant, if not, non-existent. Measures to help the individual taxpayer with a 5% rebate, while useful, are not as ample as they were last year where a 10% rebate was given. The present rebate seems even smaller when we compare it to the 25% given during the recession year of 1985. When we compare the assistance given to property developers with the 5% rebate, we must note that the relatively small number of developers will receive some $200 million, as I have said, while all taxpayers will in total receive the lesser sum of about $130 million from the rebate. Two questions arise from these comparisons. First, is it the Minister's view that the property developers are in a situation akin to that which was witnessed in the mid-1980s and, by comparison to the help given to them, is it the Government's view that other sectors like hotels and retailers and individuals are not so badly hit at present? The second question is how much must other sectors and individuals be affected before Government will assist in a larger way? What yardsticks will Government use to measure when it will be timely to bring in its reserved off-Budget assistance into play? In asking this, I note that the business sector has perceptions that things are already bad. Among some individuals I also know there have been already reports of distressed sales of property and even some suicides apparently triggered by economic woes. We have a reactive Budget. The important question is that it should be clearer when the threshold for reaction will come. Sir, in bad times of uncertain growth, many will look to the Government for assistance. It is not of course that all who ask must get what they ask for, not even Singapore's reserves are large enough for everyone's wish-list. But in deciding who to help, when and how much, there has to be a legitimate and fair basis for decisions and just as important, transparency. Sir, I have suggested that this Budget focuses on the third priority to plan for the future so that Singapore would emerge from the crisis stronger than before. While I agree largely with this policy, I think it is also important that this Budget gives equal expression to the first priority, to rally the people. In good times, many would be proud of Singapore, of being Singaporean. The more severe test of this pride is during bad times. Will the people rally? Does Singapore have sufficient heartware to pass the test of bad times? This is a question that follows from the Prime Minister's speech in this House in June last year about Singapore of the 21st century. The Singapore 21 Committee, of which I am a Member, and I declare my interest, Sir, will undertake its work on Singapore's heartware during the course of this budget year. There is a real danger, Sir, that some will think that the relevance of heartware is sidelined by economic exigencies. I hope that many more will be persuaded that, to the contrary, the question of heartware becomes even more important this year. It is precisely during these testing times that the heartware becomes vital and people have an opportunity to unite. How does heartware and the priority of rallying the people find expression in this present Budget? I am encouraged by the farsighted and generous provision for education. There is every need for a long-term and sustained commitment to the education of our youth. Additionally, Sir, I believe more can and should be done for heartware in terms of charities and the arts. These two subjects are of course very different. But they connect to heartware, how we take care of the less fortunate in our society and how we give expression to ourselves as Singaporeans. Both charities and the arts also need long-term and sustained commitment and they both share the prospect of diminished financial support during the coming hard year. The economic uncertainties of 1998 will likely cause businesses and individuals to cut back on their contributions to charities and the arts. Some arts groups I have spoken to have already seen or anticipate a drop of about a quarter of their support. The Government's emphasis has been on the `many helping hands' approach. The Government is not to be the sole provider but businesses, individuals and the people sector - societies, clubs and others - must also help. I do not ask Government to change the `many helping hands' policy. I do not ask them to step in with more money where private sector has pulled back, although of course there seems to be more than ample surplus for this. What I do ask is for Government to keep its contribution to charities and the arts constant, as far as possible. If there are cuts by this Government, this would be read by the private sector that the Government accepts that these matters are not priorities. Then they too will cut back. The other helping hands will take their signal from Government. In this way, our `many helping hands' policy means that a cut of a single dollar by Government must be multiplied by the corresponding cut of other helping hands. I also ask Government to recognise that even if their contribution to charities and the arts remains constant, the cut-back by the private sector will be felt. That is to say, in the `many helping hands' approach, the pulling back of any one hand would destabilise the charity or the arts in question. I therefore ask Government to consider if there are ways to encourage the private sector hand to remain constant even in these coming hard times. One measure, it seems to me, is to use the tool of double deductions. Sir, we currently allow contributions to approved charities and the arts to be deducted from taxable income on a one-to-one ratio. My suggestion is that this ratio be doubled. I understand a double deduction is already available for some contributions under the National Heritage Board, mainly for donations made to museums. I would encourage its wider application during the current downturn. I reiterate that this is not for Government to give more money or to give up the `many helping hands' approach, rather my suggestion is to find incentives for private sector hands not to waver in hard times. This would help maintain the consistent support that is needed for both the charities and the arts. For charities, especially, it should not be the case, that in hard times, the recipients of charity who can least help themselves would be those hardest hit. Sir, in conclusion, the Budget is not just a question of dollars and bottom lines. It represents our priorities as a nation. In bad times as much as in good, or even more so, we must prioritise not just big businesses and heartware but also people and heartware. I urge the Minister to consider the needs I have pointed to.

Sir, the Minister has a particularly difficult task this year. The groups which seek his assistance are many. If the Minister accedes to all the requests, we will be well and truly on our way to financial ruin. On the other hand, he cannot completely acknowledge all requests. The difficulty is always in identifying and, more importantly, defending his choices as being legitimate. This year, in particular, there has been a chorus of complaints about the budget due partly at least to the unreasonably high expectations of handouts aired publicly before the budget. How should we assess the budget and to what extent are the complaints legitimate? I would, as a point of reference, consider three factors. The first is the macro economic picture. Does the budget serve to retain investor confidence in Singapore and show the world that we are rational people who set a steady course and do not steer away from it? By that test, the budget scores extremely well. It tells the world that we are in a strong position, that there is no reason to panic and that there are no U-turns. By going for budget surplus even this year and by refusing to accede to most of the requests for help, the Minister has produced what I would call a "crunchy" budget. It is a word I borrowed from a journal which uses the yardstick of crunchiness to test government policy, crunchy as opposed to being soft. It is a crunchy budget which recognises that there will be pain, and rightly recognises that generally Government cannot ameliorate that pain. The Government has succeeded until now by being crunchy and not by being soft. It should continue on that course. The second point of reference that I would use is to consider the extent to which the Government is prepared to consider or create a macro economic environment which will provide the framework for sectors of the economy to thrive. Again, the Minister has to be commended for recognising the need for creating the right environment for the banking and financial sectors to grow. People complain that this is a Shenton Way budget. That criticism appears to overlook two points: first, that the manufacturing sector already has several tax breaks and incentives and that perhaps this budget simply tries to equalize that position vis-a-vis the banking sector. Secondly, the criticism really fails to recognise the great potential there is for Singapore if the financial sector's full potential is recognised and realised. The third point of reference that I would refer to I will call the cost of business issue. It is not the Government's business to do micro economic tinkering or molly coddle specific sectors. The Government should broadly aim to provide macro economic stability, keep taxes low and provide its services at market rates. What should the Government do about the services that it provides? The Minister has heard over the years the same complaint - the costs of doing business are too high - and his reply has also been the same. I would suggest perhaps a slightly different way of considering the problem. The Government provides various services and charges for such services. The private sector complains that the charges are too high. The Government, on the other hand, says that the charges are at market rates and such charges are also sometimes imposed to try and achieve certain socio-economic goals. Having heard a Member of the GPC who heard representations from the industry, all I would say to the Minister is that there is a substantial gulf in the perception between the Government and private sector as to whether the charges are at market rates and whether they are fairly reflective of the market rates. This year, in view of the economic situation, the Government should review its charges and the cost of its socio-economic policies, bearing in mind that often it is a monopoly provider of such services. And it should carefully review and, where possible, the charges should be in line with the prevailing economic conditions. In this context, one other point is that the Minister must know that the retail sector has been suffering for years, but consistent with what I said earlier, I am not herer to plead the case for the retail sector or any other sector. But this year, that sector faces even more challenges, and this is a year when the individual Singaporean is likely to have less liquidity. Mortgage rates are higher. Incomes are going to be squeezed. One should consider whether this is the year when tax rebates should in fact be reduced from 10% to 5%. It appears a peculiar move. It will mop up what liquidity there might otherwise have been in the market. The Minister may reply by saying that the rebate is a bonus anyway and that it is at the discretion of the Government. And my short reply to that would be that as far as possible, more money should be left with the individual to decide how he or she wishes to spend it, rather than mopping it up. With that, Sir, I support the budget.

