Hansard, 1998-09-04

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: NameFromTo 19981998 Mr Zulkifli Baharudin11 Aug17 Aug 19 Aug23 Aug 28 Aug5 Sep Mr Shriniwas Rai12 Aug20 Aug 24 Aug28 Aug Mr Goh Chee Wee17 Aug20 Aug Mrs Yu-Foo Yee Shoon18 Aug22 Aug Mr Chay Wai Chuen18 Aug22 Aug 24 Aug29 Aug Mr Hawazi Daipi 19 Aug19 Aug 23 Aug29 Aug 12 Sep14 Sep NameFromTo 19981998 Mr Yeo Guat Kwang 19 Aug19 Aug 23 Aug29 Aug Mr Loh Meng See22 Aug29 Aug Mr Chan Soo Sen23 Aug29 Aug 6 Sep11 Sep Encik Yatiman Yusof23 Aug29 Aug 4 Sep6 Sep Mr Inderjit Singh23 Aug29 Aug Mr Chiam See Tong24 Aug28 Aug Dr Toh See Kiat24 Aug28 Aug 15 Sep15 Sep Dr Lily Neo24 Aug28 Aug Mrs Lim Hwee Hua24 Aug29 Aug Mr Tan Soo Khoon24 Aug29 Aug 8 Sep11 Sep 15 Sep16 Sep Mr Zainul Abidin Rasheed24 Aug5 Sep Mr Simon S C Tay28 Aug1 Sep Dr Ow Chin Hock30 Aug9 Sep Mr Cyrille Tan31 Aug4 Sep Mr Lim Boon Heng31 Aug9 Sep Prof S Jayakumar1 Sep3 Sep Mr Choo Wee Khiang2 Sep4 Sep Mr J B Jeyaretnam 4 Sep4 Sep Mr Lee Kuan Yew 4 Sep4 Sep Encik Ibrahim bin Othman4 Sep6 Sep 10 Sep12 Sep Mr Leong Horn Kee5 Sep15 Sep 27 Sep30 Sep Dr Aline Wong5 Sep19 Sep Mr R Sinnakaruppan5 Sep15 Nov Mr Tang Guan Seng6 Sep8 Sep Mr Bernard Chen6 Sep10 Sep Mr Chew Heng Ching7 Sep9 Sep Dr Ker Sin Tze9 Sep21 Sep Dr Tan Cheng Bock10 Sep13 Sep RAdm Teo Chee Hean11 Sep13 Sep 21 Sep22 Sep BG George Yong-Boon Yeo13 Sep16 Sep Mr Mohamad Maidin B P M17 Sep21 Sep NameFromTo 19981998 Mr Peh Chin Hua17 Sep29 Sep Dr Lee Boon Yang29 Sep7 Oct Mr Ahmad Mohd Magad14 Oct21 Oct TAN SOO KHOON Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the dates stated: 6 August 1998 Income Tax (Amendment) Bill 1998 18 August 1998 (1) Control of Plants (Amendment) Bill 1998; and (2) Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Bill 1998. TAN SOO KHOON Speaker Parliament of Singapore

asked the Deputy Prime Minister why the Stock Exchange of Singapore (SES) suspended the trading of shares of Mid-Continent Equipment Ltd on SESDAQ, and whether the SES should have approved the `Initial Public Offer' application by the company, especially considering the large percentage of private placement shares.

Mr Speaker, Sir, trading in the shares of Mid-Continent Equipment Group Ltd ("Mid-Continent") on SESDAQ began on 22nd July 1998 following its initial public offer ("IPO") of 18 million shares at $0.15 each. SES suspended trading in the counter on 31st July 1998, following a sharp run-up in prices and large volumes during the first eight days of trading, and confirmed on 11th August 1998 that the shares in Mid-Continent had been cornered. The SES has referred the case to the CAD to investigate possible offences of manipulation under the Securities Industry Act. The attachment (Cols. 985 - 988) that I have circulated to Members sets out fully the facts of the case. Attachment - The Trading and Suspension of Mid-Continent Shares on SESDAQ (Cols. 985 - 988) The SES approved Mid-Continent's IPO application because Mid-Continent met the listing requirements for a company to be admitted to SESDAQ, according to the existing rules and procedures. However, the Mid-Continent case revealed weaknesses in these rules and procedures that need to be put right. Concentration of Placement Shares The problem with the Mid-Continent IPO was an over-concentration of shares in the hands of a few persons. 90% of the IPO shares were placed privately with only five persons. The company's shares were therefore vulnerable to being cornered when trading started. It is not MAS or SES policy to require companies to sell the majority of shares in an IPO by open subscription by the public, or to limit the private placement tranche to only a small percentage of the IPO shares. The listing rules for SESDAQ allow a company to use private placement for up to 25% of its IPO shares, or a higher proportion if the SES agrees that there are good reasons for doing so. In practice, the SES has been flexible in allowing companies to sell IPO shares via private placement, particularly for Main Board listings. SES has used this discretion more widely for SESDAQ listings since August 1997, in view of the difficult market conditions. Mid-Continent was similarly allowed a large private placement tranche of 90%. The problem was not this large private placement per se, but the small number of placees and the resulting over-concentration of IPO shares. The present SES rules are inadequate to prevent such over-concentration. Moreover, neither the company nor the issue manager is required to inform the SES of the number of placees and their respective shares of the IPO issue. For several years now, the SES has left it to the issue manager to ensure a sufficient shareholding spread after an IPO so that trading in the secondary market would be orderly. This needs to be reviewed. In Hong Kong and the United Kingdom, a company can distribute up to 75% of its IPO shares via private placement, but this is subject to a tight limit on the value of shares placed to each investor. Hong Kong also requires a minimum number of such placees. MAS has asked the SES to propose rules to prevent over-concentration of IPO shares, including the maximum percentage that can be placed privately and the minimum number of placees. Once provisions to prevent over-concentration of IPO shares are put in place, issue managers will be responsible for complying with them and ensuring a sufficient shareholding spread for orderly trading in the secondary market. The SES will also introduce requirements on standards of conduct for issue managers to bring them in line with the best practice internationally. Responsibility for Approving Listing Applications We are also reviewing the procedures for approving listings. Presently, the SES is solely responsible for approving applications by companies to list on the stock exchange. In 1983, after a spate of listings of doubtful quality, the Minister for Finance had directed the Securities Industry Council (SIC) to advise the SES on new listing applications. The final decision on listings still rested with the SES, but there was close consultation between the SES and SIC. But this arrangement ceased last year after the SIC decided that it no longer needed to review SES listing decisions . The Corporate Finance Committee chaired by Mr Lim Yong Wah is studying the appropriate roles for the SES and MAS in approving listing applications and the issue of shares by companies. One issue is whether the MAS should be given the power to overrule decisions of the SES on listing applications, where it considers this necessary to protect the public interest. Regulators in some other jurisdictions can exercise such veto powers within a mandated time period. However, such powers should be used sparingly and only when the regulator has strong reasons to believe that doing so is in the public interest. Approval of Listing Applications under a Disclosure-Based Regime The MAS agrees with the proposal by the Corporate Finance Committee for a predominantly disclosure-based regulation regime. This will give more room for the market, rather than the regulator, to judge the commercial merits of transactions. It will help to develop deeper capital markets, with broader participation from institutional investors. But disclosure-based market discipline is not an automatic formula for sound and orderly financial markets. In established markets which adopt a disclosure-based regulatory philosophy, the stock exchange or regulator does not totally suspend judgement on the proposals put to it. The stock exchange or regulator should not attempt to judge commercial merit, but in some instances it may have non-commercial grounds to conclude that a proposal is not in the public interest. For example, it may have reasonable cause to doubt the integrity of the directors or major shareholders of a listing applicant. In such cases, it may consider disapproving the listing proposal. We too need to develop such safeguard mechanisms. I have explained MAS' position with regard to approving listing applications in order to clarify what a disclosure-based regime means, and not to comment on the specific case of Mid-Continent. MAS will evolve its regulatory style to allow more free play in the market. But it will not lower standards of integrity, or allow our financial markets to be brought into disrepute through manipulation and sharp practice.

Mr Speaker, Sir, as the Deputy Prime Minister has said that he would not comment on the case, I would not ask about the case. May I ask him whether he could explain what are the rules and penalties against manipulation of shares?

Mr Speaker, I believe manipulation of shares is a criminal offence and one can go to jail.

asked the Deputy Prime Minister whether the Singapore Government will review its humanitarian aid and financial assistance to Indonesia in view of the unfavourable comments and doubts expressed by Indonesian President B.J. Habibie.

