Hansard, 1998-08-03

asked the Minister for National Development whether his Ministry will consider allowing lessees of Housing and Development Board flats to restructure their loans when they encounter financial difficulties during the current financial crisis.

asked the Minister for National Development (i) how many households are affected by the increase in the interest rates of Housing and Development Board (HDB) housing loans and (ii) what measures will the HDB undertake to alleviate the increased burden of these households.

asked the Minister for National Development (a) what can a Housing and Development Board (HDB) flat owner do if he is retrenched and is unable to service his housing loan or stick to the original repayment scheme; and (b) what assistance the HDB will offer to such home owners.

Mr Speaker, Sir, since Questions 1, 2 and 3 are related, can I have your permission to take them together?

Yes.

HDB adjusted the interest rates for its housing loans on 1st July 1998. The public rate was raised from 3.58% to 4.39% in line with the upward revision of CPF interest rate. The market rate was also increased by 1% from between 5.25% and 5.75%, to between 6.25% and 6.75%. While the interest rate adjustments affected some 440,000 households with outstanding mortgage loans, the increase in the monthly loan instalment was $40 or less for 60% of the households. HDB has in place various financial assistance measures to help lessees who have difficulties in servicing their monthly mortgage loan instalments. These measures are: (1) Allow lessee to pay the mortgage loan arrears by instalments within a reasonable period; (2) Allow lessee to reschedule the mortgage loan repayment period up to the maximum repayment period that they are eligible for; (3) Allow lessee to defer payment of loan instalments for an initial period of six months. The deferment may be extended for another six months, if necessary; (4) Allow lessee to convert the loan scheme to an easy repayment scheme. Under this scheme, the monthly instalment for the first five years is set at 75% of the normal monthly instalment. The monthly instalment will then be recomputed from the sixth year to the end of the repayment period based on the outstanding loan at the beginning of the sixth year; and (5) Advise lessee to include a working family member as a joint owner if the latter meets the eligibility conditions. This will enable the family to use the CPF monies of the new lessee to pay for the arrears.

Mr Speaker, Sir, may I ask the Minister whether the HDB will levy any administrative charge for those who need to restructure their loans?

If the loans are rescheduled, then the whole loan is recomputed.

Mr Speaker, Sir, in view of the prevailing difficult economic situation, may I ask the Minister if he would ask the HDB to consider deferring the collection of the principal element in the payment and require the house owner to only pay for the interest element, in the case of families facing financial hardship? In other words, of all the alternatives that the Minister has proposed just now, can I ask that this alternative be also considered?

The five measures which I outlined earlier have been very effective. Very few HDB mortgage cases require us to repossess the flats. As of today, the percentage of arrears of mortgage loan instalments has increased only slightly from 1.9% in May to 2.1% in June. So the situation is still very much under control and HDB takes a very helpful approach to the mortgage loans.

Mr Speaker, Sir, may I ask the Minister that if, in spite of all these schemes that the HDB has, the flat owner is unable to meet his payments, how much time does the HDB allow before it decides to repossess the apartment under the powers given in the Housing and Development Act?

Under one of the schemes which I have outlined earlier, we first give them an initial period of six months and then, if they still face difficulties, we give them a further period of six months. And we work very actively with them to see how they could reschedule the loans, how they can make use of the ballooning scheme, how they can include additional family members to help pay for the loan. So our experience, both in the 1985/1986 recession, as well as all these years, is that servicing the mortgage loans for HDB flat is never really a big problem.

The Minister said that very few apartments have been repossessed. Could he tell us how many apartments were repossessed?

I do not have the exact number. But if my memory serves me, probably five or seven last year.

Further to the question by Mr Jeyaretnam, would the Minister tell the House what is the percentage of increase compared to last year?

As I said earlier, the percentage of loan arrears has gone up by a very small percentage compared to nearly half a million mortgage loans that we administer. HDB takes a very positive and helpful attitude towards all home owners. It is our objective to let them keep their flat, own their flat, and we try our best to help each case that comes before us to reschedule and to make the payments, to stretch it over a longer time. The number of cases where we actually take back the flats is very few.

Sir, I would like to ask the Minister, if a flat owner is willing to downgrade, would the HDB help him?

This is part of the various measures which HDB has. If a family has over-extended themselves by buying a bigger flat than they could really afford, especially with this economic downturn, and it is quite clear that they cannot continue to service the loan, HDB would help them to sell off their flat if they are eligible to sell it off, and buy a smaller flat.

Mr Speaker, Sir, eviction notices are fearful messages to receive, especially to a person who is already down in the dumps, enveloped by a sense of gloom and helplessness. Will the Minister ask the HDB to thoroughly investigate each case to assess its merits before eviction notices are issued? Now is the time when understanding and compassion are appropriate. Households will be extremely grateful to the Board for their support to help them overcome their difficulties. I have no qualms with the Board taking harsh actions against those who try to abuse the system.

If a family falls behind in its loan repayments, HDB will have to serve the necessary notice. This is the first warning to them, and then they come forward, and we work together. By deferring serving the eviction notice, I do not think you are helping the family adjust to its present circumstances.

Sir, may I ask the Minister whether HDB is prepared to allow a working member in the family, who is an existing HDB lessee, to be included as a member to pay the mortgage instalments?

The HDB's policy on this is very clear. You are only allowed to own one HDB property.

May I ask the Minister what is the position as regards those who are just paying rents as distinct from loan instalments? What is the policy as regards them?

Our rental tenants belong to the lower income group and therefore HDB takes an even more sympathetic approach towards these families. Our rental arrears are higher than the loan instalment arrears because these are from the lower income families. But we do not evict people unnecessarily. We take great pains to let them stay in the HDB flats and, unless it is absolutely necessary, we do not evict our rental tenants.

asked the Minister for National Development whether the Housing and Development Board (HDB) will consider allowing HDB flat applicants who have been shortlisted and wish to downgrade, due to the current economic slowdown, to retain their original queue position.

Mr Speaker, Sir, under HDB's prevailing policy, flat applicants under the Registration for Flats System may switch to a smaller flat type if they have not been shortlisted to select their flats. However, this is subject to meeting the eligibility criteria and a 3-month setback in their registration numbers. For applicants who have already been shortlisted to select their flats, HDB does not normally allow changes to be made to the flat-type and zone applied. However, in view of the current economic downturn, HDB will consider such applicants' requests to downgrade to purchase a smaller flat type, on a case-by-case basis. Their registration numbers will similarly be set back by three months.

asked the Minister for Manpower what is the breakdown in terms of gender, age, industry, types of courses and amount of benefits received, of employees who have benefited from the Skills Redevelopment Programme; and if the subsidy does not cover the full amount of the training programme, what options an interested party has in order to obtain funding to cover the difference.

asked the Minister for Manpower whether there are plans for skills redevelopment programmes to be offered to workers who have been retrenched and, if so, what kind of training will be offered for what kind of jobs.

Mr Speaker, Sir, Questions 5 and 6 are on a similar subject. May I have your permission to take both Questions together?

Yes.

Mr Speaker, Sir, the Ministry is working closely with the NTUC and the SNEF (Singapore National Employers' Federation) to promote the Skills Redevelopment Programme (SRP). This programme is designed to enhance the employability of the local workforce by encouraging employers to send their workers for skills upgrading and retraining. The aim is to equip the under-educated and lower-skilled workers with certifiable skills to enable them to remain employable in the future. Of the 4,176 workers who have so far benefited from the programme, 70% have Secondary Two education or less. 46% of these workers are above the age of 40, with another 39% between the ages of 30 and 39. Some 80% of the employees who have benefited from the Skills Redevelopment Programme are from the manufacturing sector, as this was the first to be adversely affected by the economic downturn. About 70% of the SRP participants are females, since there are more women in the manufacturing industry. A requirement of the Skills Redevelopment Programme is that the courses offered must lead to national certification. This protects the worker and ensures recognition of skills by the employer. The types of courses offered include preparatory courses such as language and numeracy, Certificate of Competency, National Technical Certificates (NTC) levels 2 and 3, and other certificate courses offered by the polytechnics and the ITE. These skills are required by jobs in various sectors, including manufacturing and services. The current estimate of benefits granted is about $16.7 million, or about $4,000 per worker. This is based on a funding mechanism that subsidises up to 80% of the course fees, and up to 70% of the worker's absentee payroll. The employer is asked to co-share the cost of the training, since he is the immediate beneficiary of a better-skilled worker. Workers who have been or are about to be retrenched are, in fact, already a group that is being targeted for retraining under the SRP for employment in new and high growth areas. These include the wafer fabrication and process chemical industries. The NTUC and my Ministry are working with agencies such as the EDB, STB, TDB and PSB to get these industries to recruit the retrenched workers to meet their manpower needs. The SRP will provide such recruits with the necessary training for their new jobs. Sir, the Ministry is also working with the Ministry of Trade and Industry, the NTUC and other economic agencies and industry bodies to expand the spectrum of certifiable courses under the SRP in areas relevant to the needs of each industry. We will provide a wider range of training to meet employers' needs.

Would the Minister elaborate on whether there has been an increased willingness on the part of workers to go for retraining in view of the economic uncertainty and downturn?

When the SRP was launched in December 1996, as a pilot project, this was in fact one of the main concerns. Will our workers be sufficiently motivated and will they be sufficiently interested in taking advantage of the training opportunities offered under the SRP? The other concern was of course whether employers will support such a programme. As the economic crisis unfolds and as workers become more concerned and worried about job security, we found a matching increase in interest to undergo retraining and skills upgrading by the workers themselves. So we find that workers, particularly those who are low-skilled and with lower education, as can be seen from the figures that I gave earlier on, were very amenable to undergo retraining and skills upgrading courses. Fortunately, over the same period, we also found a greater interest on the part of employers to participate in these programmes because they would be able to minimise the need to retrench workers and, instead of laying off workers, they can send workers for skills upgrading or retraining under the SRP, and Government will come in and assist them with up to 70% grant on the absentee payroll. So it is a win-win situation for workers, employers and the Government too.

asked the Minister for Home Affairs (i) whether the search for Mr Phey Yew Kok has been abandoned and (ii) what success the police have had to secure the return of the man reported to be hiding in Macau after the suicide of the late Mr Teh Cheang Wan.

Peng Kee) (for the Minister for Home Affairs): Sir, any effort in tracking down Phey Yew Kok is now very much dependent on available intelligence on his exact whereabouts. Without this, no specific effort can be mounted. Meanwhile, he is still on the wanted list of all Interpol member countries. Also, the warrant of arrest against him is still in force. As for the question on securing the return of "the man hiding in Macau after the suicide of the late Mr Teh Cheang Wan", can Mr Jeyaretnam give me the name of the person he is referring to so that I can answer the question?

If the Minister had read the Hansard in 1987, he would have seen that the then Prime Minister did not reveal the identity, but was simply saying the man had run off to Macau and was hiding and they were trying to get him. So I am afraid I cannot give the identity. The CPIB must know.

I would like to assure Mr Jeyaretnam that I have read the Hansard. I wanted to make sure because the tenor of his question suggests that this person was implicated in Mr Teh's death.

That is what the then Prime Minister said.

In that case, I know who he is referring to. That would be Ho Yau Koon from whom Mr Teh Cheang Wan allegedly received gratification for assisting Ho to buy a piece of land. Ho Yau Koon passed away in Hong Kong in 1987.

Considering that this man Phey Yew Kok has been out of the country for more than 20 years, and we hear the Minister saying that the Police has still not been able to find where he is, are we to understand that the Police are now abandoning the search because I cannot see any purpose? The second question is: are the Police aware or do they know if the wife of Mr Phey Yew Kok regularly takes trips out of Singapore or not?

Sir, as to the first question, I have stated just now that he is still on the wanted list of Interpol. The case is therefore still alive. As to the second question, because the case is alive, it would not be prudent to divulge information on the operation procedures of the CPIB.

May I know the answer to a simple question and, that is, do the Police know that the wife goes regularly out of Singapore or not?

Sir, I think I have answered that question.

asked the Minister for Community Development how his Ministry publicises and administers the Interim Financial Scheme which was set up to help destitute families; and since its formation, how many Singaporeans have applied for assistance from the scheme. The Parliamentary Secretary to the Minister for Community Development (Mr Chan Soo Sen) (for the Minister for Community Development): Mr Speaker, Sir, the Interim Financial Assistance Scheme was implemented in September 1996 in response to a recommendation of the Inter-Ministry Committee on Dysfunctional Families, Juvenile Delinquency and Drug Abuse. The Scheme, as the name implies, is meant to provide interim financial aid to destitute and needy applicants of the Public Assistance (PA) allowance while their applications are being processed by the Ministry. If an applicant for Public Assistance is assessed to have immediate difficulties in meeting his/her daily needs and requires assistance while waiting for the outcome of the application, the Ministry will provide immediate financial assistance. So far, 41 cases have been assisted under the Scheme. The total amount disbursed was about $11,000. (The quantum given will depend on the applicant's family size and is pegged at 90% of the Public Assistance rates when it is approved.) Because this is an interim arrangement for those who already applied for the Public Assistance Scheme, there is no need to publicise it. Applicants of the Public Assistance scheme who have been assessed as needing immediate financial assistance are automatically given the allowance without they having to apply for it.

asked the Minister for Manpower whether his Ministry will consider allowing Singaporeans to use part of their Central Provident Fund savings (capped at $2,000 per year) for education or skills upgrading purposes.

Eusofe) (for the Minister for Manpower): Sir, I would like to inform the House that the main objectives of CPF savings are for housing, medical and old age needs. CPF savings are also allowed to be used for selected purposes, including full-time studies in approved institutions of higher learning, which are the 2 local universities and 4 polytechnics. Sir, the CPF Education Scheme is a loan scheme and it is an exception made for full-time students because they have no income and are likely to have more difficulty paying for tuition fees with their own savings. Sir, workers who need to upgrade their skills today have many opportunities to do so with the support from their employers, the Skills Development Fund (SDF) and the Skills Redevelopment Programme (SRP). Training and upgrading courses organised by employers for their workers are funded by SDF up to 80% of the course fees. Sir, for employers who send their workers to enhance their employability and to be certified under the SRP, they are also eligible to claim for subsidy up to 70% of their absentee payroll, apart from the 80% subsidy from the SDF on course fees. For individuals who take up training courses to upgrade themselves through their unions or the self-help groups, they could also enjoy the training grant of 80% from the SDF. To encourage workers to undergo training and retraining, the Government has also given a tax relief of up to $2,000 of course fees for individuals pursuing courses on their own. Sir, I am therefore of the view that it is not necessary to use individual's CPF savings for education and skills upgrading courses. CPF savings should be reserved to meet their housing, medical and old age needs.

Sir, while I understand that CPF savings are allowed to be used for tertiary education by university students, why is it not extended to polytechnic students?

I have mentioned that it is also extended to the four polytechnics.

asked the Minister for Communications if he will say how far the investigation into the SilkAir crash has proceeded and when a report may be expected.

Mr Speaker, Sir, the crash of flight MI185 took place in December 1997. In February this year, I updated the House on the progress of the investigation into the crash. I also made known the various tasks that would be undertaken by the investigation team. The investigation team is headed by Indonesia and supported by experts from Singapore and the US. This is in accordance with international laws which stipulate that the investigation of aircraft accidents should be under the charge of the State in which the accident occurred and supported by the State of the airline operator and the State of the aircraft manufacturer. The team is also assisted by experts from Australia, which has a mutual agreement with Indonesia for investigation of aircraft accidents. Investigation into the crash is still very much in progress. Since I last updated the House, the team has examined the recovered wreckage pieces. A partial reconstruction of the aircraft tail section has been completed and the team has carried out tests in flight simulators. Investigations into air traffic services, meteorology, maintenance records and operations have also been completed. The team is currently looking into further analysis of certain aircraft system and flight control parts and components and the human performance aspects of the accident. All the information extracted from these investigation activities will be carefully studied. The investigation team fully understands the importance of keeping the next-of-kin and the public informed of the progress and findings of the investigation. As the leader of the investigation, Indonesia is the authority for the release of such information. No information can be released by any other party without the approval of the lead country in this investigation, ie, Indonesia. In March this year, Professor Oetarjo Diran, Chairman of the Indonesian Aircraft Accident Investigation Commission (AAIC) and Investigator-In-Charge of the investigation, was in Singapore to report on the status of the investigation. Last month, Professor Diran wrote a letter to the press to update the public and next-of-kin on the investigation. The team will continue to update the next-of-kin and the public when there are significant developments or findings, and when the investigation is completed. Investigations of air crashes are very painstaking and laborious. The complete investigation of the ValueJet DC-9 accident in Florida, USA in May 1996 took 16 months. The China Airlines A300 incident in Nagoya, Japan in April 1994 took almost 27 months. Others took even longer. In the case of the United Airlines B737 crash in Colorado Springs, USA, in March 1991, seven years ago, investigation is still on-going. In the SilkAir case, the investigation is made difficult by the extent of damage of the aircraft and the lack of useful data from the black boxes. At this point in time, the team is unable to predict when investigations into the accident would be completed. They have, however, informed me that it is unlikely to be completed within the next six months. Nonetheless, the team of 70 experts is putting in maximum effort to do a thorough and objective investigation. All parties concerned are determined to find out the cause or causes of this tragic accident.

May I just ask the Minister whether he is satisfied for himself that the Indonesian authorities are exerting all efforts to find out the cause of the accident? Or has it been superseded by the recent events in Indonesia?

Mr Speaker, Sir, my Ministry is in constant touch with the investigation team, which is led by the Indonesians but active participation comes from Singapore as well as the NTSB of the United States. I would like to assure the House that the investigation led by Indonesia is very professionally done. It is still very active. The current troubles in Indonesia are not affecting the investigation. Prof. Diran, who is the leader in charge of the investigation has been misquoted in the press as saying that the investigation has been completed and he has come out to clarify the situation. I believe that he will be issuing further statements to update the public on the progress of the investigation in due course.

Mr Speaker, Sir, can the Minister give an assurance to the House that when the report is completed he will present the report to the House or perhaps make a Ministerial Statement in due course?

Sir, the investigation report will be issued by the Indonesian authorities. As to the modalities of presenting the investigation report, I will have to discuss with the authorities concerned. But, definitely, I will endeavour to at least make a statement in this House when the report is finally published.

Sir, may I ask the Minister whether SilkAir has paid compensation to the relatives of the air crash victims? If not, why is that so?

I believe that the lawyers of SilkAir and the lawyers of the next-of-kin of the deceased are in touch. SilkAir has made provisions for advance compensation to the next-of-kin up to an amount of $20,000. This was to help in some of the expenses incurred. However, not all the next-of-kin have taken up that offer. Nevertheless, I believe that discussions are ongoing with the rest of the next-of-kin.

Sir, I would like to ask the Minister about recent disturbing reports in the Wall Street Journal suggesting that suicide could be one of the causes of the crash. I would like to ask the Minister how credible is this report and are there investigations to study the possibility of this being one of the reasons?

The question is out of order. A question should not be asked confirming whether a press report is correct or not.

asked the Minister for Manpower how many employers of foreign domestic maids have their security bonds forfeited or withheld since January 1998, and of these, how many of the maids went missing while in the care of employment agencies, and whether his Ministry will consider amending legislation to hold the employment agencies liable for those maids who went missing while in their custody.

Manpower): Sir, during the first six months of this year, the security bonds of 79 employers of foreign domestic workers were forfeited because their workers have absconded. This is a small proportion of more than 100,000 foreign domestic workers who are currently working in Singapore. Most of the foreign domestic workers had run away from their employers' homes. There were very few reports of foreign domestic workers running away while under the care of the employment agents. As such, I do not have the number of such cases. Sir, employers whose foreign domestic workers have absconded are given one month from the date of cancellation of the work permit to locate and repatriate the worker, failing which the security deposit will be forfeited. However, we allow employers up to six months to locate or help to locate the missing workers and a refund of the forfeited money will be considered. On the issue of foreign domestic workers going missing while in the care of the employment agencies, I would like to remind employers that they are ultimately responsible for the worker the day she comes into Singapore. The employer cannot shift this responsibility to an employment agent. It is therefore not necessary to amend the legislation to hold employment agents liable for foreign domestic workers who go missing while in their care. However, my Ministry will consider such factors in appeals by employers for refund of the security deposits.

Sir, I would like to ask the Minister of State to reconsider the request. When an employer applies for a maid through an agency, the agency basically brings the maid in from whatever country and they make an arrangement with the employer and assures the employer that if the maid is not satisfactory, the employer can send the maid back to the employment agency and some arrangement will be made to send a new maid to the employer. Under these circumstances, I think there is an understanding between the employer and the agency to send the maid back to the agency if she is unsatisfactory. If this is the case, is it not right for the maid agency to take responsibility for the security of the maid while she is in their custody? And if the maid were to go missing during this period of time, does the Ministry not consider it appropriate that the responsibility should lie with the agency?

Dr Tan, are you making a speech?

I am sorry. I just want to say this. Will the Ministry reconsider its decision? The Ministry can help in resolving the issue of helplessness of the employer?

Sir, I have mentioned that the employer is ultimately responsible for the worker the day she comes into Singapore. He employs the worker and therefore he should be responsible for the worker. However, we will take this into consideration when appeals are made by employers for refund of security deposits when the maid goes missing under these circumstances. But I repeat again that the employer is responsible for the worker. In some cases, the employer applies for transfers. While they wait for the transfer, the foreign domestic worker can still be under the care of the employer. So the employer should be responsible.

Mr Speaker, Sir, I want to ask the Minister of State whether it is fair for the employer to be held responsible when the maid is in the custody of the employment agency. The agency would say, "Yes, I will take back the maid and find you a new one." In this case, the employer would say to the maid agency, "I have already passed back this maid to you and she is under your custody." In this instance, would the Ministry consider passing legislation to hold the maid agency responsible? Because to say that the employer is responsible, I think it is not fair. The indifference of the maid agency could really frustrate the employer.

Sir, as I have mentioned, the employer brings the maid into Singapore and he should be responsible for the maid. When the maid is given back to the employment agency while they wait for certain things to be done, I think the employer must recognise that he still has the responsibility for the maid. The employer can come to an arrangement with the employment agency. That is a private arrangement. But when the employer brings the maid into Singapore, our position is that he should be responsible for the maid. And if the maid goes missing, then he has to abide by the terms of the security deposit.

asked the Minister for Trade and Industry whether the introduction of a single Euro currency and the eventual formation of a single market in Europe will have any implications for, and impact, direct or indirect, on investments, trade flows and inflation for the Singapore economy.

Mr Speaker, Sir, the European Union is a significant trade and investment partner for Singapore. As a bloc, it was our third largest export market last year, accounting for 14% of our exports. It was the second largest investor into Singapore (accounting for about 20 % of our total inward investment) and our third largest investment destination abroad (accounting for about 12 % of total investment abroad). . The introduction of the Euro with the target of monetary union by 2002 is a fundamental shift. There are still considerable uncertainties surrounding the final shape of the European Monetary Union (EMU) and its effects on EU growth and trade patterns. Our current assessment of the impact on Singapore is therefore tentative. The creation of a single currency per se should not affect the volume, direction and composition of trade and investment flows significantly. While a single currency eliminates cross-border transaction costs and could lead to increase in intra-EU(15) trade at the expense of trade with the rest of the world, there is no historical evidence that this will necessarily be the outcome. For example, the Single European Market was formed in 1993 and yet, over the period 1990-96, the trade growth between EU (15) and Asia at 9.1 % per annum was faster than the intra-EU (15) trade growth of 3.6 % per annum. From a longer-term perspective, it is widely expected that Europe would benefit from higher efficiency and market orientation as a result of the EMU. A stronger EU is likely to increase imports from Asia and the rest of the world. To qualify for entry into the EMU, according to the criteria of the Maastricht Treaty of 1991, member countries had to keep their inflation rates low, at not more than 1.5 percentage points above the average inflation rate of the three countries with the lowest inflation rates. Monetary policy under the EMU is expected to maintain this price stability and help keep price increases at bay. Given the high import content of our economy, this development should have a small positive effect on imported inflation for Singapore.

Sir, what is the Minister's assessment of the potential use of the Euro as a reserve currency?