Mr Speaker, Sir, during these difficult economic times, it is prudent that the Government still plans to achieve a budgetary surplus of $2.7 billion. Some people have said that the Government should propose a very expansionary budget, and even chalk up a budget deficit, in order to pump-prime the economy which may enter into recession soon. I believe, however, that what characterizes our current economic problems, and makes it different from our previous recessions, is our vulnerability to external economic shocks. The fall-out from Indonesia's deepening crisis may hit us much harder than we can currently anticipate and, if it does, we may well need a mid-year mini budget which may advocate some deficit spending. But at this current state of uncertainty, I support a policy of conservative prudence. It is reassuring to know that the Government is spending on long-term investments on education, infrastructure and defence, which truly underpin our economic success. We cannot just talk about our economic fundamentals; we must continually reinvest in honing and sharpening these fundamentals, which this budget has done. There is disappointment, however, about the lack of immediate palliative measures to help small and medium enterprises in their business difficulties. Many SMEs feel that the Government could have cut more levies, fees, charges and taxes and increased public spending in more sectors of the economy, thereby improving cashflow and business prospects in the private sector. The Government may not think that the conditions are serious enough, but a survey done by the Chinese Chamber of Commerce in January 1998 indicated that 94% of the respondents were adversely affected by the regional financial turmoil. I hope the authorities will monitor the situation closely and prepare in time contingency measures to deploy off-Budget expenditures to assist struggling enterprises. I would like to take this opportunity to highlight the need to spend more in areas which I think are important to Singapore's long-term development. I shall confine my remarks to the community service sector. I would like to propose six priorities for budgetary expenditures. First, more spending on social development projects because prevention is better than cure. In the budget's development expenditure for FY 98, the Ministry of Community Development (MCD) is given the lowest priority among all Government Ministries. It is just 0.11% of GDP, with the exception of the newly-created Manpower Ministry which has no development expenditure at all. While I recognise that development projects for other Ministries are equally worthy of our attention and support, I am concerned and curious to know why a Ministry such as MCD, which handles family support services and community intervention programmes to promote families and prevent their disintegration, has less need for development projects than other Ministries. I observe some disturbing social trends which were recently reported in our newspapers: increasing youth crimes, teenagers not confiding in their parents, rising divorces, increasing single households' problems, declining `O' and `A' levels results and low esteem among those who did not fare well in 1997, etc. We may well accept that the Ministry of Home Affairs with all its responsibilities will be given a development budget which at $900 million is more than five times greater than MCD's development budget, which is $178 million only. What is perhaps a little lopsided, however, is the fact that MHA's Police programme alone, which is $240 million, is given a development budget which is 45% more than the total development budget of the entire MCD. The equivalent is $240 million for the Police programme and $116 million for the entire development expenditure for MCD. I wonder if there is a correlation between an expanded Police programme and family instability, ie, the more unstable a family, resulting in family abuse, runaway kids and drug addiction and other concomitant problems, the more the need for policing activities to keep crime rates down and restore community security. Is there an argument that in the long-run, it is a more effective and sustainable strategy to invest and encourage preventive programmes in neighbourhood FSCs (Family Service Centres) by MCD than having to spend on remedial institutions like the Police Force, drug centres, prisons and detention homes? In a similar vein of thinking, more development expenditure by the Government on family life education programmes in promoting family relationships will prevent spousal violence, child abuse and juvenile delinquency, creating less need to deploy police officers and health officers in clinics and hospitals in the management and rehabilitation of the violence. The dollars wasted in the time and energy spent in managing family conflicts is not inconsequential. Some countries have shown that the aggregated resources spent represented a sizable percentage of the GDP. It may be worthwhile for us to attempt a similar evaluation exercise. If MHA were to focus on remedial rather than preventive programmes, then perhaps MCD could be given a larger development budget to undertake preventive programmes. The increase in the development expenditure for MCD, however, is only 7% which is $12 million over the last fiscal year, whereas for the Police programme, the increase is 38%, which is $66 million. Second, spend to build a body of knowledge in our community service delivery system. A more serious concern is the fact that MCD will spend only $7.5 million or 1.4% of its total expenditure of about $532 million on research and information technology. And in MHA, there is not even any provision on research at all. How much of MCD's research and information technology budget will actually be spent on research on family and community issues, I do not know. I do not need to emphasise the importance of having continuously updated, integrated data on families at risk to help policy makers from various Ministries define their management strategies and operational procedures. A one-off nation-wide survey on families which MCD is currently engaged in may be necessary and useful for identifying demographic and family relationship patterns, but it does not substantively add to our enforcement officers' operational knowledge which should be grounded by case analysis, informed by research inputs and tested by practices uniquely adapted for our society. Without building up a research department within the Ministries, handling family cases or providing the budget for such efforts to be undertaken by other academic institutions for the Ministries, we will find our enforcement officers less and less equipped with effective intervention and family therapy methods and able to identify the necessary social programmes to enhance service standards among our frontline workers. Third, spend to set up a Neighbourhood Continuum of Services for all ages. It is an important item on my wish list to see more but small, efficiently run old folks homes, children centres, youth hang-out joints, family service centres, day-care rehabilitation centres for the old and the disabled, special programmes for physically and mentally disadvantaged in more schools in every constituency. As to how many of these services need to be set up in relation to the population base in the constituency, what optimal size will be ideal to achieve best performance, the number of workers and the kind of social work skills we require, these are key issues to address, and I do not think we really know. Fourth, spend to identify national manpower needs in the social service sector. Without guided research data to inform us exactly what are community service needs, we may be busy building more development projects, but unable to clearly evaluate their relevance, impact and sustainability for the community which needs our services. How do we even start mapping the needs of the community and determine the continuum of services and skills to be set up? It will be the public, the vulnerable victims and dysfunctional families who will be shortchanged due to incompetent service standards. It also results in economic wastage. By comparison, our Government seriously identified the need for skills upgrading in our workforce and a large sum of money is put aside by the Ministry of Manpower to retrain our workers in the industrial sector after research into skills retraining. We all agree to this pro-worker and pro-business directive because it enhances our competitiveness and fuels our growth engines in the economy. In a similar manner, I argue that we need to commit priority time and resources to critically evaluate community service delivery programmes, identify where the needs are, train our social workers and volunteers with the necessary skills to offer the public value-added service and rehabilitation treatment so that as healthy and well integrated families, we help to build the social foundation for Singapore to cope with the challenges of the 21st century. Fifth, budget for fitting the puzzles of Inter-Ministry management and integration. Another component which I think should be included in a budget is programme management and evaluation expenses. In cases of juvenile delinquency and drug offences, violence in the home involving young children and other family disputes, their management is very often beyond the boundary of one Ministry. Take a family violence case, for example. It involves the intervention efforts of MOH, MCD, MHA, MOE, the Courts and FSCs. I take an example of spousal violence case. MOH will determine the extent of abuse through medical examination; MCD offers the social support through FSCs and protects the child by taking her or him to a place of safety; MHA offers protection and safety to the victims and directs abusers for rehabilitation; MOE identifies cues and signs of abused children or child witnesses in schools to intervene early before their traumas deepen. Recognising that case management has to be multi-disciplinary and involves multiple parties from different Ministries, we need to study, pilot and evaluate intervention and rehabilitation programmes. Following this argument, I would like to propose that the Minister set aside a special budget to pay a team of consultants to re-engineer a cross boundary integrated study in community management. It is time to take a fresh look and review as well as recommend how Ministries can and should work effectively together to solve social problems. Models from other countries and their experts can be consulted for this purpose. My last budget proposal is for a Central Registry of victims and perpetrators for fast response and efficient intervention. In most countries, a Central Registry is set up to capture victims' information in computers so that front-line agencies like the police, the courts, the hospitals, FSCs and Helplines are electronically linked up to better able to track offenders and victims and adopt appropriate prevention measures before crimes are alerted. A national priority must be given to setting this up for the purpose of promoting quick alert, fast response, efficient referrals and cross-checks. I have highlighted six budget priorities for the community service sector which I hope the Minister will look into and consider giving off-Budget expenses for their implementation. If we give $3 million to start up each of these programmes, the total will only be $18 million, which is a small drop of the expected surplus of $2.7 billion. The return on investment in dollars spent in this sector, unlike in business, is not immediately calculable, but as in education, its rational reinforcement only helps to refine our social service network of institutions and expertise and restore to the community its sense of well-being. A sense of well-being felt by Singaporeans is arguably a most competitive human resource which we can bring to the economy and this country. That, for me, Sir, is priceless and enduring.

Mr Speaker, Sir, in spite of this year's budget being dubbed a prudent one, I am glad to note that many MPs who have spoken before me are generally supportive of it. The Budget Statement is in line with our larger goals of preserving our long term competitiveness and achieving a stable growth pattern as we position ourselves to become a developed economy. What is impressive is the Finance Minister's ability to show a surplus of $2.7 billion or about 1.7% of GDP in a difficult and uncertain year. This is important as it demonstrates to fellow Singaporeans and the international business community that in spite of the financial woes enveloping the region, and to some extent our economy, we are still intent on building our reserves even though it may be the lowest in years. The financial crisis has certainly proven the importance of building a strong and healthy reserve, without which we would have suffered the same fate as some of our neighbours did in the regional currency battering. For the year ahead of us, what is even more important is the fact that this very surplus will become available immediately for infusion into the economy should there be a need for the Government to implement off-Budget measures, as already promised by the Finance Minister, Dr Richard Hu. Sir, as stated by several Members already, the financial services sector is once again the major beneficiary of the host of incentives unveiled in the Budget Statement. As this sector is one of the key propellants of our economy and the fact that it is also tied to our goal to be a global financial centre and a regional business hub, it is therefore appropriate for this sector to be given a further boost. Above all, I am pleased to note that there is no softening in the allocation of funds for education, although we could have done better in setting aside more funding for Continuing Education and Training (CET) in the wake of the current financial crisis. I am sure several of my labour MP colleagues will touch on this subject at length. In spite of the need to be prudent in crafting the Budget during this unstable period, we must continue to build on the philosophy and wisdom of "teaching a man how to fish". Inculcating creativity and thinking skills in our school children will provide the foundation for them not only to survive in an increasingly challenging world but will also shape their mental framework to overcome adversity. However, Sir, in the wake of our expected growth slowdown and the full impact of the regional economic crisis expected to be felt this year, it is fair for the business community to also anticipate a budget that would offer them some relief to help them tide through the current difficult period. As already stated by Mr Leong Horn Kee, Chairman of the Government Parliamentary Committee for Finance, Trade and Industry, and also being a member of the Committee myself, I wish to echo the disappointment expressed by the various Chambers of Commerce and Industry and the trade groups and associations the Committee met with after the announcement of the Budget Statement. They strongly felt that the budget primarily benefited certain segments of the financial sector and failed to provide sufficient reprieve in lowering business costs in the current difficult and challenging business environment. As a result of the financial crisis afflicting the region, many of our local businesses are experiencing various setbacks and are cash strapped due to their exposure in the regional markets, especially Indonesia, Malaysia and Thailand. Demand for the products they sell to these countries has sharply decreased due to the exchange rate situation, and at the same time their imports from these countries are finding fewer buyers as Singaporeans tighten their belts on spending. Sales contracts made before the currency crisis and denominated in regional currencies are resulting in drastic exchange losses, and to make matters worse, payments are coming in slower than ever before, thereby contributing to cash flow difficulties. On the local front, interest rates are higher and banks are more conservative in extending credit. Many businesses are therefore confronted with tight cash flow, reduced turnover, relatively higher costs, and potentially higher bad debt exposure. Sir, the recent widening of the scope of the Local Enterprise Financing Scheme (LEFS) is indeed the sparkle in the Budget for our local businesses, especially for the small and medium-sized enterprises (SMEs). It will help to alleviate cost pressures on businesses. However, some groups expressed the concern that the enhancement will primarily benefit larger companies which will be viewed more favourably by the financial institutions in their lending considerations, whether or not they are prepared to co-share the lending risks. I suggest that some attention be given by the administrating body of the scheme, ie, the Singapore Productivity and Standards Board (PSB), to deserving companies which may have difficulty in securing working capital loans from the financial institutions. Concerning the wide range of Government assistance schemes available for companies to take advantage of, the local enterprises continue to feel that there is room for further simplification of the procedures. Many are turned off by the amount of paper work required to apply for the schemes. I hope the appropriate Government agencies administering the various schemes could look into this matter. In regard to the 15% tax rebate for commercial and industrial properties, while this directly benefits the property owners, there is concern that many private owners will not share this concession with their tenants. I suggest that some form of a concession-sharing formula be considered to require landlords who rent out their properties to share the rebate with their tenants. Only then will this concession benefit a wider cross-section of the business community. Sir, on the extension of rent freeze by the JTC and HDB, it was strongly felt that the freeze did not offer anything extra to lower operating costs, as both agencies had frozen their rentals since the middle of last year. As rent in most cases represents the second highest component of business cost, I suggest that this area be closely looked at as a possible off-Budget action, should the situation worsen. On corporate tax reduction expected by certain quarters, I personally feel that it would not make much of a difference to businesses in a year where profits are expected to be generally lower or where there are no profits to be made at all. However, I do hope that some form of a multi-tier corporate tax system for local SMEs as proposed by Mr Lew Syn Pau in last year's Budget debate is being considered by the Minister for Finance. As an example, Mr Lew suggested that the first $2 million in taxable income could be taxed at 15%, the next $3 million at a higher rate of 20% and amounts above $5 million at the long term rate of 25%. Such a move will help local SMEs grow faster as the savings in corporate tax could be ploughed back into the business. One way to ensure that the money is reinvested is to make it a condition that companies could only enjoy the scheme if the tax savings are retained in the business for re-investment purposes. Mr Speaker, Sir, on the 5% one-off tax rebate for individuals, while I do understand the rationale for the reduction from the 10% one-off given last year, I wish the Minister could have been more generous in the light of the current economic gloom. The relief could have helped make up for the declining disposable income anticipated this year as a result of lower variable bonuses and salary increases because of more difficult business conditions. The spare cash could, in turn, be channelled back into the economy to help the ailing retail sector which is experiencing a serious slowdown. Sir, I think it is important in this rapidly changing and events-driven economic environment for the Government to closely feel the pulse of the business community and economy on a regular basis to ensure that off-Budget measures could be taken swiftly before the situation becomes very difficult to contain. Having said all that, Mr Speaker, Sir, I believe there is an urgent need for businesses to learn that they cannot continually look up to the Government to solve their business problems. They need to be educated on the realities of the harsh and fiercely competitive business environment which calls for responsiveness to changing circumstances and customer expectations in the smallest possible lapse of time. They must be made to understand that survival today means effectively managing perpetual motion or risk becoming obsolete. Finally, Sir, amidst the gloom hovering over us, it is important also for us not to be obsessed with the negatives and forget about the opportunities abound in the region. With the strength of the Singapore dollar relative to regional currencies, there are tremendous opportunities to acquire or buy into companies which are in dire need of capital infusion in our neighbouring countries. On that note, Sir, I support the financial policy in the name of the Finance Minister.