the Deputy Prime Minister): Mr Speaker, Sir, in his National Day Rally speech on 23rd August 1998, the Prime Minister laid out the rationale for our assistance to Indonesia. We have a vested interest in Indonesia's stability, growth and prosperity. Indonesia is a close neighbour and a major trading partner. We have large investments in Indonesia. An Indonesian collapse would hurt Singapore as well as affect the regional economic and investment climate. The Prime Minister also pointed out that because Singapore is a small country, our capacity to help Indonesia is limited. But we are committed to helping our neighbours within our means, so that Indonesia and the region can recover from the present crisis as soon as possible. At the sitting on 1st June 1998, the Deputy Prime Minister had informed Members that the Singapore Government would be proceeding with humanitarian aid to Indonesia as well as the proposed Bilateral Trade Finance Guarantee (BTFG) scheme. Subsequently, on 6th July 1998, the Singapore Government announced that it would provide humanitarian aid in rice and medicine worth S$12 million to Indonesia. Singapore and Indonesian officials have started work on implementing the assistance. Minister for Education and Second Minister for Defence, RAdm (NS) Teo Chee Hean, visited Indonesia from 5th-7th August 1998 to deliver the first shipment of humanitarian aid. Indonesian Minister of Defence and Security/ABRI Commander, Gen. Wiranto, received the humanitarian aid on behalf of the Indonesian Government at a hand-over ceremony on 6th August 1998. In his speech, Gen. Wiranto expressed his appreciation and gratitude to Singapore, and described the handing-over ceremony as a milestone in strengthening the ties of friendship between the two nations. On 4th August 1998, just before Minister Teo's visit to Indonesia, the Asian Wall Street Journal (AWSJ) had published an interview with President Habibie, covering Indonesia-Singapore relations. It quoted President Habibie as saying that "a friend in need is a friend indeed. I don't have that feeling from Singapore", and that "There are 211 million people (in Indonesia). Look at that map. All the green (area) is Indonesia. And that red dot is Singapore. Look at that." Minister Teo's visit to Indonesia was planned and scheduled earlier. It was not made in response to President Habibie's comments to the AWSJ. Minister Teo called on President Habibie on 6th August 1998. President Habibie repeated to Minister Teo what he had said to the AWSJ. But he also told Minister Teo that he had a vested interest in maintaining good Singapore-Indonesia relations. He thanked Minister Teo for Singapore's humanitarian assistance. Subsequently, other Indonesian officials have expressed their appreciation. The Indonesian media has also generally reported favourably on our humanitarian assistance. Kompas, a major Indonesian daily, on 12th August 1998 referred to it as evidence "that our bilateral relations remain in a good state". We will continue with our humanitarian assistance. Singapore and Indonesian officials are now working out the details of the second delivery of aid. As for the proposed Bilateral Trade Finance Guarantee Scheme, we remain prepared to proceed with the scheme, as we believe it can help to restore confidence in Indonesia. Singapore officials held the first meeting with their Indonesian counterparts in April. The Indonesian officials said at the meeting that they would have to study the proposal in greater detail. In his recent Jakarta trip, Minister Teo agreed with Coordinating Minister for Economy, Finance and Industry, Ginandjar Kartasasmita, that officials from both sides should continue discussions on the BTFG. Singapore officials are ready to resume discussions as soon as their Indonesian counterparts convene the next meeting.

Mr Speaker, Sir, the humanitarian aid represents a sincere and genuine gesture of Singaporeans. I am sad only to be received by doubts and cynicism and reciprocated by callous remarks ---

Order. Are you asking a question?

I would like to ask the Minister whether he would inform President B. J. Habibie of Singapore's disappointment over his remarks.

Mr Speaker, Sir, I think we take it from the point which I have mentioned. As I have said, the Prime Minister has said that Singapore has a vested interest in maintaining good relations with Indonesia and a vested interest in Indonesia's stability, growth and prosperity. President Habibie has also informed Minister Teo that he has a vested interest in maintaining good Singapore-Indonesia relations. So the leaders at the highest levels have said that they have vested interest in maintaining good bilateral relations. Singapore will work on that basis.

Am I to understand that the remarks do not represent the views of Indonesian people and because of that, we will continue with our commitment to humanitarian aid to Indonesia?

Mr Speaker, Sir, I do not wish to speculate on remarks and comments made by other leaders. I would confine myself to saying that both sides, at the highest levels, have expressed the wish to embark on good relations.

May I ask the Minister whether in giving financial assistance to Indonesia, will Singapore Government consider adding environmental conditions so that our assistance will not inadvertently accelerate economic activities and conditions in agriculture and other sectors that give rise to the haze, and especially if it leads to fire?

Mr Speaker, Sir, we have given and extended humanitarian assistance in good faith, considering the difficulties which are being faced by the Indonesian government and its people. When we give such aid, we give it in good faith and we cannot micro-manage and attach too many conditions of the nature that the Member has said.

I wish to clarify with the Minister that I was speaking on the financial assistance and the possible bilateral trade financing scheme, not the humanitarian assistance which I accept.

asked the Minister for Finance whether the Government will consider setting up a development assistance programme, which is funded within our means and resources, to serve as a mechanism for providing (i) loans, grants, technical cooperation and other forms of assistance for meaningful projects in the region; and (ii) humanitarian aid, where the situation requires.

Mr Speaker, Sir, Singapore is a small economy relative to the neighbouring countries in the region. The assistance that we can give through loans, grants and humanitarian aid would naturally be limited. Singapore should focus on areas where our help can be most effective. This would principally be in giving technical training, helping local companies establish economic activities in these countries, and offering humanitarian assistance where the situation requires. These are already adequately covered by well-established mechanisms. There is no need to start yet another development assistance programme. Singapore provides training and transfer of technical expertise to countries in the region through the Singapore Co-operation Programme (SCP), administered by the Ministry of Foreign Affairs. It comprises of two programmes, namely, the Third-Country Training Programme and the Technical Co-operation Programme. Approximately S$16.25 million has already been allocated to the Singapore Co-operation Programme this year, a considerable portion of which has been channelled towards Indonesia and Vietnam. Training is concentrated on areas where Singapore has special competency and experience, such as maritime management, information technology (IT), airport management, environmental management, economic and trade development and financial services. In 1997 alone, approximately 800 public officials from Indonesia, Malaysia, the Philippines, Thailand and Vietnam benefited from this programme. Singapore also provides help through the Regionalisation Assistance Schemes administered by the Economic Development Board for local companies venturing into the region. The Assistance Schemes comprise seven support programmes for Overseas Project Identification, Overseas Project Implementation, and two support funds for Joint Venture Feasibility Studies in third countries. The aim is to provide selective aid in the form of economic incentives - mainly grants and financing schemes - for local enterprises to undertake meaningful and viable development projects and other investments. These will in turn help generate employment and contribute towards economic development in these countries. In FY97, the Government spent approximately S$18 million on the Regionalisation Assistance Schemes. In respect of humanitarian aid, the Government has offered support in cash and kind towards humanitarian relief in various disasters around the world. These have typically been on the scale of tens of thousands of dollars. None have been of the magnitude of the S$12 million worth of rice and medicine Singapore is offering Indonesia over and above the S$5 million raised by the Singapore Red Cross.

I would like to ask the Minister if the ringgit deposits held by the Singapore Government can be deployed towards these or similar purposes for projects, say, in Malaysia and, if not, what is the status of Singapore's ringgit deposits in light of the recent capital control measures undertaken by the Malaysian government?

The question is slightly outside the ambit of the question. However, I do not think that the ringgit holdings should be used for specific purposes because we can fund all our aid projects from our normal pool of funds. On the question of the status of our ringgit deposits, the Prime Minister has already said that the Government has several billion dollars worth of ringgit in its reserves. Some of these ringgit are in the form of on-shore deposits placed with Malaysian banks in Kuala Lumpur. But the bulk of it is held in ringgit deposits in Singapore banks. The GIC is currently seeking clarification from the Malaysian authorities on the status of our on-shore ringgit deposits and GIC is also discussing with our local banks on ways in which the ringgit deposits can be repaid to the Government. However, whatever the outcome of these discussions, I can assure the Member that the GIC will not suffer any capital loss on its ringgit holdings.

asked the Minister for Finance whether he will consider allowing companies to buy back their shares from the market and, if so, whether such a scheme will be implemented in the near future.

Mr Speaker, Sir, the share buy-back proposal is in fact included in the Companies (Amendment) Bill 1998 being tabled today. It had been developed after extensive consultation with the Stock Exchange of Singapore (SES), the Association of Banks of Singapore (ABS), the Singapore Merchant Bankers' Association (SMBA), the Law Society, companies and industry participants. The proposal will be implemented when Parliament has discussed and agreed to pass the Bill, which will hopefully be in November or earlier. The amendment, if passed, will allow the purchase or acquisition by a company of its own shares, without having to apply to court for approval. Currently, a company can only return capital to its shareholders by way of a capital reduction under section 73, which requires confirmation by the High Court. This can be a time-consuming and expensive process. Capital reduction also does not give listed companies the same flexibility as a share repurchase in terms of the method, timing and amount of capital to be returned to shareholders. Appropriate safeguards and disclosure requirements have been incorporated in the proposed amendments to ensure that share buy-backs by companies will not be abused to the detriment of shareholders and creditors. The details are set out in the Companies (Amendment) Bill 1998. Additional safeguards for public listed companies will be formulated by the Stock Exchange of Singapore as part of its listing rules.

asked the Minister for Finance (a) what kind of fiscal measures or policy changes the Government will introduce to nurture an entrepreneurial business environment in Singapore; and (b) what avenues are open to local enterprises to develop partnerships with Government-linked companies in order to capitalise on emerging opportunities in the region.

Mr Speaker, Sir, a number of policy changes and programmes have already been implemented to nurture an entrepreneurial business environment in Singapore. Our bankruptcy laws went through a major reform in 1995. One of the primary objectives of the new Bankruptcy Act was to encourage entrepreneurship, especially in cases where bankruptcy had arisen from misfortune rather than malpractice, by having a more liberal regime in bankruptcy discharges. With the liberalization, bankrupts are also encouraged to work towards an early discharge. The law was also amended to enable the Official Assignee to discharge more bankrupts by certificate. Further studies are currently being undertaken to determine if additional changes are necessary. The Government has also appointed a Corporate Finance Committee under the Financial Sector Review Group, which is currently looking into ways to facilitate the listing of start-ups on the stock exchange. Details will be released in due course. In addition, the Government has also been actively promoting the venture capital industry in the mid-1980s. As at the end of 1997, there was over $7.7 billion worth of venture capital funds managed in Singapore. Currently, these funds enjoy tax exemption on the gains from disposal of investments, and on certain investment incomes for a maximum of 10 years. To further encourage the growth of the venture capital industry, I have announced in this year's Budget Statement that the current 10-year limit will be extended, on a case-by-case basis, by up to a further five years, at a concessionary tax rate of not more than 10%. This will encourage venture capital funds to take a longer-term perspective of their investments and to minimize premature divestment. The Government has also established a $50 million Technology Development Fund (TDF) which co-invests with private venture capital firms to fund early stage ventures. Other similar funds include the $100 million Technology Commercialization Fund and the $100 million Pharmaceutical and Biotechnology Growth Fund. EDB Investments Pte Ltd, a subsidiary of the Economic Development Board, also runs venture capital funds that invest in start-up companies at various stages of development. As to the concern on the avenues open to local enterprises to develop partnerships with GLCs, I would like to point out that GLCs have been forming partnerships with smaller local enterprises for regional projects. However, the test is in the degree of complementarity between the specific needs of the GLCs and the capabilities of the SMEs. We should not force a pace beyond what commercial reality dictates. The Government has also been facilitating the development of partnerships between the GLCs and smaller Singapore companies. An example is through the business interaction and networking made possible at Trade Development Board trade missions. GLC/SME partnerships are already beginning to happen on the ground. For example, STIC, a GLC, has brought its core group of suppliers to Wuxi in China and paved the way for the latter to form business tie-ups with our suppliers there. Sembawang Shipyard has brought a number of local contractors to support their Karimun yard in Indonesia. Another example is PSA helping local companies bring their port-related innovations to overseas ports that PSA has invested in.

asked the Minister for Manpower what is the latest unemployment figure; what is the success rate for the job placement service that his Ministry provides; and how many workers have been able to find jobs through this service.