Sir, I think this question is better answered by MAS or the Finance Ministry. My own expectation is that it will be significant.

asked the Minister for Trade and Industry what is the status and progress of discussions with the Indonesian government with regard to the possibility of Singapore obtaining water supply from the Riau Islands to meet our long-term needs.

Mr Speaker, Sir, on 28th June 1991, Singapore signed a water agreement with Indonesia. It enables Singapore to develop water resources in the Riau Province of Indonesia and draw up to 1,000 million gallons per day of water for 100 years. PUB has identified Pulau Bintan and Sungei Kampar as possible sources of water. The agreement provides viable supplementary or alternative sources of water for our long-term needs. Its implementation will be carried out at the appropriate time, after evaluating the various options, including desalination. Water is a strategic resource and Singaporeans should be regularly reminded to conserve water.

Sir, I would like to ask the Minister how much of this constitutes our total water needs. That means, how much of water from Riau will constitute our total water consumption in Singapore?

Our current consumption is about 280 million gallons per day. So 1,000 million gallons per day is about three times that volume.

Sir, I wonder whether the Minister would be able to highlight to the House the latest position of our Water Agreement with Malaysia.

Sir, I presume he is asking about the latest situation on the negotiations.

Yes.

The talks are still on-going. Since the last meeting, there has been not much progress. But we are still hopeful that at some stage we will be able to come to an agreement. Because we are interested to buy water and if they do not sell the water to us, it just goes to waste. So it is really a commercial deal. It is a single buyer, single seller, kind of situation.

What is the cost of buying water from the Riau Islands compared to that from Malaysia and desalination?

Water from Bintan is expected to be competitive and it is probably cheaper than desalination. Water from Kampar is likely to be expensive because it is a long way away and we have to put in a very expensive pipeline. But as I have mentioned in my answer, these sources are viable. It is a matter of deciding which are the alternatives we want to adopt.

Sir, bearing in mind the problem we have with Malaysia pertaining to the CIQ matter, would the Minister envisage any problem with our negotiations with Malaysia and will the Minister tell us whether there is going to be a deadline in terms of finalising the negotiations?

Sir, I suppose the current state of relations must affect the negotiations. The CIQ is one issue. But we should try and keep the issues separate. We need water. The first Agreement which allows us to draw up to 90 million gallons of water per day is expiring in the year 2011. So we are still very keen to buy water. As I said, if we do not buy the water from them, it will just be discharged into the sea and it is of no value to them. So I hope it will be seen in the light that it is of mutual interest to come to an early agreement.

I would like to ask the Minister how much and how long it would take to build the necessary infrastructure to bring water from the Riau Islands to Singapore. Secondly, could the Minister tell the House when we are likely to expect the first drop of water to come from the Riau Islands?

It is likely to take a few years to build the pipeline from Bintan, the reservoir and so on. Also, we have to agree on the terms, for example, how to keep the water clean, how much to pay for the resettlement and so forth. But it is well within the time frame. We do not need the first drop until 2011. So we still have another 13 years.

I would like to ask the Minister whether, in the light of the current difficulties with Malaysia, the Government would consider accelerating its plans for desalination.

Sir, we continue to proceed with our plans for the first desalination plant of 30 mgd, based on the multi-stage flash evaporation process. So those plans are in hand and we are in the process of preparing for that. We will work within the time frame where necessary. There is no need for us to hurry and do it just because of the problems. Because when we bring in the plant, we must operate it. So we have this window when we must put in the plant, and our plans are well in hand. We are proceeding as we have announced previously.

May I ask the Minister if there is a problem in getting fresh catchment areas in the Riau Islands due to the uncontrolled dense population there?

Sir, the problem could be more in Bintan because it is a small island. If a lot of immigrants come in, it could affect the reservoir area. But the Kampar area is enormous. So we think there should be no problem there.

Would the Minister assure this House that even in 2011, when the first Water Agreement with Malaysia expires, Singapore would not face the problem of water supply?

Sir, I can assure the House that that would be the case. As I have mentioned, our plans are well in hand for us to put up the first desalination plant. So it is just a matter of putting in the money. The technology is proven. It has been done in so many other countries. So long as we are able to pay and buy the energy and pay for the plant, we can have the water.

asked the Prime Minister if he will appoint a committee to study the economic situation in Singapore.

Mr Speaker, Sir, there is no need to establish another separate committee to study the economic situation in Singapore. The Ministry of Trade and Industry and the other economic agencies are closely monitoring the economic situation. They rely on regular meetings with businessmen, surveys of companies, and statistics on trade and industrial production. This combination of on-the-ground feedback and timely, hard data enables the Government to keep close tabs on the economic situation and the problems faced by businesses and Singaporeans during this difficult period. In addition, there is already established a Committee on Singapore's Competitiveness (CSC), chaired by the Minister for Trade and Industry, and comprising private sector members from all the economic sectors. The CSC was originally tasked to assess and make recommendations to sustain Singapore's economic competitiveness in the medium to long term. But since the regional crisis began, the CSC has broadened its scope of work to cover the impact of the crisis on Singapore, and the immediate measures needed to sustain the Singapore economy. The Government took into account the CSC's inputs when it formulated the economic measures in the FY1998 Budget and more recently in the off-Budget package.

asked the Minister for Home Affairs (a) whether juvenile delinquency is a serious or growing problem in Singapore; (b) what are the trends in recent years; and (c) whether there are particular juvenile problems that require the attention of families, Government and society in general.

Sir, the number of juvenile offenders arrested rose steadily from 1,205 in 1990 to 2,574 in 1995 before falling to 2,110 in 1996. Last year, the situation stabilised, with the number of juvenile offenders arrested rising only slightly by 37 to 2,147. In the first six months of this year, 1,028 juvenile offenders were arrested, which was a slight 1.5% increase over the corresponding period last year. Juvenile delinquents commit mainly property-related offences such as shoplifting and theft, and gang-related offences such as rioting and unlawful assembly. The increase in the total number of juvenile offenders in 1997 and the first six months of 1998 is mainly due to more juveniles arrested for shoplifting and other property-related offences. Juvenile delinquency is a multi-faceted problem. The reasons why a juvenile turns to crime are diverse and complex in nature. Studies on juvenile problems have shown that the reasons for juvenile delinquency include ineffective parenting, parental neglect, boredom, undesirable peer influence, greed, the desire to do the unconventional, or a combination of these factors. We have not detected specific juvenile problems that need to be urgently addressed so far. Only with more information can Government, families and the society in general be able to target specific groups of juveniles that need assistance most. This is being looked into. MCD is chairing an Inter-Agency Work Group, which has been set up to develop a centralised inter-agency database on juvenile pre-delinquents and delinquents. This database will facilitate the monitoring of juvenile delinquency trends. It will also help to highlight specific juvenile problems. In addition, the Inter-Ministry Committee on Juvenile Delinquency (IMJD) has also commissioned a study on juvenile delinquency, which is expected to be completed by year-end. This study will also provide further insights on why juveniles turn delinquent.

There seems to be a worrying trend towards a more violent behaviour amongst our youths, such as rioting, gangsterism and street fights. I would like to ask the Minister how serious is this, and whether we are meting more severe punishments towards these offenders.

The courts have taken a tough stand, particularly against this area of teens fighting and rioting. As I have indicated in my speech, the problem of rioting has been there for some time. It was contained last year. In fact, in the first six months of this year, as I have indicated, the total number of offenders has been about the same, but the number of offenders caught for shop-lifting and other property-related offences has gone up much more. So the early indications in the first six months of this year are quite positive. The other matter is that when we talk about juvenile delinquency, we are talking about the under-16s. Of course, we know that youths above 16s also fight. They are the youths. What we have to look at is a more composite picture. So IMJD will do that, and not just address the problem from the juvenile delinquents' point of view, but even those above 16.

The Minister of State cited figures for juvenile offenders. In the Minister of State's assessment, is this merely the tip of the iceberg? In other words, is there an increase in terms of youth joining youth gangs? Is there an increase in ill-discipline in schools, for instance? To what extent are these figures on juvenile offenders which give us no cause for concern really just something which may not be indicative of a general trend as a whole?

Youths go through phases in their lives. At a certain age, when they are probably in secondary 1, secondary 2, secondary 3, I think they are looking for excitement. They are very easily influenced by peers. So what is important, as I have said in my answer, is the parenting effect. The key point which we would have to emphasise continually and work with the CDCs and other VWOs is to help parents understand what their teens are going through. The important thing is that whilst the teens undergo through this phase, which I think all teens will go through, they should not fall beyond the abyss. They may do naughty things but they should not do anything which is so serious that will lend them in jail or put them in violation of the law. As I have said in my answer, it is a multi-faceted problem. Fighting is something that has emerged, but it has been contained. I would say that we must continue to press on, bringing everybody on board to tackle the problem.

asked the Minister for National Development (a) how many applicants (first-timers and upgraders) are on the waiting list to purchase a new Housing and Development Board (HDB) flat; (b) whether the waiting list has lengthened or shortened when compared to June 1997; (c) what is the average waiting time between submission of application and taking possession of a HDB flat; (d) whether the Government will maintain the pace of its public housing building programme in view of the current state of the property market; and (e) what impact, if any, this will have on the HDB resale market.

Sir, as at 30th June 1998, HDB has a waiting list of about 110,000 applications on its registration system. 43% are first-timers and 57% are upgraders. Compared with 145,700 applicants in June 1997, the waiting list has dropped by 25%. With the current waiting list, the average waiting time for first-timers is 2� years from the submission of an application to the invitation to select a flat. It will take another 2 to 2� years for the selected flat to be completed. The Government will build 30,000 units this year to cater to the people on the waiting list. About 22,000 units will be allocated to the first-timers and 8,000 units to upgraders. Upgraders who take delivery of their new flats would release their existing flats to the resale market. In the first six months of 1998, the resale volume was 28,200, of which 10,600 were sellers who are moving into new HDB flats. Resale HDB flats will remain an alternative option for HDB flat buyers who prefer not to wait for their flats. 1.30 pm

Order. End of Question time. [Pursuant to Standing Order No. 21(3), Written Answers to Question Nos.17 and 18 on the Order Paper are produced in the section, "Oral Answers to Questions Not reached" Col. 891 - 892 ).] Question Nos.19 and 20 have been postponed to the next sitting of Parliament.]