Mr Speaker, Sir, before I move on to speak on the Budget, may I just say a few words about how refreshing I found Dr Tan Cheng Bock's outburst on, what I guess, an attempt to silence even an MP speaking up. I do hope that Dr Tan Cheng Bock would accept the invitation of the Leader to move a motion in the House that Singaporeans should not be admonished or stepped down for speaking up, and he will find in me a ready supporter. I await the motion from Dr Tan Cheng Bock. Dr Tan Cheng Bock rose ---

Do you wish to give way to Dr Tan?

No, Sir. I want to continue.

Dr Tan, resume your seat. Dr Tan Cheng Bock resumed his seat.

Maybe afterwards. May I move on to the Budget because we are allowed half an hour for the Budget speech. Mr Speaker, Sir, may I make a few introductory remarks about the Budget before I come to the specific concerns of my Party on this Budget.

4.35 pm One is that, reading it, it sounded to me more like the 1997 Budget. It seems to be a rehash of the 1997 Budget. It read more like the 1997 Budget than a Budget for this year. The other observation that I wish to make is that, as has been mentioned by a number of speakers, the Government's assessment of the impact of the financial turmoil in the region on Singapore seems to be different from that outside the Government. The Government would appear to take the view that Singapore should come off quite well without getting hurt too badly. But that does not appear to be the view of the people in the business community and outside. We only had the statement of the Singapore National Employers' Federation on 4th March, replying to the head of the NWC saying that there should be no cuts in the basic pay. The Federation's reply was that it was too early to say pay cuts were not necessary and that some companies had already taken the step to cut the pay of their executives. This is something that was lost on the Deputy Prime Minister when he replied to my motion about six weeks ago. Because he seemed to think there were no pay cuts outside the Government and Government should not move in first. So there are these conflicting views. And as has been expressed, this Budget would appear to be not alive to the seriousness of the economic crisis that faces us. I get that impression. It seemed more alive in the 1985 Budget but not in this Budget. A thought passed my mind and that was whether the Finance Minister was perhaps getting a bit too old in being Finance Minister, or getting tired of it.

Order. You shall not be personal with your remarks.

All right, Sir. I am sorry. But may I also then move on to the other observation that I wish to make, and that is this. He says in his Budget speech that the Government is keeping a "tight lid", a cap on operating and development expenditures. And he goes on to say elsewhere that it was the Government's "deliberate policy to keep the public sector lean and trim". Having said that, if one looks through the Budget, one finds that the operating expenditure has gone up by $1.12 billion over 1997, and that is, after the Minister says it will be the policy of this Government to keep a tight lid on expenditures, particularly operating expenditure. I have no quarrel with the increase in the development expenditure, but this operating expenditure. I look at the expenditure for the Prime Minister's Office. And I see the operating expenditure there has gone up this year by $7.55 million. I also read what was the work programme under the Prime Minister's portfolio. And if I may read from the Budget book, Mr Deputy Speaker, Sir: "The work areas under the Administration programme include providing administrative support to the Prime Minister, Senior Minister and Deputy Prime Minister, administering the Singapore State Arms and Flag and National Anthem Rules, allocation of state cars as well as matters relating to National Honours and Awards. The Elections programme covers the production and public exhibition of the registers of electors, maintenance of the electoral database and conduct of elections in an election year. The Corrupt Practices Investigation Bureau investigates allegations and complaints of offences under the Prevention of Corruption Act, maintains records of persons investigated by the Bureau and provides screening services to public authorities and authorised organisations."

To administer this programme which, as I have read, includes, among other matters, administering the State Arms and Flag, the National Anthem Rules, allocating state cars, the elections programme and the Corrupt Practices Investigation Bureau, we are told that the operating expenditure should be raised by another $7.55 million. And we are told also that this programme is administered by no less than four Ministers, one Senior Minister (this post has been vacant for the last two years but apparently it is considered necessary to have a Senior Minister as well, besides the four Ministers), one Minister of State, one Parliamentary Secretary and two Political Secretaries. Really, Mr Deputy Speaker, do we need six Ministers to administer the work programme that I have just read out? And I see that, of the increase in the operating expenditure, it is the expenditure on political appointments that has gone up by $4.4 million from 1997, and it has gone up by $7.4 million from 1996. I see the Prime Minister has left the House, but I was hoping we would hear from the Prime Minister, because the Finance Minister may not be in a position to answer this. Why do we need all these Ministers to administer this programme? Is this, Mr Deputy Speaker, Sir, a case of Parkinson's law in operation? And do we still need nannies for the Ministers to oversee what the Ministers are doing in their own Ministries? I say this because it seems to me that not enough thought has been given to what we are spending on the administration. I have taken the Prime Minister's Office as an example. Now, may I move on, Mr Deputy Speaker, Sir, to my Party's concerns in this Budget. Several speakers have spoken of the concern of the business sector. I am not here to say that we should not take care of the business sector. They are most important. But at the same time, I think one must not forget that labour has an equal part to play in the economy and in attempts to resuscitate the economy. And as I said, my Party is concerned about the effect on the workers. Before I come to that, may I also mention something which I have overlooked, and that is, the total absence in this Budget of any cost cutting measures on the part of the Government. Mention has already been made of no announcement of JTC and HDB decreasing their rental charges or that they have any intention to do so. Neither is any mention made of the amount of revenue that is collected by the Government in fees and licences. Do we still have to maintain these high fees and licence charges when the businesses are finding it difficult to make their ends meet? May I now move on to the Party's concern. The Minister says again, in his Budget, that our priority this year should be to protect jobs. We say amen to that. But look through the Budget Statement and we see no word at all of how the Government proposes to protect the jobs of the workers. As was mentioned by the Singapore National Employers' Federation in their statement on 4th March, the rate of unemployment has increased this year and several speakers have mentioned this. I was told the other day, when I was at Ang Mo Kio, of a company telling one of its workers that either he took a pay cut or face losing his job. How is the Government going to protect the workers' jobs? Has the Government any plans to stop employers from taking advantage of the recession to terminate the services of workers who have been with them for years and employing cheaper labour? During the last sitting of this House, when there was a question from my Party Member to the Minister about paying retrenchment benefits to workers who have worked for more than 10 years, the Minister of State said that there was no need for any legislation. May I tell the Minister for Labour and the Government that if there had been some legislation protecting the workers' rights by requiring employers to pay compensation for unfair termination, employers would not be trigger-happy, to use that term, to lay off their workers. But we do not have any such law and, as I said then, our workers are completely at the mercy of the employers. What is the position of our workers vis-a-vis foreign workers? Are they going to lose their jobs in preference to foreign workers? Sometime ago, I thought I read about the Secretary-General of the NTUC, who is also a Cabinet Minister, saying that it would not be right to expect companies to keep Singapore workers and only get rid of foreign workers first. Across the Causeway, Mr Deputy Speaker, Sir, I see the government has announced its intention to keep strict watch on companies laying off workers by requiring them to explain the proposed retrenchment. Does the Government here propose to do anything like that? Then there is the question of retraining of workers. I had asked the Minister for Labour to let me know what is being done by the Government on retraining and his private secretary rang up to say, "You can't have it now. The Minister will be giving an answer in the House on Monday and you will have it then." I have not been able then to study the Government's plans on retraining. So it is very difficult for me to speak on that. But I think Mr Chiam has already touched on it slightly, and that is, it does not seem really to provide for the situation that we are facing at the moment. A lot of it is left to the employers or the agencies outside and the Government itself is not controlling the retraining of workers. The Finance Minister went on to speak about the United Kingdom rolling back on welfare. I think the Minister was a little unfair. If he had studied what the Labour Government in the United Kingdom has planned, he will find that it is not just rolling back welfare payments for workers but has prepared well thought-out plans and schemes to find employment for those between 18 and 25 and for those who are over 25 who have been unemployed. There are booklets available and perhaps the Minister should look at them. Why cannot the Singapore Government do something on those lines? Then there is the relief or help for those who lose their jobs. All the Minister can offer is the rent rebates and the service and conservancy rebates and the utilities rebates. But the rent rebates and S&C rebates are lower this year than what they were last year. For 1- and 2-room flats, the S&C is reduced by one month. For a 3-room flat, it is reduced by 1� months. For a 4-room flat, it is reduced from one month to _ month and for a 5-room flat, it is reduced from one month to � month. Is that all the help that the Government proposes to give to people who are going to find themselves without a job and are unable to make their ends meet? Is there nothing else that this Government can do? There was a wonderful opportunity for the Minister and for the Government to do something, not just for the wealthy but for the entire country, and that was to suspend the Goods and Services Tax for the period of the recession. Mr Deputy Speaker, Sir, we were opposed to the Goods and Services Tax. We called it an evil tax, an unfair tax. But the Government proceeded, and the result was an immediate increase in prices of everything. Of course, retailers and manufacturers had to put up their prices if they have to pay the Goods and Services Tax. And I see that it is now a good earner in revenue for the Government. For 1998, it is estimated at $1.95 billion and it has gone up by $90 million over 1997 and it is the third biggest earner in tax revenue. I was curious to see that there was another item "Other Taxes" which brought in $2.3 billion. I wonder whether the Minister would explain what these "Other Taxes" are. And again, the fees and services collections account for a very significant portion of the revenue. May I ask the Minister: was suspension of the GST ever considered at all? Even if it was not thought possible to suspend the whole GST, was any thought given to exempting the tax from basic necessities like food and clothing and education? What about the water tax? Was any thought given to suspending the water tax and other taxes on basic services provided to the people? We were told that the reason for the water tax was because there was a threat to cut off our water supply. But now, we have been told by the Malaysian government that it has no intention to cut off the water supply. So will the Minister consider waiving even that little bit, cutting off the water tax, because that affects almost every household in Singapore? Mr Deputy Speaker, Sir, the Budget should address all sections of the community. As I said, we have no quarrel when it addresses the concerns of the business community. But it abysmally fails to address the concerns of the workers and of those who are not well-to-do. And it is, Mr Deputy Speaker, Sir, in many ways a very disappointing Budget. As has been mentioned, the business community is not exactly clapping. Nobody is clapping at this Budget. It is unfortunate that the Minister has missed the many opportunities that were open to him and to the Government to show that it was concerned about the economy and its effects on the people and that it would take into account the hardships of our people and that is why I call this a most disappointing Budget we have had for many, many years.