Mr Speaker, Sir, the labour market continued to soften in the second quarter of 1998. The seasonally adjusted unemployment rate was 2.3% in June 1998. This was slightly higher than 2.2% in March 1998 and substantially higher than 1.7% in June 1997. The actual unemployment rate without adjusting for seasonal factors was 3.2% in June 1998 compared with 1.9% in March 1998 and 2.4% in June 1997. Unemployment is traditionally high in June as this is the period that the new local tertiary graduates join the ranks of job seekers. An estimated 62,100 persons (seasonally unadjusted figure) were unemployed in June 1998 compared with 36,500 in March 1998 and 45,500 a year ago. The Employment Service Department of the Ministry of Manpower registered about 1,500 to 1,700 new job seekers per month in recent months. About 80% of job registrants were able to get job referrals from the Department. Based on companies' feedback, about 6% of the total job registrants were successfully placed in employment. The ESD records show that about 50% of the registrants were able to find employment on their own, or they rejected the job offers by the prospective employers. The reasons cited for rejection include the unsuitable nature of work, working hours, location of workplace, or salary.

Will the Minister please enlighten the House as to whether the duration of unemployment has increased and also the nature of the unemployed, in other words, are these predominantly older and unskilled workers?

Mr Speaker, Sir, I do not have the figures on the re-employment rate. But I understand that the re-employment rate between the first and second quarters has not changed substantially. There may have been a slight lengthening in the period of unemployment among those who were retrenched or out of work. With regard to the profile of the unemployed persons, as most of the retrenchments in the last two quarters, about 68% to 69% of the retrenched workers, came from the manufacturing sector, you will expect to find more women. In fact, there could well be a higher proportion of the older or middle-aged workers, ie, those above the ages of 35-40 and above, and that in itself presents an added dimension to the problem. Because they are older, less educated and less skilled workers they have greater difficulty finding new jobs and that is why we are investing so much money and effort in providing them with skills upgrading opportunities so that they can take on the new jobs that are being created in the other sectors of the economy.

I would like to ask the Minister what is the prospect of graduates from universities and polytechnics, whether there are specific plans to help them to get jobs, and whether the Government departments and statutory boards will consider increasing their intake of these graduates in view of the shrinking job market in the private sector.

Mr Speaker, Sir, as the labour market loosens and employment creation slows down, we can expect that even graduates will find greater difficulty in getting jobs, particularly new graduates, and this is to be expected. I hope that this year's batch of new graduates will understand this position and also, more importantly, revise their expectations. On our part, we will assist graduates who need job placement assistance. They can register with the Employment Service Department if they have difficulty finding a suitable job match on their own. We will help them find a suitable job match because we have a team of officers in our employment facilitation team who will make contact with all the employers in the various sectors that we know are still recruiting staff. We will try to help the graduates who register with us to find a suitable job match. As to the statutory boards and Government departments, let me assure the Member that Government departments and statutory boards will continue to recruit manpower according to their needs. Faced with this crisis, we should not try to take the approach of using the Government as a sponge to soak up the surplus manpower as the economy slows down. There is a limit to how much the Government can do to soak up this surplus manpower. What we have to do is to create real jobs for them. We should not just randomly recruit graduates because we want to provide a refuge for them in this period of economic slowdown. That would be unwise. It would lead to Government inefficiency and, in the long term, it will hurt us more than it will benefit us. What we should do is to try to stimulate development, bring in more investments, and create more jobs so that the graduates can get employment and make a real contribution to the economy.

I quite agree with the Minister that we should not employ surplus graduates at this time. But clearly if there are a number of ministries or departments which are understaffed, according to their establishment guidelines, would the Ministry of Manpower consider, using this time, filling up those establishment limits?

Mr Speaker, Sir, I think it goes without saying that if a ministry or department is understaffed, whoever is in charge will look at this loosening of the labour market as a golden opportunity to fill up the vacancies that he has to live with for so long.

Does the Minister have any statistics to show that the starting salary for new graduates has dropped and by how much has it dropped?

Mr Speaker, Sir, this year's batch of new graduates has just entered the job market in the last 1« to two months. So I think it is still too early to gather such details. We will in due course have such information available.

Sir, in a recent report in the newspapers, it was reported that the starting pay for graduates hired in the civil service is the highest in the industry. Will the Government take this opportunity to revise this downwards so that it sets a trend for the rest of the private sector?

Mr Speaker, Sir, the civil service salaries are closely pegged to the private sector. If, in fact, the private sector's starting salaries are going down, in due course, the civil service will also make an adjustment.

The following Question stood in the name of Mr Cyrille Tan - 7. To ask the Minister for Manpower, with regard to the Government's stand that a cut in the employers' Central Provident Fund contributions will only be considered as a last resort, what constitutes a "last resort".

Question No. 7, Sir.

Mr Speaker, Sir, since 1987, we have built up a flexi-wage system to enable companies to adjust their wage costs through the variable component of wages, based on company's performance. This variable component now constitutes 16% of total wages. In the unionised sector, the variable component is 20%. This provides a cushion for companies to reduce wage costs in difficult times. The NWC recommendation for 1998 is wage restraint. It was formulated in May, when the forecast for economic growth was 2.5%-4.5% for the year. Since then the regional outlook has deteriorated. We now expect the economy to grow by 0.5%-1.5% for this year. The figure is still positive, but this does not truly reflect current reality. In a rapidly changing situation, quarter-on-quarter figures give a better indication of the direction of the economy, although they are more volatile. On a quarter-on-quarter basis, seasonally adjusted growth was only +0.3% in the first quarter, and was -1.7% in the second quarter. We can expect very weak or negative growth for the rest of the year and next year. These difficult economic conditions are already being reflected in wage settlements. My Ministry's data on wage settlement achieved so far showed that the weighted average basic wage increase up to July this year is only 2.5%, compared to 5.9% last year. The average increase agreed between management and unions has progressively dropped since January this year. Sir, NTUC data paint the same picture. NTUC has reported that over the last two months, 48 companies employing 4,490 workers settled for a wage freeze, out of which one company had a wage cut. Many more requests for wage freeze are now on the negotiating table. NTUC expects that for the year as a whole, the average basic wage increase will only be 1.5%-2.5%. At the same time, variable payments are likely to be cut. NTUC expects bonuses, including the Annual Wage Supplement, to average 1.0-1.3 months this year, down from the 2.3 months on average that were paid out last year. Sir, overall, total wages are likely to decrease by 5%-8% this year, compared to last year. This is a valuable contribution to cutting business costs, and helping firms to remain viable. The flexi-wage scheme is therefore working. Union leaders have been very responsible, moderating the expectations of members and negotiating realistic settlements. Many companies are already exercising not just wage restraint, but severe wage restraint. This is a prudent interpretation of the NWC recommendations in the present circumstances. But the question is whether flexi-wage adjustments alone will be enough. Flexi-wages are effective for making firm-by-firm adjustments, when individual companies are in difficulty. But if we need to lower wages across-the-board, as part of an overall reduction in our business costs, then flexi-wage adjustments may need to be supplemented by a cut in employers' CPF contributions. The regional crisis has altered the competitive landscape. Many Asian countries have seen large currency depreciation of 25%-75% against the Singapore dollar. With unemployment rising, their wages have not increased to compensate for the reduced purchasing power. This has sharply reduced their labour costs, and made them more cost-competitive compared to us. Our electronics exports have lost market share in the US. Other Asian countries have lost market share too, but by less than Singapore. The retrenchments in our electronics industry are partly caused by companies shifting production to other countries, including Malaysia, Thailand and South Korea. This goes beyond the normal process of industry upgrading. It is a sign that we are becoming less competitive. We must watch this carefully, and not allow our manufacturing sector to be hollowed out. Mr Speaker, Sir, as the Prime Minister said at the National Day Rally, our solution is not to depreciate the Singapore dollar to match that of our competitors. That would erode the purchasing power of workers' wages, and reduce the value of workers' CPF savings, through higher inflation. It is better to maintain a stable exchange rate, and tackle the components of business costs directly, whether they are wages, rentals and land prices, and Government taxes and charges. Indeed I understand this has been the MAS' policy - to maintain a stable Singapore dollar exchange rate, but within flexible limits that reflect our economic fundamentals. Mr Speaker, Sir, on a trade-weighted basis, the Singapore dollar exchange rate has risen only slightly since the crisis began, particularly if we discount the effect of the large depreciation of the Indonesian rupiah. The purchasing power of the Singapore dollar has been maintained, as seen in our very low consumer price inflation. Sir, the Government will reconvene the National Wages Council to update their recommendations in the light of developments since May, and issue new wage guidelines to help the economy cope with the continuing crisis. The Ministry of Trade and Industry is currently studying all components of costs in Singapore to establish how competitive we are in this changed situation, and what we must do to strengthen or restore our competitiveness. This will be a major focus of the report of the Committee on Singapore's Competitiveness, chaired by Mr Lee Yock Suan. The report will be ready before the end of the year. In an overall plan to reduce costs, wages will have to bear its share of the reduction through the flexi-wage adjustments and, if necessary, a CPF cut.