Mr Speaker, Sir, I beg to move, That, in view of the economic downturn, the Government should rally the support of the entire nation to minimise unemployment in the short term and strengthen economic competitiveness and social cohesion for the long term so that Singapore will emerge from this regional crisis even more competitive and resilient. Sir, in my address I may touch on issues related to various organisations which I am associated with. I would like to begin by declaring my interests, as a Deputy Secretary-General of NTUC, the Chairman of the National Computer Board, a Board Member of the EDB and PSB, and a Member of Singapore 21, Manpower 21, and the Committee on Singapore's Competitiveness. Sir, in 1992 when I was working with the EDB, we presented the economic strategy of Singapore to the Chairman and CEO of one of the world's largest corporations. We were there trying to get him to invest more in Singapore. At the end of our presentation, this Chairman, who had just taken over the running of the corporation and gone through a major exercise of downsizing and retrenchment, commented that he was very impressed by the economic strategy of Singapore. He said the way we ran our economy in Singapore was very much like the way he ran his big corporation, a global operation. We thanked him for his compliment and pointed out to him that there is one big difference between running a big corporation and running a national economy. We pointed out to him that in the case of a corporation, when business is not doing well, when the company needs to restructure to remain competitive, you can downsize, you can retrench to be lean and trim again. But in the case of a national economy, a country cannot just simply retrench and downsize the country, the workforce, because at the end of the day we still have to find jobs for every Singaporean. Sir, I think this precisely is the challenge facing us today. For the last 30-over years, in the process of nation-building, we have been very conscious about the need to create more than just a competitive economy. Because we realise and understand that at the end of the day, the long-term survival of Singapore rests not just with a competitive economy but equally, if not more importantly, on a cohesive society and a strong and resilient nation. In fact, if you look back the last 20-over years, since the mid-70s, the standard of living of all Singaporeans has improved tremendously because of full employment. As a result, there is no widening of income gap, there is no widening of social gap, standard of living, and so on. What we have today is both a competitive economy and a cohesive society. However, full employment in Singapore is likely to come to an end this year. If you look at the economy today, for every Singaporean who is still having a job, I assume we have to be at least 1% to 2% more productive than last year, so that we can still keep our job. And yet at the same time, the workforce is growing, because every year we have 40,000 to 50,000 young Singaporeans joining the workforce, maybe 10,000 to 15,000 older Singaporeans retiring from the workforce. So there is a net growth in the workforce of about 1 1/2% to 2%. In other words, the economy will have to grow by about 3% to 4% every year, in order that everyone of us who is having a job can continue to keep the job, and at the same time to create enough jobs for the new entrants to the workforce. So we need to have 3% to 4% growth a year. But we are not going to see 3% to 4% growth this year, and not likely next year. The Government has projected that GDP this year will grow at maybe between 0.5% and 1.5%. That will be about 2 percentage points or so less than the 3% to 4% needed to sustain the present level of employment. Therefore, it is possible that unemployment rates in Singapore may reach as high as 4% before the end of the year. And if slow growth were to continue into next year, then by the end of next year, if we do run into a recession, unemployment may even reach 5% to 7%. The point I want to highlight here is this. Looking at the nation, we can talk about unemployment of 4%, 5%, and so on. But the workers, who are unemployed, to them unemployment is 100% when you do not have a job. It is for this reason that I felt it is very important that the entire nation, whether we are Government, unionists or employers, all Singaporeans, we must come together to rally the support, work united, stay united, and ask ourselves this question: what are the three to five most important things we have to do together, work together, in order to manage and contain rising unemployment in the near future? There are, of course, various ways we can try to regain full employment or to defer unemployment. Some people have suggested that since we have a healthy reserve, why don't we spend more money - the consumers be given tax incentives, the Government increases the budget. Then by spending more money, hopefully, we can prop up the economy to the 3% to 4% needed to sustain full employment. I did a simple calculation. Based on the report I read in the newspapers about leakage through import, if we were to increase consumer spending or government spending to increase GDP growth from 0.5% to 4%, an increase of 3.5 percentage points, we would have to inject an equivalent of 5% of GDP of spending for GDP growth to go up to 4%. 5% out of a GDP of $143 billion, as at the end of last year, works out to about $7 billion, meaning that we have to spend another $7 billion in the economy to boost the economic growth. I called up HDB and asked how many flats they can build with $7 billion. They said: 61,000 4-room flats. I called up MOH and asked how many hospitals they can build with $7 billion. They said: 20 hospitals with 800 beds each. I called up the LTA and asked how many LRTs they can build with $7 billion. They said: 14 LRTs, each one costing $500 million. Sir, my point here is this. $7 billion is a lot of money. It is easy to talk about spending $7 billion, but by the time we translate the $7 billion into real goods and services, then we understand. It is not possible for the Government or for the people to just throw $7 billion to building another 61,000 flats, another 14 LRTs, another 20 hospitals, just to keep the economy growing, just to defer unemployment. So spending our way out of a slowdown is a no-go solution. Then somebody said, if that is the case, why don't we send back the foreign workers? After all, there are about 450,000 foreign workers in Singapore, which is equivalent to about 25% of our workforce of 1.8 million. Theoretically speaking, if unemployment were to go up by 2% to 3% every year, we can just downsize our workforce by sending back the equivalent number of foreign workers. So 25% of the workforce of foreign workers can defer unemployment, in theory, by 10 years, because every year we send back 2.5% of the workforce. So we can defer by 10 years. That sounds very good, very attractive. But if you were to look into the composition of the foreign workers, one-third are construction workers; one-third are domestic maids; and then how about the nurses, how about the workers who work on shift, the skilled workers working at wafer fabrication plants and so on. Therefore, I come to this guesstimate that if we were to look at the number of jobs taken by the foreign workers which Singaporean workers are willing to do, are able to do, maybe the number is down to 70,000 or so. And how long can 70,000 last us? My guess is one year, maybe two years, and after that we will run out of foreign workers to send back. Then what do we do? Unemployment will still be there. Then some said, if that is the case, it is so difficult to spend the money and to send back foreign workers, how about setting up an unemployment fund? So, again, I did a simple calculation. Assuming unemployment was to rise by 1%, which means 18,000 workers out of a base of 1.8 million, assuming we pay them $500 a month, it will cost the Government $100 million a year, at $500 a month for each of these retrenched workers. Then what next? Now you pay $500, two months later they will come back and say $500 is not enough, how about $700, how about $1000? Also, do not forget, if we do not address the real issue of unemployment, the number will go up, which means over time, what is going to happen is that Singapore will become a welfare state whereby employers say it is okay to retrench because the State will take care of them. The workers will say, "No hurry to find jobs because the State will take care of me." If that is the case, eventually, we are going to go down the tube. Sir, whether spending money, sending back foreign workers or setting up an unemployment fund, in my view, I feel very strongly that this should not be the three to five things that we should be worrying and thinking about at a time like this. At a time like this, the most important thing is to think about how we can preserve jobs, how we can upgrade the skills of workers. Sir, let me move on to talk about what are the three to five things I think we can do. The first thing we need to do is to see in what way we can minimise unemployment in the short term. There are four ways we can minimise unemployment in the short term. Firstly, keep costs low; secondly, keep productivity high; thirdly, retrain rather than retrench workers; and lastly, offer job placement services, employment assistance to the retrenched workers so that we can help them find jobs. If you think about it, this is precisely what the tripartite partners are doing - the Government, the unions and employers. These are what we have been doing over the last few months. In the area of cost competitiveness, the tripartite partners have agreed to go on a wage restraint. The Government has also introduced various cost-cutting measures to reduce the non-wage costs. The tripartite panel on retrenched workers is now working on things like retrenchment advisory, encouraging companies to go for retraining of workers rather than to retrench workers, to go for a shorter work week rather than to downsize companies. And at the same time, through initiatives like the Labour Net and Back-to-Work programme, and so on, we are helping retrenched workers to find jobs. All in all, I think a lot has been done, and is being done. However, if we were to look ahead to the future, a lot more needs to be done, because the slow growth that is coming our way is likely to be a prolonged one. And to what extent we are able to keep unemployment low, I think, depends on whether we are able to change our mindset. When I said "we", I refer again to the whole nation, not just the Government, not just the unions, but also the employers and the workers. Let me explain. Firstly, on the part of the workers, it is important for our workers in Singapore to change their mindset towards jobs. We should never take full employment for granted; we should never take jobs for granted. At this moment, even though we talk about unemployment and slow growth, there are still many jobs in Singapore where employers are looking for workers. But what they are looking for will be workers who are prepared to work in shifts, prepared to travel the distance to the factory location and be prepared to upgrade to have the skills to do the job. Therefore, for the Singaporean workers, it is important that at a time like this, we should learn to value jobs and learn to change our mindset. It is all right to travel a little bit further to the factory; it is all right to go on a shift job; it is all right to go for retraining. But at the same time, it is important for the employers to change their mindset too. We have come to notice that many employers are still preferring to employ younger workers. Any Singaporean worker who is more than 40 years old is considered as old. As a result, in the course of job placement, we have come across many situations whereby older workers who are more than 40 years old are not even able to secure interviews. They are stopped at the factory gates. The security guards say that they have received instructions not to let anybody who is more than 40 years old to come in for job interviews, not even to fill up the job application forms, because the company is not interested in them. Sir, in Singapore, what we are going through is an aging population. The workforce is aging. If every employer were to think that anybody who is more than 40 years old is too old for employment, then we are going in for a very serious social problem. I think it is important for the employers to change their mindset. The second area the employers should also change their mindset is the concept of wage versus productivity. For a few years now, at the National Wages Council, we often debate about this issue of whether wage cost in Singapore is rising too fast. The very favourite line adopted is that, if you look at the real wage of Singapore over the last few years, it has exceeded productivity gain. Therefore, we are becoming less competitive. But I think there is another way to look at this. The problem is not because our wage cost is going up too fast but rather our productivity is not going up fast enough. For many years, we have been riding the wave of high growth. When the growth is high, it does not matter what we do, just put in more equipment, more people, we achieve high productivity. But at a time like this and looking ahead in the future, I think the challenge for Singapore is how to be able to produce more with less, ie, produce more output with less equipment, less technology, less workers. The concept is known as the Total Factor Productivity (TFP). It is at a time like this that we must bite the bullet and ask ourselves: have we done enough all these years to improve the TFP in Singapore and, if not, what more can we do? Deferring the problem is not the solution because the environment of the future will change, and become even more competitive. Sir, on the part of the unions, we need to change our mindset too. We have to change our mindset to one of to be pro-worker, we have to be pro-business. If we are not pro-business, companies cannot grow and cannot be profitable. Eventually, workers will suffer because either they do not get good wage increase or they may even lose their jobs. In this regard, I am pleased to say that the labour movement in Singapore takes pride in being one of the first in the world to adopt such a progressive view. In fact, the NTUC has formulated NTUC 21 in April 1997, and that was before we were hit by the slow growth. Under NTUC 21, we have made a formal declaration that we do take shared responsibility towards the competitiveness of the companies and enhancing the life-long employability of the workers. Right now, the unions affiliated to NTUC are formulating their Union 21 plan to see how the labour movement can add value, not just to the workers, but also to the economy and the employers. This is something we will continue to do. Sir, how about on the part of the Government? The Government should also think about changing the mindset in at least two areas. The first area is in the area of employment assistance. For many years, employment assistance has never been an issue because we have full employment. But if you look ahead in the future, we should not take it for granted that workers will always have jobs, not because there are not enough jobs to go around, but because of the mismatch either in terms of skills, age or location. I think it is important for the Government to give this whole idea of employment placement services higher priority and to think in what way we can strengthen and enhance the system. The second area I hope the Government agencies will consider to change their mindset is an issue which I discussed at the last Budget debate. In the business world, competition is so keen that companies have changed over the years from a cost-plus mentality to a price-minus mentality. Instead of looking at what is the cost of production of goods and services, add a profit margin and become the selling price, companies basically look at the market and customers and see what they can afford to bear. From there, they work backwards to see how much they need to lower their cost of production so that they can meet the price set by the market and at the same time be profitable. This is an area I hope the various Government agencies will seriously think about because, in the next few years, wage increase will be fairly moderated. Some workers may become jobless, and I think they will be concerned about the cost of living, and so on. At the same time, many companies are also concerned about the cost of doing business. Sir, I hope Government agencies can think about how they can also adopt a price-minus mentality. Look at the marketplace and the competition we are facing and ask what kind of prices, what kind of cost level can the business community and members of the public bear, and is there any way the various Government agencies can offer the service without compromising on the quality of service and, yet, at the same time, be able to meet the pricing target. Another area which the Government may want to think about is this. When we talk about the CPF cut being the last resort, the question which many people ask is: what does it mean by "as a last resort"? We have asked companies, for example, in the manufacturing sector, what are their major cost items. They said, "Yes, wages are important. But foreign worker levy is another major cost item. Industrial land, factory rentals, and so on, are all major cost items." Sir, is it not possible that, before we talk about the CPF cut, the Government could think about whether there is any way it can lower non-wage cost in terms of foreign worker levy? I understand of course that, on the one hand, if we were to lower the foreign worker levy too much, it may actually make the Singaporean workers less attractive compared to the foreign workers. But, yet, at the same time, if we do not lower the foreign worker levy, employers will keep on looking at the CPF cut and other wage cuts to make their operations more viable. Therefore, is it not possible for us to think through this issue ? If we assume that every factory will have some foreign workers because of shortage of workers in Singapore and, in order not to encourage employers to retrench Singaporean workers and replace them with foreign workers, why can't we have, for example, a three-tier foreign worker levy? For the first tier, anybody who employs less than 20% of the workforce, in terms of foreign workers, will pay a very low foreign worker levy, and for the next 20%, he has to pay much more, and the next 10%, from 40% to 50%, he will have to pay a lot more. In this way, we help to lower the cost for the businesses and, yet, at the same time, we do not encourage companies to replace Singaporean workers with foreign workers. In the case of land and buildings, again, we have discussed several times before in this House whether it is possible for the Government to review land pricing policy and make it more predictable because, today, it is not predictable. Companies are told that their land lease can be revised up to 7.6% a year. Up to 7.6%, it is very difficult for any company to plan their business. They will never know whether they will be charged 1% increase or 7.6% increase. So they are asking for something more predictable. Is it 3%? Is it 4%? It should be something more predictable. How about something more responsive too? Their view is that when the market is good, the rental goes up very fast. When the market is down, the rental comes down very slowly, because Government agencies say that the rental today is still below market rate and therefore they are not entitled to any adjustment. Thirdly, intensive use of industrial land. We talk about how we can encourage companies to intensify the use of industrial lands which are very expensive in Singapore. We talk about reviewing the differential premiums, and so on, but to the best of my knowledge, nothing has been done. Sir, my point here is that, in the past, when the economy was doing well, the business sector could afford to bear some of these higher costs. But at a time like this, and looking to the next few years, every dollar we can help them to save, we should do our very best. I hope the Government agencies can really think about adopting a new mindset like moving away from a cost-plus towards the price-minus mindset, and ask the business community what it can bear and what they can do to achieve that kind of price target. Sir, when I talk about all these issues, I look at them in a very positive sense. I believe that we in Singapore are in the best position to contain rising unemployment. The reason why we are in the best position is that Singapore is not a low cost location. If today we are a low cost location, how low can we go? But since we are not a low cost location, there is still a lot of room for us to adjust lower the cost of doing business in Singapore. At the end of the day, the extent to which we will be able to contain unemployment depends a lot on whether the workers are able to change their mindset towards jobs, the employers towards older workers and Government towards the cost structure in Singapore. Having talked about minimising unemployment in the short term, I think that is only the short-term measure and that, in itself, will not be sufficient to see Singapore through this crisis. Because by the time the crisis is over, we are going to find ourselves in a very different environment. I would just like to highlight five trends which are unstoppable. Like it or not, they are already happening and they will continue to evolve. Of these five trends, two are within the region. The first is the realignment of the regional currencies. Because of the crisis, the Singapore currency dropped by 15% to 17%, while the regional currencies dropped by 35% to 84% in the case of Indonesia. By the time the crisis is over, we are going to see a complete realignment of the regional currencies. What it means is that these countries vis-a-vis Singapore will be about two to five times more cost competitive. So that is the first trend we have to accept. It is already happening and there is nothing we can do to stop it. The second trend is the potential threat of rising protectionism in the region. In the last couple of years in particular, we are beginning to see very intense competition within the region, within ASEAN, for example. We have our airport, we have our seaport. They also want to have their airport and seaport. Ours is big. They want to be bigger, and so on. But competition is not what I am talking about. What I am talking about is, that the competition is turning into unhealthy competition, and unhealthy competition leads to all kinds of protectionistic measures. This is something we have to be concerned about. When the countries in the region forget how to think win-win and start to think win-lose, at the end of the day, it is going to end up lose-lose for all of us. And we have to think about what should be our response. The other two trends are more global. Firstly, it is the whole issue of globalisation. With globalisation of technology and market, and so on, companies are now moving towards a horizontal division of labour, meaning that they will start to deploy their complete value chain all across Europe, US, North America and Asia. What this means is that there will be more opportunities for us to strengthen our economic strength. But yet, at the same time, it also means that there will be stronger and keener competition for these opportunities. The other global trend is technology. Technology is moving faster and faster. The good news is that, with faster change in technology, it means we have more room to move ahead. But the bad news is that we can only continue to ride the wave of technology provided we are able to quicken the pace of change in Singapore as well to be able to learn new knowledge faster and sooner. The last trend is more domestic, the issue of an aging population. With a longer lifespan of people and shorter lifespan of technology, the issue of employability will become more acute in the future. So given this new environment that we are already in which will only get more intense, in terms of competition, pace of change, and so on, there are basically three scenarios for Singapore in the future. The first scenario is one of unemployment. The second scenario is one of structural unemployment, and the third scenario is full employment. If we are not able to remain competitive in this new economic reality, then obviously we will be heading for unemployment forever. If we are competitive, but we are not able to upgrade the workforce, retrain the workforce fast enough, then we are heading towards structural unemployment. But if we are able to do both, to be competitive and at the same time ensure the employability of the workforce, then of course we have a chance to head towards full employment. In fact, before the crisis, I was very sure that we were moving from full employment to structural unemployment because we could observe that we were beginning to have many bad habits, whether it was in the economy or in the society. Workers did not take training seriously and employers had no time to worry about how to train the workforce for the future. Because of all this, it was very clear to me that many of our new growth sectors in Singapore will increasingly depend on foreign skilled workers, foreign talents. If you look at the wafer fabrication plants, tomorrow if we were to stop foreign talents and foreign workers from coming in, all our plants would have to close shop. It is good in a way. It is good that we are hit by this slowdown. Because with this slowdown, it gives us a chance to reflect on what has happened to the Singapore economy over the last five to 10 years and where are the dangers and pitfalls that we may be trapped in and, therefore, what action we can take at a time like this to correct these mistakes and, hopefully, come out of this slowdown stronger and better. Sir, there are three areas I would like to propose as must-do for discussion - competitiveness, employability and national unity. The first must-do for the long term is to enhance the competitiveness of Singapore. We have many domestic sectors that, over the years, have continued to enjoy very low productivity. Take, for example, the retail sector. Everybody knows that the retail sector is not doing well and everybody knows that there is a surplus of players. Too many players in the market which is not growing fast enough. And, yet, at the same time, the pace of restructure and upgrading, for example, in the retail sector is way too slow. I would like to quote an example of New York city. New York city was in a hard time in 1990/1991 because of the recession. In fact, companies were closing, workers were retrenched and the retail sector almost came to a standstill. On Christmas week, the whole shopping mall was empty. But today, if you go to New York city, things have changed. Is it because they have no more competition? It is not quite true. In New York city, if you are prepared to drive half an hour out of the city to Queens and so on, you will be able to find many factory outlets. The factory outlets sell the same goods that you can find in the city but maybe 30-40% cheaper. That is why they call them factory outlets. Yet, many people, whether local or tourists, are still prepared to pay a premium and shop in the city. Why is this so? It is because they have managed to restructure and upgrade. They have managed to change mindsets, from quantity to quality. Macys used to be the largest shopping mall in the world. They are successful because they are big. Anything a person wants to buy, he can find it there. But today, in New York city, they cannot operate on the basis of just having more stock items on the shelf. This does not bring them customers. It is the value added service that they talk about. Sir, the point here is this. When can we start to get some of our domestic retailers to change their mindset? Things are going to be difficult over the next few years. Just to sit there, sit tight and do nothing is not going to do them any good. Can we find ways of helping the domestic retail sector to upgrade and to grow again, help them to shift their mindset, from quantity to quality, from hardware to software? Hardware means just more goods and more people and software is value added services. The second area is to create new jobs in new growth sectors. Many of the jobs which we are losing today will not come back to Singapore forever. For example, the consumer electronics sector has been downsizing and the jobs that are going away will not come back. Why should they come back? Two or three years from now when the market is back, if they look at the cost structure in Singapore vis-a-vis the region, we are going to be so much more expensive, as I mentioned earlier, due to the realignment of the regional currencies. So what we have to do is to look for new growth sectors and areas where we can compete based on our new capabilities. For example, analogue consumer electronics is going down. But that does not mean we should give up consumer electronics, because after analogue consumer electronics, there is this thing called digital consumer electronics. Since we are not competitive in analogue, why not go for digital? Why not start building the infrastructure, the capability and go for this new product and new services in the future? How about building new capabilities? In the 60s and 70s, when we went through the process of industrialisation, we did not have any market in Singapore. We did not have any technology in Singapore. What did we do? What we did not have, we borrowed. So we went to the MNCs and we brought them in. We did not have a market. We borrowed their market. As a result, MNCs exported out of Singapore. In a way, we borrowed their global market. We did not have technology. So we brought in their know-how in processes, products and applications into Singapore. So by borrowing their technology, borrowing their market and by creating a conducive environment for mass volume production, we were able to earn a living. But the question is, in the future, given the five global trends which I mentioned earlier, is it possible for us to continue to earn a living by borrowing technology and borrowing markets from the global players? I do not think so. I think what we have to do, looking ahead in the future, is to move away from a cost containment strategy to a revenue generation strategy. Revenue generation means: can we try to create value out of technology, out of ideas, out of markets, for the global players? It means: can we offer a platform in Singapore which will have the integrated capabilities in technology development through R&D, in innovation development, being able to design new products, new processes, new applications, new services, be able to do market development, help them to create markets in Asia or in cyberspace, the new market that we talk about in the future? If we are able to do so, then I think the future for Singapore will continue to be a bright one, because we will be able to differentiate ourselves and become an integrated hub in the knowledge-based economy of the future. This is the second area where I think we can do a lot more and a lot faster. The third area is to strengthen our position as a global hub in the Asia Pacific. The idea of a global hub is not new. In fact, in Singapore, we started off as a global hub in the 60s and 70s. What we did was to become a global hub in the industrialisation age, eg, airport, seaport, for the transportation and distribution of goods. In that sense, we helped to link the region (ASEAN) to the global economy. We became the gateway and, as a result, it was win-win. But the unfortunate thing is this. After so many years of win-win, instead of thanking us for contributing to this linkage to the global hub, we are accused of stealing things away from our neighbour. But it does not matter what other people say about us. I think at the end of the day, what we have to continue to pursue is the strategy of global linkage. For the simple reason, in the competitive world of the future, the strength of any economy is not what you are able to do within a country. It is not the strength of the location that really counts. In the future, what will really make the difference to the competitiveness of any location is your ability to strengthen the network capability, whether you have the network of resources, expertise, markets, that will make the difference, meaning that in the future world, we are going to compete on a network basis. Sir, in the case of Singapore, we have come this far in becoming a global hub in the industrialisation age. I think our next target, our next challenge, must be to become a global hub in the information economy of the future. And how can this be done? I am optimistic that this can be done. Take, for example, in the area of IT. Today, Singapore is one of the best computerised nations in the world. Our infrastructure like Singapore One, for example, is one of the best in the world, one of the most leading infrastructures in the world. In terms of our legal framework, we have the Electronic Transactions Act in place. What we have to do is to capitalise on this infrastructure, this capability, which we have built over the last 17-20 years and then to link ourselves to the rest of the world. Just think for a moment, if today we can find 10 leading cities of the world which are very advanced in the area of IT, whether they are in the US, Europe, Japan or Asia Pacific. If each one of them were to contribute, let us say, 100,000 users of broadband multi-media services, then what can be done will be for Singapore to link up with these 10 leading cities of the world. And together, we would have created what we call a global information infrastructure (GII), the information infrastructure of the future, to support broadband multi-media interactive applications and yet cut across the world, North America, Europe, Asia Pacific. And when that happens, Singapore will be a very key node and integral hub in the GII of the future. So by the time the region is ready to go for electronic commerce and so on, they can then, like in the old days, link through this GII through Singapore. In this way, we will be able to continue to perform our role as a global hub in the Asia Pacific by helping the region to link up with the information economy of the future. Sir, in the area of competitiveness, if I may summarise, I am basically saying that we have to move our mindset from competing on the basis of cost competitiveness to a new basis of capability competitiveness, and there is a big difference. Being cost competitive means that I do not have to be as good as you, but as long as I am so much cheaper than you, I am still more cost competitive. But to be capability competitive means that we must aspire to be as good as the best in the world, and that is what I am talking about. At a time like this, we should really think about how we can make use of this lull period, this spare capacity that we have in the economy, turn it into an investment for the future, so that we can come out as the best in the world. The must-do at a time like this is to maximise employability. I think enough has been said about the issue of structural unemployment. So I do not intend to repeat the whole issue again, but all I want to say is that in Singapore, we are in the best position to tackle the issue of structural unemployment, better than most other countries. This is because we have always believed in in-employment training. We set up the Skills Development Fund way back in 1979, almost 20 years ago. And because of the SDF mechanism, we have been retraining/upgrading our workers all these years and that is the reason why today we have one of the most cost competitive workforce in the world. What we have to recognise now is that the future will be so different from the past and therefore we have to recognise that the present system of continuing education through SDF may not be enough for us to tackle the issue of structural unemployment. And what we need is to set up a new national system for continuing education and training. For example, we need to set up a new national framework for skills certification. Companies today are coming to Singapore to set up new operations. So they want to train their workers. They want to skill certify their workers. But some of them found out that the skill courses that they want to certify their workers are either not available in Singapore or the skills system is not well defined in Singapore yet. As a result, they are not able to proceed in a systematic way of training the workforce. So there are gaps in the skills certification system. In that regard, the Government's announcement on the national skills recognition system is a most timely move. We hope that quicker progress can be made and we hope that the Government will set some specific timeframe for the expansion of this national skills recognition system. Having a national skills recognition system is not enough because what we have is a system on paper. We have to turn this system on paper into reality, which means we have to set up a nation-wide training infrastructure. We have to upgrade our capabilities in CET. We have to expand our capacity in CET. In this regard, we are very happy that the Government has decided to set up the first full-time training centre for continuing education by converting the ITE at Bukit Merah into a full-time training centre. I think this is something very strategic. It is something that would pave the way for the evolution of a new national training infrastructure for CET. I would like to suggest that we do not stop at the Institute of Higher Learning (IHL). We should encourage the private sector to take on that shared responsibility. Take, for example, in the electronic sector, they have a training centre co-funded by the Government and the industry known as the Electronic Industry Training Centre. This Training Centre is performing a very important role in the present process of retraining our workers, and we believe that the same concept, the same idea, can be expanded to all the other sectors, whether they are in manufacturing or in services. And if we can do that, then over time we may be able to set up a training infrastructure, a training network, linking up both the IHL as well as the training centre in the industry and, in some cases, for the larger employers who may even have in-house training centres. I hope the Government will consider setting up a formal mechanism to co-fund this kind of training centres in the industry and in the companies. Sir, we can have the facilities, we can have the certification in place, but at the end of the day, we have to mobilise the workers for this training. I think the NTUC and the employers' federation can play an important role. Overall, we estimated that there are 580,000 unskilled workers in Singapore. It will take quite some time for us to retrain not necessarily all of them but, hopefully, as many of them as possible. As I say, we believe that we, in Singapore, are in the best position to address this, because the direction is clear, the resources are there and the tripartism spirit is very strong. However, even if we were to strengthen our competitiveness and enhance our employability, that still does not mean that we can have full employment. Because, at the end of the day, it all depends on how we are able to link up the two efforts, how we are able to synchronise and derive synergy from the two efforts. In the OECD countries, in the case of USA, for example, they discovered that even though the economy is competitive, even though they are doing a lot to retrain the workers, yet, they cannot escape from structural unemployment. The conclusion is that the linkage between the two efforts is not strong enough. Sir, my suggestion is that the manpower agencies and the economic agencies have to work very closely together. Take one example. Today, we have workers who are now prepared to go for retraining because of the crisis, because of rising unemployment. They are prepared to go for three months, six months or one year of retraining in order to secure new and better jobs in the new growth sectors. But our challenge is that, if tomorrow, 5,000 workers are prepared to go through the process of retraining, do we know in what area do we train them for? My point here is that we need the economic agencies to be more specific in identifying employment opportunities over the next 1-3 years and be able to, as far as possible, give an early projection. This is because retraining of workers has a long lead time, at least six months, if not one to two years. If we are not able to have early information on where these job opportunities are coming from, it is very difficult for us to retrain the workers, because by the time we retrain them, again they are going to miss the boat. So my point here is that, as a strategic intent, I should say it is a national challenge, to systematically migrate workers from the declining sector into the new growth sectors. If we can do that, and do that in sufficient numbers, then I am confident that Singapore can be one of the first countries in the world to avoid structural unemployment. Again, I am hopeful because today we have Manpower 21 and we have the Committee on Singapore's Competitiveness. What we have to do is to link up the two into something more tangible and actionable. Thirdly, for the long term, besides strengthening competitiveness and employability, we need to strengthen our national unity. The crisis is something we did not wish for, but it has happened. It is actually a very rare opportunity if we look at it positively. Earlier, I talked about competitiveness and employability, which basically is to strengthen and enhance the economic stakes of Singaporeans in the Singapore of the future. The question is this: is this also a great opportunity for us to enhance and strengthen the emotional stakes of Singaporeans in the Singapore of the future? We have been talking about this in the last one year or so, since the launch of the Singapore 21 Committee chaired by Minister Teo Chee Hean. There is a lot of discussion about the people sector. In fact, Minister Teo coined the term "people sector" as against the private sector and public sector, which I thought was a very exciting idea. The question is: how can we make use of this opportunity as a way for us to strengthen heartware and nurture an active people sector? Take, for example, between the private sector and the public sector. We often have this public debate - the private sector will say the public sector does not understand that the rain is really pouring, and the public sector will say the private sector does not understand that government cannot bail out companies. So there is a lot of debate and disagreement. My own observation is that in a way we have to recognise and accept that different business sectors have different cost structures. So one solution which may be relevant to some sectors may not be relevant to the other sectors. Up till now, what we have been trying to do is to come out with a common solution which will be common to all sectors. As a result, there is this mismatch between the solution and the needs. Maybe one possibility as a way of strengthening this active partnership between the public sector and the private sector is for the private sector to do a proper analysis. Can they analyse better what is their cost structure, put out a stronger case to explain their position better, and in what way certain measures can help them more than what is being done today? If we can go through a process of consultation and collaboration, exchange of views and debate the views, then hopefully the public sector and the private sector can come closer together. At the same time, how about the people sector? Again, we talk about the active citizenship of the people sector. This can be done. At a time like this, why do we not encourage the people of Singapore to come forward with their creative and constructive ideas on how we, as a nation, can go through this crisis and come out stronger? If we were to make use of this opportunity in the right way, the Government can make use of this opportunity to encourage active citizenship from the people sector and the private sector, which is what Singapore 21 was set up to do. At the same time, the people sector and the private sector, by being responsible and constructive, can also gain the confidence of the Government that effective participation of the 3Ps (people, public and private sectors) can actually lead to a greater trust, greater respect and, most importantly, greater sense of ownership of all the national policies and issues. At the end of the day, I think it can be done because we have Singapore 21, where the message is very clear. What we have to do is to quickly seize this opportunity so that we can stay united at a time of crisis. In conclusion, I would like to say that we have got to where we are here today since 1965 from a no-hope situation. But today, we are getting to Singapore 21, not only not from a no-hope situation, but actually we are getting there from the best-hope situation. After all these 30 years of nation building, now we have a competitive economy and a cohesive society. Our challenge is - if we can do it right, not only will we be able to minimise unemployment in the short term, maximise our competitiveness and employability for the long term, but more importantly, we should be able to strengthen the emotional stakes of Singaporeans in Singapore 21. On that note, I beg to move the motion. Question proposed.

(In Mandarin): Mr Speaker, Sir, every businessman has been saying time is bad and everyone agrees that it will be worse. Every day when we read the newspapers and listen to the news, we learn that more and more companies are winding up and many workers are retrenched. It is getting from bad to worse. More and more people are losing their jobs. We also hear a lot of grumblings from the people. Some companies have simply closed down and the workers lamented, "Retrenched today, no more job for me tomorrow!" Businessmen are grumbling, "The banks are most merciless, they keep on pressing us for payments." In June this year, the Government announced the off-Budget measures where $2 billion were pumped in to bring forward the construction of infrastructure, and to help the businessmen tide over the difficult times. But they say that the Government is not doing enough. More rebates should be given. Sir, many Singaporeans who are yet to be retrenched are worried that they would be retrenched. They are worried that once their CPF contribution is reduced, they will have problems servicing their housing loans. With all these worries, their confidence is lost. So at this time when we are threatened by this regional financial crisis we should pull ourselves together and face the problem together. In the short term, we should minimise unemployment and in the long term we will have to improve our competitiveness. To attain these targets, whether you are the employer, employee or Government, you must first of all have confidence and the determination to face the problems squarely and work out long-term strategies to strengthen our economy. I shall elaborate on the roles of the employers, employees and the Government. First, let us talk about the employers. When this financial crisis came all of a sudden, many companies were caught off-guard. When business is bad, they try ways and means to cut cost and resort to downsizing their operations. In many circumstances, our employers still have a heart. They would discuss with the union representatives and arrange for the workers to undergo retraining so that they can cross over to the high-tech industries and command higher wages. We say that the bosses do have a heart. An accountant friend of mine who works in an advertising company said that this year the company's business was reduced by 70% and most of the time the staff had nothing to do. The management then discussed with the staff and they all agreed that in order to keep their jobs and stay employed, they accepted a wage cut, and they are allowed to take on part-time jobs outside. So they retain good employer-employee relationship, the company could continue to survive and they have employees who have developed a strong sense of belonging. Sir, the unions affiliated to NTUC are working hand in hand with companies affected by this downturn. The workers are either on shorter work week or temporarily laid off or attending the Skills Redevelopment Programme (SRP). At the moment, employees who are retrenched are not confined to ordinary workers in the manufacturing sector and the service industry. Many managers and company executives are given the golden handshake. Even CEOs and General Managers could be retrenched. There are, in fact, more and more cases of this nature. These managers and executives are neither here nor there. It is difficult for them to secure alternative jobs. Some of them have to maintain their parents and support their families, with housing loans and car loans to service, and lots of other financial commitments. They are prepared to work - any kind of work! So long as they can get a job, they are prepared to accept any salary. But the employers say these people are over-qualified, they are very demanding and will not stay long in the job. So they do not even get a chance to go into the interview room. A 51 year-old manager told me that he had attended ten interviews, and had written lots of letters. Every time he attended an interview, he could tell from the expression of the interviewers that he did not stand a chance. He lamented, "If I do not go, I will have no opportunity. But if I go, I do not stand a chance. It is all the same." In Singapore, the Government is the biggest employer. The Government should take a leading role. In some Government departments where there are a lot of backlogs to clear, let some of these retrenched executives and managers be employed to clear the work. They have the management experience and expertise to take on these jobs. Employees face the reality It is said that all good things in life do not last forever. If you say this a few years ago, not many people would believe in it. There used to be long queues to buy the million-dollar apartments and long queues to buy club memberships. There were long queues everywhere because people believed that where there was a queue, there was opportunity to make profits and amass a lot of money. With this trend developing, many people were using future money to buy things that they do not need, just to impress others. When the financial crisis hits Singapore, we all realise that good things in life really do not last forever. We have to tighten our belts. It is a blessing in disguise because it makes people more realistic and they begin to realise the importance of upgrading themselves. Not so long ago, I participated in a dialogue session on foreign talents and a young lady told me that the taxi driver who drove her to the dialogue session spoke very good English. She found out from him that he was working as a manager and was retrenched. Since he spoke such good English, why should he work as a taxi driver? We should find a better job for him. I said, "Well, there are many taxi drivers who speak very good English. It does not mean that if one speaks good English, one should not be driving a taxi." I actually admire the courage of this ex-manager who dared to take up this job of a taxi driver. He is being realistic. He grabs a job first and then looks for something better. Actually driving a taxi is not a bad thing. I know of many taxi drivers who drive taxis in the day time and at night time they enjoy themselves by singing in the Teochew opera troupe. In the day time they work hard but at night they go about enjoying themselves by doing things they enjoy doing. Nowadays, many retrenched workers are working as taxi drivers. Even those who are not retrenched as yet, are also working as taxi drivers, just in case they are retrenched later on. So it is good to have such a sense of crisis. However, Singaporeans should try to upgrade themselves at all times and get better trained to ensure their employability. In the past, we said, "A skill in hand brings you benefit the whole life long." But now with technologies advancing all the time, your skill may soon become obsolete when the technology you are familiar with is replaced by new technologies. In order to avoid unemployment, you will have to possess many skills in hand so that you can be employed all the time. I urge all Singaporeans to have this habit of lifelong training and participate in the training courses provided by the NTUC and the various self-help bodies so as to ensure lifelong employability. Foreign talents Let me talk about the policy of attracting foreign talents. In recent years, the Government has been attracting a lot of foreign talents to help in our economic development. Foreign talents can be divided into three categories. The first category of foreign talents are the specialists like the R&D researchers, the computer experts, the medical specialists, etc. which we do not have. The second category of foreign talents are the teachers and nurses, etc., the type of people we are short of. These professions were very shorthanded in the past and not many people like to be nurses, but recently there was a change in mind. This year, for the first time, Nanyang Polytechnic has full enrolment for the nursing course. I think it is not because people change their mindset about being a nurse but it is because of the changing circumstances. The third category of foreign talents are those who are recruited to undertake jobs which Singaporeans do not wish to do, such as bus drivers, construction workers, etc. I understand that among our bus drivers in Singapore, some 40% are foreign workers. We issue work permits for people to do these jobs which Singaporeans do not wish to do. When discussing the policy of attracting foreign talents to come to Singapore, everyone supports the idea of getting these foreign talents here to strengthen our economy and to enhance our competitiveness. But now with the economic slowdown when many people are losing their jobs, many people are complaining. They say, "Why are we allowing so many foreign talents to come here? Why are they called `talents'? Are we not talents ourselves? Why don't you employ us?" In order to improve our economy, to increase our competitiveness, yes, we have to employ foreign workers but we must also look after our Singaporeans. The famous poet Li Bai of the Tang Dynasty said, "Everyone is born a talent. I have my own niche." I must emphasise here that everyone is a talent, even a taxi driver is a talent. So we must make good use of talents and try not to have the mismatch of talents. Mr Speaker, Sir, I suggest that the Government's policy on the attraction of foreign talent be more transparent. We should let everybody know that in each industry what are the job opportunities available every year. How many Singaporeans can we absorb and how many foreign talents do we need to absorb? At the same time, employers who are applying for work permits or professional passes should consider employing locals, especially the retrenched middle management people and executives. Only when we run out of these local talents, then can work permits be issued to foreign workers. The Government should also give a projection as to what are the jobs available, what can be done by locals and what are the vacancies that we need foreign talents to fill. The Government has already had the Retrenchment Advisory Scheme and the Employment Assistance Scheme. I suggest that the Ministry of Manpower publish the statistics of how many people have applied for jobs and what are the job vacancies available. Give some illustrations to let our people know what is the success rate of our job matching efforts. I suggest we consider allowing the middle management executives to be registered too, because nowadays there are so many middle management people or company executives who are retrenched. At the moment, many employers do not wish to employ the older workers because they feel that these people are more demanding. In fact, many people have lowered their expectations. A friend of mine was suddenly retrenched. He told me that when he returned home with the news of his retrenchment, he asked members of his family, "So, what am I going to do now?" The wife replied, "No problem. Let us dismiss our foreign maid. We can save about $700 a month." Then the daughter said, "Well, I will give private tuition." The son said, " I am in national service. During the weekends, I can do some part-time jobs." Now, he has taken a new job which requires him to do typing, filing and all sorts of odd chores, and he is earning only one quarter of what he used to earn. But he said, "Never mind. I will carry on. I will work hard and I shall survive." So it is only in times of difficulty that you realize how precious your family is to you. The family gives him the support he much needed. For the time being, he may not be able to meet the payments such as income tax, PUB charges, housing loans, etc. I think the Government should be more sympathetic - allow them to defer payment or even to pay by instalments. Now, let me talk about the cost of doing business. We all know that in recent years, our wage cost has already been adjusted. The Ministers and top civil servants have their salaries cut. Civil servants have their bonuses reduced. Many private companies are implementing the wage restraint policy. Since the 1990s the property prices have gone up by about 300%. There is a chain reaction. For example, in a coffeeshop which is tendered for millions of dollars, a chicken rice stall has to pay rental of $3,000 to $4,000 a month. So let us think about it. How many plates of chicken rice has the stall-keeper got to sell in order to just pay his rent? I hope that the Government will give these property owners more rebates and we must see to it that their tenants share these rebates. Many tenants are telling me that up to now, they have not enjoyed any of these rebates that the owners are getting. Nowadays we have a lot of open-bidding exercises, for land sale, for COEs, etc, and all these tender exercises are absolutely transparent. The policy is correct. But many people feel that property prices can only go up but cannot go down. So everyone will start bidding higher and higher. Now all of a sudden, we know that the property price can go down and there is nothing that they could do. In this aspect, I think the Government should review the policy. We should do away with the speculative element so that we will not commit the same mistake again in future. When we are reviewing our policy, we should also consider the outcome of the review so that everybody would benefit. Recently, the Ministry of Communications reviewed the policy of diesel tax. The saving of the diesel tax rebate is as much as $109 million. The Land Transport Authority makes it clear that the taxi drivers should be entitled to a share of this benefit. Recently, the three major taxi operator associations in Singapore reached an agreement with the taxi companies, whereby each principal taxi hirer shall have $750 paid into his Medisave Account for the next five years. So in five years, every taxi driver would have accumulated $3,500 in their Medisave Account. In all, $60 million will go to these taxi drivers, which is as much as 55% of the savings from the diesel tax. In the past, whenever the taxi drivers talked about the diesel tax, they would become angry. They would scold and abuse. But now, they are happy. I feel that this diesel tax is no longer a burden to them and the taxi drivers no longer have to worry about their contributions to Medisave. This is a win-win situation. In this example we can see that the employer does have a heart and the workers have the incentives to work hard. This is a time for everyone to work together with one heart. As long as the Government has a realistic, pragmatic policy to reduce business cost, I am sure we would be able to overcome all odds and come out of this economic crisis stronger and wiser.