Mr Deputy Speaker, Sir, I heard a very refreshing and interesting speech by my parliamentary colleague, Dr Tan Cheng Bock, but not the speech and viewpoints of the NCMP. That aside, I know that you are functioning on a very tight schedule. So I shall be very precise and raise a few issues. Sir, I would like to state that this year's budget is rather prudent and I expected some giveaways for low-income families, but there are less giveaways this year. This is understandable as the economic situation is expected to be tight for the next few years. However, I would state that it would be better to maintain a status quo in terms of the budget, rather than to increase other related charges because there were off-Budget charges which had been implemented earlier such as electricity, medical and property charges. The increases which have been announced by some Ministries and restructured Government bodies have increased the burdens of the households and companies. These increased charges should be reviewed as they were implemented before the economic downturn. I hope the Minister, in his off-Budget proposals, would take this into consideration. Sir, such practices should be carefully monitored to ensure that the budget is not jettisoned out of course. Sir, I would like to touch on a number of issues. First, is the plight of the low income pensioners. The pleas of low income pensioners have been heard by the Minister many a time. I hope he will not just hear but act to bring some relief to the pensioners. It is high time that we revised the pensions of very low income pensioners, particularly those whose pension is very low and meagre, much lower than the public assistance rate. These pensioners have given sterling services to the Government during their time and it is about time that we gave them an uplift their life and their shoe-string income. And this is particularly the case for those without children and immediate relatives. I think they do deserve our attention and we should provide the best of support we can give for this group. Although there is an argument that there is the Singapore Allowance, I do not think that the allowance together with their meagre pension would reduce their burden at all. I feel that the Minister should give very close attention to this group of low income pensioners. Sir, the other issue is to look at the effects of corporatisation. In the last five years, Government has corporatised various public sector services. The question we should ask ourselves is whether the corporatised public sector services are achieving their objectives. Are these corporatised bodies efficient and effective? I think it is very important to review their performance at this stage. Sir, a number of public sector services such as health care, telecommunications, power and gas, and broadcasting have made their presence felt in the last number of years through corporatisation and restructuring. They set charges and commit huge expenses. A lot of them spend millions of dollars. All these decisions have implications on the consumers, namely, cost and efficiency of services. In short, one cannot ignore that these public services must be affordable to the majority of the population. Sir, I must say that there is always the temptation that these corporations strive to make high and mindless surpluses, as they do not want to show up as inefficient. When this happens, consumers would have to carry the brunt as they have limited alternatives to purchase services, other than telecommunications where there has been competition in telecommunication services. A number of operators have come in. Prices have been reduced and I am sure you would agree with me that it would be a welcome change to have a number of other operators to provide public services so that they can give the monopolistic private sector services a run for their money. I must say that the interest of the consumers must be protected and regulatory bodies must be established to make them accountable. I read with much concern the comments of the Public Accounts Committee which stressed for more accountability of corporatised public services and statutory boards. It is high time that the Government imposed some controls on them so that the interests of the consumers are safeguarded. I think this is very critical at this stage of growth and there is a need to ensure that there is good accountability from these various corporatised public service bodies. I want to find out from the Minister whether these corporatised public service bodies are efficient in making surpluses or cost effective in providing services. This is essentially a very important issue that we would have to review and examine. Sir, on incentives for savings, we have to encourage Singaporeans to save more, and not to spend money that they can save. The spend culture will make us more indebted and economically vulnerable. We cannot expect to be a strong society if we have low reserves. I would like to urge the Minister to give incentives or rebates to those who save. We will have to encourage a more saving culture so that we will be more consolidated and be able to manage even in difficult times. Sir, on the question of training for workers, particularly older workers, companies that have older workers should be given tax rebates for training of their workers besides the funding from the Skills Development Fund. The Skills Development Fund is not comprehensive to cover various grades of workers. An additional tax rebate for companies which take active steps to retrain older workers should be considered. The present incentives are cosmetic and not serious enough to step up the interest to train our workers. It is important to encourage some of these companies to think about more innovative ways to retrain older workers. And I am sure the Minister could be a bit more liberal and provide grants and support to companies which are more positive and prepared to undertake the retraining of older workers. On that note, I support the motion.

(In Mandarin): Mr Deputy Speaker, Sir, Singapore is facing financial and economic difficulties. How long the difficult situation will continue or how deep it will sink is still uncertain. But what we can see is that many businesses are faced with a stagnated market and serious cash flow problems. Many people are faced with a reduction in income or even unemployment. Everybody is trying to adjust or adapt, but they soon discover that the options open to them to adjust or adapt are not many. In the business community, many items of operational cost such as rent, wages and various Government charges are fixed expenditures. The little bits of rebates offered by the Government cannot effectively bring down the operational cost for them to pull through. As for the ordinary citizens who are unemployed or have suffered a reduction in income, they still have to pay the instalments for their mortgage loans, educational fees, GST and the various charges that have been raised again and again over the years. During the Budget debate last year, I pointed out that the escalation of the various service charges such as public transportation, refuse collection fees, university fees, water conservation tax and the selling price of HDB flats was worrying. I also warned the Government that if it was unable to resolve the problem of business cost resulting in the workers' salaries being stagnated or the factories closing down, then the pressure on the people would be mounting. Unfortunately, many people are already facing this pressure. The Government should review the price mechanism that it has been employing all the time to achieve its policy objectives. The side effect from the price mechanism principle is higher cost of living and higher operational cost for businesses. When times are good, and business is good, the various costs and charges would go up. Once the economy takes a downturn, income is reduced, and they will face a big problem because the fixed expenditure cannot be changed. For the business community, when the economy is good, the costs of materials and operations will go up. When sales are good, they could still manage to pull through. But once the situation is bad, when their sales drop, they would not make enough money and they will have a serious cash flow problem. Because of this high cost of operation, the profit margin is low, and they could not save enough for a rainy day. Once they face difficulties and are caught in the midst of instalment payments, there is no way they would adjust or trim their overhead expenses to tide over. From this budget, it is apparent that the Government feels that the economic situation faced by Singapore is not serious enough. But the survey by the Singapore Chinese Chamber of Commerce and Industry reveals that more than half of the businesses are facing cash flow problems. A global securities institution, Morgan Stanley, has predicted that Singapore may face zero growth in its economy. I hope that the Government's judgment this time is correct. I hope that it would not repeat what it did in 1985 when it waited until many companies had closed down and the economy was well battered before they resorted to contingency measures. What I do not understand is that when the Government levy taxes, they always say that we have to provide for a rainy day. But when we are having difficult times, when the people are tightening their belts and not knowing whether they could tide over, the Government does not come to their rescue. All they say is, "wait and see". When the people are faced with unemployment problems, the Government's policy is to enhance their employability so that they could resolve their unemployment problem. If you can find a new job that pays you the same wages, it is well and good. But if you cannot get a job that gives you the same pay or you cannot even get a new job, then what is going to happen? When we face an economic depression, when people are facing a long unemployment situation and if the Government is unable to attract new investments to create job opportunities, then what protection can we give to our workers? What I am more worried is that, with the financial crisis in this region, the value of the Singapore dollar may be affected. Our imported goods would be more expensive and our people will face serious problems of inflation. Under such circumstances, would the Government promise to suspend the collection of GST? The Government has also said that if the economy takes a turn for the worse, it will consider reducing the CPF contribution rates or allowing people to withdraw some CPF savings to tide over. But the problem is how much money do our people have in their ordinary accounts in the CPF? The HDB flats are getting more and more expensive. Under the new policy, the people have to withdraw everything they have in their ordinary accounts before they could obtain a loan from HDB. I understand that many Singaporeans have only enough CPF savings to pay for their loan instalments. What happens if one day we suffer a very serious depression and many people are unemployed and faced with serious inflation, what can our people rely on? When the economic situation is good, the Government feels that the people could afford it and they keep on increasing charges. When the budget is released, the rebates given to the people are so small. It is just like trying to put out the fire of a burning cart-load of wood with a cup of water. When salaries are frozen or incomes are reduced, the Government does not provide anything for them. To the Government, it is a situation whereby the "horses will continue to be raced, and the taxes will continue to be levied."

(In Mandarin): Mr Deputy Speaker, during the Budget debate last year, the MP for Hougang used the analogy of "wool coming from the back of the sheep". This year, he switched to the horse, saying "the horses will continue to be raced, and the taxes will continue to be levied". This being the "Year of the Tiger", I think the most appropriate animal to be used as an analogy should be the tiger. The financial and currency crisis this time is like a tiger. When the tiger is around, we will have difficulty climbing the mountain. I think the Government should play the role of the legendary hero Wu Song. In the episode from the Chinese classic The Water Margin, Wu Song drank three big bowls of strong liquor to gather enough courage to go to the mountain where he encountered the fierce tiger and killed it with his bare fists. Our Government can play the role of Wu Song, but it relies on prudent financial policy rather than alcohol to defeat the "tiger". We must go to the mountain, face the tiger squarely and defeat it, for the benefit of not only our own people but the people around us as well. This Budget is presented in the midst of a regional financial and currency crisis. It hits our neighbouring countries, like Indonesia, Malaysia and Thailand, and we are also affected. Our Singapore dollar is also affected. However, I feel the impact of the currency turmoil has not been fully and adequately reflected in this Budget. Perhaps, the Finance Minister wants us to remain unruffled. He does not want us to be unduly worried. He only indicated that if the situation gets worse, he will take off-Budget measures to assist the people. I hope that in his reply tomorrow, he can enlighten us on what measures he is going to take to pull us through the difficult times. As we can see, some companies are beginning to downsize or restructure and many workers are affected. I feel that this is a very important lesson to learn. At a time when we want to attract foreign talents, we should also help our own workers to upgrade their skills. However, there is no mention in the Budget of any specific measures to promote job upgrading for our workers. Many businessmen feel that this Budget has not provided adequate help to the small and medium enterprises. Although there are existing packages to help them, they feel that it is something which "you can see but cannot enjoy". The government officials, on the other hand, say "You do not see it, thus you don't enjoy it." So there is a perception gap between the businessmen and the bureaucrats. I feel that we should have more dialogues between the SMEs and the authorities so that the business community can understand what facilities are available to them. Similarly, some people feel that owners of 5-room HDB flats should be entitled to the same rebates as those living in the smaller flats, because living in bigger flats does not necessarily mean that they are better off than their neighbours in the smaller flats. From these observations, we can see that people are more concerned with their own interest. Of course, we cannot fault them for looking after their interest. But at a time when we are faced with this regional financial crisis, we should have a [ ] "sense of crisis" rather than the [ ] "sense of self-interest". I feel that in this budget we have not fully made use of this opportunity to inculcate in our people a sense of crisis. Let us reflect on what happened at the SilkAir accident. After the crash, many people came forward and signed the book of condolence and attended the public memorial service. It is a very valuable lesson. Singaporeans are more united and have more human touch because of this incident. Therefore, we should make use of this regional financial crisis to unite our people so that we have a sense of crisis and have less sense of self-interest. We should also encourage the people to upgrade themselves. In the past few years, many Singaporeans have been upgrading. They have been upgrading in terms of their housing. When they can afford it, of course, it is well and good for them to upgrade. Unfortunately, there are many people who are upgrading even when they could not afford it. They upgraded from a small flat to a big flat, and then from a big flat to a bigger unit. Now, because of this crisis, many people are changing from the bigger flats to the smaller flats. They are downgrading! In fact, the people should be encouraged to upgrade their skills rather than their flats. In the past, we said that a skill in hand can benefit you for a whole life time. But in the present context, one skill is just not enough. We must be multi-skilled so that we will not be caught in the wrong foot in the face of an economic crisis. I agree with the Government's policy to curb property speculation. I feel that we should encourage our workers to upgrade themselves. Not only the workers, but even the managers and CEOs should also upgrade their skills. Of course, this financial crisis has some negative effect on us, but it has also brought to us some revelation. Firstly, we have a very stringent and highly transparent monetary policy. It is because of this that we are able to withstand the impact of this recent regional turmoil and Singaporeans are beginning to understand this. Secondly, our people are beginning to realise that they cannot keep raising their expectations indefinitely. They must have the ability to adjust to changes. Thirdly, whether it is investment or speculation, we have to face risks. Although for investment the rate of return may not be very high, if you speculate you may lose your last penny. So I feel Singaporeans should have more sense of crisis and less sense of self-interest. I hope the Minister will give us more details on the off-Budget measures he proposes to take if things get worse, when he replies tomorrow.