Sir, may I ask the Minister what are the chances of not having a CPF cut this year?

Sir, in a nutshell, a cut in the employers' CPF next year is very likely, but we will have to wait for the report from the Committee on Singapore's Competitiveness to make its full recommendation.

Sir, I would like to ask the Minister whether the Government is taking steps to ensure that employers do their fair share to see an economic turnaround instead of taking the easy way out by cutting wages or cutting employers' CPF contribution.

As I have explained in my answer, it is not just a question of cutting wages. Government will also make a comprehensive review of all taxes, rates and levies to help minimise cost of business in Singapore. At the same time, it stands to reason that employers faced with this crisis will also be examining their business strategy, re-engineering their business operations, for instance, looking for new product mix, in order to survive this crisis. They will have to look for new markets and in their efforts, they will receive additional support from Government. The Trade Development Board will help them to look for new markets for their products. In the case of Singaporeans who want to invest abroad and to find new places where they can invest, Government will also provide the kind of support to help them reach out to new locations where they can invest to continue their business.

Sir, my question has partly been asked by Mr Rai. In the light of Malaysia implementing its currency control policy and its adverse effects on Singapore, will there be a possibility now that CPF will be cut this year rather than next year?

Mr Speaker, Sir, Malaysia's imposition of currency control took place barely three days ago. We can wait a while to see the full impact on Singapore before we decide how it will affect us and what should be our response by way of improving our wage competitiveness.

Sir, the NWC negotiation had indicated a downward trend. Furthermore, most of the unions have agreed to cut the variable component and I think we also know that if things become very bad, maybe a CPF cut will be the last resort. Then why is there a need to reconvene the NWC?

Sir, when the NWC made its recommendation this year, it was through a series of deliberations in April and May. The situation then was very different. The regional crisis has got worse over this period, between May and now. In fact, the regional crisis has not bottomed out yet. Changes are still taking place almost on a day-by-day basis. Malaysia has just introduced exchange control, as Mr Chiam has mentioned. This is a sign of the seriousness of their economic problem. And as the Prime Minister had said at the National Day Rally, when there are economic difficulties in Malaysia, it will have a serious impact on Singapore. We will be affected when they have difficulties. Likewise, Indonesia continues to face serious economic difficulties. A shortage of essential food supply continues to cause social unrest and create problems of law and order. This year and the next year will therefore be very difficult years for Singapore. There is a real likelihood that we will end up with much higher unemployment than we have experienced since the mid-80s. Reducing business costs, including wage cost, will help our companies to weather this crisis. It will help us to reduce job losses though it may not lead to a quick recovery because we are suffering largely from the impact of the regional crisis. Hence, I think it is necessary at this juncture for us to take another look at our wage policy. So by reconvening NWC to review its recommendations made in May this year will give the trade unions representing the workers and the employers who are component parties of the NWC to re-examine the whole changed environment and come to a new consensus on how we could improve our wage competitiveness.

Sir, may I ask how soon will the NWC be reconvened and what is top on the agenda, whether it is a CPF cut or implementing a wage freeze?

Sir, I will try to get the reconvening of NWC settled as soon as possible. I expect that we will be able to make an announcement by next week. The priority for NWC to consider would be the wage guidelines, what should be the wage guidelines for the rest of the year. NWC will also examine the background to the need for a CPF cut and make its recommendation in that respect.

Sir, it is indeed laudable to note that the NTUC has taken the initiative by urging its members to go for wage restraint. In view of the worsening economic situation, what further measures are being considered to save jobs and to restrain and, wherever possible, prevent further retrenchments?

Sir, as I mentioned in my main answer, the Committee on Singapore's Competitiveness will be looking at all these issues and to develop a new strategy for us to cope with the crisis. This would include how to seek new investments, how to look for new markets for Singapore, how to reduce our overall cost of business so that we can become more cost competitive in view of the changed condition. And it would include, of course, how much more effort and investment we must put into upgrading the skills of our workers so that they can take on the new jobs that are created by the flow of investments coming into Singapore. This will be settled by the Committee on Singapore's Competitiveness.

Sir, may I ask the Minister when will the Government announce the public sector bonus in December and whether the 13th month annual wage supplement is part of flexi-wages for the public sector?

The NWC, as I said, will be reconvened sometime next week. After the NWC has the chance to meet and to discuss and make its recommendation, the public sector will then announce its position. As to whether the 13th month annual wage supplement is part of the variable component, as I said in my answer, the NWC has already indicated that it will be considered adjustable. In the case of a company that is doing very badly and making losses, certainly the AWS may also be reduced.

Sir, I would like to ask a question related to the consequences of a CPF cut. Would the Government encourage or allow the banks to reschedule loans for private properties if there is a CPF cut, because this will be the main concern when the CPF is cut, especially now that the HDB has announced that it will help those who have bought HDB flats? But in the private sector, there does not seem to be any clear direction on this.

Sir, should there be a need to cut employers' CPF contribution, we understand that it will cause difficulties to home owners who are servicing their home mortgage loans. This includes those who have bought HDB flats and those who have bought private properties. In the case of those who bought HDB flats, HDB will look into how to assist them over this period. When we made a similar cut in 1986, HDB offered rescheduling of their loans, longer repayment period and a ballooning repayment scheme. There is a whole host of alternatives that can be found and can be offered to home owners who have difficulties. In the case of the private properties, during the mid-80s when we had to cut CPF, Government offered them a soft loan pegged at CPF interest rate. It is a bridging loan to help them over this period. We will look at all these possibilities. We will look at all these means of helping home owners who are adversely affected and implement those that can help them to cope with the crisis.

asked the Minister for Manpower (a) what exactly was the Malaysian Government's call on the return of West Malaysian workers' Central Provident Fund; (b) what is our official response to the call; and (c) if there is any official response, what are the conditions attached.

Mr Speaker, Sir, several Malaysian leaders have made statements, questioning why Singapore chose to treat East and West Malaysians differently with regard to CPF withdrawal conditions. There are reasons for the distinction between East and West Malaysians. West Malaysian CPF members are distinguished from other foreign CPF members because of the historical links between Peninsular Malaysia and Singapore. Geographic proximity enabled many West Malaysian workers to shuttle frequently between Peninsular Malaysia and Singapore. West Malaysians often returned to Singapore to work after a period of absence from Singapore. This was unlike other foreigners, including those from East Malaysia, who were fewer in number and seldom returned to work after they had left. West Malaysian CPF members, in fact, are given preferential treatment over Singapore members. Apart from enjoying the privilege of tax-exemptions on their CPF savings, West Malaysians can withdraw their full CPF savings from age 50, without having to set aside the minimum sum, provided that they have not worked in Singapore for at least two years prior to the withdrawal request. Singaporeans can only withdraw their CPF at the age of 55, and after they have set aside the prevailing minimum sum. Sir, CPF funds belong to individual account holders and not to governments. There is no question that the CPF savings of West Malaysians will always belong to the West Malaysians themselves. Only individual West Malaysians can withdraw their own CPF savings when they meet the age criteria. Their contributions were made in accordance with the prevailing rules and withdrawal conditions that have been in place since 1971. All workers in Singapore, including those from West Malaysia, were well aware of these rules upon assuming employment in Singapore. They are therefore bound by the withdrawal rules that they had accepted when they first came to work in Singapore. From 1st August 1995, all foreigners, including West Malaysians, were not required to contribute to CPF. However, West Malaysians who have savings accumulated before this date must continue to be subject to the prevailing withdrawal rules. In January, Prime Minister Goh Chok Tong and Prime Minister Dr Mahathir Mohamad discussed a framework for wider cooperation between Singapore and Malaysia, including changes in CPF withdrawal criteria for West Malaysians. Although they have held further discussions since then, they have not yet reached an agreement on the framework for wider cooperation. Once an agreement is reached, this issue will be resolved. Recently, the Malaysian Minister of Human Resources wrote to me to enquire on this matter. I have replied to the Malaysian Minister to explain that the matter should be left to the two Prime Ministers when they resume their discussions on bilateral cooperation.

Sir, did the Ministry receive any feedback from West Malaysian workers that they prefer to leave their savings with the CPF?

While my Ministry did not receive such direct feedback, I understand that there had been calls made to the NTUC by West Malaysian workers who have expressed the sentiment that they prefer very much to leave their savings with the CPF than for it to be repatriated back.

Sir, I would like to ask the Minister what the Government's response would be to Malaysia's attempt to bring this matter to the International Labour Organisation (ILO).

Mr Speaker, Sir, there is a Question for Written Answer on this subject. Nevertheless, if they do bring it up to the International Labour Organisation, we will respond accordingly, because we believe that there is really no basis for the ILO to adjudicate in such a bilateral issue. This is not within the charter of the ILO. 1.30 pm

Order. End of Question time. [Pursuant to Standing Order No. 21(3), Written answers to Question Nos. 9-14, 16-18, 20-27 and 29 on the Order Paper are reproduced in the section, "Oral Answers to Questions Not Reached" (Cols. 953 - 972). Question Nos. 15, 19 and 28 have been postponed to the next sitting of Parliament.]