Mr Speaker, Sir, I rise in support of the motion exhorting the Government and the people to rally together so that Singapore will emerge from this regional crisis even more competitive and resilient. Having a strong, able and honest Government in Singapore is necessary under any circumstance. But it is not a sufficient condition for the survival of our nation, whether economically or socially. A resilient and equally strong population is just as important. During this crisis, there is no doubt that the Government's role as a leader and facilitator of changes is crucial to Singapore's ability to not just survive the crisis, but also to emerge the stronger for it. To do so, Singaporeans should support the Government constructively and should not despair nor be overwhelmed by pessimism. Sir, the Government should rally the people in the following ways: Firstly, view challenges collectively. Reflecting on our own past, as we struggled through the last three decades, there can be no denial that both the Government and the people worked hand-in-hand as there was a sense of ownership of a common destiny and a common vision. There was mutual trust that everyone would strive towards the common good. This did not mean that there was no suffering, no pain nor adjustments. But it did mean that everyone was prepared to work towards a longer term goal even though there was going to be hardship in the interim. This was again evident as we rode out the downturn in the mid-80s. Painful decisions were taken. Singaporeans rallied behind this Government and we emerged better able to tap growth potential. The financial and economic crisis that we are now confronted with has no precedent. It has hit all Asian countries with such ferocity that it would be quite impossible to be spared. Even though we have a relatively sound financial system and competitive business infrastructure, we are still adversely affected. Estimates on how long this crisis will plague us have not been encouraging. This means that for us in Singapore, the pain, particularly from unemployment and extremely challenging business conditions, is likely to intensify over the next year. How we react to this monumental crisis will determine how we will fare in the medium, if not, longer term. The current crisis resembles a mighty earthquake, which unfortunately has many epi-centres within the Asian region, each capable of triggering equally damaging aftershocks. The role of the Government is therefore to help prepare people to cope with the devastating effects and we have to recognise that there is very little, if at all, that it can do to prevent another aftershock from happening. So how do we cope with this crisis? Do we begin by shifting blame, say, to our employees or the Government? Understandably, this may be a reaction triggered by despair for those who have been retrenched, or badly affected by the plunge in property or stock market values, or financially crippled by higher interest rates. However, once we start drawing lines of division and forming separate camps, we will not be able to be on top of the situation. Reaction to the current call to stay employable may be a good illustration of how we can view these challenges, literally, as one people or as different parties. Do we see the need to be constantly trained and upgraded as a necessary survival skill for all Singaporeans or is it simply an end unto itself, the road to another job? If we see training as an obligation of employers or the Government, then the motivation to get trained will not be high nor sustainable. However, if we see this as a means to remaining employable, on account of our continual upgrading of skills, then we will fully realise the benefits of the various schemes put in place by employers, unions and the Government. As Mr Lim Swee Say has elaborated, a change of mindset is crucial at this stage, otherwise those who have been retrenched and who have gone onto training schemes, will emerge more disappointed, when they are still unable to find jobs. In the final analysis, our sustainable edge will be knowledge-driven, which implies that Singaporeans would always have to be ahead. This is only possible if we constantly upgrade ourselves for our own sake. The Government should help by constantly raising awareness amongst the workforce and companies of the changing skill-sets needed over time. More incentives for individuals to upgrade themselves should also be made available. Secondly, be prepared to make adjustments. We feel helpless or even frustrated when we have just been retrenched or have failed to find a similar-paying job for the last nine months. But, we should all ask ourselves the question - whose responsibility is it to secure jobs for us? Somewhat, ironically, the very same factor, that is, a tight labour market, which has led to strong income growth in the past decade, is also the cause of our mental unpreparedness in coping with unemployment during this crisis. To a large extent, this reflects our vulnerability as an economy with no natural resources and one which is so dependent on the human factor. Government agencies, such as the Economic Development Board, slog hard to garner foreign investments which will in turn create jobs for us. This has been accompanied by judicious manpower planning for the necessary skills. So far, the matching has worked well, which has made job placement a fairly straightforward, if not easy, task for employees. Therefore, the sense of competition for jobs and the need to make oneself presentable, skill-wise especially, is seldom felt. This is perhaps our greatest challenge - to understand the need to stay relevant and flexible at all times, so that in trying times such as these, we can make the necessary adjustments, both mentally and physically. Sir, this is therefore not an issue of what else the Government should be doing to reduce unemployment. Certainly, there is no question that the Government should drive retraining efforts, with the necessary funding and placement assistance, to help those who are seeking to stay employable. But the response of Singaporeans must be compatible in order for the whole exercise to be a constructive one. For example, as Mr Lim Swee Say has alluded to, Singaporeans have, justifiably, called on the Government to reduce reliance on foreign labour and divert jobs to locals instead, in a bid to lower unemployment. However, will there be enough Singaporeans to fill these jobs, for example, in the construction industry? So the question really is: will Singaporeans be prepared to make adjustments to their expectations and take on jobs which may not always be ideal but which will nonetheless reduce unemployment and the related financial problems? Thirdly, do not allow pessimism to overwhelm us. Daily headlines just do not make for pleasant reading nowadays - they merely reinforce some of our greatest fears that the whole region is plunging into a recession. Acknowledging how badly even the Singapore economy has deteriorated is necessary and painful, but we should try to look beyond this crisis. We should not allow pessimism to drag us down the economic spiral. For we are a small economy and if we continue to wallow in self-pity, we will miss out on the opportunities to reposition ourselves. We should try to resist the temptation to pour our reserves into repairing depressed sectors per se, but to instead focus on how we can deploy them towards consolidating our position economically. This would have favourable long-term implications and will help ensure that we have sufficient growth impetus beyond this crisis. For example, there is feedback that many Singaporeans feel that instead of pledging the $5 billion to Indonesia as trade financing assistance, the Government should redirect this sum towards helping Singaporean companies that are going under. This is perhaps a good example of how difficult it is to strike a balance between competing demands. Ultimately, what is the swinging factor has to be the longer term value of each competing course of action, for we have limited resources. Seeking the Government's assistance to avert bankruptcy or a shake-out may seem to be a perfectly reasonable request. Deciding which companies or individuals to help, and help constructively, is however extremely difficult. It is inevitable that some may drop out of the economy in the course of this downturn, and this is something which is of course hard to accept. Sir, this economic crisis is both a test of political leadership and the robustness of Singaporeans. It calls for mutual trust and assurance that all parties, the Government, the economic sector and the population at large, will respond in a responsible manner. Whilst the Government should continue to show empathy, Singaporeans should be prepared to endure. There is no doubt in my mind that only when Singaporeans rally behind the Government and make the necessary adjustments, can we all cope with this crisis, emerge more cohesive, better prepared to tackle new challenges and realise further growth potential.

Mr Speaker, Sir, the rallying point for a country in times of crisis must be the political leadership. The Government must lead and must be seen to be leading in the process of alleviating the hardship and in the process of restructuring. In the midst of pessimism, the Government needs to encourage. Where people are disheartened, the Government needs to inspire. Where people are suffering, the Government should show that it cares. I agree with the motion that the Government can act in three ways. It can take short-term measures, it can take long-term measures, and it can rally the people. First, the short-term measures. I think the Government faces a genuine dilemma. Nobody, not even our competent Government, can tell how long and how severe the downturn will be. It depends on a whole host of external factors, Japan, China, US, Indonesia, and so on. And on top of that, the relatively painless measures that the Government can take are limited in effectiveness and in scope. For example, the traditional pump priming measures, such as increases in public sector spending and even temporary cuts in income tax and GST have limited effect because the Singapore economy is so externally driven. In 1986, for example, there was a 25% income tax rebate. This time around, because 70% of the people do not pay income tax, the effectiveness of an income tax rebate is therefore limited. What about policies to cut business cost? The problem is that every levy or charge has its specific micro allocation objective and reducing these charges would disrupt the attainment of these allocated goals. This applies, for example, to the foreign worker levy which is used to discourage use of unskilled foreign workers, ERP charges which discourage use of certain roads and utility charges. Even lowering the corporate income tax would be useful only for those companies which pay tax and is irrelevant for those suffering losses or those with pioneer status. Difficult though this message of limited effectiveness is, I think that it is important for all sectors, including the business community, to understand and to accept this. It is important for the business community to expect neither bailouts nor handouts. In my view, the $2 billion off-Budget measures announced in June are appropriate and sufficient for the time being. However, as the downturn gets worse in the future, a further round of off-Budget measures would be needed. The timing of the second round is all important. It should be early enough and large enough to have an impact. The action should be decisive and strong. I believe that the second round of measures should include some of the policy options mentioned above. They may not be as effective as we would like. However, in times of crisis, it is not just the hard and fast numbers which count. Confidence is all important and signals an impact that can extend beyond their actual dollar value. But we may have to face the harsh and painful reality that what would have the most direct impact on business costs is the reduction of labour costs. The variable component of wages which constituted 16% of total annual wages last year should be the first to go. Furthermore, in my view, the public sector should carefully consider what annual variable component it is going to give in December, if any, and announce this early in order to send a signal to other employers. And then, there is the CPF. Considering that more than 100,000 households are already withdrawing the maximum allowable from the CPF for housing loan payment, a CPF cut should only be used as a last resort and, even then, should be accompanied by means to help those with loan repayment difficulties. And this is where, I believe, a compassionate Government should chip in - the realisation that a CPF cut, or whatever cut, is needed in order to reduce labour costs would be painful, would be harsh and would affect many. Second, the long-term measures. As Lim Swee Say has spoken at length and very eloquently on these measures and I think he has given us a very good lecture on the economic possibilities, I shall not elaborate on these measures. Suffice to say that the Government can focus its mind and channel resources on the opportunities and that we do not need to wait for full recovery and once the region bottoms out, there are going to be growth areas. We also need to diversify and we should prepare ourselves for these opportunities and be quick on the uptake. The third role of the Government is to rally the people. A national crisis calls for all hands to be on deck. Everyone has a role to play. Allow me to outline what I think should be the role of business, workers and the community. First, the role of business. I have consulted a number of business leaders. Mr Stephen Lee, President of the Singapore National Employers' Federation (SNEF) has said that he supports the motion. He said that SNEF's stand is to minimise job losses. In order to stay afloat, companies can agree to stop hiring, they can agree to terminate contract work, cut overtime, cut the variable component of wages and redeploy staff. Retrenchment is the last resort. But it is a legitimate response to save the company. Second, the role of workers. Workers must be willing to be trained and flexible enough to ensure that there is no mismatch in capabilities. NTUC's effort in promoting retraining through the SRP and the Government's support for this effort has been crucial and timely. It is also encouraging to note from Minister Lee Boon Yang's response this afternoon that workers nowadays are more willing to be retrained. Also, if workers are retrenched, they should not be choosy about job options. Third, financial institutions also have a role to play. It is understandable that they are concerned about non-performing loans. However, banks and financial companies should not take advantage of this situation to force companies and individuals to top up so long as they are able to service their loans. Also, while there is a lot going for the DBS/POSB merger, it does have a negative side effect on Credit POSB home loan repayments. It has been said that, at current levels, readjustment of Credit POSB interest rates to the DBS' level would, for a 20-year loan, require an increase in monthly repayment of $92 for every $100,000 borrowed. In other words, a person who borrowed half a million dollars on a 20-year loan would have his repayment increased by $460 a month, and not a small sum indeed. Considering that Credit POSB housing loans amount to an estimated $7-$8 billion, the effect of this on the economy is not small. Even though there is a grace period up to the end of 1999, and the adjustment will take place over a three-year period, this is definitely bad news for the mortgagees affected. Could not the grace period be extended at least by one year up to the end of the year 2000 to soften the blow on those who have already borrowed money from Credit POSB? Fourth, the community also has a role to play. During times of economic downturn, there are those in our society who are genuinely hit hard, families whose main breadwinners have been retrenched, wage cuts which eat into their already meagre income and so on. We do not have a social safety net in the form of unemployment benefits in Singapore. But what can be done at a time like this? It is for the community to bear in mind that there are those who are worse off than ourselves, and to continue to give. The Government should also increase funding for the Government and voluntary welfare organisations precisely so that they can continue to help those in need. In conclusion, where there is confidence that the political leadership can implement the appropriate policies, convince the people to swallow the bitter medicine and unite society, half the battle is already won. I would like to state that I, for one, have that confidence in our Government and I am sure that this view is shared by many. This is the time to close ranks, face the crisis together as a nation. I support the motion.

Order. I suspend the Sitting and will take the Chair again at 3.25 pm. Sitting accordingly suspended at 3.00 pm until 3.25 pm. Sitting resumed at 3.25 pm

Debate resumed.

Mr Speaker, Sir, I rise in support of the motion standing in the name of Mr Lim Swee Say. Sir, the economies of Thailand, Malaysia and Indonesia have been significantly affected largely because of inadequacy in their national policies, their political culture, their crisis management or mismanagement, or for many other reasons that have been advanced. Singapore, on the other hand, despite its strong fundamentals and an able and honest Government, has nevertheless inevitably been inflicted by this economic flu, or perhaps the economic bronchitis that has swept the region. While other governments are scrambling around trying to solve their economic and political upheavals, the Singapore Government has begun to steer its course to address the worsening economic downturn. Despite its efforts to reduce business costs, the Government has come under attack from some quarters of the business community. But as economic analysts, like Dr Jim Walker, have pointed out, despite the clamour for more actions to address the crisis, the reality is that there is not much that the Government can do to lift the economy from the downturn or the recession that is looming. The external factors, as Dr Lee Tsao Yuan has pointed out, far outweigh whatever internal measures that the Government takes in the short term. But the Government cannot simply sit out the recession or downturn but instead must plan for the future and develop Singapore's long-term pontential. The crisis mode and environment present a silver lining for Singapore to strengthen its long-term competitiveness and social cohesion. And by "Singapore", I do not mean just the Government but also the employers, unions and the workforce. Sir, the Government on its part sees skills upgrading as a way to save jobs and to restructure the economy and prepare itself for the knowledge-based economy in the 21st century. The Government has allocated some $120 million for the skills redevelopment programme. But the Government's role in skills redevelopment cannot be limited merely to the funding of programmes. Presently, the NTUC, through its own initiative and to its credit, has taken centre stage in skills upgrading through the SRP. But only about 5,000 workers, out of the more than 700,000 workers without a full secondary four qualification, have been reached so far. This is even less than 1% of those vulnerable workers in our workforce. Sir, the NTUC, I believe, has got finite non-financial resources. The strategy of outreach to individual companies, I understand from the media, has been refocused to one of outreach through the industry, federations and associations, so that a larger number and spectrum of workers can benefit from the programme. This is where I feel that the Ministry of Manpower (MOM) should play an important role. From feedback, I hear many people telling me that the Ministry of Manpower is perceived as not doing enough and leaving the job of upgrading to the NTUC. This is certainly a common perception. Sir, the MOM must, like the NTUC, take a pre-eminent role in worker upgrading and drive these efforts. The MOM must move swiftly into action supported by the various Government agencies, the NTUC, the unions and the employers federation. Skills upgrading of the workforce cannot materialise by merely providing funding. From NTUC's experience, the workers' skills upgrading is achieved through a lot of marketing, cajoling, coaxing, perseverance and sustained effort. The MOM must get into the thick of action. Sir, presently, the Government disburses funds for skills training through some central funding programmes like the SDF or the SRP. I think it is very timely for the Government to consider the much talked about CPF account for skills training, or, as some call it, "trainsave" or "skillsave". Introducing such an account for workers now has got two main advantages. One is that it will make available funding directly to workers to embark on training. It will have the advantage of the push effect on workers to go for training, especially if their companies are reluctant to send them for training. It is just like what NTUC is now trying to do, instead of going to the individual companies it reaches out through the industry associations. But there may be many workers out there who find that they cannot approach their companies to go for training. Having an account like this will make it possible for them to directly join some of these programmes. It will certainly be much better to have this push effect than just the pull effect of central funding for the programmes. The second reason why this should be done is that there has been much discussion on the possibilities of a CPF cut if Singapore goes into a recession. A CPF training account top-up scheme of sorts will send the right signal on the importance of skills training to workers and help show alternate directions to workers who are facing difficulties, or who would face even more difficulties if CPF is cut. So a CPF reduction will be well buffered by having a CPF training account. Sir, at this point of time I would also like to ask the Government or perhaps the Minister for Manpower as to when the report on the CET 21 will be released. It seems long overdue, although I believe that the Committee might have completed its work. The report, I believe, will provide insights as to how we can develop a comprehensive framework and action plan which will help turn the economic slow- down into an opportunity for growth for Singapore and Singaporeans. Sir, the employers and workers, besides the Government, have also an important role in shaping and strengthening Singapore's competitiveness for future growth. Having just returned to the private sector, after spending nearly five years in the trade union movement, I deeply appreciate the respective roles and responsibilities of employers and workers, especially in difficult times like this. In this regard, I would like to urge fellow employers not to use the excuse of the looming recession as a first excuse to shed their workers through retrenchment or temporary lay-offs. This must certainly be the last resort. Companies must embark on retraining programmes, such as the SRP instead. Many employers do not realise that it is cheaper for them to send their workers for training like the SRP instead of laying them off, retrenching them or having temporary lay-offs. For example, the temporary lay-off very often means that the company bears, say, 50% of their payroll whereas sending workers to SRP means that the company only pays 30% of salary, since SRP pays 70% of absentee payroll. Therefore, companies must approach the workforce with a medium to longer term perspective and use the downturn to train their workforce and nurture in their workforce a sense of company loyalty. I am sure this will pay off when the good times return. On the other hand, the workers must also become more loyal and committed to the employers that they work for and do their part to improve their work attitude which is grossly lacking, according to BERI's findings, and the workers must do their part to improving productivity at the workplace. Programmes like the NTUC's Productivity Push will certainly strengthen competitiveness of companies in the medium to long term. I urge the NTUC and the PSB to push ahead more aggressively on such programmes so that more can be done to enhance productivity at the workplace. Sir, there is another area that I would like to touch on relating to employers and unions' bipartite relationship at the workplace. Generally speaking, the relationship between, say, the NTUC leaders and the top management in most companies, is usually pretty good and cordial. Somehow, from my own experience, it cannot be said that the relationship between middle management and many of the branch union officials is just as good. There are many reasons for it. But I think it is important, at a time like this, to close ranks and strengthen that relationship because that relationship would become a strong pillar to strengthen tripartism in Singapore. So we should use this difficult period to focus on strengthening this relationship between the middle management and the branch union officials so that we can come out of it better, stronger and ensure that tripartism will thrive in the beginning of the 21st century. Sir, I support the motion.

Resolved, That the proceedings on the item of business under discussion be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng].

Debate resumed.