Mr Deputy Speaker, Sir, thank you for giving me this opportunity. Sir, before I proceed with the Budget proper, I hope you will allow me to comment on the point raised by Dr Tan Cheng Bock, and state my view to this House. Sir, I agree with him and the other Members that no civil servants should undermine the confidence of Members of Parliament and their standing in public as well as in Parliament. However, Sir, when we discuss the conduct of a person who is outside this House, we should be cautious, temperate in our language, and we should see that in no way do we cast aspersion of the civil service as a whole because no matter how strong the political leadership is, if the civil servants are not committed to carry out the work, goods will never be delivered. Sir, if a Member wants to speak on the conduct of a civil servant, he should at least file a proper motion. Dr Tan Cheng Bock, in fact, spoke more on the Chairman of EDB than on this Budget. I think it is proper that we, the Members, should abide by the Standing Orders. I especially remember reading in the papers some years back when an hon. Member of this House criticised somebody outside this House and Members took great exception. I think we should re-express the same sentiments today. Sir, when we examine the Budget presented by the Minister for Finance with the background of the turmoil that is facing many South East Asian countries, we can say that this has been a Budget without pain. The Budget is positive, prudent and, if I may say so, promising. Our priorities are right. Defence and education have been given top priority and they should be so. I am glad that no Member so far, either opposition or from the Government backbenchers or the NMPs, has questioned the spending on defence and it is important because we are living in a turbulent world. Defence and stability cannot be taken for granted. Sir, we have a very pragmatic budget. This did not come about because of the planning just of last year. It is the result of careful finance balancing and planning that the Government has taken over the years. Some Singaporeans take it for granted that this is a natural process. Some believe that there will always be some surpluses. Sir, while talking of the surplus, I am a little disappointed that the Minister could have been a bit more charitable by giving less surplus and the money could have been channelled to areas which I am going to discuss later. Sir, a stable, open, transparent, honest Government which is committed to improving the life of the people has brought about this Budget. Even the Government's worst critics cannot deny the Government's sound fiscal policy. In any economic development, the people have a pivotal role to play. So is the case of our economy and our people. The people must undergo some sacrifice now for a better future. All of us should upgrade our skills even if it may mean some change in our lifestyle. Here, I agree with Mr Seng Han Thong that we should all, irrespective of what our position in economic life, train ourselves. Some temporary loss would yield gain in the future. Sir, I would like to share some concerns shown by the private property owners. They are concerned that the prices are falling, distressed sales are on the rise. The bottom line is yet to come. It is reassuring to note that the glut in private property would not increase as the Government will control the release of land. I urge the Minister to review the position from time to time to see that the property market does not fall dramatically. I believe a long slump in the property market will not be good for the economy. But having said that, let me add a word of caution, Sir. I share the sentiments of Mr Inderjit Singh. We must not allow the free market forces to be stifled. While we must see that the property market is protected, we must not allow the free market to be flouted. Mr Deputy Speaker, Sir, I am a little disappointed, and I share the sentiments by some Members of this House, that despite the urgent need for skills training, the Minister has not been very generous in this area. No special fund has been allocated from the Budget to train the workers. All we have is a previous set-up under the Skills Development Fund. I urge the employers to take more interest in skills training. Wherever possible, they should not wait for retrenchment or wait for the Government's call for skills training. They on their own initiatives should try to find out which area of skills development will help them. The Government could in some cases offer financial assistance to small enterprises so that they can take full advantage of the workers' training. I believe the present system is not adequate. Mr Deputy Speaker, Sir, it is encouraging that our financial sector is being reorganised and I congratulate the Minister for the various tax incentives in this area. I am sure this area will further grow, and let us hope that we will become the best financial sector in the Far East. We should encourage more fund managers and financial experts to settle down in Singapore. Therefore, I have no hesitation in supporting the Government's move to allow talented people to come and work here. Singapore would benefit from these people. Our diplomatic missions abroad should promote the policy as other countries are equally interested in wooing these people. They are in short supply. We must not miss them. Sir, I have no doubt that the Government will not allow these talented personnel who have come here to take away jobs from our people. The simple truth is that we do not have such people in our midst. Even developed countries are trying to attract these talents. We need them more than they. This is why even USA, with a highly successful workforce, is trying to get computer engineers from Asia. Similarly, medical specialists are in high demand both in USA and UK. I support, and I hope every Singaporean support this move. In Singapore, where we do not have any natural resources, we are depending on our manpower and our location. It is therefore very vital that we attract top talented people. They will enrich our workforce. They will add high value to our economy in the end. The whole economy will benefit. And we must not be shortsighted, as some people think that the Government is neglecting its own people. The truth is that Government is concerned about Singapore citizens and we will always be concerned. The Government in allowing these people to settle is going to help the workforce. However, Sir, I have one caveat, and this is an important caveat. We must try to persuade these skilled people to train our workforce, to train our senior echelon in the area of speciality. We must make an extra effort and sell to these people our sound fundamentals and sound educational system. We have very good local as well as international schools. We are a safe haven where they can come and work and settle here. Sir, many Members are disappointed that the tax rebate has not been increased. I am one of the minority who says that the Minister has been very prudent. The 5% is a fair figure, bearing in mind that the people who are going to pay these taxes are those who are in a higher bracket. However, I would have been happier if some of the savings from the 5% could have been allocated to skills training. I am hopeful that the Minister would look into this area when reviewing this, and when the need arises. Mr Deputy Speaker, Sir, if we look at the totality of the picture and not some areas, we are in a better position than many countries of the world. There seems to be a fear that because of the problems facing our neighbours, we may be in a long period of economic recession. I agree with the Minister that there will be no recession as our fundamentals are very strong. Our growth may be slow, but there will be some growth. It is better to have a period of cooling-off. An overheated economy can burn our pockets. We have overcome worse economic conditions. We can do so provided we are united in our resolve. Mr Deputy Speaker, Sir, some Members have said that the Minister has failed to stimulate the economy. Artificial stimulation, whether in the economy or in any human organisation, can never be satisfactory. Let the natural process take its place, and only when we have a need do we introduce stimulative measures. Sir, I support the motion standing in the name of the Minister for Finance.

Sir, may I seek a clarification from the Member?

Yes.

Sir, the Nominated Member says in his speech that he is glad to note that no Member of Parliament, including Opposition MPs, raised questions on defence expenditure. I would like to ask him: what is wrong in questioning defence expenditure and whether the Budget debate is not for the purpose of questioning and scrutinising Government expenditure, be it defence or any other Ministry?

Mr Deputy Speaker, Sir, what I was trying to state is that we all support the defence policy. I am not questioning the right of Members to debate this issue. I am saying that so far the Members, who have spoken, are in support of the Government's defence policy. We know where our priorities lie. I am not checking for a moment the constitutional right of the Members to question either in Committee stage or now. I hope this will satisfy the hon. Member from the Opposition. I am saying our priority on defence and education is right. We are not saying: why are you spending more on education and defence? I hope he understands the position.

Mr Deputy Speaker, Sir, the economic turmoil in the region has brought to us the realisation that Singapore may not be the master of its own destiny. The economies of the region are interlinked and interdependent. Prosperity or misery felt by one may equally be felt by others, although the dosage of bitter medicine may differ. For many young Singaporeans who have known only prosperity in their working lives, the crisis is surprising and frightening. The usual response is: We are doing well. Why are we affected? The Minister for Finance is to be complimented for giving a detailed account of the crisis, although we may need an update as the situation changes even as we speak, such as the delay by the IMF in paying the next tranche to Indonesia, and Indonesia responding by saying that the IMF's demands are unconstitutional. The Minister has presented a careful, restrained Budget, recognising the need to help ailing businesses to promote certain desirable businesses and the need to continue to strengthen the infrastructure of Singapore. There is no doubt that in terms of macro-economic planning, the measures introduced in the Budget would go some way to meeting the challenges posed by the crisis. To the young working population, however, the crisis translates itself not in terms of the IMF, Central Bank, or macro-economic policies. To these young workers, the questions are: Does the wife have to go back to work? Where can we put the children, if she does that? And what else can we do to service the debts that we have accumulated. Every last cent counts. This is typified by one young constituent who said to me: Why only 5% rebate when we need every cent we can earn? He knows about the crisis. He knows that one needs to be prudent but he nonetheless is concerned that he cannot make ends meet. It is in this context that I have to ask whether the measures of relief to taxpayers, the 5% rebate, and the rebate on HDB S&C charges, are sufficient to cater to the needs of many young families who are facing a year of uncertain wage policies. The spectre of retrenchment, of bankruptcy also may loom large for some. Paradoxically, at a time when there are fewer jobs, housewives who did not contemplate an early return to work now may have to in order to buttress the family income. But they are constrained by factors such as the lack of child care and pre-school facilities. This is an issue that should be addressed in the current Budget. One of the key pillars of Government policy is to invest in the young. There is no doubt that much has been done in this regard, especially in relation to the building of schools and the roll out of the IT Master Plan for schools. But I am talking about the care for the very young - the pre-schoolers. At the moment, the provision of child care centres is within the aegis of the Ministry of Community Development while pre-school facilities are undertaken by the PAP Community Foundation and other private agencies. There is an acute shortage of trained minders and teachers in relation to the provision of facilities for the pre-schoolers. We do not have the quantity, and the quality can always be improved. It seems to me that there should be provision in the Budget for several measures. First, to provide for institutions to train more child minders and teachers for the pre-schoolers. Second, to provide concessions or subsidies to those who are providing such services so that they can employ better teachers and minders. And third, to provide incentives or subsidies for the training and retraining of teachers and minders for the pre-schoolers. There is no provision for such measures in the current Budget. The provision for child care in the MCD budget is a small one, relatively speaking. Child care services and pre-schooling are taken very seriously in advanced countries. For example, in France, 98.8% of three-year olds and 100% of four-year olds are enrolled for pre-primary schooling. In West Germany, the figures are 30.8% and 68.5% respectively. In the US, the figures are 28.5% for the three-year olds and 53% for the four-year olds. The source is from the OECD: `Education At A Glance', published in 1995. Mr Deputy Speaker, Sir, as the industrialised economies move from brawn to brains, it is never too early to start cultivating the minds of our young. The Minister has mentioned the excellent achievements of our students in international surveys. That is a cause for happiness and congratulations to our educators. I believe, however, that studies have also shown the importance of child care and pre-schooling in the pre-primary years. A study in the United States that took nearly three decades to complete revealed that the group under review who participated in pre-primary schooling had excellent results in terms of social discipline, in avoiding undesirable behaviour and in doing well in college. This motivated in fact the Federal Government to spend about $3 billion a year on such programmes. Admittedly, of course, the situation is different in Singapore but it certainly deserves more attention. We, unfortunately, do not have figures for Singapore which in itself is a cause for concern. As Singapore moves towards its goal of becoming a developed country, such facilities grow in importance and should be provided on a larger scale. It is hoped that such measures may be considered in due course. Finally, in these times of economic turmoil, all of us would do well to remember that when times are hard, the need to show character and regard for others is paramount. No doubt, the need to earn a comfortable wage is always uppermost but one must be careful not to sacrifice principle for pay. One of the most unfortunate incidents that has been mentioned in this House that has come to light is the conduct of scholars in relation to their bonds, that is, the so-called bond-breakers. Scholars are role models for their younger counterparts who are still in school. They shoulder not just legal obligations but moral ones as well. Now these scholars have redeemed their bonds, have not committed any offence or civil wrong. However, the moral responsibility rests on them to fulfil what they promise to do. Moral responsibility and a good sense of long-term interest should guide these scholars who are role models for our young. Sir, the Minister for Finance has provided us with a Budget that seeks to fuel investment confidence at a time of economic uncertainty. It is to be especially welcomed in this regard and I hope that the Minister will consider more measures for the young families that may face hardship. On the whole, I strongly support the Minister in his motion.