"to amend the Companies Act (Chapter 50 of the 1994 Revised Edition)", presented by the Minister for Finance (Dr Richard Hu Tsu Tau); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Parliament (Privileges, Immunities and Powers) Act (Chapter 217 of the 1985 Revised Edition)", presented by the Minister for Home Affairs (Mr Wong Kan Seng); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Employment of Foreign Workers Act (Chapter 91A of the 1997 Revised Edition)", presented by the Minister for Manpower (Dr Lee Boon Yang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Housing and Development Act (Chapter 129 of the 1997 Revised Edition)", presented by the Minister for National Development (Mr Lim Hng Kiang); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The existing Boundaries and Survey Maps Act and the Landmarks Act were enacted long ago in 1884 and 1882 respectively. The Bill seeks to repeal both Acts and to re-enact them as a single new Act. This new Act will contain provisions of the two Acts that are still relevant and also introduce new provisions. Sir, the new Act will primarily (1) facilitate the adoption of modern surveying technology; (2) legalise survey maps in electronic form to reflect the computerisation of survey records; (3) define the powers and duties of the Chief Surveyor who will administer the new Act. Clause 7 of the Bill empowers the Chief Surveyor to establish and maintain a coordinated cadastre. Currently, land parcels are defined by boundaries represented by bearings and distances with reference to boundary marks. This is old technology. The Survey Department has shifted to the use of satellite technology or Global Positioning System. This modern technology allows boundaries to be demarcated and defined more accurately. For the shift, the Chief Surveyor will need to establish and maintain a legalised set of boundary points with precise coordinates called coordinated cadastre. The coordinates of the cadastre will act as reference points for defining land parcels. The Chief Surveyor will convert existing areas already surveyed to the coordinated cadastre within five years, ie, by Year 2004. Section 7 of the new Act provides for the gazette declaration of these areas as and when they are converted. The conversion will only define existing land lots more accurately. It will not affect their land areas. The Survey Department has completed the computerisation of survey data. Maps are now being maintained electronically in graphic databases in computers. It is timely to recognise such electronic maps. This will pave the way for electronic commerce of electronic survey records. Clauses 3 to 6 make the Survey Department responsible for administering the new Act and provide for the appointment of the Chief Surveyor by the Minister. Under the new Act, the Chief Surveyor will: (a) Conduct cadastral survey of any land parcel; (b) Establish, protect, maintain, repair, alter or remove survey control marks on any land parcel; (c) Inspect and verify the accuracy of cadastral surveys submitted by registered surveyors; and (d) Assign lot numbers, maintain survey records and make available such records and plans at prescribed fees. There are 45 sections in the Boundaries and Survey Maps Act catering for the survey of all lands in Singapore and the publication of the maps. By October 1978, every land parcel was systematically demarcated, surveyed and their maps published. The Chief Surveyor has identified 33 of the 45 sections as redundant. These 33 redundant sections will therefore be excluded from the new Act. In addition, all 16 sections of the Landmarks Act are redundant and should be repealed. The Landmarks Act was enacted in 1882 to provide for the establishment of landmarks used to define the boundaries of land lots. The new Boundaries and Survey Maps Act has catered for land lots to be demarcated by boundary marks. A consequential amendment arising from the substitution of the definition of "title survey" to "cadastral survey" in the new Act will also be made to the Land Surveyors Act. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee]. Bill considered in Committee; reported without amendment, read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Illegal Immigrant Problem Sir, I shall first touch on the illegal immigrant problem and the proposed enhancement of penalties for some of the existing immigration offences. Singapore is a small country with limited resources. The presence of illegal immigrants will pose a serious social and security problem, and compromise the safety and security of Singaporeans. We have therefore taken, and will continue to take, a tough stand against all immigration offenders - be they illegal immigrants, their smugglers, overstayers, or the harbourers and employers of such people - especially given the current regional economic situation. Since early this year, the Police Coast Guard (PCG) has stepped up patrols in our waters to deter and arrest illegal immigrants. The Police and Singapore Immigration and Registration (SIR) have also raided hideouts and haunts in Singapore to flush out immigration offenders. Joint raids were also conducted with the Ministry of Manpower in the service and manufacturing sectors, for example, at food courts, hawker centres and factories. These raids have resulted in the arrests of 9,449 illegal immigrants and 5,425 overstayers in the first seven months of 1998 alone, compared to 7,599 illegal immigrants and 6,314 overstayers for the whole of 1997. These enforcement measures must be backed up by tough laws and strict penalties for those who have committed offences. My Ministry has undertaken a comprehensive review of the penalties for the various types of immigration offences. While we found existing penalties to be generally adequate, the penalties for some offences need to be enhanced to enable us to effectively deal with the illegal immigrant problem. The Immigration Act has to be amended to give effect to these enhanced penalties. Enhanced Penalties (i) Attempted illegal entry and departure Currently, attempted illegal entry and departure attract penalties which are less severe than those for actual illegal entry and departure. While the penalty for illegal entry is a maximum six months' jail and mandatory caning of a minimum three strokes, the penalty for the attempted illegal entry offence is imprisonment of between three months and two years and a fine of $4,000, but no caning. For illegal departure, the penalty is a maximum $2,000 fine and six months' jail, while the penalty for attempted illegal departure is a maximum $2,000 fine and three months' jail. My Ministry proposes to equate the penalties for attempted illegal entry or departure to the penalties for illegal entry or departure respectively because there is no reason to treat an unsuccessful act of illegal entry or departure more leniently than a successful one. Clauses 3 and 4(a) of the Bill will amend sections 5 and 6 to make attempted illegal entry and attempted illegal departure punishable with the same penalties as illegal entry and illegal departure. (ii) Abetment of illegal entry Smugglers of illegal immigrants bring the illegal immigration problem to Singapore and therefore have to be dealt with severely. Currently, those convicted of engaging in the business of conveying prohibited immigrants into Singapore can be jailed between two and five years and caned a mandatory minimum of three strokes. Although this penalty is adequately severe, in reality, many traffickers, boatmen and runners caught smuggling illegal immigrants escape punishment under this section. Instead, they are charged with abetment of illegal entry. This is because it is, in practice, difficult to obtain evidence showing that the traffickers have engaged in the business of smuggling illegal immigrants. As abettors, they are liable to be jailed between six months and two years and fined up to $6,000, but do not receive corporal punishment. Let me relate an actual example to illustrate the point I am making. On 7th May 1998 at 3.30 am, Police Coast Guard intercepted a fast-moving sampan, fitted with a 200 hp outboard engine, at sea off Changi while it was proceeding from Batam towards Pulau Tekong. There were two boat operators and three passengers in the sampan. None of them possessed valid travel documents and they were all arrested. The two boat operators were charged as abettors, and sentenced to seven months' imprisonment each. The three passengers were charged for attempting to enter Singapore illegally, and sentenced to three months' imprisonment each. The two boat operators could not be charged as traffickers because we did not have adequate proof that they were engaged in the business of conveying illegal immigrants to Singapore. Under our proposal to equate the penalty for attempted illegal entry to the penalty for illegal entry, caning for attempted illegal entry will become mandatory for the passengers. But it is absurd that the passengers are caned under the proposed amendments while those who facilitated their illegal entry, ie, the boat operators, are not. It is more effective to tackle the problem at source, and deter the conveyance of illegal immigrants to Singapore altogether. Besides, these so-called "abettors" are as guilty in bringing in illegal immigrants as those convicted as smugglers. Therefore, deterrent penalties have to be imposed. To ensure that these smugglers do not escape the corporal punishment meted out to those convicted of trafficking in illegal immigrants, we propose that the penalty for abetment of illegal entry be amended to include mandatory caning. Clauses 11(b) and (d) of the Bill amend section 57(1) of the Act to provide that abettors of illegal entry under section 6 will be punished with a mandatory minimum of three strokes of the cane, in addition to the existing penalty of between six months and two years' jail. (iii) Employment of immigration offenders Employers of immigration offenders should also be severely dealt with. This is because if employers do not offer them jobs, illegal immigrants will not be attracted to come to Singapore. Currently, employers of more than five immigration offenders can be sentenced to between six months and two years' jail, fined not exceeding $6,000 and caned. Clause 11(c) of the Bill amends section 57(1B) of the Act to increase the maximum fine for employers of more than five immigration offenders who cannot be caned because they are females or more than 50 years old from $6,000 to $10,000. Corporate bodies which employ immigration offenders are fined between $50,000 and $100,000 in lieu of mandatory jail sentences or caning on conviction. In addition, an officer of the company who approves the employment is personally liable to be prosecuted for the offence of employing immigration offenders. He is liable, on conviction, to the same penalties for employing immigration offenders. Clause 11(f) amends section 57(2A) to increase the default fines in lieu of mandatory jail or caning for corporate bodies convicted of employing immigration offenders to between $100,000 and $200,000 to maintain the deterrent effect. Rebuttable Presumption for Attempted Illegal Entry Let me now turn to the proposed introduction of a presumption clause for attempted illegal entry under section 6 of the Immigration Act. Illegal immigrants arriving by sea and who are caught in our territorial waters before they disembark from their vessels are not considered to have "entered" Singapore within the meaning of the current provisions in the Act. Although they can be charged with attempted illegal entry, there is a problem of proof of intent as the illegal immigrant, when caught, usually claims that he has no intention to enter Singapore. Added to this is the problem created by the right of transit under international law. These illegal immigrants often claim that they are exercising their right of transit through Singapore waters as a legal defence. Short of a confession, there is often no way to rebut their claim. By relying on such a defence, the illegal immigrants can create a reasonable doubt as to whether they had intended to enter Singapore illegally. Such evidential difficulties have made it difficult for the Police to prove such cases beyond a reasonable doubt as required by law and to successfully prosecute some of these illegal immigrants in the past. To deal more effectively with similar cases, my Ministry proposes to introduce a presumption clause in the Act so that any foreigner fitting the profile of an illegal immigrant found in our port waters will be presumed to be attempting to enter Singapore illegally if -