(In Mandarin): Mr Speaker, Sir, more than 2,000 years ago, the great Chinese philosopher, Lao Zi, said in his famous Daode Jing (Moral Canon), "In calamity lies good fortune, and in good fortune lurks calamity." The meaning of this saying is that good fortune is concealed in calamity and calamity is also hidden in good fortune. In other words, bad things may turn into good things, and good things can also turn into bad things. In the past decade, when the leaders and people of many Asian countries were complacent over their unprecedented economic growth, it never crossed their minds that the calamity in the form of a financial crisis was lurking in the good fortune of economic prosperity. As such, when this calamity of financial crisis surfaced, they appeared to be caught off-guard. Of course, such a reaction is perfectly normal. As Singaporeans, we ought to be happy because we have a good and responsible Government. The Singapore Government leaders have all along possessed a very strong sense of anxiety. Even in the good years when we had good and strong economic growth, the Government has been reminding the people not to take economic prosperity for granted, but to look at the success as the fruits of our hard work and diligence. Senior Minister Lee Kuan Yew has, on more than one occasion, told the people of Singapore to "be prepared for danger even in times of peace". Therefore, the arrival of this financial crisis should be looked upon more positively as a challenge to the Government, the business and the workers, to see whether they could once again put the advantage of their tripartite co-operation to full play, pull together in times of trouble and tide over difficulties, rather than treating it as a crisis per se. "In calamity lies good fortune". Bad things can be turned into good things. This is an objective dialectical law of the development of history. It cannot be diverted by man's subjective will. As such, I strongly believe that the current financial crisis will be a turning point for the further development of Singapore's economy. In this respect, I support the long-term objective of the motion moved by Mr Lim Swee Say and Mr Seng Han Thong, that is, to suggest that the Government should make full use of this economic downturn to strengthen our economic competitiveness and social cohesion, so that Singapore will emerge from this regional crisis even more competitive and resilient. As for the short-term target as raised by the two hon. Members, that is, to urge the Government to rally the support of the entire nation to minimize unemployment, I have no reason not to support it, because it concerns not only the abstract meaning of the standard of living of the people of Singapore, but also the actual problem of the friends, relatives and neighbours of each and every one of us here. However, I hope that while trying its best to rally the entire nation to ensure that our unemployment remains at the lowest level, the Government would also make every effort to ensure that the impact on the industrial and commercial sector of Singapore, particularly the SMEs, would be minimal. If we were to make a rough analysis of the employment structure in Singapore, we will find that the vast majority of Singaporeans are employees of the five major categories of employers, namely, the Government and statutory boards, MNCs, Government-linked companies, local large enterprises, and the SMEs. In the current financial crisis, all the five categories of employers are affected, without exception. But the "degree of injury" varies. The first four categories have strong financial and resource capabilities. As it is said, "a lean camel is still bigger than a horse". Their injuries are just superficial. After a period of recuperation, they will regain their strength and vitality. As for the last category, that is, the SMEs, they are critically injured. If they are not treated promptly, they will most probably succumb to their injuries. The Chinese Chamber of Commerce and Industry conducted two surveys on the SMEs this year. In the January survey, 73.9% of the SMEs indicated that they suffered drastic reduction in their turnover and, at the same time, 45.1% indicated that they had cash-flow problems. In the June survey, both figures exceeded 80%. If the situation continues to deteriorate, the consequences would be too ghastly to contemplate. While the other countries in this region are recording negative growth, Singapore managed a 3.8% growth in the first half of this year. This is evidence of our strong and healthy economic foundation. Yet, while we rejoice in feeling how privileged we are, we must not forget that this financial turbulence has in fact destroyed a good number of enterprises which could not withstand the impact, with many others hanging by a thread in a precarious position. Since the beginning of this year, more than 12,000 employees have been retrenched due to liquidation or down-sizing of their companies. According to a report, by the end of this year, this figure would be more than doubled, touching 30,000. Apparently, we no longer enjoy the enviable situation of full employment that we have enjoyed over the last many years. The Secretary-General of NTUC and Minister-without-Portfolio, Mr Lim Boon Heng, recently told the media that if the economy further deteriorates, the first thing to do would be to save jobs. And to save jobs, we must ensure that there is a market for the type of services and products we supply, and to reduce cost. He also said that the Singapore dollar was higher than the currencies of our neighbouring countries. Unless we can reduce our unit cost, improve our productivity and implement cost-saving measures, Singapore may lose out to countries where the cost is lower. At another occasion, DPM BG Lee Hsien Loong raised a similar point. He said that reducing cost, including wage cost, would not only help the companies to survive, but also enable the companies to be more competitive, thereby helping the workers to save their jobs. Mr Speaker, Sir, the spirit of the speeches of DPM and the Minister-without-Portfolio happens to coincide with the objective of this motion before us. As a representative of the business sector, I agree that the business sector should also try its best to coordinate and put to full play the advantage of our tripartite cooperation. Let us put in a concerted effort to lead all the people of Singapore in tiding over the current difficulties. However, I must emphasise that to do this, our imminent task is to help the local large, medium and small enterprises to maintain their confidence and fighting-spirit to persevere in exerting themselves in their struggle for survival, for the sake of their own business development and the welfare of their workers, so as to tide over the troubled waters and search for a breakthrough. As employers, unless it is of absolute necessity and as a last resort, we do not wish to retrench our workers. As a matter of fact, we are even reluctant to cut the salaries of our workers, including reducing the CPF contributions. Because, by so doing, it will result in reduction in the workers' income, which in turn result in lower purchasing power. Lower purchasing power will then lead to further contraction of the market. The end result is that we, the businessmen, will stand to lose. This is a vicious cycle. It will make our economic situation turn from bad to worse. Recently, the Senior Minister called upon Singaporeans to consume more. I believe he made this call because he was worried that Singapore's economy might fall into this strange vicious cycle. Mr Speaker, Sir, our local enterprises must reduce their operational cost. This goes without saying. However, labour cost is only part of the cost of doing business. In other words, if the local enterprises can further reduce the other parts of their operational cost , such as rentals, taxes and other charges, our pressure on labour cost will be relatively alleviated. Lowering of labour cost implies that less workers will be out of job. Is this not the short-term target that the two hon. Members are seeking? Of course, the Government has already adopted some measures to lighten the burden of the SMEs. We are not turning a blind eye to all these. Indeed, we are grateful to the Government for the various cost-saving measures, particularly the series of off-Budget measures introduced by Finance Minister, Dr Richard Hu, in Parliament on 29th June. However, as a Nominated MP representing the interest of the industrial and commercial sector, I am duty-bound to accurately reflect the views of the SMEs in this august Chamber, that is, what the Government has done seems to be not quite enough. Mr Speaker, Sir, the Singapore entrepreneurs, big or small, generally keep to the excellent tradition of our forefathers, that is, they all possess the sense of duty and sense of mission towards society and the nation. With the zeal of "what is taken from society to be used in the interests of society", they often share the profits they earned from their business with their employees, and even donate generously to national and community welfare organisations, benefiting Singaporeans of all races, religions and walks of life. Of course, we have not forgotten to pay all the taxes and levies to the country, accumulating a lot of surpluses for our national coffers. Now, these large, medium and small enterprises are subjected to the sudden impact of the financial turmoil. Faced with the pressure from the various cost inflation and credit squeeze, they can be said to be burning with anxiety and racking their brains for solutions. In this crucial moment, if they are unable to receive further support and assistance from the Government and the understanding and cooperation of their employees, then eventually they will collapse and have no choice but to wind up their business. Then, not only will more workers lose their jobs, the Government will also lose tax revenue. As a result, the entire national economy will shrink further. Mr Speaker, Sir, when the Chinese Chamber of Commerce and Industry announced the results of the second survey of this year on 26th June, it recommended to the Government to adopt a series of pro-business measures in the areas of taxes, property sector, banking and financial sector, transport and communications, supplementary schemes, etc. to help the local SMEs tide over this crisis. In order to save time, I will elaborate on just a number of important points. In respect of taxation policy, we hope that the Government would adjust the GST, say, from 3% to 1%. This will help to reduce some pressure of the small businessmen. In addition, we also hope that the Government will allow more personal income tax rebates. In respect of the property sector, we hope that the Government will further revoke the anti-speculation measures for the property market, and to raise the CPF portion of the purchase price to 90%. In respect of the banking and finance sector, we hope that the Government will relax the credit regulations, and at the same time try to adopt some measures to stabilize the exchange rates. In respect of transport and communications, we hope that the Government will consider reducing the duties on diesel and petrol. At that time, we also suggested that the Government postpone the implementation of the Electronic Road Pricing system. But the Land Transport Authority has already announced that they are going ahead with it. It may seem inappropriate if I were to raise this point again today. However, I must emphasise that if the Government discovers any negative impact with the implementation of this system, it should promptly make some adjustment to it. In respect of supplementary schemes, we hope that the Government can establish some special schemes to help those companies which are facing difficulties in capital turnover. At the same time, assist SMEs to explore new markets, for example, help them to go to emerging markets in India, Europe, South Africa and Latin America to look for business opportunities. Mr Speaker, Sir, we hope that while the enterprises and the workers are making substantial sacrifices, the Government can also make corresponding adjustments in its policies, and lead us out of this "coldest winter in the history of Singapore", into a beautiful and warm springtime. I fully support the motion.

(In Mandarin): Mr Speaker, Sir, thank you for giving me this opportunity to speak in support of the motion. The recent regional financial and economic crisis can be said to be the most serious one in 30 years. Various countries in Southeast Asia are suffering from its serious impact, resulting in many companies closing down and many workers unemployed. There was even social unrest in some countries where properties were destroyed and many lives were lost. This economic crisis which has been evolved into a political and social crisis has serious undermining effect on the prosperity of the societies that have been painstakingly built up over the years. In order to avoid such incidents from happening again, leaders of the various countries are actively trying various ways and means to buffer the deterioration to the economy. The various countries in ASEAN have manifested their cooperative spirit to help these countries which are in trouble. Singapore has participated in the economic action of the IMF to save Thailand. We have also committed a US$5 billion guarantee for the letters of credit used in bilateral trade between Indonesia and Singapore. At the same time, we have lobbied for the assistance of the United States and the IMF with the hope that with the cooperation of the various quarters, we would be able to prevent the economy from deterioration, with a view to an early recovery. For the moment, we are most concerned with the stability of the renminbi. Once the renminbi devalues, there will be another round of economic crisis for the region. The economy of the whole of Asia, even that of Europe and the United States, will be affected. A regional economic crisis is not an easy problem to resolve. It is not something which Singapore can overcome by itself. We have to depend on the cooperation and assistance of our neighbouring countries and the super powers for an early recovery. So long as the economic crisis does not evolve into a political or social crisis, the Singapore Government should have the ability to lead us out of the crisis. The economic recession in 1985/86 is a good example of our Government's capability. However, all the people of Singapore must have full confidence in the Government's ability to lead us out of the bad times. We must stand united with the Government so that we would be able to resolve these economic problems together. At this time when we are facing an economic downturn, it is a test on the degree of unity between the Government and the people. We should also make use of this opportunity to strengthen our social cohesion. Just as we are facing the regional economic crisis, our neighbouring countries adopted an uncooperative attitude in our removal of CIQ from Tanjong Pagar to Woodlands. They have also issued some erroneous statements aimed at undermining the unity between the Government and our people. This is very dangerous. With regard to the background of the removal of our CIQ from Tanjong Pagar to Woodlands, the Minister has already given us a very detailed explanation. I feel that so long as the policy is for the benefit of the people, we should implement it. So long as the people and the Government stand untied, we would not be affected by erroneous arguments coming from outside. Mr Speaker, Sir, the country belongs to us. The Government is elected by us. We should give the Government 100% confidence and to give it our full support so that the Government will have the full authority to deal with its foreign policies. So long as our stand is correct, the principles are right, the matters will be eventually resolved. I feel that the imminent task before the Government is how to implement appropriate measures to help the businessmen tide over the difficult times. At the same time, we should use effective ways to help the retrenched workers in securing alternative employment. The Ministry of Manpower (MOM) has already provided this service. However, MOM alone is not enough. I feel that the CDCs and the community centres in all the 83 constituencies in Singapore should set up "Employment Services" counters. We should combine the resources of the Ministry of Manpower, the Ministry of Community Development and the CCs to establish a National Employment Network to help Singaporeans find jobs and tide over the difficult times. If everybody has a job, then socially we will have no big problems. We would be able to maintain a peaceful society and to work hard to get us out of the recession. So long as we stand united as a nation, we will be able to take one step at a time to get out of this financial crisis, and position ourselves in better conditions and solid foundation for our future economic development.

Mr Speaker, Sir, I rise to support the motion. Sir, there are a few critical issues that we need to address, especially at this time of our economic crisis. This economic crisis has not been brought upon by ourselves. It is like an economic haze because, as you all know, if somebody burns a forest somewhere, we are affected by it. So we are faced with this dilemma and many of these events are in fact beyond our control. I hope that Singaporeans, workers and others would be able to see that these problems are not really brought upon by us. Many of these events are outside our control. In the light of this, it is very important therefore for us to mobilise ourselves and to rally behind the Government, the trade unions and the employers so that we should begin to join hands and see how we can brace this economic storm. Unless and until we get together to think of effective and creative solutions to these problems, I do not think we will be able to surge forward and find new solutions and opportunities to deal with the problems. I feel that, at this stage, it is very important for Singaporean workers, the Government and the employers not to blame each other. It is time that we should get together and see how we can tackle the problems which are very critical and crucial for us. This is essentially necessary because it is time that we should rally and find a creative solution and band together to surge forward to bring Singapore another economic growth, and to try and find ways to reduce the burdens that we will be facing. Sir, there are a few important issues that we need to tackle, to try and ensure that we can keep Singapore as attractive as possible so that people would want to come and invest in Singapore. If we really cannot make Singapore an attractive and competitive place, then I do not think it is possible for us to solve the problems. So how do we ensure that Singapore is an attractive place for people to come, whether they are foreign talents, or people who want to invest in Singapore, or people who want to be educated in Singapore, or tourists who want to come to Singapore? It is an important issue that we need to address and Singaporeans must examine this, that we all have a responsibility that we all owe to Singapore, to try and see how we can work at this hard time to find effective and cohesive efforts to tackle the problems. Unless we stay together as a bigger family, I do not think we will be in a position to weather the storm. We may be in sixes and sevens and this will inevitably do us in. So I urge Singaporeans, be they workers, students, families, retirees or others, to come and work together to solve this economic crisis that we are facing. Although many of these problems are beyond our control, when we band together, we are likely to find ways to meet the problems. What I can see, Sir, is that it is very important to have political stability, especially at this time. There are various people trying to blame us for their problems, particularly the Malaysian politicians, and many of them have recently said that we are doing them in or undermining them. Being a small country, we want to live mutually, with good understanding and with good neighbours. How can a small country, like us, try and create problems for others? We want a stable place, we want a stable Singapore, we want a stable community, we want to have a stable ASEAN region, and we are trying our best to contribute to this. Therefore, it is important for Singaporeans to realise all these issues and the blames on Singapore by many politicians outside Singapore. Recently, Members must have read many of these Malaysian politicians blaming Singapore for their problems. Is this the case? I do not think it is the case. We are a peace loving people. We are a small nation. What else can we do? We would like to live as peacefully as possible. As good neighbours, we will encourage and support the interest of the wider majority in the region. I do not think we should stomach all this bullying and blaming. As Singaporeans, I am sure, we must be able to see the broader picture that Singapore wants to be mutual, supportive and have as good as possible a relationship with anyone who wants to bring progress and provide a better life for all within the region. So we need to cooperate, and Singapore's belief is this. All our workers in the various factories and industries believe that the more stable the place, the more prosperous the region, the more attractive it is, the more stable the governments are in the region, the better for us, be they Singapore workers, Malaysian workers, Indonesian workers or workers in the ASEAN region. So I would urge Singaporeans to make sure that we do not allow foreign politicians to subvert us and bring dissent. What I am very concerned about is the possible resurgence of religious fanatics, racial fanatics, language fanatics, in trying to subvert us. We will have to be aware of this. We should ensure that we do not allow this to happen in the context of Singapore's growth and development at this stage, because it is very easy to put the blame on racial division for an economic problem. We are a multi-racial society and, being a multi-racial society, there is always this danger that you have fanatical elements to assign the blame to various racial groups for their problems and issues. I hope that thinking Singaporeans will band together to ensure that there is progress, be they Malays, Indians, Chinese or Eurasians. We all have a stake in Singapore. We should in fact try and see how we can work together and we should not be allowed to be made use of by fanatics who are out there to do us in. If we succumb to this whole thing, then Singapore would be a broken society and we will never be able to put it back because political stability is a very critical issue for all of us. Without political stability, you can talk about economics, better education and better housing, all these will never happen. If we do not manage this carefully and we are not aware, we are all gullible Singaporeans, and we allow ourselves to be subverted and made use of, then we cannot put Singapore together. Because once the setback happens and once it is exploded in our hands, then Singapore would never be the same again. I hope that all thinking, well meaning Singaporeans, whether they be Malays, Indians, Chinese or Eurasians, should band together to see what we can do to help Singapore to move ahead. We should not allow religion, race and language to stand in our way because these are not the critical issues. What faces us is the economic issue and we should see how we can come out with sound economic plans and policies to tackle the problem. I think this is very critical and essential for us to move ahead. Sir, the second important issue is to have a proactive labour union, workforce and employers. It is important for the labour union, workers and employers to work together. And here, I do not think we can assign blame on any of these quarters. If we do so, we will be foolish because we will be doing ourselves in. We are in the same boat, whether you are an employer, worker or Government. Try and puncture the boat, try and rock the boat, who is to gain at the end? Employers are not going to gain at the end of the day if they are going to retrench workers at the slightest excuse they can find. Neither can workers say they would want to have better salaries at this point in time. It is very important for the three parties to work together and find effective solutions to their problems. I see that there is a need for employers, unions and Government to come out with strategic plans, particularly unions and employers, to deal with saving jobs and to think strategically in terms of ensuring that the workers are not retrenched because many of these workers have served a long time in their companies. Some have served 15 years while others have served 20 years. So I think it is important for us to ensure that workers who have been with these companies are given the best. We should try and see how they can be kept and, if they need to be trained, we should find ways in which they could be trained. Sir, recently, many employers took the slightest excuse to retrench older workers. I am very concerned about this. I want to find out from the Ministry of Manpower what steps are being taken to ensure that these workers are not retrenched at the slightest excuse. Many of these workers have worked for many years in the company. When bad times come, instead of finding strategic solutions to deal with these issues, they find a short cut approach through retrenchment which is not a solution to the problem. Many of these workers have given their lives and many years of service to the company. It is humanly important for the companies to think of ways in which they could help these workers to be reorganised and find ways in which they could be redeployed. Sir, there are also the other aspects that we need to look at and, that is, to see how the Government can also play a part in trying to soften the blow by taking a number of measures. First, many of our workers are paying mortgage loans and we are quite fortunate that about 85% of them are living in HDB flats. I want to find out from the Minister whether there are contingency measures to help defer payments and other approaches to tackle the problems of their housing mortgage loans. The other issues that we need to look at are job placements and manpower plans; what are the long-term manpower plans and how workers are going to be trained; whether these are in place and whether we would have to develop a comprehensive plan that can carry us for the next 20 years in terms of having an effective manpower plan to deal with the training and development of a more educated workforce. I would like to see more training incentives by Government and also incentives to enable companies to begin reviewing what training plans they can implement at the work site. I think there is a need for Government to provide matching grants for companies that are very interested to run their manpower retraining plans. If many of them can be encouraged to do so and they fit in the overall manpower plan, I think it is in the interest of Singapore and for Government to support these companies to think of how they can participate in the retraining of workers. And that will help us to have a better educated and well trained workforce to meet the contingency plans of the future. Sir, there is also a need to look at how Government could soften the blows of the economic downturn. We could look at how we can cut costs in terms of land cost, cost for rents of industrial sites and other related things. How can Government review, besides the current measures that are in place, the off-Budget measures, whether there are some long-term measures to review how we can reduce business costs in view of the economic problems? Can we do this? Can we take a bolder step to try and ensure that Singapore remains very attractive in terms of land, capital and factory costs for the development of our own infrastructure? There have always been a lot of arguments by many investors that our land cost is high and, over the years, we have become quite expensive and less competitive compared to other countries in the region. The last area we need to look at is the training of workers. I am very concerned that close to 48% or nearly half of our workforce are 40 years and above. As Mr Lim Swee Say has said, we are moving towards an aging workforce and half of this workforce are going to be aged workers of the future. It has serious implications in terms of productivity, in terms of rejuvenation of what they can do and how they can be retrained, in terms of their social security and their old age pensions. I think there is a need for serious examination as to how we should tackle this aging workforce and, despite the extension of retirement age, how can we utilise this large number of workers who are in the 40s and who are going to be in the 50s. There is this big number of them and I think we should come out with a serious plan in terms of what could be done for them. Many of us will be in the aging workforce in about 10 years from now, me included, Mr Speaker. I am sure the Minister for Manpower would agree with me that this would be one of the serious issues that we would be confronted with. How do we attract younger people into the workforce when families are very small? We do not have enough people to come into the workforce. What do we do and how do we try and ensure that there is a continuing productive workforce that will help in terms of Singapore's economic growth. Sir, I feel that, ultimately, it is very important for workers, for employers and for Government to band together in these economic hard times that we are facing and many of us have said that recession is going to be deeper in the next few years and we need to stay together as a strong family and Singaporeans must find ways to work together despite all these external problems that we are facing. I think it is important that we stay ahead, we stay cool, we stay collected and we remain cohesive. If we are able to do this, then I think we have a good future, we have a good promise to be able to deal with the hard times ahead. On that note, I would like to support the motion standing in the name of Mr Lim Swee Say.

Mr Speaker, Sir, I rise to support this motion. I would like to touch specifically on the issue of social cohesion which Mr Lim Swee Say and some other speakers spoke about. I have no doubt that there is enough goodwill, public spiritedness and national pride among Singaporeans that when the crunch comes, I am confident that Singaporeans would be willing to do whatever they can to help one another. But I am afraid that we do it too late and wait for the worst of the economic situation to hit us before we do something. We have seen how in Thailand and Korea, people give up their jewellery and gold in order to save the country. And we have seen starvation and hunger in Indonesia. While in Singapore the situation is not as bad, never have I known more people, including my friends and acquaintances, who have either lost their jobs or risk losing one. I have known of families who have to take the painful decision of having to cut their children's tuition because they have suffered, because of retrenchment. This is sad because I fear the implication that we have on our children. That is the reason I think we have to do everything we can to help buffer our children from the impact of this economic crisis. I therefore urge all Singaporeans, young and old, to start doing something to help fellow Singaporeans who are in need of help. The Government has stated that retraining of workers and continuing education are important aspects in our strategy to prepare ourselves during this difficult time. Let me just highlight examples of how Singaporeans can help in this effort. The Singapore Corporation of Rehabilitative Enterprises (SCORE), of which I am a board member, recently organised training for inmates to prepare them to work as cooks in the hospitality industry. It costs more than $50,000 to pay for trainers and tutors for the 17 inmates. Despite the slowdown in business faced by many hotels, SCORE has, with great success and difficulty, managed to secure sponsorship for these trainees. But I think we could have done better and train more people if more qualified Singaporeans are prepared to come forward and train these people. It is times like this that we must ensure that every Singaporean counts and be an important contributor to our national economy. Untrained and unskilled workers would only be a national burden we cannot afford. Even at the neighbourhood level, Singaporeans can help neighbours to babysit their neighbour's children, provide tuition at the various tuition centres in the neighbourhood or even do simple things like preparing a meal for their neighbours or giving a neighbour a ride to the office. Simple things like this take on a very important and significant meaning in times like this. Everyone can help and must help. Whether you are a doctor or lawyer, school teacher or taxi driver, everyone can play a part if they want to. I would suggest that agencies like the Community Development Councils and the National Council for Social Services set up registers to match the skills of Singaporeans volunteering their services with the needs of the community. I note the Minister for Education's call to develop what he called the people sector. I really feel that there is no better time and no greater need than now for each and every Singaporean to do something for their friends and neighbours. I know of families where both parents with young children have to take on an additional job or do shift work, leaving behind their children at home to look after themselves, to cook and to wash. In this example, a caring and friendly neighbour does help. The current economic difficulty poses the danger of weakening our social infrastructure when people become self-centred, less caring and disinterested in things around them if it does not bring immediate benefits. We have seen how countries become more protectionist and nationalistic. Internally, we must be aware that our people can become more selfish. This attitude cannot be allowed to take place in our society. On the contrary, we must rally our people to do more to help strengthen our social infrastructure and civil society. This is a calling to all Singaporeans. We must ensure that we not only recover from this crisis economically stronger but equally important is the need to preserve and enhance social cohesiveness of our people. And this can only be achieved through shared experience, good deeds and good work amongst all our people.