Mr Deputy Speaker, Sir, I rise to speak in support of the motion standing in the name of the Minister for Finance. Sir, without doubt, the region in the last 10 months went through a crisis that proved to be most challenging and perhaps the most unnerving since the Second World War. Never before have we seen such relentless pressures on our economy. The regional currencies lost much value because of the sell down by those who lost confidence. Companies simply went under and unemployment ballooned. The mood soon became despondent for many. This proved to be the right recipe for social unrest. The disaffected and hungry took to the streets in violent anger while governments most affected tried desperately to stem the tide of events. The problems soon shifted from an economic dimension to a political one in some cases, which resulted in the erosion of confidence in government leadership. Sir, Singapore, stable as it may be, by no means escaped from the forces that affected the region. As the Minister has pointed out, the region's financial crisis had a contagion effect and put a damper on the economic outlook for Singapore. The growth prospect for the economy seems less promising as businessmen began to brace themselves for a tough year ahead. Indeed the growth estimate of our GDP for financial year 1998/1999 at approximately 2.5% to 4.5% from our GDP growth of about 7.8% in financial year 1997 projects a cautious mood on our part in assessing the future. In real terms, all major business sectors, with the exception perhaps of some sectors in manufacturing and construction, would see some weakening of the business conditions. Sir, rightly, therefore, in view of the poor economic outlook for the region and Singapore, in particular, that this year's Budget should be a prudent one. Public expenditure should be trimmed when necessary and Singaporeans should be encouraged where possible to be constantly mindful of the difficult times that loom ahead. While most people would accept the underlying basis of our Budget this year, there are also many who feel that this Budget does not go far enough to adequately prepare them for the conditions ahead. In fact, looking at the present Budget, it was felt that more can and should be done to help the citizens in coping with the rising cost of living brought upon to some extent by the weakening of our currency. There are many who are disappointed that the rebate given is pegged at 5%, and not 10%. It is arguable that the rebate of 10% should be given to taxpayers to cope with the difficult conditions. Even if the majority of Singaporeans do not pay taxes, maintaining a tax rebate at 10% would have sent a strong signal support to the people. Sir, for the majority of Singaporeans who do not pay taxes, which speaks a lot about their annual income, I would urge the Government to consider a greater rebate on the service and conservancy charges and utilities. A greater rebate on the service and conservancy charges and utilities will go a long way in helping these citizens cope with the pressures of rising cost of living in Singapore. For the businessmen who have invested in the region, they are, I am told, disappointed that there is no additional assistance from the Government in the present Budget. The current financial crisis has had a significant impact on the operations. Mr Deputy Speaker, Sir, going regional is to a large extent encouraged and initiated by the Government. To the extent that our businessmen have responded to the call to invest in the region, the Government should actively assist these companies to cope with the present difficulties. Additional tax reliefs for these companies in respect of their regional operations would provide the much needed moral support required at this stage. In the current financial crisis, the systemic weakness of the business and financial institutions has often been blamed as one of the causes. It is often said that the close relationship enjoyed between the private business sector and those closely linked with the establishment is one of the reasons why some economies in the region went into difficulty. Such companies were extremely influential and as a consequence were able to leverage on the connection which they enjoy to procure financial institutions to lend monies on very soft terms and often not adequately securitised. There was often no proper assessment of creditworthiness of the project being funded through the loans. The banks found themselves in a position of not being able to recall the loans when economic weather changed. There was a lack of transparency in the system and it resulted in much institutional weakness and hidden inefficiencies in the affected economies. Sir, through it all, the regional crisis has also paid much credence to a cardinal principle that government should be transparent as far as possible. Transparency begets accountability which in turn controls the conduct of those who are held to account. In every government, the degree of transparency is a matter of calibration. It is a balance between the need to maintain confidentiality because national interest demands it and the need to keep the people informed so that they can better exercise their right to vote. How the calibration is to be made is dependent on the Government of the day who enjoys the mandate of the people. In the final analysis, there is an increasing expectation these days towards greater transparency and accountability, where possible, rather than to have less of it. How is this applicable to us? Sir, in Singapore, we have come to accept Government-linked companies (GLCs) as playing a strategic role in developing our economy. As the Minister has said at the last sitting, the GLCs have moved into areas which are of strategic interest and where entrepreneurs in Singapore have limited resources to venture into or have no knowledge of. In recent years, GLCs have grown, both in number and size. Today, there are few areas of business the GLCs have not gone into. Their business interests range from telecommunication, banking and finance to aerospace and property development. The market capitalisation of these companies runs into hundreds of millions of dollars and one would not be wrong to say that the performance of these companies is a barometer of the state of the Singapore economy. Sir, GLCs, the way in which they are owned, managed and run, are often distinguished from ordinary companies for a number of reasons. Firstly, these are companies wherein the Government has sizable equity interest in, either directly or indirectly, through such holding companies as Temasek or GSIC. Secondly, a substantial number of officers who run these companies came from the civil service. And thirdly, a good number of these companies have substantial business relations with the Government. Sir, by any measure, the GLCs have contributed in no small way to Singapore's profile as an industrial economy and they have given us a place in the world economy that we would not have otherwise got if we had just allowed the economy develop its own course without the GLCs. However, as the GLCs grow in size and number and the value of the equity holding expands over the years, we must ensure that there is an adequate system in place to provide for the accountability for the conduct of these companies. At the moment, the scope of public accountability of these companies, both in relation to corporate disclosure and governance, is limited. Presently, officers of these corporations are accountable under law to shareholders. They owe a duty principally to the company. However, in the case of ordinary shareholders who own shares in listed companies, participation at shareholders' meeting is often given a miss. Even if they are inclined to do so, the ordinary shareholders do not have the necessary technical expertise to analyse reports and hold directors to account by asking relevant questions. In other words, there is usually very little known beyond the audited accounts about these companies. Control of these companies is often in the hands of the managers. Sir, GLCs by virtue of the status, have very strong bargaining power in business dealings. In a government that is as disciplined as ours, we can be assured that the GLCs are tightly run and managed and that they are not likely to abuse their privileged position. However, we cannot always assume that our system of Government and political culture will remain unchanged. In a weak government, control over the GLCs may not be firm. There will always be a danger of mismanagement without a proper system of control. The consequences may be similar to that which confront the countries in the region today. Mr Deputy Speaker, Sir, GLCs essentially provide a corporate vehicle for Government to go into business. Accordingly, because the Government is in business, there is an expectation that the forum of accountability of these companies should be wider than just a shareholders' meeting. I share the sentiment expressed by my colleague earlier wherein he said the GLCs perform essential functions within the economy. In these days, we can expect corporatised entities to provide utility services, services to people who are users, who are not necessarily shareholders in a company. And in the context of these people who have to depend on these companies for services, I think there is something to be said about holding these companies to some extent accountable to the consumers. Sir, the Public Accounts Committee feels, and I agree, that it is important to ensure that public money invested in GLCs is well spent and decisions are made under the best circumstances. The call is for greater accountability and through appropriate disclosure, information may be given as to the performance of these companies. I would like to ask the Minister whether the Government, in addition to the measures which we have at the moment, is considering other measures to provide for greater transparency and disclosure in the GLCs. Such a move, Sir, would strengthen the confidence of the public in the management of our GLCs. On that note, I support the financial policy of the Government.

(In Mandarin): Mr Deputy Speaker, Sir, when the Finance Minister was formulating the new Budget for this year, many countries in Asia were facing the financial crisis and Singapore, to a certain extent, has been affected by this. Therefore, in formulating the new Budget the Government is bound to be prudent in its attitude. When the new Budget was disclosed, we knew that the Minister was adopting a moderate and prudent strategy to cope with the financial crisis, and to make adequate preparation in case the turmoil deteriorates so as to cope with the difficult years ahead. The Minister also ensures that we have a balanced budget in order to maintain our long-term economic competitiveness and to accumulate massive surplus so that we will move forward when the financial turmoil subsides. I believe this is a correct and farsighted Budget. Mr Deputy Speaker, Sir, when our neighbouring countries are urging their people to donate money and other valuables to help their countries weather the economic crisis, our Government has been able to provide tax rebates and rebates on S&C and utilities charges to the people so as to lighten the burden of the people. During this critical period, the Government has been able to provide assistance to the people. Although this is not a big red packet, it nevertheless is something we are happy about. There are some taxpayers who say that the tax rebates have been reduced from 10% to the present 5% and they are quite disappointed. Tax rebate is normally given only during good times. It is a measure to return some of the wealth to the people. But because of this year's economic slowdown and the tightening of our monetary policy, the budget has been reduced. This is to be expected. But taxpayers feel that their tax return was based on 1997 income and yet they have to pay tax from this year's income. This year, they are faced with economic recession and there will be a reduction in their income. Hence this is an increased burden on them. So they hope that the Government, during this economic slowdown, would give them more tax rebates in order to lighten their burden, especially those businessmen who fail in their business or those workers who have been retrenched. I hope the Minister would explain to the people why such tax rebate has been reduced by 5%. If the taxpayers understand the rationale for such a reduction, they will support the Government's policy and be more united in order to work for a better future. Mr Deputy Speaker, Sir, Singapore is a commercial and financial centre. Our Government's policy has been to encourage our local enterprises to be more enterprising. At the same time, we attract foreign investors to come here and invest. These are the twin engines for our growth. This year, our budget has provided for certain beneficial measures to the financial and property sectors, so that they can grow satisfactorily even in the midst of a financial crisis. However, there is little assistance for the industrial and commercial enterprises. Because of the regional financial turmoil and the slowdown in the economy, many companies have received less orders from the region. However, their cost of business has not come down. Therefore, these companies are faced with dwindling orders and they have cash flow problems. According to the Chinese Chamber of Commerce's survey, about 54% of the companies said that their business has been affected and about 45% of the companies said that they are faced with cash flow problems. In order to help these businesses to tide over this period, I would recommend certain measures to the Government. First, the JTC and HDB should consider curtailing their rental on land and factories to reduce their cost of doing business. At present, JTC and HDB rental is based on the rental they formulated three years ago when times were good, the so-called market rental. But in the present situation, the market rental has gone down. For example, the tender prices for the two pieces of land offered for sale by URA have gone down by many times as compared to those in 1996. Therefore, during this critical period, the Government should adjust the rental for land and factory spaces, so that a more reasonable rental could be formulated. I suggest that JTC and HDB should consider reducing rental by 10% for two years. In this way, they could directly help to bring down business cost in order to enhance their competitiveness. Secondly, they should liberalise the subletting of factory space. During an economic recession, many tenants need lesser factory space. Therefore, the authorities should consider letting these tenants to have more flexibility to sublet their factory spaces in order that the usage of their factory space could be maximised. This will also reduce their operating expenses, and more optimum use can be made use of such space and land. Therefore, I suggest that JTC and HDB should consider increasing the ratio for subletting from 50% to 75%. This will effectively help the tenants to tide over this period and also help those who want to launch new businesses to find the factory space. This will provide good opportunities for those who are interested in entering the manufacturing industry. Sir, I hope the Minister for Finance would consider my suggestions.