(In Mandarin): Mr Speaker, Sir, I welcome this Amendment Bill introduced by the Minister for Home Affairs to tighten the control of illegal immigrants, in order to maintain peace and order in Singapore. However, I wish to take this opportunity to urge the Government to seriously consider relaxing the restrictions on bona fide tourists who come to Singapore through legal channels, particularly the tourists from China. Sir, since the start of the Asian currency crisis, tourist arrivals from our traditional sources such as Japan, Thailand, Malaysia and Indonesia have dropped substantially owing to the internal economic difficulties of these countries. The tourism industry has suffered gravely. Statistics announced by the Singapore Tourism Board (STB) recently revealed that during the first seven months of this year, tourist arrivals have dropped to just 3,610,495, a drop of 17.6% as compared to the 4,381,664 for the same period last year. In the meantime, the China market seems to be showing excellent potential. According to the STB, China is among one of Singapore's top 12 sources of inbound tourists. From the 11th ranking in 1996, it has gone up to the 10th ranking last year, and in the first seven months of this year, it has risen to the 9th ranking, with a total of 163,745 visitors, an increase of 13% from the same period last year. With the national income growing all the time, more and more people from China will have the means to go on oversea tours. Because of the geographical and human affinities between the two countries, Singapore has become one of their most popular tour destinations. On this account, I believe that given more encouragement, the number of tourists coming from China to Singapore will increase by leaps and bounds. This will help to stimulate the dispirited tourism industry in Singapore, and can accelerate the recovery of the service and retail industries. Mr Speaker, Sir, unfortunately, since the implementation of the new tourist visa regulations for Chinese visitors in 1996 by the Singapore Immigration Department, tourists from China are no longer entitled to the 48-hour visa-free stay in Singapore. To make things worse, the authority requires the travel agents in Singapore to furnish a $1,000 security deposit for each Chinese tourist coming to Singapore when they apply for a 96-hour visa to stay in Singapore. This has resulted in the loss of many potential visitors from China, and moreover gives the mistaken signal that they are not welcomed in Singapore. This misunderstanding is certainly detrimental to the development of long-term bilateral relations between Singapore and China. Sir, if the $1,000 security deposit is meant to prevent Chinese visitors from overstaying or absconding, then it is not practical at all. For this very small number of black sheep who are prepared to flout the law, this $1,000 means nothing to them. It does not serve any deterrent effect at all. Why are we knocking out everybody with one sweeping blow just because there are a couple of black sheep in the flock? At the moment, the Immigration Department takes about 14 days to process a visa application for a visitor from China. After obtaining the original copy of the visa, the travel agent will first of all fax a copy of this visa to its counterpart in China, and then send the original copy over to China by courier service. The whole process, from the time of submission of the application to the time the original visa is received by the travel agent in China, takes about one whole month. If we compare this standard of service to the high speed and efficiency of the checkpoint at Changi Airport, there is indeed a whole world of difference! On the other hand, faced with stiff competition, the travel agents normally will have to dig into their own pockets to furnish upfront the $1,000 security deposit for each of the tourists from China when they apply for their visas. Let us make a simple calculation. Singapore receives about 250,000 visitors from China each year, or an average of 20,000 per month. So at $1,000 per visitor, the travel industry has to activate $20 million of their capital each month as security deposit for their Chinese visitors. Although the Immigration Department has made some administrative adjustment to reduce the amount of the security deposit by half, with effect from the 1st of this month, the revised amount still stands at $10 million. Now, with an increasing number of Chinese tourists visiting Singapore, the huge amount of bank guarantees "stuck" with the security deposits will certainly affect the cash-flow and business operations of the travel industry. In this present time of economic difficulty, this measure adopted by the Immigration Department is really rubbing salt into the wounds of the travel industry. Presently, only government officials from China are exempted from visa requirement for up to 48 hours' stay in Singapore. But the period of 48 hours is apparently too short. When the Chinese government officials come to Singapore, apart from official duties, they also hope to take the opportunity to spend some time touring Singapore. Some of these government officials approached the local travel agents to assist in applying for extension of their stay in Singapore. But there was nothing the travel agents could do to assist them. From the business point of view, this is a great pity because business is brought right up to their door-step. Yet, they could not benefit from it. Mr Speaker, Sir, since Singapore wants to develop itself into an international metropolis, it should have the magnanimity and openness of an international metropolis. As such, I hope that the Ministry of Home Affairs would reconsider this matter and grant visitors from China the facilities of obtaining a visa on arrival, or even to exempt them from the visa requirement. In the meantime, may I suggest that the Immigration Department remove the requirement for travel agents to furnish a $1,000 security deposit for each visitor from China. Of course, some people may say that since Singapore citizens are required to apply for a Chinese visa to enter China, then the Singapore Government has to adopt a reciprocal arrangement for all PRC nationals to have a Singapore visa to enter Singapore. In my view, as an open metropolis, Singapore does not need to conduct itself in this manner. Moreover, unilateral waiver of visa is not without precedence in Singapore. As we all know, Singapore citizens need to have an American visa to enter the United States, but US citizens do not require a visa to come to Singapore. Since the Immigration Department can allow US citizens to enter Singapore without a visa, I feel they should also accord a similar privilege to PRC nationals. Otherwise, this may create a misunderstanding that Singapore is adopting double standards in dealing with the entries of Chinese and US citizens to Singapore. Mr Speaker, Sir, I fully support the Bill.

I am obliged to you, Mr Speaker, Sir, for giving me this opportunity. Sir, having heard my friend, Mr Tay, I would just add, before I come to the Bill proper, another concern. I have known of a case, a year ago, where the father, a PR, was working in Singapore and his son wanted to visit him, and he was required to pay a surety bond of $5,000. He could not get the visa in India. So the father had to make the application. Of course, when I took up this matter with the Immigration Department, they tried to console him and me by saying that this was because we have such a large flow of people coming here. I can understand the problem, Sir, but we must be selective. We must look at the genuine cases, like those people who have family ties in Singapore. A visit of two weeks will do whoever is being visited some good rather than harm. Mr Speaker, Sir, having listened to the Minister, I must say that he has given all the details and he has given this House the reason why this Bill is necessary. One of the earliest laws that Singapore had was the Immigration law in one form or another. Sir, I will not deal with the Bill clause by clause, as the Minister has amply dealt with them. I am in support of most of the provisions, especially those which deal with higher punishments. I think it is high time we enhanced the penalties because, despite an amendment to the law some time ago, there is, as the Minister has pointed out, an increase in both illegal immigrants and overstayers. Members may wonder whether the increase in punishment will deter. Certainly, the illegal immigrants will have to think twice. Another thing which I had spoken earlier in this House is this. Our missions abroad have also to carry the task of informing the public there that anybody who flouts the law in Singapore will be severely dealt with. Sir, one area which has been of some concern to lawyers would be the question of presumption. It is not something new. It has been in our law and I think we should have it because unless we have this presumption, we are going to have difficulty in enforcement. In any case, I would like to assure the Members of this House and the public at large that the presumption can always be rebutted. It is for the person who is charged to disprove. It does not make him guilty straightaway. So I would say that it is timely and we should have it, especially in this law, as the Minister has graphically pointed out the difficulties our Coast Guard and Immigration officers have to face. Sir, other than our Malay community, we are basically immigrant people. We will have immigrants and we encourage them to come here. We are encouraging talents to come here, as the Prime Minister has pointed out in his National Day Rally Speech. But at the same time, we must keep a check and balance whom we want to welcome in Singapore. Although it would be out of point, I would like to request the Minister to consider getting fast speed boats and things like that so that our coastal areas can be amply guarded. Sir, another area which I am also concerned, and I think the Minister has pointed out, is people who pose danger to public health. My concern is on a very small but very important area. We do not want the flesh trade in Singapore to increase. This happens in most countries where, because of the economic downturn, some desperate people are driven to this. It is very important that we must keep a tight check, not just on public morality but also on the question of public health. And I am glad that we have now imposed a condition which requires a compulsory check by a qualified medical practitioner. Sir, one problem that we would have to consider is this. I know it is a serious problem how to discourage people from travelling with false documents? In my course of work, I have had to deal with this problem twice. I think the Government must take precaution because some Singaporean racket is involved and unless we know the source, unless we get these people busted, the poor victims will always be exploited. I know it is very difficult to ask every visitor to be thumb-printed, but it is important, for our own national security, that whenever an immigration officer feels that there is reason to believe that a person is not of bona fide standing, then we should impose this condition. Because there is nothing to stop these people from travelling with a new passport. Sir, with these observations, I would like to support the Bill and I would urge the Minister to consider reviewing the whole of the immigration law so that the national security of Singapore is not put to risk.

Mr Speaker, Sir, I support the Bill, especially on the provision to impose penalties for those involved in illegal immigration and entry into Singapore. The deteriorating economic and political situation in the region could turn Singapore into one huge haven for refugees if we do not have stringent and punitive measures to deter illegal immigration. This little country can ill afford to accommodate or hope what could potentially be a bigger problem than we have ever thought. I am, however, concerned about something quite different about amendments to section 8(b) and would like to seek the Minister's clarification on the matter for two reasons: (1) on the effects of tourism and visitors; and (2) on justice should a visitor find himself in breach of a law after he has entered Singapore. Section 8(b) terms a person suffering from AIDS as a protected immigrant. I would like to draw a difference between a person visiting Singapore and subsequently an AIDS patient finds himself to have breached the law as against a person or AIDS patient who enters Singapore and engages in activities that certainly bring danger to Singaporeans. I agree that while we should have thorough and stringent medical examination as a pre-requisite to allowing someone to work in Singapore or stay here for a long period, such precautions are necessary to ensure that AIDS patients will not cause health and other problems. However, I seek clarification on the following. First, does the clause impose unnecessary barriers and prohibition of travel of AIDS patients amongst our visitors and tourists? Secondly, are we not discriminating against AIDS patients by making travel and access in and out of Singapore difficult for them? I am not making a moral judgment here but I think we can guarantee travellers/visitors free and unobstructive access to travel in Singapore so long as they do not cause danger to Singaporeans.