Mr Speaker, Sir, thank you for allowing me to join in the debate. Sir, I support the motion. We have so far been fortunate in that Singapore has been hit by the regional economic crisis relatively late as compared to our immediate neighbours. Malaysia, Indonesia and Thailand are going to be in a recession and possibly in deep recession, and Singapore cannot avoid but go into a recession later this year, in my own opinion. The downslide should continue for another year or so. We can either get defensive and become conservative in such an environment or, alternatively, we can be aggressive and consider this downturn as an era of opportunities to invest while preparing for a better future. Sir, I fully support the call from all the Members who have spoken before me for the public, private and the people sectors to work hand in hand to solve our problems as a team. I will, however, focus my speech on what I feel we can do to strengthen our economy, both in the short and the long-term. While some of the suggestions I am going to make would be appropriate as Budget proposals, I feel that we cannot wait for the normal Budget cycle and they should be addressed very early. I therefore hope that we can take some more off-Budget measures to further strengthen our economy. Sir, there are some areas where I feel our fundamentals are weak, basically the fundamentals of the Singapore economy and if we can focus in correcting the problems, we will be able to do much better than before. However, if we do not tackle these inherent weaknesses in our economic structure, we will not be able to take the full advantage of the next upturn. Worse still, we may face even worse problems in the future should another downturn hit us. One obvious problem in our economy is the over reliance on the property sector. I refer the House to the Business Times report dated 20th July, titled "The Perils of the Property Economy". I fully agree with the analysis made that the Singapore's economy, just like those of our neighbours', is heavily dependent on the property sector. We must realise that the property sector also impacts many other sectors of our economy, especially the financial sector. It was reported that the banks in Singapore have an exposure to the property sector of about $49 billion or a whopping 34% of our GDP as of May this year. And it is believed that this is an under estimation, since the numbers do not take into account the loans that are given to professionals, individuals and so on. It is likely that the exposure of our banks could be close to 50% of our GDP. By any account, this has to be a very unhealthy position for any country to be in. Sir, this is one area where all Singaporeans, including the Government, can learn a very valuable lesson. We need to reduce our dependence on the property sector drastically. In the Western economies, property is nowhere near the top in terms of contribution to economic growth. If we look at our top companies and wealthy people in Singapore, most of them made their fortunes through the property sector, while those in the Western countries came mainly from value added activities like technology and innovation. In Singapore, many companies tried to make a quick buck through the property sector. Even bus companies, food companies and others tried to do so. Even the Government, through most of its Government-linked companies, too is to be blamed for adding to the perils of our economy by getting involved in the property sector in a big way.

4.30 pm I therefore feel that our solution is to defocus from the property sector and to refocus on more technology and innovation based economy. In Singapore we do not have enough large local companies capable of growing in this area other than the likes of Creative Technology. I urge the Government to stimulate the private sector in this direction by creating a conducive environment for more technology and innovation based economy which, in my opinion, will be better able to weather a downturn if it comes again the next round. I also call on the private sector to do likewise to be more entrepreneurial in developing their business in this direction. This downturn provides us the best opportunity to restructure our economy. Sir, while we cannot become the USA, we could try to become the Silicon Valley of the East. One of the effects of the property economy has been asset price inflation, particularly the high land rentals, building cost and property cost. Being involved in the electronics sector and in the high technology area in the last 15 years, I have seen many examples of new investments deciding not to locate in Singapore or existing companies who decided to move their investment overseas because of the high cost being one of the major issues. The economic downturn has made this problem even worse with our neighbouring countries being able to offer much cheaper land cost. While the off-Budget measures did try to address the issue by offering rental and property tax rebates, I feel that the Government did not do enough to instill long term investor confidence. Permanent cuts would have been much better, because investors and businesses would see the rebates go away in one to two years should the economy recover. In my opinion, the Government could take this opportunity to put in place long term measures, like very clear policies on strategic land pricing, where a large cross section of companies will be allowed to pay much lower rentals for companies that we would really like to bring into Singapore, which can provide widespread employment. One other way is to give a 10-year tax rebate in lieu of high rentals paid to JTC or HDB so that we can de-couple the market price of property from the cost of doing business in Singapore. In this way, companies will take a longer term view of investing in Singapore. Sir, we also need to do more to bring in investments by offering innovative incentives. I must admit that the Economic Development Board is doing a good job here. But there are many more private sector initiatives that could develop into concrete investments in Singapore and hence creating jobs. We all know that our neighbours are today able to offer exactly the same investment incentives as we can. In fact, their approach in luring investors is to copy exactly what Singapore can offer and then to offer a little more. With their cheaper land and labour cost, we are definitely in a disadvantaged position and have in fact lost a number of big companies that could have invested here in Singapore to them. We therefore need to be more transparent and be more innovative in the type of incentives we can offer to these companies. During the Budget debate this year, I talked about the need for us to promote entrepreneurship among Singaporeans. I also asked for a review of the bankruptcy laws, easier listing of high-tech companies on the Stock Exchange, promoting venture capitalists and a number of other incentives that can help us better create an environment of innovation. In his reply, the Minister for Trade and Industry said that his Ministry is in the process of reviewing some of these things. I feel that the process needs to be speeded up so that we could take advantage of the many opportunities that are available in Singapore and in the region. We should not wait for the next Budget cycle to announce some of these changes. Similarly, we need to do more to encourage our companies to accelerate their regional drive and not to slow down, despite the economic crisis. Banks need to be more proactive in lending to their strong clients. Unfortunately, in this environment where tremendous opportunities to invest are available for our companies, and there are viable companies in the region, cash flow seems to be a problem. Since our local banks are very conservative, I feel we can do with many more venture capitalists locally. However, the incentives to some of the small venture capitalists are not as attractive as those provided to the big fund managers. Most of these incentives favour the fund managers, for example, very generous tax cuts. I urge the Government and the Monetary Authority of Singapore to review some of these rules and incentives to make it more conducive for such boutique funds to flourish and to do away with the bias favouring the bigger funds. I feel that by creating such an environment today we will position ourselves to benefit the high technology investments that are going to come our way in a few years to come. We could learn a lot from Hong Kong and Taiwan in doing such things. In conclusion, I support the motion and feel that, other than improving labour cost and productivity, we can create a much more vibrant business environment that consists of a high proportion of value-added activities while we try to move away from the low value-added activities like the property sector.

Thank you, Mr Deputy Speaker, for giving me this opportunity to support the motion. I would like to take the opportunity to add two proposals. First, that the Government should invest in and develop social infrastructure. During economic downturns, governments often adopt expansionary fiscal policies and invest in physical infrastructure such as roads, schools, MRT lines, and so forth. Our Finance Minister during last Friday's sitting listed out in detail the current and planned infrastructure projects to be accelerated to increase public spending. These are hard, tangible projects which directly generate jobs and spur economic demand. The tendency is, however, to cut back on investment in social infrastructure, as these are seen to be not contributing directly to economic growth. I would argue the contrary. Not only can investment in social infrastructure spur employment creation, but it can also achieve two further objectives. It can contribute to Government's efforts to retrain retrenched people in new skills which 21st century Singapore will need. And, as we prepare for a long period of slow growth or even no growth, it can contribute to the social cohesion which we will need to tide us over difficult times. Let me elaborate. For the past few months, MOM has taken the lead to develop numerous re-skilling programmes and to work with MOE to create a culture of life-long learning for workers. This focus on continual learning, training and education to enhance workers' existing skills or train them for new skills is a significant long term strategic measure to develop our competitiveness. I also note that DPM BG Lee Hsien Loong recently identified the service sector as an opportunity for a comprehensive infrastructure to be set up including "a regulatory framework, promotion strategies, and an approach to attracting and developing manpower." I urge the Government to also see the social services sector as another opportunity sector for development. The social services community has drawn the bulk of its manpower from volunteers. But while volunteerism remains a bedrock principle in community service, there is a dire need for more professional workers to help us deliver a higher level of service to the community. Recession or not, Singapore has all the socio-economic and demographic characteristics of a developed society, and if we study other developed societies, we can anticipate that demand for social services, and by implication for full time social service workers, will increase in the next two decades. And I see a growing demand for more sophisticated and informed care which the market can respond by developing a range of job types. The need for trained therapists, para-medical and social service workers to cater to the elderly, the chronic sick and the disabled, will grow as our society ages rapidly and medical technologies increase longevity. As a developed society, we will face the pressure to improve services for the small but growing part of our population which is intellectually or physically disabled, or blind or deaf. For the marginalised and criminalised population, such as drug offenders and young criminals, we will face pressures not to just increase deterrence, but improve rehabilitation and aftercare services. What I am saying is that a lot more jobs at both the community preventive and remedial levels are necessary to fill the gaps in the continuum of services in this sector. We should stop seeing them as social problem professions. We need to see them as people service professions which we must nurture within a comprehensive social infrastructure. During times of crisis, we all the more need social engineers who are trained to repair and mend people's lives, and by doing so, they strengthen society's competitiveness and resilience as a whole. For the amount of resources spent on economic solutions, significant inputs must equally be spent on developing social service infrastructure to reap investment returns not in dollar terms, but in terms of social cohesion. Social cohesion can be threatened even during economically good times. During bad times, the lack of social cohesion can sabotage all credible economic efforts. I propose that the various skills training or retraining funds be extended to train some of the retrenched or structurally unemployed to seek employment in the social services sector. This is consistent with MP Lim Swee Say's call for maximizing employability of our workforce. Here, I am broadening the call for cross sectoral employability. Government's investment here will be both in the provision of training funds and also in identifying sectoral needs and the provision of social service jobs. Although it will be employment-generating, my proposal is not an ad hoc approach to just mop up the jobless. In the long run, we create new employment, and develop a manpower resource for staffing the social service sector to address our social problems. Such investment in social infrastructure therefore has both short term and long term merits. The workers who are past 40 and who are retrenched are most suited, in my opinion, to these jobs, because they are married, they have families, they have lived life and they have learnt from the hard knocks of living. This proposal is consistent with what Minister Lee Boon Yang said last Friday that in lieu of setting up a Retrenchment Fund for workers, the more lasting measure is to retrain workers and help them keep their jobs or re-enter the job market eventually. My second proposal is for the Government to set up a task force to develop our own misery index as the first step towards developing our own social security net or social safety net. With full employment and double-digit growth for the past decade, Asia, Singapore included, never really pondered about the social consequences of unemployment. Any able-bodied, willing worker should be able to find some job, though perhaps at a lower pay. Now, we face the prospect of sustained period of relatively moderate unemployment by western terms, but serious by our previous standards. Government has long promised that for the truly destitute, basic services such as primary health care, education and housing will not be denied. This is indeed a promise which many other societies cannot give, and for that I am proud. But beyond the truly destitute, there is a broad range of the poor and near-poor who may be long term unemployed or unemployable. While we as a society do not believe in welfarism and its excesses as practised in the west, we do need to ask the question: should we create a social safety net for the truly needy? This, of course, begs another question. Who are the truly needy? Can we measure this by just one yardstick, such as net income? My answer is no, because a chronically sick, old and disabled person with no relatives, who earns a subsistence income is to me more needy than a young, able-bodied person living with relatives but earns zero income. If income is not the sole yardstick, then what are the others, and how should they be weighted? By the year 2030, we will have two active persons supporting the needs of one elderly person. How are we allocating our funds to meet their needs? Is it time to look into an elderly welfare fund to repay to these older persons who had contributed to the making of this nation? I strongly believe that education and employment are the best welfare policies in the long-run. But for pockets of our population, there may not be available opportunities. School drop-outs, single parents, the illiterate older persons, deserted homemakers, the severely disabled, the very sick. Among these, some individuals can still contribute given some level of support. The questions that follow will be to whom, how much and for how long. In order to develop an appropriate social safety net which avoids resource wastage and programme duplication, we need to define a "misery index" as it has sometimes been called, which takes into account various factors to determine who are the truly needy in our society, for whom a social safety net needs to be constructed. So far, we get scattered data and signals from the community on the extent of the impact of this downturn on family situations. Some hotlines registered a rise in the numbers of calls related to financial difficulties; a few social services registered increasing petitions for financial support. These are early indications of the hardship but we cannot clearly establish if they are due to the current economic slowdown or not. How bad off are Singaporeans? Who are the casualties in this regional crisis? Mr Chan Soo Sen this afternoon, in response to my question, said that between the years 1996 and 1997, there were only 41 applicants for the Interim Financial Scheme and the Ministry only disbursed $11,000. Are we saying that people are not poor enough? Or are we saying that the forms for applications are too complicated that they have decided not to fill them? Or are we saying the criteria for the application are too stringent, and maybe it is time to broaden the criteria? I do not think we know the answers. In a written response to me from MOM, it was reported that out of 80% of job placements for the retrenched workers, only 10% accepted the referral. This says to me that workers are still choosy and therefore times are not as hard yet. So I have varying impressions. I am proposing that we set up a cross-agency fact-finding task force comprising Government statisticians, academics, social workers, and others, to conduct surveys to identify the distressed in our midst, and to devise a Singapore specific misery index with indices which are socio-economic in nature. I recognise that we need to be cautious, not to travel on the slippery slope of welfarism as practised in some developed countries, and we must not determine social policies based on compassion and generosity alone, but on principles of efficiency and effectiveness. We all appreciate the contingency measures recently set up by the various Ministries and CDCs to offer assistance to people with financial difficulties. A question I would then raise is: when was the last time we thoroughly reviewed our social security schemes? Are these schemes adequate? As other ASEAN states are now studying ways to create their social safety nets, is it time for us too to review ours and identify new ways of providing funding and infrastructural support for the families, in view of the fact that this economic downturn may well be the worst that Singapore and the region have experienced in 50 years? A timely and well-considered policy evaluation exercise by the Government, in conjunction with social services agencies, regarding investment in social infrastructure as well as the creation of appropriate safety nets for our most needy, will contribute both to our short-term economic recovery as well as long-term well-being of a society.

Mr Deputy Speaker, Sir, the motion moved by Mr Lim Swee Say is timely. It is a time of crisis, although I do not agree with some of the suggestions. I think we are going through an economic crisis. It is important that the people and the Government rally together and come to grips with the problem and try to find the solution. Sir, the Government can lead but it is equally important for the people to be led in such a way that they will reach their destiny. We are fortunate than many other rulers in the region are worried about their political fortune. Here the ruling Party does not have to worry about change of power from one man to another. There is political stability here. The banking system is still sound and this, I think, is a credit to our political leadership and to the people for working hand-in-hand. It is important for us, therefore, Sir, to see that this institution is preserved. Many a time we take it for granted. But when we look around the region, we realise how fortunate we are for having a banking system that is sound. Of course, some of us feel that the bankers are trying to be a little too cautious in this period. I would urge the MAS from time to time to give the bankers some indication, that they should be a little slow in enforcing claims. Because I have heard from some clients that the bankers are asking for reassessment of their loans, which they are entitled. But unless these customers are in danger of collapsing, I think we must not pull the carpet. It is very important for the banking system, the institution, to gain the confidence of the people. I know that DPM had said earlier that banking is a private institution, and we cannot interfere. But I think the Government can take the lead in giving indication as to which way the banking sector should go. Sir, Dr Vasoo mentioned very eloquently about the spirit. I think it is very important for us to have the fighting spirit in us. What I am a little disappointed with some of the people is this. There is some sector, and I give an example, where we see very young able-bodied men in early 30s, 40s, working as security guards. What is the pay? $1,000, $1,100. My work in SINDA has led me to meet some of these people and talk to them. And I asked: "Why can't you be a driver?" He said, "I have no driving licence." I said, "Why don't you go and take a driving licence? It will take some time." He said, "Oh, it is difficult. I have got a family to support." All he requires is half an hour to one hour, three to four times a week, and the job is ready in the market. Similarly, a restaurant man was telling me that he is finding difficulty getting workers. So something is wrong here. While some people are losing jobs, there are other people who are happy with their jobs. So I share the sentiments shown by earlier speakers that we must at all costs tell the people that they must upgrade. And unless they upgrade, unless the productivity increases, they are not going to succeed. Here again, Sir, if I could share with Members a classic example of how an institution went out of time. We used to have in early 1970s a company called the Singapore Traction Company. Who were its rivals? More than half a dozen Chinese bus companies. They started with mosquito buses. I remember they carried 20 passengers. But because STC did not know how to change with the time, the small bus operators merged together and took over STC. It operated through a Charter. It was guaranteed by the British government through a charter. But it did not know how to compete and live with the economic realities of Singapore in changing times. When the market was open, they could not compete. Similarly, Sir, as Mr Lim Swee Say has said earlier, we have to be conscious of not only the cost price but we must be in position, as our neighbours are going to have cheaper cost of production, and we must be seen to be very competitive. Today, I think the only solution is through productivity and education. There are a lot of Singaporeans who do not even have primary education. The WISE and BEST programmes must be worked to such an extent that they are all gainfully employed. Sir, I move to another related issue. Again, I would like to draw from personal experience. Over $60 billion is tied to property. Every young Singaporean wants to upgrade from 4- to 5-room flats to Executive flats to terrace houses. There is nothing wrong with being ambitious. But let us have a sense of realism. Can we afford at the end of the day to pay the instalments in case there is a rise in interest rates? And specially so for those who have bought, let us say, a terrace house in 1995 for $1 million, it is probably now worth $700,000 to $800,000. And if the bank suddenly decides to call back just $100,000, where are they going to find this money to pay? So my appeal to all these people is to get their priority right. The Government, through the Housing and Development Board, has built enough houses. Nobody lives in the streets, save for some of the foreign workers. We all have a home. Get the priority right by having some savings. And I am really surprised when I see young people, husband and wife, earning $9,000 a month jointly, and they straightaway upgrade from a 4-room flat to a terrace house. Why must we be so much attracted by this private property? Sir, I have a private property because I could not qualify for HDB flat; otherwise, I will opt for it. In fact, when I am older in my age, I probably would do that. There will be homes for the aged, I hope by then. HDB will build them. Sir, the question that we have to ask is: can we afford? I think this is where I would urge members of the public to be very careful with these commitments. Sir, the other matter is this. It is in times of crisis that the community really is being examined, whether we are one social cohesive unit. As has been told by Mdm Claire Chiang and Dr Lee Tsao Yuan earlier, we must feel for fellow Singaporeans. I am not asking that if you have a whole loaf, give the whole thing to him, but share some of the suffering. Those of us who could afford to share a bit of our extra, give it to them. Talking about social cohesiveness, I think the Government can feel a sense of achievement. Last Saturday, together with Mr Inderjit Singh, I attended a function organised by the Sikh community. Very young Sikh boys and girls, who are secondary school students, were singing in Punjabi, songs based on Singapore's national values, and I was really touched. I can understand a little bit of Punjabi. Hindi is my mother tongue. And I was really touched by these boys and girls, how they could sing the core values of Singapore. Ten years ago, I do not think they would have done it. This is called community bonding. The Minister for Community Development was there. It is an example of bonding of a community, small it may be. We were told by Bhajan Singh, the Chairman of Sikh Advisory Board, who is an educationist himself, how Sikhs have welfare schemes to help those in need. I thought it is something we can emulate from them for the whole of Singapore. Sir, I wanted to say many things but, unfortunately, most of the things have been touched and I do not want to prolong the debate longer than necessary. Sir, this is the disadvantage of being the last few speakers. Everybody has spoken what probably you wanted to. But I just want to say one thing. Whatever we do, we always must do, the Government and the people, and it is important that Government from time to time consult the people, not after it has taken the decision and then get the feedback from the people. I think that is not correct. Consult the Chambers of Commerce and the various professional groups, get their inputs and see how the policy is going to be implemented to help the community. And I would say that the Government is concerned, because the Government always consults, but its consultative process must go for some fine-tuning. I urge the Ministers from time to time to consult Chambers of Commerce because they are the most concerned people in this issue and I share the sentiments of my fellow NMP Mr Tay Beng Chuan. Sir, with that, I support the motion. 5.00 pm

(In Mandarin): Mr Deputy Speaker, Sir, I have some doubts on this motion. This motion urges the Government to rally the support of the entire nation in this time of economic downturn to minimise unemployment in the short term and strengthen economic competitiveness and social cohesion for the long term so that Singapore will emerge from this regional crisis even more competitive and resilient. First of all, to unite all the people of the nation and to enhance social cohesion and the competitiveness of the country is something which a responsible government should be doing. To emphasise that point in this time of economic downturn, the Government should unite all the people. In moving this motion, are the PAP Members saying that the Government has not been doing enough in this area? Secondly, during the general election last year, in order to win votes, the PAP Government used the HDB upgrading policy which undermined the unity of our people and weakened our social cohesion. Now the PAP MPs are raising this motion to rally the support of the entire nation. Is it an admission of the mistakes committed during the last general election? Thirdly, the focus of this motion is on unemployment and the economic downturn. Is it because the PAP Government's feeling that its economic trump card of urging the Singapore people to submit them in exchange for economic growth, for the creation of wealth and for enhancement of assets is losing its effect and it has come to a sudden realisation of the importance of national unity? By right, the Government and the people should work together. This is something which of course should be done. Yet, during the election, the PAP Government was unable to share the fruits of prosperity with those who opposed them. And yet, at this time of economic downturn, they are asking everybody to share the sufferings. It is like the Emperor Qian in ancient China who sought company of the ugly but resourceful concubine when he was in trouble but favoured the pretty but ineffective beauty when everything was fine. Despite all this, I would say that national unity and a strong sense of identity with the nation is the basis for the prosperity of the nation. Although the PAP Government has not been kind to the people, in this time of crisis, I support this motion to rally the support of all the people in the nation. To rally the support of the entire nation and to enhance our social cohesion, I feel that the most important thing is to make everyone in Singapore feel that he is a part of the country and he is being treated fairly. For the Government to get the support of all the people, it should treat every citizen fairly, particularly in the distribution of the fruits of economic success. We should look after the people and make everyone truly convinced. If the PAP Government is sincere in enhancing social cohesion and achieving the target of national unity, first of all, it must remove the psychological barrier that prevents our people from being united together and should consider the following suggestions. First, we should remove the political elements in the conditions for HDB flat upgrading. This political factor is that when all conditions are the same, the rate of support for the PAP becomes a deciding factor. The impression given by the PAP in the last election was that the housing estates in the opposition constituencies will never be upgraded. I think the Government should clarify this point. PAP Government should also consider announcing the schedule of upgrading of flats in all constituencies in advance to prove that its deed matches with its words. Secondly, we should amend the criterion for application of CIPC funds from the Ministry of National Development so that the opposition town councils can apply directly to the Ministry for CIPC assistance in improving the facilities of the housing estates. Thirdly, to open the MRT station in Potong Pasir. If they feel that there is not enough volume of passengers, we should develop the nearby areas so that the residents in the opposition wards could also benefit from that. This will show that the Government makes use of national resource without favour and takes care of every citizen and in turn expresses the Government's sincerity in uniting the entire nation. Fourthly, the Government should remove GST and reduce the various charges. Although all these suggestions have been rejected by the Minister, the Government should consider the feelings of the people. At the time when everyone is facing the impact of the economic downturn, especially the lower income population and those who lose their employment, the Government should respond to help by minimizing the pressure in life. Fifthly, the Ministers should volunteer to take a pay cut, although I understand that the pay cut by the Ministers will not help to improve our economy. But when the people are facing economic difficulties, as leaders of the nation the Ministers volunteer to take a pay cut, it will have some positive effect. Sixthly, the PAP Government should frankly admit that the prosperity and development of the Singapore economy is dependent on the regional and world economy and not just on the economic policies of the PAP Government. I hope that the PAP will stop blowing its trumpet and proclaim to be the saviour of Singapore and assuring the people during the general elections that they will have their assets enhanced and their incomes will be increased year by year as though the PAP Government is omnipotent, they can solve all problems and help the people in every way. This resulted in people not seeing the need to be united in order to make use of the strength of unity to help the nation pull through in a crisis. Mr Speaker, Sir, as I have said earlier, to enhance our social cohesion and to unite our people, the important factor is to treat every Singapore citizen fairly. The PAP Government has been using the national resources to distribute unfairly to the people, inducing and threatening people, such as the HDB upgrading programme, CIPC funds and infrastructural measures, such as the MRT. It has created a psychological barrier that prevents our people from being united. This feeling is not only in the hearts of the people in the opposition wards, but it is also something which has been disturbing every Singaporean who has a conscience. The PAP should now realise that every citizen has its own contribution to Singapore. The PAP should be magnanimous to accommodate those who hold different views and the supporters of the other political camps. If the PAP Government has such a heart, I believe that we can enhance cohesion, we can make all the people stand united and create a home that belongs to us, our Singapore.