Mr Deputy Speaker, Sir, much has been said about the regional currency turmoil that has resulted in the slowdown of economic growth in virtually all the countries in South East Asia. The Finance Minister is prudent to refrain from forecasting growth for Singapore or, for that matter, for other countries in the region. We are, I think, in general agreement, save for a few other Members in this House, that, at best, things are likely to remain bad and they may get worse. There is little doubt in my mind that we are heading for very difficult times for at least the next 1-2 years. The question is not so much whether there is going to be a recession now, but how deep it will be and what our responses should be. The last time we had a recession was in 1985. At that time, the regional economies were growing well. We ourselves were plagued by high costs caused partly by the necessary move to higher technology industries and a tight labour force. Once we have improved our competitiveness and set the fundamentals right, we were able to get out of the recession relatively unscathed. There were no drastic retrenchments and no loss in real income. For the next decade, we were able to capitalise on the boom times in the region, especially with the emergence of China as an economic power and the revival of Vietnam. This time round, the issues are different. The currency turmoil and other difficulties have caused a loss of investor confidence that has affected investment flows into the whole region. Countries have to battle against the difficult task of reviving their economies to create jobs. They also have to tackle the prospect of increasing inflation and for some countries, even shortages of essential foodstuff and materials. In other words, we cannot depend on the region as we did in 1985. Even if we manage to retain and sharpen our fundamental strengths, we cannot escape the adverse effects of recession in the region. Take the simple example of tourism. A great number of tourists originate from the other ASEAN countries. We should be lucky if half the number who visited Singapore show up this year. With recession in these countries and their depreciated currencies, we cannot really blame them for not coming. Tourist arrivals are likely to fall sharply this year, maybe as much as double digit. And if the haze comes a bit earlier this year, the drop may be more precipitous. This will have a rippling effect on the retail sector that depends on tourism, including hotels, restaurants, shopping centres and transport services. Taxi drivers are going to find fewer fares. This fall in demand is not likely to be compensated by Singaporeans who will also tighten their belts. Even if we cut prices for these services, there may not be sufficient customers. The effects of this slowdown will permeate to a wide cross-section of our economy. Everyone will in one way or another be affected. What should be our response then? It is fair to say that we in Singapore have been having it good for many years. High economic growth has translated into rapid rise in real income and better well-being for everyone. The Government has been able to record surpluses every year in the past decade. The times are so good that many Members in this House have remarked that we are making too much money. Our people's expectations have also soared at the same time. HDB flats have now given way to Executive Condominiums and private condominiums in districts 9, 10 and 11. IUPs are not quite enough. Our people want more MUPs. On the whole, our people's tolerance level has also lowered. At the slightest inconvenience, there will be complaints to the MPs and to the press. Increasingly, our people are beginning to think of themselves rather than the community as a whole. Many of our young and successful citizens are coming to the view that it is their right to be rich and powerful, without realising that their ascent to fame and fortune has been helped by the nation's progress with everyone pitching in their effort. More important, just as dinners will not last forever, good times too would not last. We must prepare ourselves for the ups and downs that will inevitably come. Therefore, we should first look at what we ourselves can do rather than just asking the Government for more hand-outs. It would be reasonable for us to do so if we have been responsible for the slowdown as in 1985. The present problems are externally generated and in many instances are out of our control. It comes with the ups and downs of business cycles, although much of the present problems are man made. There is a Chinese saying that "when the horse dies, get off and walk." There is nothing we can do if we stay on the horse, especially if it is a dead one. If we look back the last 30 years, this is precisely what the Government and our people did when we got into trouble. We did not ask for charity. Instead, we adapted ourselves to the situation at hand and made adjustments. There is no running away from the painful effects of a recession. This time round, the recession is going to be painful. Those of us who lived through some recessions can vouch for the fact that in certain cases, the pain can be considerable. However, if we are strong and have a higher threshold of pain, we will be able to survive and become stronger. The question now before us is: are we prepared? The sustained economic growth for the past two decades, allowing for the minor setback in 1985, may have lulled our citizens, especially the younger ones among us who have not lived through recessions, into believing that economic prosperity will go on forever. The good times that we have been having have lowered the threshold of pain considerably. Continued success has also bred individualism, selfishness and, worse, greed. We can find examples of these traits in the working places, restaurants, shopping centres and even golf courses. The arrogance with which some young and successful people flaunt their wealth and power is evident in the way they spend and the way they treat those who serve them. I was told of an incident in which a member of an exclusive golf club, when he failed to get satisfactory service from the waiter, reminded the latter in no uncertain terms that he had paid a princely sum to join the golf club and expected that he should be served properly. In another incident, a member of a golf club took legal action to intimidate the club on a very minor disagreement because he thought that it was a "matter of principle." The lower threshold of pain will see our people yelling for blue murder when conditions deteriorate just a little bit. Worse, it may lead to panic and recourse to expedient measures that will not solve the longer term problems. The attitude of "every man for himself" will erode community's ability to fight together. We need to brace ourselves for the difficult times ahead. We must increase our threshold of pain to ensure that we can pull through and become fitter and trimmer at the end of these bad times. Given our sound fundamentals, we should be able to achieve this target. By working together, we can face the problems head on and seek strength through unity of purpose. In doing so, there will be those amongst us who are weaker and will need help. We should extend all possible assistance to help them tide over this difficult period. This help should not only come from the Government but also come from those of us who are in a better position to help. I would especially urge our younger Singaporeans, those successful ones, to help our country sail through these difficulties. For those who may be afflicted by the symptoms I have mentioned, I hope there will be a change of mindset so that they can work together with their fellow countrymen. For those who are not, I can only appeal to them to continue their good work and reinforce their fine efforts. In the coming months, we will need to work even closer together and survive the storms that will surely and inevitably sweep our shores. I appeal once again to all our fellow citizens, let us stay tight together and overcome.

Mr Deputy Speaker, Sir, the Finance Minister has allowed companies to claim double tax deduction for approved relocation and recruitment expenses incurred in the hiring of talents from abroad so as to help offset the extra costs which these companies will have to incur in employing such talent to supplement our local workforce. Such a policy move is indeed encouraging. As mentioned by the Prime Minister at last year's National Day Rally, human talent, whether in the form of new immigrants or foreign nationals on work-stints of a few years, will be the key factor in ensuring that Singapore stays economically competitive and successful in this information age. While I do believe that the budgetary initiative will undoubtedly strengthen the positive factors in attracting foreign talent, I would like to put forward, for the Minister's consideration, a few additional points. The benefits of the double tax deduction scheme primarily accrue to companies which recruit overseas talents, I would like to suggest that assistance should also be rendered to the talents themselves. As such, I would propose, firstly, that a unit, known as Foreign Talent Unit, be set up in the newly named Ministry of Manpower to centralise, develop, implement and oversee Government policies pertaining to the recruitment of overseas talent. This unit should gather information and feedback from foreign nationals currently working in Singapore so that we can tap upon their experience, and understand from them the particularistic problems that nationals from particular countries face when working and living in Singapore. This unit will serve as a nerve centre to coordinate what I believe must be a multi-pronged approach, and which will necessarily involve both Governmental institutions, such as HDB and our schools, and private companies and organisations. The major difficulties faced by foreign nationals working in Singapore are most importantly housing, and thereafter schooling for their children. Housing is expensive here, and rentals high. The Government has already worked out a scheme for JTC to buy and own a stock of HDB flats which are to be let out entirely to foreigners. This will certainly alleviate the housing problem to some extent. With regard to schooling, the problem has not been totally solved. High-ranking expatriate staff have the schooling expenses of their children paid on their behalf by their employers. However, middle management expatriate staff will have to bear such expenses themselves, and many are not able to afford the fees charged by international schools. The Government should, through assistance offered by the Ministry of Education, encourage them to send their children to a local school instead, and special arrangements can then be made for their children to continue learning their own languages, be it German, French or Tamil. Moreover, a small number of foreign children studying in our schools will also promote greater understanding of foreign cultures and facilitate interaction between our students and those from other countries. This will be beneficial in broadening the contacts and outlook of both parties, and in the process enriching the educational experience. The Foreign Talent Unit should also selectively screen and entice qualified expatriates and skilled labour from overseas to become immigrants. This will add to the pool of skilled and professional labour here, a favourable development which will enhance the quality of our workforce and strengthen our economic fundamentals on a permanent basis. However, the successful integration of new immigrants into our society will be a pre-requisite before their inherent potential can be unleashed. Therefore, the Government should tap on the resources of both Governmental institutions and private enterprises to render adequate assistance to immigrants to enable them to adapt better to local working conditions and, more generally, to the Singapore way of life. While we are trying to attract foreign nationals to work in Singapore, we should not lose sight of Singaporeans who are staying overseas. For one reason or another, some Singaporeans may choose to work overseas and they form a part of our useful overseas network. However, some of them may wish to return in the future, and we should attempt to make it easier for them to reintegrate into our community. In this instance, suitable initiatives that can be considered include special assistance to enable them to purchase HDB flats and efforts to ease their children back into the Singapore education system. We are all aware that a high quality workforce is the only tangible resource Singapore possesses. Hence, we have to do manpower planning carefully to satisfy our future needs. I therefore support the Minister's proposal to introduce the double tax deduction scheme in connection with the recruiting of overseas talent and hope that the Government will consider as well the suggestions that have been put forward. On this note, I support the motion moved by the Minister for Finance.

Mr Deputy Speaker, Sir, I would first like to compliment the Finance Minister on the prudence with which the Budget was assembled. There is merit in conservatism in times of uncertainty and there is merit in ensuring the Budget reflects consistency at the policy level. I fully support the measures introduced to facilitate the development of the financial services sector as well as the range of rebates to help lower income families. However, the market reacted unenthusiastically in the following days after the Budget announcement. The corporate world appears to think that the Budget is insufficient for these trying times. Many individuals are also disappointed in that the current Budget offers only 5% personal income tax rebate across-the-board compared to last year's 10% in the face of the most turbulent years since confrontation. It is interesting to reason out why the public reacted this way. I would think that since the Budget has to be presented in late February, it is understandable that the Finance Ministry would have used information that was good up to the end of December. But if it is so, it happens that the significant economic events that affected our economy took place in January and February this year. So the important question is: is the Budget catering to our current needs? The point that I would like to raise today correlates to the questions I posed in the last two parliamentary sittings on the loan exposures of local institutions to the regional economies. In his reply to my query in January, DPM Lee said that the local banks' exposure to the region was small. Then in February, we were updated with the report that the local banks' exposure to the region has increased and that had not affected our banking system much. Yet, in the last few days, barely a month from the second report, Tat Lee Bank announced heavy losses to the point that an unprecedented move by the MAS was needed to allow Tat Lee Bank to re-value its assets in order to shore up its balance sheets. Most of the other big four banks have also reported huge provision for losses. To top that, we have heard financial reports of banks across the causeway sustaining massive losses. All these reports show that local banks with an exposure of more than $20 billion to Malaysian businesses may go on to suffer more and more losses in the coming months. This sums up my concern for the timeliness of information used in these fast changing economic times. It is only with timely and accurate information that we can react fast. Perhaps the public's lack-lustre response to the Budget announcement sends the message that the Government is not reacting fast enough and not providing the leadership that the people are yearning for in this crisis. I think the Government can do more this time by stimulating the economy with a more expansionary Budget. It has been reported by many Members of this House that a survey conducted by the Chinese Chamber of Commerce shows that more than 50% of its members have been affected badly by the crisis. Many complained about credit squeeze and the high cost of running business. Yet other than the LEFS Scheme, no other significant measures have been introduced in this regard. I would like to call on the Government to work closely with the various trade associations to feel the pulse and the health of the local enterprises and, at this point, I would like to echo Mr Leong's call for the pre-Budget consultations to take place in the next Budget. Sir, may I remind the House that for years the Ministry of Finance in Japan has reacted slowly to their growing economic problems. Now it seems that it has become increasingly difficult for Japan to propel itself to full recovery. I only hope that we would not go the same way. I urge the Minister not to allow the current economic difficulties to deflect our long term infrastructure development plans and, hopefully, it would not affect the construction of our underground road system and the facilities needed to push our vital economic sectors.