Sir, I thank the Members for speaking up on this Bill. First, let me answer Mr Zulkifli's point about HIV carriers. This amendment is not intended to stop any HIV carrier from coming here as a tourist. If he is here as a tourist, a short-term visitor, he is not subjected to this Bill. This amendment on medical examination of people who may be HIV carriers only applies to those who work in Singapore or who apply to work in Singapore, and those people who are staying here for some time. So if they are here as short-term visitors, they are not affected. If they are here on long-term social visit pass, then they would be affected. For example, if they are here on a student pass, even though they may not be workers, they would be subjected to this amendment if they are here for a long period. Similarly, for those who are here on professional visit pass, they would also be subjected to this particular requirement. So let me assure the Member that this Bill is not to deter any tourist who may be an HIV carrier. Sir, let me now talk about another point which Mr Rai raised before I talk about the general point about visitors. On speedboats, yes, indeed, we have to have a lot of speedboats and this is what the Police Coast Guard is doing: upgrading its capability and resources and renewing its speedboats when they become due for renewal. And as a result, we are going to acquire a few more very fast boats. Recently, I sat in one and found it very good indeed. I think it would be adequate for the purpose of patrolling our shores to ensure that those who come on very high speed speedboats will easily be caught by us and there would be no way of getting away from it. On the more general point about tourists, this amendment is not intended to discourage tourists. We want to welcome tourists but at the same time we do not want these tourists to become overstayers. And how do we do that? It is to make sure that those whom we think or believe are likely to be potential overstayers, we must make it difficult for them to become overstayers. Therefore, for some time now, we have implemented visa requirements for those who come from India and subsequently for those who come from China and now for those who come from Bangladesh. We require them to furnish a bond and apply for a visa before they can come here as a visitor. If they come here to work, then of course their agents will bring them in and apply for work permits and if their permit is approved, they will come here to work. But if they just come here and claim to be a tourist and eventually overstay, then we must find ways to sieve them out. It is not our intention to impose stringent conditions on tour companies bringing in tourists. It is not our intention to dry up their business by requiring them to put up security bonds. But while we welcome tourists, while we want to promote such tour companies, we must also bear in mind that we should not allow some of these people who come here to overstay in Singapore. Let me just give Members some data to illustrate what I mean when we have to impose visa or security bonds. Let me start with 1994. Otherwise, it will go into history and it will take a long time. In 1994, among the total number of 9,846 immigration offenders, 2,686 or about 25% of them were illegal immigrants. 7,001 or the majority of them were overstayers. In 1994, we imposed visa on Indian tourists and subsequently we saw a slight decline in the number. No visa was imposed on those who came from China. But in 1996, we decided to impose visa on those who came from China. As a result, we saw the number of overstayers from China went down and the number of illegal immigrants from China went up. Before I go into the details of such overstayers and immigration offenders, I will just give Members the other figures which I was referring to earlier. In 1995, we had 11,732 immigration offenders. 6,587 or just slightly about half or 55% of them were overstayers. But the number of illegal immigrants had gone up to 5,001. In 1996, we had 14,260 immigration offenders. The number of overstayers was 8,553 and the number of illegal immigrants was 5,700. Then we decided to impose visa, as I said, on PRC visitors. The number of illegal immigrants subsequently went up to 7,599 in 1997, out of a total of 13,913 immigration offenders. That was all normal activity. In other words, police carried out the normal enforcement, etc. But since March this year, police stepped up their enforcement together with the Immigration and they patrolled our coast more strictly and they raided worksites, residences, haunts, etc. The number of immigration offenders arrested in the first seven months alone was already more than that for the whole of last year, 14,874. And among them, a great majority, 9,449 were illegal immigrants. Who made up most of these people? I will come to the details which I am talking about. On Indians, after we imposed the visa in 1994, it took a while to take effect and the number of overstayers increased somewhat, but not that large, from 1,342 in 1996 to about 1,452 in 1997. But the number of illegal immigrants coming from India has shot up from 387 in 1996 to 909 in 1997. In the first seven months of 1998, the number of illegal immigrants arrested shot up to 1,700. So when they cannot come through the normal way, they will come in by the illegal way, ie, by smuggling themselves into Singapore. But what is more startling is the number of illegal immigrants from PRC ever since we imposed the visa requirement. In 1996, the number of overstayers, ie, those who came to Singapore legally and overstayed was 2007, but the number of illegal immigrants was only 516. After we imposed the visa requirement, the number of PRC overstayers arrested dropped to 694, but the number of illegal immigrants of PRC origin arrested went up to 1,854. In other words, the figure has changed significantly. If they come in legally, they will overstay. When we imposed a visa requirement, they will smuggle themselves in. So if we do not have a visa requirement, there will be overstayers. Now we have, of course, to take enforcement action to look for them and eventually repatriate them when they are arrested. So I am not in favour of making it more liberal for tour companies to bring in foreigners, whether from PRC, India or any other country, who are likely to overstay in Singapore. We must continue with these visa rules to make sure that they do not overstay. Then we can take other actions to reduce the number of illegal immigrants. To complete the picture, just in the first seven months of this year, the number of PRC illegal immigrants arrested was 1,909 which is already more than that for the whole of last year, although the number of overstayers has gone down to 768. The more liberal we are in our visa rule, the more people will come in here and overstay. It makes our problem very difficult because for Chinese, Indians or Bangladeshis, it is very easy for them to blend in with the environment and for enforcement action, it is very difficult to look for them until we ask them to produce their pass or identity card. So we must continue with this very strict policy of making sure that only those who come here are genuine tourists, and they must have the money. If not, they should not come here as tourists. For those who want to come to work, they must apply for a permit. We should not impose visa on the basis of whether the country is friendly or not friendly, and we cannot compare whether an American citizen is more favoured than a PRC citizen. We treat all nationalities equally, but if a particular nationality has a tendency to overstay, then we must look at the visa rule and apply the rule. If Americans come here and overstay, then we will apply the visa rule on them. I see very little evidence of that now. So we do not need to reciprocate the American visa rule on Singaporeans. Immigration Department recently made some adjustments to the bond requirement of tour companies. For those tour companies which bring in tourists from PRC and they can look after them and make sure that they go home, we can be a bit more flexible, and that is where adjustments have been made to reduce the bond required for such tourists. But if they cannot look after their tourists who run away, then of course their bond value will go up. That is what we have done. I hope that these companies which bring in such tourists will continue to do their work and make sure that their tourists go home so that they can reduce their financial burden. Actually, it is just a bond from a bank. We do not require the money.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Wong Kan Seng]. Bill considered in Committee.

Clauses 1 to 6 inclusive ordered to stand part of the Bill. Clause 7 -

Sir, I beg to move, In page 5, after line 5, to insert - "(8) For the purpose of this section, "Government medical officer" includes a medical practitioner registered under the Medical Registration Act (Cap. 174) who is employed in any hospital or medical institution and who is designated by name or office by the Controller in writing for the purposes of this section.".". Sir, this amendment is proposed because persons who are required to undergo medical examination by the Controller of Immigration for an infectious disease has to be referred to the Communicable Disease Centre at the Tan Tock Seng Hospital, which is now a restructured hospital. Therefore, there is a need to broaden the definition of "Government medical officer" to include private medical practitioners in restructured hospitals. The new definition will provide the Controller with the flexibility to designate other private medical practitioners in the private hospitals if such a need ever arises in future to carry out any medical examination. Amendment agreed to. Clause 7, as amended, ordered to stand part of the Bill.

A consequential amendment will be made: In page 5, line 5, to leave out "".". This will be done. Clauses 8 to 11 inclusive ordered to stand part of the Bill. Bill reported with an amendment; read a Third time and passed.

Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Wong Kan Seng]. Adjourned accordingly at Twenty-One Minutes to Three clock pm to a date to be fixed.

asked the Minister for Trade and Industry whether the Government is prepared to help the many businessmen who face severe credit squeeze or cash-flow problems in their ventures into the regional markets and probably require some extraordinary assistance to tide over this difficult period before they can bounce back; and, if so, what are the enhancements that can be immediately introduced to existing Government financial assistance schemes to help these specific areas.

Local companies which require fixed asset financing for regional projects can apply to the Economic Development Board for its Regionalisation Finance Scheme (RFS). This scheme provides SMEs with financing for equipment and industrial properties in their overseas operations. Since the regional financial crisis started, the EDB has received and approved more RFS loan applications. In the first 7 months of 1998, 9 loans amounting to $12 million have been approved, compared to a total of 10 loans for $8 million in 1997.

The Trade Development Board has expanded its Trade Development Incentives to assist companies in setting up overseas marketing offices and other business development programmes such as branding, franchising and licensing. To assist companies in exploring new markets, TDB has also increased its funding for companies participating in its trade missions and in approved trade fairs.

My Ministry welcomes suggestions on how we can further assist our investors here and abroad. Any measure taken must be based on sound market principles and recognise the financial risks and rewards of any investment decision. We cannot use public funds to bail out any project which has become non-viable as a result of the regional economic crisis.

asked the Minister for Trade and Industry whether the Government, in recognising the pressing need to watch and lower the business costs in order to woo investors, save jobs and help firms stay competitive, will (i) take immediate steps to reduce government charges and levies, including the foreign worker levy, port charges, Electronic Road Pricing charges, petrol taxes, Housing and Development Board/Urban Redevelopment Authority car parking charges and Goods and Services Tax; and (ii) seriously reconsider establishing an Inter-Agency Government Charges and Levies Review Committee to strengthen the existing Government mechanism of monitoring and co-ordinating all the major fee hikes of all Government agencies to maintain our international competitiveness.

Our cost competitiveness relative to the regional countries has been affected by the sharp depreciation in the regional currencies. The Government has therefore taken steps to reduce business costs through various cost-cutting measures in the FY1998 Budget and the June off-Budget package. These measures include property tax rebates, rental rebates and tariff reductions.

Excluding material costs, the major component of business cost is wages. In May this year, the NWC recommended that firms exercise wage restraint and put the flexible wage system to effective use given the economic slowdown. Taking the lead, the civil service cut its mid-year variable bonus payment from three-quarter month to half a month and indicated that there could be further reduction in the year-end payment. Companies and unions have exercised wage restraint this year. Many have settled for a wage freeze; some a wage cut. If the economic situation deteriorates further, a cut in the employers' CPF contribution rate may be necessary to reduce wage levels across the board.

My Ministry is monitoring the overall business cost situation closely. We will do whatever is necessary to keep Singapore competitive. This includes reviewing all Government fees and charges as well as a possible CPF cut. The Committee on Singapore's Competitiveness has obtained feedback from businesses and will deliberate further on this matter.