Sir, on many occasions in recent years, I have heard many top executives, top businessmen, educationists and even politicians, complaining that the long boom years have led to escalating costs, demanding workers and lower productivity. We should all somewhat have a recession to moderate the untenable cost. We have a tremendous economic slowdown or even a recession coming. Some people from the very same group complain and they cry foul and ask for help. So are we really hypocrites? Although this crash in East Asia has come too fast and too great for most people to anticipate and be prepared, why are there so many people out there who are affected by the crash? Perhaps, we should re-examine ourselves and see whether we are all part of the reason why the economy has turned sour. Did we not try to get more gains out of the stock market or property market? Did we not try to get more pay to buy a second home or have more overseas holidays, without regard whether we are adding more value to our jobs? Collectively, yes. Greed in people drives the market economy. But that very market economy is sustainable only if the collective decisions or the expectations of the players are rational. When the decisions become irrational, that is, when the speculative effect overwhelms the investment effect or the cost overwhelms productivity, the market has to correct itself to a truthful equilibrium position. We should not cry now. Instead, as a nation, as a people, we should take stock. We should honestly and boldly be self-critical. We should examine our systems for possible weaknesses, reflect on our mistakes and then tap on the internal and external resources to formulate new strategies to move on. With $100 billion in reserves, our economic situation is not in a state of panic. But we should not be complacent either. Rather, we should see what our huge reserves and our people, that is the only other reserve we have, can serve to procure us a better future. Here, I would like to draw an analogy to a situation faced by a large and cash-rich corporation like IBM a few years ago, even Microsoft, two or three years ago, when they faced an attack on the Internet issue, and how these companies with bloating cost, with possibly unwise investment or wrong product lines, had eroded their competitiveness in the global marketplace. So what would the CEO do? The immediate task of the turnaround CEO would be to troubleshoot quickly by examining their strengths and weaknesses internally and externally, benchmark its own company against the best in the world, and formulate a clear strategy to rally its employees from the bottom to the top to work towards a new corporate goal. I strongly believe that, for a nation like Singapore, we should do exactly the same but on an even larger and wider scale, covering not only the economic issues but social and political as well. Before we can rally the people round, the Government should face the economic crisis and take advantage of it for future opportunities. We should carry out a diagnosis to find out the symptoms and put forward a very clear plan stating the directions, the resources required, the timeframe and possible belt-tightening measures that our people and businesses have to bear to cope with the economic slowdown and be prepared for a brighter future. Without the plan, I do not think people can see the light at the end of the tunnel. That is what they are feeling now. The recent economic forecast conducted by various agencies shows that most likely Singapore is going to have negative growth for the third and fourth quarters. Barring some exceptional turnaround, we are definitely heading for a recession. Hence, I think the Government should not hesitate now to assert its leadership by declaring a very comprehensive national action plan that will help to mobilise and unite the people as a cohesive force to resolve the economic problems. The citizens of Singapore can lend better support to the Government if they are convinced. The efforts are genuine, workable, comprehensive, not just piecemeal, haphazard or sectoral. When a person is feeling down, he needs comforting words. In this trying moment, it is particularly necessary for the Government to be more sensitive to the nagging complaints of its people. To cite just a few examples, the typical complaints are, as Mr Inderjit Singh has pointed out many times before, the encroachment into private business domain by the GLCs and the resistance to changes by Government departments. For example, Mr Lim Swee Say mentioned about the concept of price-minus and cost-plus, and also the lack of sensitivity or understanding by Government administrators about the problems in the private sector. Another example would be - of course, everybody knows about this - the ever rising business costs and, last, the boom and bust of the property sector and its related banking problems. The first few problems have been very well covered by all the Members here earlier and I am not going to elaborate any further. The last one has been touched on by Mr Inderjit Singh and Mr Rai, but I think I want to elaborate more. As it is, I think the property sector makes up too big a chunk in our whole economy. Based on the Straits Times report last week, correct me if I am wrong, the people and the institutions in Singapore committed $140 billion to the property sector. Last Saturday, in a Chinese paper, there was a report on the Accountant-General's Report on the Government's net worth. It shows net assets of $251 billion. Hence, even a primary school student can find out that the total commitment to property is equivalent to 60% of the total assets of the Government. Next, concerning the same matter, I understand that the valuation of land by the Government is based on the moving average of recent land tenders. Now I am going to give Members some examples. Supposing the price of the last $10 billion worth of land is bidded up by 10%, that means somebody pays $1 billion extra for the $10 billion. Then the remaining $130 billion would correspondingly rise by 10% too. That is the way we value our land, and that is a $13 billion increase. So, all the property owners are euphoric over this and the banks, of course, feel very secure and they probably encourage more borrowing. With more loans available, what happens? The borrowers would buy more properties and so they chase property prices up. Our financial institutions, whose traditional preferred lending policy is to have property as collateral, actually encourage the property sector to grow in this unhealthy manner. You can imagine if you are an owner of a firm, you invest money into training your workers. Would the bank lend you the money? But I am sure if you use the money to pay for a piece of property and mortgage it to the bank, the bank will be very happy. So where is the line drawn? Are we encouraging people to buy property or are we encouraging people to put more money into something less tangible? Because of this practice, as a very prominent foreign banker pointed out, the banks in Singapore probably have not perfected their skill in making loans in any other way but getting a piece of property as a collateral. So in boom years, because of this lending policy and because the way land is being valued, the property sector grew disproportionately to the whole economy. The banks' performance also exceeded that of the GDP, year after year. Now, with the economic crisis prevailing in the region, this issue is here to haunt us. It is beginning to appear, from what I read in the papers, that the country seems to be held to ransom by the property developers and the banks, because everybody worries that the bankruptcy of these companies would have far-reaching repercussions. So we have to address this issue. The importance of addressing this issue cannot be over emphasised. As an individual, the problem closest to my chest is the fear of not being able to maintain payments of a mortgage loan at a time of unemployment. As a nation, our economic competitiveness is also dragged down by the over investment in low value added properties. So I beg to urge the Government to confront this issue head on and do some clear thinking about it. I am not here to speak against the developers and bankers. I am not here to beg the Government to subsidise the property sector. But I think the more sensible way to solve this problem now is to moderate the decline in property prices in a very gradual way so that there will be a soft landing. What should the Government do now? I think the Government should immediately accelerate the creation of new wealth in knowledge-based economy, as Mr Singh has pointed out, by diverting more of our resources to human capital and to the promotion of new industries. In the long run, we should reduce our overall exposure to properties and increase high-tech services or, as Mr Lim described, the capability competitive sector, significantly. And in the short term, to alleviate the unemployment problem, the Government should come out and stress the need for workers to work harder and smarter, so as to increase productivity which is in a way translated into better chance of keeping jobs. The employers, of course, should also adopt a more positive attitude rather than the kind of pessimism they seem to convey in the press. They should improve themselves by emphasising on more skill training for their workers and also get involved in more value added activities. And, of course, the Government can take this opportunity to show their concern, to establish rapport with the businesses by helping them to search for new strategies, new directions or new markets beyond the region. In summary, Sir, I support the motion by sharing Mr Lim's call on the Government to blur the invisible line drawn between me, Government, and you, the private sector, and work together as a united force to brave the storms ahead.

Sir, we have come to almost the end of the debate and I do not think it would be useful for me to suggest any solutions to our economic problems, because I think most or nearly all the solutions have already been given in this House today. Like my colleague, Mr Low Thia Khiang, the other Opposition Member in this House, I think we are particularly concerned in this issue of social cohesion. I support what Mr Low has said, ie, the Government should be fair to all citizens whether they are in the Opposition or whether they are supporting the Government. In good times, when the economy was booming, our banks were flushed with money, the Government spoke a different language. At the last election, the Government said, "If you support the opposition, you will be last in the queue. Probably you will never even see upgrading." That kind of a policy alienates one section of the population from the other. And we, in the Opposition, have felt the alienation policies of the Government. We have heard threats being uttered by the Government, "that if you vote the Opposition and if you get stuck in the lift, you should be rescued last." An hon. Member: No.

Yes, this was in the early days. The opposition ward shall be slow in getting public services. If somebody sets a fire in the lift, the police might not attend even after a complaint has been lodged. Some hon. Members: No.

This kind of threat tactics will certainly not build a cohesive society. Even now, presently, the Opposition is being unfairly treated. A simple application for the use of land to fly kites or to hold a lantern festival and we would not get an early reply. How are we going to prepare for the event? How are we going to send out notices? And every time we ring up and ask about a simple answer to the application, they say, "We can't give you an answer now because the answer from the top has not come down yet." Sir, the way the Opposition is treated is really shameful. So I hope that the Government, if it wants a true cohesive society, I think they should treat the Opposition fairly like any other Singaporean. Mr Low has spoken about the CIPC funds. Millions of dollars have been distributed to the PAP wards, but the Opposition wards are not enjoying any of those funds. Then when we talk of applications we wish to make, we always seem to get it rather slowly, whether it is for a licence to speak at a public dinner or whatever simple applications like that. Then, every week, we have to meet in the void deck to see our residents and other people from other parts of Singapore in the meet-the-people sessions. We do not have a proper place to meet, whereas the PAP MPs have got nice air-conditioned rooms, computer sets, everything. But we, as I have said, are like the Chinese medicine sellers with one table and one chair at the void deck. So I hope all these can change. Having said all that, do the Opposition support the Government in times of difficulty? Of course, we do. We are Singaporeans. We want to see Singapore do well. We want to see that the economic downturn can go away very quickly. Dr Vasoo has spoken of the fact that we are all in the same boat. I know we are all in the same boat, but we are not even in the third class. Probably we are in the bottom or in the hull of the ship. Whereas the PAP and others who support them are in the first class. Nevertheless, if we sink, we all sink together. It is true that we are all in the same boat but I hope that there can only be one class and not several classes. As regards this problem of the economic downturn, how do we turn around? As the Deputy Prime Minister has said in public, the problem is external. This is like a person getting flu. We have to go through the full cycle and then we get cured. But meanwhile, I think what we can do is to try to give a remedy to the symptoms to lighten the sickness. I think Mr Tay Beng Chuan has already said and I think the Government should look at the problems and the plight of the small business people sympathetically and if it can, I think it should lower some of its levies, its charges and lower the costs of all these small businesses. But I think in the long term, the important thing is productivity. Even foreign organisations have pointed out that Singapore workers have got a bad attitude and have low productivity. I have seen it with my own eyes. We were in Copenhagen once on some kind of a conference and we were in a lounge of a hotel. I noticed that only one lady was managing everything, collecting money, taking orders, being a waitress, serving, taking back all the used plates and crockery. Sometimes she was assisted by a man who came out once or twice. But, basically, it was one lady doing the work. I have never seen that kind of productivity in Singapore. I hope we can really improve our productivity. There is nothing wrong with our Singapore workers. They are very skilful. I think they can work if they want to, the problem is attitude. Singaporean workers have got something in them which is hard to describe. They seem to be reluctant to be as productive as what they should be. I think the genesis of this attitude problem is our education system. I think there is a flaw in our education system. All this streaming and dividing the sheep from the goat is bad for the child. Right from the early age, the motivation of the child has already been killed. In fact, there is negative motivation on the child. As the child grows up, he just refuses to be cooperative. He refuses to contribute and be socially useful. So there is a negative attitude about this type of children who have been branded in the early days as a failure, as a no-good, as a drop out. So what do you expect him to be? If you tell me that I am a drop-out, I am no good, what do you expect me to be? I think for the long-term of Singapore, not just for quick turn around in this economic downturn, the education system of our country has to be looked at hard. I have spoken against streaming at an early age since 1984 and the problem is always there. I was in Parliament in 1984 and they were saying that half of our 600,000-odd workers did not even have an education. They were illiterate. They did not know how to read. They did not know how to write. They cannot recognise numbers. How are they going to be productive? Today, we still hear the same thing. 700,000 of our workers have got no secondary education. As for retraining, it is only 5,000 of them. That is not good enough. We have to revamp the education system across the board and only if their productivity is high, then their wages are justified. This is the message that I want to tell the House. Another matter is attitude. We should give the dignity to our labourers. There is dignity in labour. That must be recognised. If a person has to work with his hand, so be it. But he can be proud of it and be good at it. Whether he is a cook or a carpenter, if he is good at it, then society must respect him for what he can do, and not stress too much on academism, brain work and degrees. In fact, a former Member of this House has already pointed out that there is too great a disparity of wages between manual workers and university graduates. If you go to a western country, you will be surprised to note that a carpenter can earn just as much as a university graduate. But I am just trying to say that his skill is recognised by society and he is paid for it. Singaporeans can be educated to get rid of their negative motivation and be taught initiative, leadership, and work on their own instead of always being supervised. I think one of the problems of foreign workers - they have almost nil productivity - is because they have to be supervised all the time. I have seen that in the Town Council. As soon as you leave the foreign workers alone, off they go somewhere else. They would not be working anymore. So they have to be supervised every minute of the day. That is the problem. I do not think we want our workers to be like that. We want our workers to be responsible and to show initiative. If you leave them on their own, you pay them a day's wage, they will give you a day's work. 5.33 pm