Order. It is 6.30 pm. Debate to be resumed what day, Dr Hu?

Tomorrow, Sir.

So be it.

Resolved, That Parliament do now adjourn. - [Mr Wong Kan Seng]. Adjourned accordingly at Thirty Minutes past Six o'clock pm.

asked the Deputy Prime Minister and Minister for Defence whether his Ministry will consider reducing the rental for canteen stalls in MINDEF premises (including army camps) as stallholders are experiencing a slowdown in businesses.

There are presently more than 240 canteen operators in MINDEF premises. Most of the operators pay less than $300 per month per stall. Our rental rates are reasonable compared to rates elsewhere. Nevertheless, MINDEF will monitor the situation and review the rates if necessary.

asked the Minister for Trade and Industry what is the number of business failures since the second half of 1997; whether this shows a rising trend against the last few years; and what types of businesses are involved, giving a breakdown by industry, size and ownership.

The records of the Registry of Companies and Businesses (RCB) show that 6,695 companies and businesses ceased operations1 in the second half of 1997, as compared with 10,945 in the first half. The total of 17,640 in 1997 is substantially less than the number of 23,252 in 1996 (see Table 1). The lower number in the second half of 1997 could, however, be due to late reporting and is subject to revisions as and when companies and businesses report to RCB. Table 1 Cessation of Companies and Businesses, 1990-97 Period Number 1993 21,138 1994 21,980 1995 23,131 1996 23,252 1997 17,640 Source: Data compiled by Department of Statistics from the records of RCB.

1 Refers to those that have been liquidated, ceased, struck off RCB's registers, under receivership or dissolved. Details by industry and ownership are given in Table 2. In absolute numbers, company and business cessation is highest in the commerce sector. As a percentage of the total number of entities in each major sector, cessation is highest for the construction and commerce sectors, each accounting for 7.4% of the number in the sector. In terms of ownership, 6% of foreign companies ceased operations in 1997 compared with the average of 6.9% for the whole economy. We do not have the breakdown by size. Table 2 Cessation of Companies and Businesses in 1997 by Industry and Ownership Category Number As % of Total Entities In Category3 Breakdown by Industry Manufacturing 1,864 6.3 Construction 2,123 7.4 Commerce 7,886 7.4 Transport & Comms 957 6.2 Financial & Biz. 3,083 5.7 Svcs Others 1 1,727 8.4 TOTAL 17,640 6.9 Breakdown by Ownership Foreign Companies 2 101 6.0 Other Companies and 17,539 6.9 Biz. TOTAL 17,640 6.9 1 Agriculture, fishing, mining and quarrying, other services, and activities not stated. 2 Foreign refers to branches of foreign companies only. 3 Refers to the total number of "live" companies and businesses in each sector based on RCB's records. Source: Data compiled by Department of Statistics from the records of RCB. Although company and business cessation has increased slightly in recent years, the total number of company and business formations has also grown (see Table 3). This is normal in a vibrant market economy. The impact of the regional financial turmoil has not shown up in the number of cessations in 1997. This is in line with the robust growth in 1997. However, as the turmoil exerts its full impact this year, we can expect the number to rise. Table 3 Company and Business Formation and Cessation Number Formation Cessation Net Formation Total Companies1 Businessess2 Total Companies Businesses Total Companies Businesses 1990 24,101 6,503 17,598 15,544 2,024 13,520 8,557 4,479 4 ,078 1991 25,745 6,654 19,091 16,294 1,978 14,316 9,451 4,676 4,775 1992 27,082 7,220 19,862 17,213 3,839 13,374 9,869 3,381 6,488 1993 30,285 8,816 21,469 21,138 2,469 18,669 9,147 6,347 2,800 1994 31,404 9,811 21,593 21,980 2,449 19,531 9,424 7,362 2,062 1995 31,163 9,468 21,695 23,131 2,748 20,383 8,032 6,720 1,312 1996 32,720 9,473 23,247 23,252 3,225 20,027 9,468 6,248 3,220 1997 32,099 8,918 23,181 17,640 3,881 13,759 14,459 5,037 9,422 1990 1H 12,388 3,330 9,058 7,963 1,040 6,923 4,425 2,290 2,135 2H 11,713 3,173 8,540 7,581 984 6,597 4,132 2,189 1,943 1991 1H 12,787 3,293 9,494 6,503 885 5,618 6,284 2,408 3,876 2H 12,958 3,361 9,597 9,791 1,093 8,698 3,167 2,268 899 1992 1H 13,578 3,475 10,103 9,429 2,243 7,186 4,149 1,232 2,917 2H 13,504 3,745 9,759 7,784 1,596 6,188 5,720 2,149 3,571 1993 1H 15,488 4,252 11,236 11,484 1,339 10,145 4,004 2,913 1,091 2H 14,797 4,564 10,233 9,654 1,130 8,524 5,143 3,434 1,709 1994 1H 15,644 4,694 10,950 11,775 1,187 10,588 3,869 3,507 362 2H 15,760 5,117 10,643 10,205 1,262 8,943 5,555 3,855 1,700 1995 1H 15,781 4,704 11,077 10,770 1,316 9,454 5,011 3,388 1,623 2H 15,382 4,764 10,618 12,361 1,432 10,929 3,021 3,332 (311) 1996 1H 16,400 4,830 11,570 11,901 1,481 10,420 4,499 3,349 1,150 2H 16,320 4,643 11,677 11,351 1,744 9,607 4,969 2,899 2,070 1997 1H 16,296 4,584 11,712 10,945 1,894 9,051 5,351 2,690 2,661 2H 15,803 4,334 11,469 6,695 1,987 4,708 9,108 2,347 6,761 1 Companies refer to private and public listed companies. 2 Businesses refer to sole proprietors and partnerships. Source: Data compiled by Department of Statistics from the records of RCB.

asked the Minister for Health (a) how many patient visits were made at outpatient specialist clinics of government hospitals in 1996 and 1997; and (b) what is the patient load of doctors at these clinics.

In 1996 the total number of patient attendances in the specialist outpatient clinics (SOCs) of government acute hospitals, including restructured hospitals, was 2,092,751, of which 459,438 were new cases. In 1997, the numbers rose to 2,197,280 and 489,891 respectively. On average, the number of patients seen by doctors on duty at SOC clinics of the larger restructured hospitals is between 130 and 200 cases per day per clinic.

asked the Minister for Labour whether his Ministry will consider making sub-contractors solely responsible for the foreign workers whom they employ instead of the current practice of making main contractors jointly responsible for these foreign workers who are beyond the control of the main contractors.

Work Permits are issued to subcontractors on the support of main contractors for their projects. The main contractors are thus partially responsible for the foreign workers brought in by their subcontractors to work on their projects. However, in the past, some main contractors had not exercised vigilance in the support of their subcontractors' work permit applications. Their careless endorsement of the subcontractors' work permit applications allowed some unscrupulous subcontractors to either inflate their foreign worker needs, or submit applications using false contracts. As a result, they operate as labour suppliers and bring in foreign workers, receive commission, default on levy payments and even abandon the workers, resulting in a host of social problems. To stem this abuse, the Ministry had decided in December 1997 to refer subcontractors' work permit applications to main contractors for verification and hold main contractors jointly responsible for any workers abandoned by their subcontractors. This encouraged main contractors to scrutinise their subcontractors' work permit applications. It also emphasised the important role of main contractors to ensure the proper employment of foreign construction workers by their subcontractors. The measure has met with some success. Since its implementation, approximately 25% of the subcontractors' applications had not been endorsed by main contractors. The main contractors' involvement has helped to reduce the incidence of abuse to some extent. Once foreign workers are brought in by the subcontractors on the support of main contractors, the subcontractors and main contractors would be accountable for the accommodation and placements of foreign workers should they be subsequently displaced. Main contractors have the resources to house workers abandoned by their subcontractors, or transfer their employment to other subcontractors within the same project or in other projects. It is thus not true that main contractors have no control over the foreign workers employed by the subcontractors. These foreign workers were brought in to work on their projects in the first instance. Therefore, requiring main contractors to share the responsibility with their subcontractors is necessary to avoid abuses and illegal practices.

asked the Minister for Education (a) how many schools conduct swimming and life-saving lessons for their pupils; (b) how frequent these lessons are conducted and what is the duration of each lesson; and (c) whether there are any tests of proficiency for these lessons.

Swimming is not a compulsory component of the Physical Education (PE) syllabus. However, schools are encouraged to conduct various forms of swimming programmes for their pupils. Presently only six schools (one junior college, four secondary schools and one primary school) have swimming pools. These schools conduct swimming lessons during the PE lessons. Schools situated near public swimming pools also conduct swimming lessons. Simple rescue techniques, but not lifesaving, is taught as part of the swimming programme. These swimming lessons are usually conducted once a week for 10 weeks. Each lesson is of about 45 minutes' duration and pupils may take a proficiency test at the end of the programme. At the primary level, most schools conduct the Learn-to-Swim programme for their P4 and P6 pupils after the P4 streaming examination and after the PSLE respectively. This programme is for beginners and consists of 12 swimming lessons. Each lesson, which is conducted during curriculum time, lasts for about 45 minutes. Pupils generally take a proficiency test at the end of the programme. From 1994 to 1997, a total of 44,800 pupils took part in the programme. The number of schools involved each year ranges from 90 to 124. Apart from swimming done as an element in the PE lessons, swimming is also promoted in the school ECA programme. Presently, 145 primary school (74%) and 70 secondary schools (43%) have swimming in their ECA. In 1997 alone, about 20,000 pupils received the National Swimming Survival Award conducted by the Singapore Sports Council. While pupils are taught simple rescue techniques as part of the PE programme, lifesaving is not included in the syllabus.

asked the Minister for Education whether his Ministry has any accreditation system or licensing requirements to control the quality of full-time, part-time and distance learning tertiary courses (diploma, degree and postgraduate programmes) conducted by private institutions in Singapore.

There are many different overseas tertiary institutions offering a wide variety of courses of study in Singapore. It is not possible for the Ministry of Education to evaluate the quality of the programmes and the teaching. This is particularly so for distance-learning programmes. The Ministry of Education therefore does not have an accreditation system to control the standard and quality of these programmes. The tertiary institutions offering the courses and their local agents are responsible for all aspects of the programme. It is advisable for students considering taking up such courses to first check out their worthiness before enrolling in any of them.

asked the Minister for Education whether his Ministry will build a primary school in the Sin Ming Avenue area, in view of the increasing demand for primary school places from residents in that locality.

The Ministry has no immediate plans to build a new primary school in the Sin Ming Avenue area. There are currently four primary schools in the Bishan DGP, which covers Sin Ming Avenue. The schools are Ai Tong School, Catholic High, Kuo Chuan Presbyterian and Guangyang Primary. The overall provision of primary schools is sufficient to meet the demand for school places. In the 1997 P1 Registration Exercise, the three most popular schools were filled up while Guangyang Primary still had vacancies at the end of the exercise.