Sir, I support the motion standing in the names of Mr Lim Swee Say and Mr Seng Han Thong. In discussing the problems of employment and employability, it is important to understand the nature of this crisis, because what we do must be in accord with the dynamics of this crisis. This is the biggest event sweeping Asia since the Second World War. It is a big thing. Already it has brought down a number of national leaders, like General Chaovalit in Thailand, President Suharto in Indonesia, Prime Minister Hashimoto in Japan. It contributed to the election of Kim Dae Jung in South Korea and President Estrada in the Philippines. It is not over yet. We know it is not over yet because the fundamental problems have not yet been resolved. The key is, of course, the Japanese economy, which is two-thirds of the Asian economy. The old political consensus in Japan has broken down. Today, it does not matter how brilliant you are as a Minister or as a civil servant. Within that sticky rice culture, it is very difficult to effect change. Within Japan itself, there is no great sense of a crisis. Because Japan is unable to re-stimulate her economy, the effects of the Asian crisis have not only not been contained, they are increasingly being felt in North America and in Europe. Members would have read in yesterday's newspapers President Clinton using the argument to Congress to persuade them to cough up more money for the IMF, that if they do not, and the Asian crisis is not stabilised, it will in the end drag down the US economy. These are large forces not within our control. We have to observe them closely and carefully, the way a farmer would try to estimate the effects of an El Nino. There is nothing you can do about an El Nino. But you can dig reservoirs, you can protect yourself, and this is the approach that we should take. This is completely different from the 1985/86 recession. Therefore, we should not be too quick to apply the lessons of 1985/86 recession to this current economic downturn, just as generals have always been advised, never, never to fight the last war. Take, for instance, a big change in the larger situation, the dollar-yen relationship. In 1985, the Japanese yen was 250 yen to US$1. The Americans complained that it was too low, and they had this current account deficit. During the Plaza Accord, they forced Japan to revalue the yen, and within three years, from the Plaza Accord in 1985 to 1988, the yen rose from 250 yen to US$1, to 130 yen to US$1. If you look at the graph, that is just one movement. But it created a sea change in Southeast Asia, because an expensive yen led to an outflow of Japanese capital out of Japan and a lot of it found its way into Southeast Asia. Malaysia had good infrastructure, administrative and physical infrastructure, they were a beneficiary. So was Thailand. The Plaza Accord was in 1985, and by the end of 1986/87, Malaysia and Thailand were on a boom. We were coming out of the recession and we were swept along. Indonesia had a boom later in 1988/89. China after Tiananmen, June 4th 1989, by 1990/91, ethnic Chinese capital from Southeast Asia, Taiwan, Hong Kong went in, and that in turn sparked off a Chinese boom. The Japanese economy is huge. It dominates most of Asia. So that 50% change in the value of the yen led to an in-rushing tide which brought prosperity to all of Southeast Asia. It was supplemented by a revaluation of Korean Won and the Taiwan NT. So in addition to the capital flow from Japan, there was also the capital flow from the NIEs. Let us now look at the events of the last few years. In the middle of 1995, it was 80 yen to a dollar. Today, 1998, it is about 143, 144, 145 yen to a dollar. Within the same period of three years, the yen has moved the other way, about 50%. Because of it, it has an enormous contractionary effect on the economies of all of Southeast Asia. In other words, what we are talking about are huge tidal flows over which we have no control because the yen-dollar relationship is not dependent upon what happens in Southeast Asia. It is dependent upon the complex interaction between the US economy and the Japanese economy. The key contradiction now is that Japan has no capacity to lead internationally, even though it is the world's greatest creditor country. America is the only leading superpower left in the world but it is also the world's greatest debtor country. It is a complex relationship suffused with policy and other implications. But that relationship plays dice with our lives. The question now is, this tide which is receding, how long will it recede? The last tide brought 10 years of prosperity to Southeast Asia. This tide, we hope it will turn around quickly, but I do not see it turning around yet, and we have to wait, and have to wait anxiously, and in the meantime take all necessary precautions. We hope for the best but prepare for the worst. The period of boom in Southeast Asia led to a period of excess. Suddenly money was easy. Borrow American dollars on the short term. Institutions were weak and capital markets were opened freely before the regulatory structures were in place. So they became very vulnerable to short term capital flows. This happened in particular in Thailand and Indonesia. Worse, there grew in Southeast Asia, political structures which were fueled by easy money. Politically connected vested interest got rich, because they were near centres of power. All that was fine and a wonderful game to play when the tide was coming in. Now when the tide is receding, all those poorly built structures have either collapsed or have become very shaky. During high tide, the water looks very calm and beautiful. During low tide, all the sins and wreckage show. In Singapore, we are completely affected. Because we are, as it were, in the middle of that tidal cross flow. We cannot fight the tide. If we fight the tide, we are sure to lose. We must float with the tide. We are feeling it. There is a lot of pessimism in Singapore, not all of it justified. We have to revise our growth projections downwards every few months. And as Mr Lim Swee Say and many MPs have spoken about this afternoon, unemployment is growing and will continue to grow for a while yet. But unlike many of the countries around us, our fundamentals are strong. This is where I profoundly disagree with Mr Low Thia Khiang who said that when we were successful we blew our trumpet. Now when the tide is down, we should take the blame. We never took liberties with ourselves. Even when times were good, we were frugal. In fact, the PAP Government had a certain reputation for being very careful with money, and watching the cents. We were like Joseph in Egypt. Years of plenty, rather than squandering the money, we carefully built warehouses, stashed away whatever we could, whatever we did not consume, wasting not a grain, because we were preparing ourselves mentally for difficult times. I hope the difficult times will not be as long as in the Bible, but still we cannot be sure. We should not take liberties with ourselves, as we did not when times were good. But, of course, as a number of speakers have pointed out this afternoon, there have been a few excesses in Singapore, particularly in the property market. Young people became very ambitious, leverage themselves to the eye balls, and are now in trouble. It is sad that every generation must learn its lessons for itself, that whatever their parents may have to tell them, they must make their own mistakes before an internal balance is found. But because our infrastructure is basically strong and our system is basically sound, I think that lesson comes relatively cheap. It is crucial, as Mr Lim Swee Say and many MPs have said, that whatever the situation, whether the tide is coming in or going out, that we maintain our relative competitive position. Take no chances. Always assume that things will get a bit worse. It is like running with lead weights. If you do not have to wear those weights, you fly. Here, we have got to worry about not just short term investment conditions but the long term, as Mr Inderjit Singh has said. The key is to convince domestic and international investors that Singapore runs a tight ship, that our core philosophy is that there is no free lunch in the world. That if we make a good living it is because we are of service to others. No one owes us a living. If we have something in the kitchen, we have something in the living room, it is because we work hard for it. We must continue to project this philosophy to all potential investors, foreigners and Singaporeans, that whatever we need to do, we will do. There are no sacred cows. There are no mindsets. If we have to adjust, we will adjust. That is all. Because if we do not adjust, if we become paralysed or ossified in our present position, then we will be swept aside. That is all. I think most Singaporeans understand this. And it is because they understand this that we continue to do well. In fact, when I listened to the many Members of Parliament who spoke today, except for the two Opposition MPs who have to say something, on the whole, there were really no sides to this debate. On the fundamentals of competitiveness and having to make a living in the world, on education, on discipline, on collective effort, there is no disagreement. And this is the great strength of Singapore. In many countries in Asia today, because of economic astringency, very quickly the economic problem becomes a political problem, and the fracture quickly finds its way to the core, because powerful vested interests are involved. I support A, he wins, I am millions of dollars richer; he loses, I am finished. If B wins, he wins, and so on. But in our system, complete rationality, complete objectivity. If this is something that must be done, let us do it. We can disagree honestly, but not on the basis of your vested interest versus his vested interest. You remember last year before the crisis, we established the CSC, the Committee to look at Singapore's competitiveness, chaired by Minister Mr Lee Yock Suan. And no sooner had the Committee sat for two or three sessions, we were straight into the downturn. At each meeting it was a different set of circumstances than the previous one. So we have had to adjust our position. When we started, a top item on the agenda was job-hopping, and many papers were written on how to stop the job-hopping problem - very creative policy adjustments to stop that problem. Today, that problem has completely evaporated. We do not even talk about it. The problems are unemployment, restructuring, competitiveness. The Committee has been meeting, its sub-Committees have been working very hard. The report will come out at the end of the year. And many of the ideas have already been incorporated in the meantime. It is economic competitiveness in the end which will solve the problem of employment and employability in Singapore; nothing else. And to maintain our economic competitiveness, there are two things that you have to watch out for, and they never change. One is our cost structure. It does not mean that we cheapen ourselves. Cost structure does not mean that we must be the cheapest in town. We offer value for money, but we must watch the cost structure to make sure that we are not out of whack. Secondly, and this is an endless task, we must continually increase productivity and efficiency. This is an endless game. Cost structure. Lowering business cost was, of course, the focus of Dr Richard Hu's off-Budget measures which came to $2 billion. If you look at the exchange rates, we can be in danger of being uncompetitive. Around us, Malaysia, Philippines, Thailand, they have gone down close to 40%, Indonesia, much more. We have only gone down 15% to 20%. Of course, Hong Kong has maintained the peg. So they are above us. But as any of us who has travelled in the region will know, things look incredibly cheap in Thailand, Malaysia, Indonesia and the Philippines. So if we are not careful, very quickly investments can flow out of Singapore into the region around us. We have got to watch the cost structure, and make sure that all components of costs are kept as low as possible. We do not want to fiddle with the exchange rate, because the reason why the Singapore dollar is viewed with such high regard in the region and why so many ten thousand dollar Singapore notes are in circulation in the region is because there is a deep trust in its value. And I would say that it lies at the core of our financial system. The easy way a weak government would take is to lower the Singapore dollar, devalue it. And then you get a flush, things may appear better, but long-term problems are not solved. And I do not think we should use the Singapore dollar to solve this problem. Instead, let us be trim and flexible. If we have to make adjustments, Government, workers, unions, everybody together, we make those adjustments, take the decisions, and not toy around with the Singapore dollar. Land cost, rental cost, because of the boom years, they have gone out of line. So they are coming down. I think they will have to ease to a lower level. We want a soft landing. We do not want a major destabilisation of our financial system. And I think the market will gradually correct itself, and we should be in a more competitive situation in the coming years. Of course, when the tide comes in again, then we will float up again. But in the meantime, do not take it for granted. Let us ease ourselves into the lower position so that rentals are lower and business costs are lower. As Mr Tay Beng Chuan and other MPs have said, we must also watch Government levies, Government fees and taxes, and whatever causes problems, and where we can make adjustments, we should. But this is really for the Finance Minister to decide and we have to wait till next March for new measures to be announced, if and when those measures are deemed to be necessary. Another major component is, of course, wage level, especially in the service industry where it can be more than half of total cost. In many manufacturing sectors, it could be up to 40%. We have got to allow wages to adjust. Mr Lim Swee Say said that to be pro-employment is to be pro-business. In the old days, that would have been considered a reactionary remark. Today, that is a very progressive remark. To be pro-employment is to be pro-business. Because if the businesses do not survive, where is the employment? So we have got to watch our wage levels, accept that it varies from industry to industry, from company to company but, at the least, we restrain; at the most, we prepare for adjustments. We have built up over the years now a variable component of up to 20% in the public sector and maybe 16% in the private sector. We should be prepared to go into those before talking about the CPF. But even if it means talking about the CPF, so be it. No sacred cows. Whatever we need to stay competitive. And that must be the impression we give to foreign and local investors. This Government, this society, these people called the Singaporeans, they will do everything necessary to stay in business, and we intend to stay in business. We should, of course, minimise unemployment. But minimising unemployment must not mean stopping unemployment. That will be very dangerous. The Ministry of Manpower has set up a tripartite retrenchment panel so that companies which have to retrench would give early warning, and try to prepare the workers for it. We have the SRP. We have various funds and programmes to help retrain them and to get them new jobs so that the pain is minimised. But if that company, if the industry, cannot sustain that level of employment, their unemployment is inevitable, we should not stop it. It is part of the process of adjusting. We have got to float with the tide. If we anchor ourselves when the tide is shifting, we will be in trouble. Mr Tay Beng Chuan spoke at length about the plight of the SMEs and how many of them are in pain. There is a liquidity crunch and the LEFS programme which is introduced can only help some of them. I think we should do all that we can to make life easier for them but we must accept that whatever we do, we cannot save everybody. If we try to save everybody, we will be in deep trouble. But those whom we can save, we should save. The LEFS is being extended in order to allow more to be taken in. But at the end of the day, the banks must decide. Government is only co-financing. The banks must decide who will survive and who will not. Yes, if we can raise the level of the water by one inch more, more will be saved; but it is not possible to freeze things in position. That will be the wrong strategy. That is on the cost side. Then on the productivity and efficiency side, there are many things that we have to do. The key in the end is the individual. We can have the best infrastructure. We can have all the programmes, all the bells and whistles, but if the individual does not make the effort and does not try harder, nothing can be done. And all our efforts are to enable the individual to help himself. Unless he is sick or an invalid, there should be a way out for him through one of our programmes. The SRP was initiated by the NTUC, together with the SNEF and the Government. SDF put in $50 million. The Government threw in another $50 million. And recently the Government added another $20 million. So they set up a skills development centre and introduce a whole range of courses. In other words, when the economic agencies sense there are areas of potential growth which can take additional employment, we put out these indicators, encourage those who might be unemployed to upgrade themselves and try. But, of course, as many MPs have said, it may mean that they have to travel further. It may mean that they have to work shifts. It may mean that they have got to convert from white collar to blue collar. But so what? I was in Thailand two or three weeks ago. There was this Thai businessman whose company had gone bust, and he now sells sandwiches. The newspapers have been reporting on him. He is bubbly and very cheerful about it, and in a very wonderful way he has given heart to a lot of Thai people. And if Singaporeans make that effort, I do not think that the problem of unemployment will get out of hand. To begin with, there are hundreds of thousands of work permit holders in Singapore and many of their jobs can in fact be taken over by Singaporeans. We must educate every individual to the fullest possible. Mdm Claire Chiang has talked about social infrastructure. We are spending a lot of money on building up our educational infrastructure. Not just a formal school system of primary schools, secondary schools, ITEs, polytechnics and universities, but also life-long education, so that all of us are used to the idea of going back to school to update ourselves, whether it is on Windows, whether it is on computer-aided manufacturing, or whatever. Eventually, what we hope is for all our institutions to become "one institute, two systems" - one system for those who come out from school; the other for those who are coming back from working life in order to upgrade themselves. And that is the kind of society that we must become, the kind of culture that we must have. Never stop learning. Always have a child-like curiosity for what is new, and try. Fail, never mind; try again. Fail again, never mind; try again. In the end, learn something. And if we cannot master these skills ourselves, encourage our younger brothers or sisters, encourage our children and grandchildren to master them, because it is good for them. We are preparing for something which we know will come, in the 21st century, when wealth is increasingly based upon knowledge, not land or raw materials or natural resources but on human minds and the knowledge in those human minds and their ability to network together. This is why we have been pushing IT; we have been pushing Singapore One and encouraging our young children to prepare themselves for that kind of a world. Then, however that world changes, you will still come up against a computer, you will still come up against Windows; you will still come up against Internet, and you make the necessary adjustments. Whether in a restaurant, in a bank, in a shopping centre, in the SAF, whatever, it does not matter. Put someone before the computer screen and he is there hammering away, no sense of being intimidated. There are other things that we should do too, like encouraging entrepreneurship and so on. These are all long-term efforts. If we can make 1% improvement a year, we would have done well. It is not something which will change the situation rapidly. EDB has mounted an Industry 21 programme which targets not just manufacturing but also manufacturing services. I announced some of the details in June this year. Our corporations will also have to restructure. We must help them to restructure. We must not, through threats or moral pressure, make it more difficult for them to restructure. Dr Lee Tsao Yuan talked about POSB. Why not we slow the process down, make it easier for those who have loans from POSB and so on? Yes, in every case, it is better to hold back restructuring. But there is also a heavy price when we hold back restructuring. Because every year lost is a year lost to competitors. And at a time like this, I do not think that our instinct should be to hold things in place, but to help individuals, corporations make the adjustments. But whether or not POSB can lengthen by a year the grace period, that is for POSB to decide. But we must remember that, at the end of the day, all restructuring is difficult. It is never easy. One of the most important things that we should pay attention to in this period is to fight political pressure to make life more difficult for foreign talent and foreign workers. At a time like this, the easiest thing to do and to say is, "Let's keep the foreigners out. Save the jobs for Singaporeans and treat it as a zero sum game." And at the political rally, on a soapbox, one can make quite a stirring speech. Our trade unionists can make quite a stirring speech on this. Therefore, at a critical period like this, it is very important that all of us, PAP MPs, Opposition MPs, NMPs, all of us, hold to this position that we need foreign workers. If we do not have these foreign workers, our economy will seize up. Let us say, for electronics companies, 40% are foreign workers. Without that 40%, there will be no 60% for Singaporeans, is it not? Without foreign workers, who will build our homes, our MRT line, who will repair our ships? There are many areas which Singaporeans would not want to do even if they are quite hard up. And we need foreign workers for those jobs. And at all times, there are imbalances. We need machinists, we need computer programmers, we need restaurateurs, and so on, bring them in. Of course, where a Singaporean is equal to a foreigner, prefer the Singaporean, choose the Singaporean. We do not have to say this. Instinctively, every Singaporean employer, for reasons of cultural affinity, would prefer a Singaporean. If he has to choose between whom to retrench, a Singaporean or a foreigner, and they are more or less the same, I have no doubts in my mind that he will retrench the foreigner, not the Singaporean. So I do not think this is such a serious problem. But we must not allow this issue to be politicised or polemicised. And when we talk about foreign talents, it is even more important. Our universities, our research institutes, our financial sector, in many areas, without foreigners, we cannot maintain this high level of performance. In fact, at the higher reaches, the majority may have to be foreigners. If you look at the economy of London, or the economy of Tokyo, or the economy of New York, how many are local to London or New York or Tokyo. If you tell the City of London that you can only recruit Londoners, I think the City of London might as well pack up. So in the same way, to maintain the kind of economy that we have, we have got to have a free flow of talents coming in from outside, and this is very important. But as I said, this is a subject on which it is very easy to make stirring speeches and get the ground worked up in the wrong direction. Therefore it is incumbent upon all of us who have a sense of responsibility to hold this ground because on it depends our long-term survival and the long-term employment and employability of Singaporeans. DBS, OCBC, you notice recently, having to restructure and adjust to a new situation, both of them have recruited foreign CEOs. Should we stop them? That would be stupid, would it not? In fact, I will go a step further. All over the region now, bright, able, dynamic entrepreneurial people have gone bankrupt or are without jobs. Should we not, selectively, encourage some of them to come into Singapore so that when the tide comes in again, we will have a thick layer of entrepreneurs and foreign talent to take our economy even further into the next century? If Hong Kong, in 1949, did not get that outflow of talent from Shanghai, and Hong Kong in 1949 was not a very prosperous economy, would Hong Kong have done as well as it did? If Taiwan did not get the one million mainlanders, would the Taiwanese have achieved that kind of progress which they achieved? The one million was the cream of a whole continent. So we should have the instinct and the wisdom at a time like this to welcome foreign talent into Singapore so that when times improve again, we will take off in double quick time. But the key to all this is political unity and social cohesion, a point raised by almost all MPs this afternoon. This crisis will put our society under stress. It will put our institutions under stress, it will put corporations under stress, it will put every family under some kind of stress. I do not think any family is unaffected by it. Should we have welfare? I listened to Mr Lim Boon Heng yesterday saying that we should not have a retrenchment fund because this can impede our long-term competitiveness. And I think we are very lucky that, in Singapore, the trade union movement understands this profoundly. If we have welfarism and get ourselves into the European position, then we are sowing the seeds of future problems for years and years to come. The European economies are doing quite well now, but their unemployment levels remain stubbornly at well over 10%. Why is this? Because of overly generous retrenchment benefits. There is a tremendous moral hazard involved. So we must guard against this. We can have welfare, yes. If a breadwinner is unemployed, children need school books, school fees, assistance from MCD, yes, help him, help him to get a job, help the children remain in school, do his examinations, get jobs later on. And in every CDC now, we have a whole slew of programmes through various NGOs and grassroots organisations to provide help. During the boom years, I think many of us, in various constituencies, had to go around persuading children to take up bursaries and scholarships. Maybe in the coming years, they will come on their own. But I think we have the programmes and if we need many more such programmes, so be it. But always watch the moral hazard and do not allow an attitude of welfarism to seep in, then it is by right, and if you do not give me, I will vote against you. Because once we settle into that position, it is well-nigh impossible to get out of it. Have we done poorly? Mr Low Thia Khiang said that we discriminated against certain Singaporeans. Mr Chiam See Tong said that we discriminated against his kite fliers and that his MPS is conducted in the void deck instead of in an air-conditioned room. If you look at the bottom 5% to 10% of Singaporeans of any race, we are far better off than any other city in the world. Our bottom 5%-10% are better looked after than the corresponding groups in Tokyo, or New York, or Los Angeles, anywhere in the world. And it is because of this that we are socially very stable. Yes, in minor things, these are part of the rough-and-tumble of democratic politics. But on major things, we provide a solid base for all Singaporeans regardless of race, language, religion or political affiliation. Mr Chiam knows this. When he talked about fires in Potong Pasir not being fought by the Fire Brigade, or crimes in Potong Pasir ignored by the Police, he knew he was joking. If he was not joking, I say we should have a proper debate in this House and a proper Commission of Inquiry for the Fire Service and the Police Department. It was a joke and we should take it in that spirit and not pursue the matter much further. But at a time like this when economic conditions are hard, human societies turn inwards. Mrs Lim Hwee Hua talked about how her friends complained to her about the $5 billion aid we gave to the Indonesians. There is a lot of carping, "If you can give Indonesians $5 billion, why cannot you help me?" To begin with, let us get the facts right. That $5 billion have not been disbursed because the IMF programme under which we rode along has not been implemented. We are helping Indonesia in other ways, through trade financing, humanitarian assistance, our investment in natural gas, by maintaining operations in Batam, Bintan and the Riau Islands. Is it right at a time like this for Singaporeans also to turn inwards and ignore our neighbours? I think that would be wrong because we are then sowing seeds for long-term difficulties. How can we turn our back because Singaporeans want help? The majority of Indonesian workers earn less than S$1 a day to support an entire family. Their future is in their own hands. There is not very much we can do to help. But if we can help in small ways, we should, and we are. There is nothing wrong with that and we should not be defensive about it. It is in our own enlightened self-interest to help our neighbours because our destinies are intertwined. But at the same time, I hear some MPs talk about some of our Malaysian friends making unkind remarks against us. We should be principled and firm. We should not be taken for granted. And at a time like this, Singaporeans should have the instinct to bunch together. Last week, a friend of mine from the SAF, he used to be a senior doctor in the SAF, called me up. He said, "I want to see you urgently." I said, "Come, let's have lunch together." He was very unhappy because he works in a private hospital and in the doctor's room, one Singaporean came in and railed against the Singapore Government for being difficult with Malaysia. He said that we should just give in. CPF, return it. CIQ, why do you want to make all these changes? This friend of mine was so angry. We were friends in the SAF for many years. He said he gave him a 40-minute lecture and all the other Singaporeans in the common room became very encouraged, and some of them also spoke up. The Malaysian doctors in the room kept quiet. At a time like this, it is crucial that we bunch together, that we have the instinct that, "Look, we must help our neighbours, but in a way which is proper and principled." And we cannot assume that this regional crisis will not lead to political crisis in various parts of the region. Many things can go wrong. The horrible events of May in Indonesia were triggered off by the regional economic crisis. Other bad things, other evil things can happen in the region. We have got to be careful, we have got to be mentally prepared for it. We cannot turn inwards. The other day, I was very cheered. I was talking to Teo Chee Hean about the SAF. He told me that the morale of the senior SAF officers is very high. I felt very good about it because if, at a time like this, our SAF officers are weak-kneed, then we might as well pack up and go, is it not? We have got to, especially at a time like this, go out of our way to help those who are in difficulties but to help them in a way which does not create long-term problems for ourselves. And I think on the whole, Singaporeans have that instinct. There is a certain resilience which our people have got. The NEE Exhibition has been a tremendous success. I have not heard a single negative remark about the Exhibition. We extended it by six days but within one afternoon, all the tickets were snapped up. Why is this? It is because when Singaporeans look back upon their past, upon what their forefathers have done, what an earlier generation of leaders had brought us through, they felt proud and their morale went up, and we must build upon this. And what we really must have is a certain spirit of resilience, pak buay see ( ) kind of spirit. However the situation turns, we will survive; we will find a way to prevail; we will find a way to compete. Mr Low Thia Khiang said at a time like this, Ministers should take a pay cut. I am glad to tell Mr Low Thia Khiang that Ministers will take a pay cut because our salaries are pegged. The salaries in the private sector have gone down and, with a time lag, Superscale salaries will also go down. So he need not be too worried about this subject. An hon. Member: MP's allowances?

And so will our allowances too. The point is: if we do not make major mistakes, our boat will stay afloat. We must be prepared for what can become a long haul, all working together, all at battle station, alert, Government, employers, trade unionists, social workers, looking after each other. If someone falls over, a lifeboat; a dent, quick repair; a leak, plug it. Will there be seven years of famine? I hope not. But can we be sure? And should we be so reckless as to say, "Let us in one decisive move raise this boat when the tide is ebbing." Some friends have told me, they said, "Government has been saying reserves are for a rainy day. Now there is a storm. Now is the time to spend the reserves." The storm has just started and we have got to husband our resources carefully. And if we do it carefully, not losing our nerves, but with a quiet sense of self-possession and self-confidence, we will sail this boat, position it well and when the tide comes in again, we will be far ahead. We will take some knocks. There will be casualties and a few Singaporeans may even lose heart and leave Singapore. In the 1985-86 recession, we had a small outflow. And this time round, there may be a small outflow again. But the majority of us, I think, will stay and we will bunch together and keep this boat chugging along and prepare for a new situation. When sweet and gentle breezes return again, the region will not look anything like what it was before last year. The landscape will be different. We cannot be sure. We cannot have a fixed plan that we must be there or here, because things are changing so fast. But we know the general direction we must move towards. We know there is no free lunch in the world. We know that every Singaporean will have to carry his own weight. We know that we have got to be competitive and that is the only sure way to stay employed and to stay employable. Sir, I support the motion. [Applause].

Mr Deputy Speaker, Sir, first of all, I would like to thank all the Members who have spoken up on this motion. I would like to acknowledge their contribution and key points. Sir, I will go in the reverse order. Mr Chiam See Tong and Mr Low Thia Khiang, basically, called on the Government to treat everybody fairly and equally so as to strengthen social cohesion, and we have heard the response from the Minister. NMP Mr Chuang talked about the over investment in the property market and the need to divert this investment in the future to human capital. NMP Mr Rai talked about the need to upgrade workers so that they can take on better paying jobs and he called on the people to save more. Mdm Claire Chiang talked about the importance of the people services sector and the need to strengthen the social safety net, and to set up a Singapore misery index. Mr Inderjit Singh talked about the need to have a vibrant business environment for technology and innovation-based economy. I like that very much. Dr Vasoo talked about the need to have a fighting spirit and the need to do long-term manpower planning, if possible, for the next 20 years. I thought that was excellent too. NMP Mr Zulkifli talked about the need to match the VWOs, the social workers, to the needs of the people at a time like this. Mr Ang Mong Seng talked about the need to set up an employment network linking MOM, CDCs, CCs and so on. NMP Mr Tay talked about the need to give more support to the SMEs and to have a stronger process of consultation with the private sector. Mr Sinnakaruppan proposed the earlier release of the report on CET 21. NMP Dr Lee Tsao Yuan talked about the need for early and big enough off-Budget measures. And, first but not least, Mrs Lim Hwee Hua and Mr Seng Han Thong talked about the older workers, skills upgrading, cost cutting, job matching, unity and so on. And I thank all the MPs for their contribution. I also want to thank the Second Minister for Trade and Industry, BG George Yeo, for his very spirited and inspiring response. I am very glad that he talked about the need for employment, employability, competitiveness and national unity. I am most impressed by his pak buay see kind of reply and I guess some of the MPs here are also the pak buay see type of MPs. So if your proposal has not been responded by the Minister, please continue to bring them up on a future occasion until some response comes out with a yes or no, whatever way. Mr Deputy Speaker, Sir, I would like to summarise my motion in this way. I think Mr Low Thia Khiang also asked this question about moving this motion at a time like this. Is it because the PAP Government admits making mistakes and so on? I want to explain. The one and only reason why I proposed this particular motion at a time like this is because I remember what a Chinese businessman told me about five years ago. The Chinese businessman was very successful in China. I hope he still is because I have not been in touch with him for quite a while now. I asked him, "How did you manage to be so successful? Somehow everywhere you went, you made money, when other people may be losing money." He said, "Very simple. Zui wei xian de di fang, ye shi zui an quan de di fang [ ], meaning that the most dangerous place is also the safest place. Why? Very simple. If the place is very safe, everybody rushes in. The place will be so crowded and the market is not enough to go round everyone. So in the end there is no winner, because they all undercut each other. What he did was he went to places where nobody dared to be there, because it was known to be dangerous. This is dangerous from a business point of view, not in terms of physical safety. Basically, he was a pioneer. He looked around China. He looked at the provinces, the cities and places that he thought there were investment opportunities. But before anybody else moved in, he moved in first. Because of that, he was able to basically make a good business out of that venture. I think for Singapore, in terms of the national economy, it is the same thing. I think we have been taking risks all these 35 years since independence and that is the reason why our economy has been successful. We went to foreign direct investment (FDI) when many people, many countries, thought FDI is no good for the country. They say it will enable the multi-national companies to come in to exploit our people and our resources. But we said, no. We say that it is dangerous but also the safest. So we went to FDI. Today's situation has changed. Looking ahead, in the future, as I mentioned, I think the Minister has also mentioned about the realignment of the regional currencies. The economic space that we are in today is going to be very crowded in the future, by the time the crisis is over. Therefore, we have to look for new space, space that is even more dangerous and has fewer players so that we can continue to succeed. Yes, it is very easy for our regional economies to copy us. They can copy our strategies on paper but it is very difficult for them to duplicate the implementation on the ground if we are prepared not to shy away from greater and difficult challenges and, in a way, more dangerous places. But to survive in more dangerous places, we better be stronger and better, and that is the only reason why I proposed this motion because I think at a time like this, instead of being bogged down by short-term problems, we should cast our mind, our vision, ahead or beyond this crisis, and ask ourselves what can we do now over this year, the next two years or three years, what can we do to make Singapore stronger and better. So that by the time the crisis is over, when we have to venture into more dangerous places, we will be ready and we will succeed. Sir, let me in conclusion, as the Minister BG George Yeo has mentioned, at a time like this, there is a lot of stress, a lot of ya li [ ]. There is a Chinese saying, we must ba ya li, ding wei dong li [ ], meaning you must turn the stress, the pressure, into forward thrust so that we can run even faster. Sir, on this note, let me thank again the House for the support of this motion and I look forward to your approval. Resolved, That, in view of the economic downturn, the Government should rally the support of the entire nation to minimise unemployment in the short term and strengthen economic competitiveness and social cohesion for the long term so that Singapore will emerge from this regional crisis even more competitive and resilient.

Resolved,

"That Parliament do now adjourn to a date to be fixed." - [Mr Wong Kan Seng].

Adjourned accordingly at Twenty Six minutes past Six o'clock pm to a date to be fixed.

asked the Minister for Education what progress has been made on the introduction of a South Asian Studies programme at the National University of Singapore.

Dr Aline Wong announced in Parliament in January 1998 that NUS had found it feasible to start the South Asian Studies Programme (SASP) from the Academic Year 1999/2000. NUS is making good progress in the preparations and will be ready to launch the SASP from July 1999. Let me update Members on the key steps in the preparations. First, the curriculum. A committee comprising historians, economists, political scientists and sociologists started developing the curriculum from late 1997. They have sought the advice and inputs from local and international experts on South Asia. The draft curriculum is now ready and will be finalised by the end of this year, after getting feedback, including feedback from potential students. Second, the recruitment of staff. The Programme has provisions for five full time academic staff. NUS is currently in the process of identifying and attracting good scholars to take up these teaching positions. Advertisements have been placed in leading journals and academic magazines in South Asia, UK, USA and Australia. NUS intends to hold recruitment visits to these regions later this year. It expects these posts to be filled by early 1999. Third, marketing. NUS will be conducting a series of publicity activities, including seminars and public talks, to promote the Programme from January and June 1999.

asked the Minister for Education if he will consider reviewing the History syllabus of schools to give greater emphasis to post-war history of Singapore.

Presently, pupils at the lower secondary level are taught Singapore's history from the colonial era till our achievement of nationhood in 1965. At the upper secondary level, pupils learn about post-war constitutional developments in Singapore till the formation of Malaysia in 1963. Pre-university students study political developments till the achievement of self-government in 1959. The History and Social Studies are currently being revised to give greater emphasis to Singapore's struggles against colonialism, communism and communalism. The content will also include the achievements and constraints Singapore experienced in the early years of nation-building. These revised syllabuses will be implemented from year 2000 onwards.

asked the Minister for Home Affairs whether from June 1997 to June 1998, the Registrar of Societies has refused registration to any applicants or delayed approval of applications in any case for six months or more, and if so, the number of cases refused or delayed and the reasons for such refusal or delay.

For the period 1st June, 1997 to 30th June, 1998 the Registrar of Societies approved 221 applications. Of these 167 (75%) were approved within 3 months and another 46 (21%) within 4 to 6 months. Eight (4%) applications took more than 6 months to complete due to the need to seek more information and clarifications during the processing. During the same period from 1st June, 1997 to 30th June, 1998, 5 (2%) applications were rejected because the Registrar was satisfied that the proposed societies were likely to be used for unlawful purposes or that it would be contrary to the national interest for the societies to be registered. Currently, there is one application which is outstanding for more than 6 months. Its processing will be completed shortly.