On Mr Tay's second question, it is not necessary to set up another committee to monitor and coordinate major fee hikes. There is already a mechanism in place to coordinate fee increases. The Ministry of Finance monitors and coordinates the magnitude and timing of any fee increases. My Ministry monitors the impact of such increases on both the Consumer Price Index and Unit Business Cost to ensure that we remain competitive. Major fee hikes require the Cabinet's approval.

asked the Minister for Trade and Industry whether there are any statistics or estimates on how much money is spent by Singaporean tourists outside Singapore each year from 1995 to 1997; and whether these figures, if any, can be broken down into the amounts spent in each country.

Singaporean tourists spent abroad an estimated $7.2 billion in 1995, $8.2 billion in 1996 and $9.1 billion in 1997. Based on statistics published by various countries and estimates by the Department of Statistics, the amount spent in the ten most popular destinations are as follows:

Spending by Singaporean Tourists in Top 10 Destinations S$ Billion Destination 1995 1996 1997 Malaysia 2.75 3.09 2.98 Indonesia 1.08 1.29 1.50 China 0.62 0.73 0.89 Australia 0.46 0.54 0.63 Thailand 0.53 0.53 0.63 USA 0.47 0.49 0.58 Hong Kong 0.32 0.44 0.44 United Kingdom 0.19 0.22 0.24 Taiwan 0.14 0.14 0.17 Japan 0.06 0.08 0.10 Note: Data includes expenditure by business travellers. Source: Statistical and tourism publications of the selected authorities, and DOS' estimates.

asked the Deputy Prime Minister whether there has been an increase in domestic non-performing loans as a result of the economic downturn, with regard to (i) absolute magnitude; (ii) magnitude as a percentage of total domestic loans; and (iii) the number of such loans.

As at 30th June 1998, the total domestic non-performing loans (NPLs) of the 6 local banking groups amounted to $5.4 billion or 3.9% of their total domestic loans. This compares with $3.1 billion or 2.3% of total domestic loans in December 1997. The number of such loans was 7,913, compared to 6,213 loans six months earlier.

87% of the domestic non-performing loans are in the 'substandard' category, with 6% in the 'doubtful' category and 7% in the 'bad' or 'loss' category. The banks have made provisions for all NPLs in line with MAS guidelines, ie, 10% provision for the unsecured portion of substandard loans, 50% for doubtful loans and 100% for loss loans1.

40% of the increase in NPLs is due to the banks adopting stricter criteria for classifying loans. Banks now automatically classify loans as NPLs once the principal or interest payments are 3 months or more in arrears, compared to the previous rule of 6 months. 3 months is increasingly the international practice. In addition, banks are continuing to treat all loans to borrowers with weak financials as NPL, regardless of whether they are in arrears. The remaining 60% of the increase in NPLs reflects the slowdown in the Singapore economy. _________________ 1 Non-performing loans are those graded Substandard, Doubtful and Loss. The definitions are as follows:- a) Substandard : loans are classified substandard when their normal repayments are overdue or may be in jeopardy. Also included in this category are performing loans which are graded substandard solely because of the borrowers' weak financials. b) Doubtful : loans are classified doubtful when full liquidation of outstanding debts appear questionable and the accounts suggest that there will be a loss, the exact amount of which cannot be determined as yet. c) Loss : loans are classified as loss when outstanding debts are regarded as uncollectible.

asked the Deputy Prime Minister whether the Brunei ringgit to the Singapore dollar peg poses any adverse risk to the Singapore dollar in view of the widely publicised Amadeo scandal and the current fragility of the Brunei economy; and if so, whether the Government intends to take any measure to delink the Brunei ringgit from the Singapore dollar.

The Currency Interchangeability Agreement (CIA) between Singapore and Brunei has been in operation since June 1967. Under this agreement, the currency notes of one country are acceptable in the other country as customary tender, although not legal tender. The CIA applies only to currency notes, but banks in Singapore have extended it to include interbank funds. This reflects the confidence of the banking communities in both Singapore and Brunei in the CIA.

This arrangement has benefited both countries. Firstly, it has strengthened financial links between the two countries, enabling Brunei banks to utilise the Singapore dollar banking and financial facilities in Singapore as though they were in Brunei dollars. Secondly, by eliminating exchange rate risk and transaction costs, it has facilitated bilateral trade and investment. Thirdly, both Singapore and Brunei have enjoyed low inflation, as a result of the credible Singapore dollar exchange rate policy.

Brunei is currently experiencing some financial and economic turbulence. Contributing factors include the Asian currency turmoil, the sharp fall in oil prices, and also problems that are more specific to Brunei. But unlike other regional countries, Brunei does not suffer from an over-extended financial sector, an overbuilt property market or a current account deficit.

Singapore's own economic and financial fundamentals are sound. Brunei is not a large market for Singapore's goods and services, representing 1% of our total trade. Its capital flows are small in Singapore's context. As a result, the developments in Brunei have had only a minimal and transitory impact on the Singapore dollar.

The Straits Times (17th August) quoted one senior Bruneian official as saying: "The currency agreement has withstood the test of time and is working very well. We see no reason to change it." Singapore concurs with this view. In fact, MAS had earlier publicly stated (15th July) that we have no intention to break the CIA.

asked the Deputy Prime Minister whether the Monetary Authority of Singapore will allow Singapore based companies to use the Singapore dollar for their projects outside Singapore.

Singapore residents may borrow S$ for use outside Singapore, without the need to consult MAS. Singapore-based companies which are not jointly-owned or majority-owned by Singapore citizens and hence are non-residents, have to consult MAS if they wish to borrow S$ for use overseas.

As a working guideline, the amount of S$ financing allowed for such projects will be more generous where the companies are under Singaporean management control or have Ministry of Trade and Industry (MTI)/Economic Development Board (EDB) sponsorship. Such companies will be allowed 100% of the project costs financed in S$ if the Singaporean shareholding is between 21% and 49%, or up to 50% of the project costs if the Singaporean shareholding is less than 21%. Overseas projects without Singaporean management control and MTI/EDB sponsorship will be allowed S$ financing up to the proportion of the Singaporean shareholding.

In all cases, the S$ proceeds from the credit facilities must be converted or swapped into foreign currency for use outside Singapore. This follows naturally as the S$ is not an international currency.

asked the Minister for Manpower what arrangements, if any, are there to investigate and, if legitimate, to pursue any claims by repatriated foreign workers for unpaid wages or other benefits due from Singaporean employers.

Employers are not allowed to repatriate their foreign workers who have outstanding salary claims. When a foreign worker files a wage claim with the Labour Relations Department, his employer is cautioned not to repatriate him before an amicable settlement is reached. If the employer repatriates the worker without settling the claim, he could be disqualified from applying for new work permits.

The Foreign Workers' Unit of the Ministry handles employment claims and complaints lodged by foreign workers. The service is provided free of charge. Complainants do not need the service of lawyers to pursue their claims. To increase awareness of the protection accorded by the Employment Act and procedure to file employment claims, leaflets in various foreign languages have been produced and distributed to foreign workers.

Since January 1998, the Unit has helped some 3,700 foreign workers who had lodged employment-related claims against their employers. Where an amicable settlement cannot be reached at the conciliation meetings, workers' claims which fall within the ambit of the Employment Act will be adjudicated by the Commissioner for Labour at the Labour Court.

If the worker is unable to file his claims in person with the Ministry against his employer, he could lodge a written claim with us from anywhere, including from his home country. The Ministry has been able to help them recover their unpaid wages. In 1998, the Ministry's Labour Relations Department helped 35 such workers.

asked the Deputy Prime Minister what steps the Government intends to take to encourage finance companies to merge so that these companies can actively participate in the growth of the financial sector in Singapore.

The Finance Companies Act was revised in December 1994 to raise the minimum capital requirement for finance companies from $0.5 million to $50 million. The aim was to enable finance companies to have the resources to compete more effectively and increase public confidence in them. The finance companies have been given up to year 2003 to comply with the $50 million minimum capital requirement.

Since the raising of the minimum capital requirement, 3 finance companies with small capital funds have ceased to operate. Of the 18 finance companies currently in operation, five have capital funds of less than $50 million. If they fail to increase their capital funds by 2003, they would have to merge with larger financial institutions or cease operations.

MAS has, through frequent dialogue, encouraged the smaller independent finance companies to merge to meet competition and upgrade their operations. However, this is a commercial decision left to the finance companies. They will have to judge how best to meet the pressures of the marketplace, particularly as we gradually liberalise the domestic financial system to allow for greater competition.

18 Mr Shriniwas Rai asked the Minister for Foreign Affairs what steps will the Government take to implement the provision of the Points of Agreement signed by Malaysia and Singapore in view of the former's stand.

Prime Minister Goh Chok Tong and I have spoken at length in this House on 5th June 1997 on the background to the POA as well as its specific provisions. I will therefore not repeat these details.

Members will know from the debate last year that Singapore's position is that the POA is a Government-to-Government agreement between Singapore and Malaysia which took effect and became operative on 27th November 1990, ie, the date on which it was signed.

Malaysia, however, has taken a different position. Last year, they maintained that the POA "would only come into effect if and when KTM should decide to vacate Tanjong Pagar Station". More recently, several Malaysian leaders have made comments to the press questioning the status and validity of the POA.

Last year, Singapore officially proposed that the disagreement over the correct interpretation of the POA be submitted to the International Court of Justice (ICJ). There was no response to this. On 8th July 1998, Ministry of Law, in response to the further statements by Malaysian leaders, reiterated Singapore's position on the binding legal nature of the POA; that there was no requirement for it to be ratified; and repeated our proposal to have the dispute referred to ICJ.

There are two ways to resolve this matter. One is to proceed through the legal process and agree to submit the legal issues for arbitration or to the ICJ for a decision. Alternatively, we could resolve it within the framework of wider cooperation which PM Goh had proposed to Dr Mahathir. As PM Goh told this House in June last year, he informed Dr Mahathir that he could overcome the political and legal difficulties of varying the POA only within this framework of wider cooperation.

PM Goh recently reiterated in his National Day Rally speech that he will try to resolve bilateral issues, such as the POA, and enhance bilateral relations within a framework of wider cooperation. We will continue to take this approach.

asked the Minister for National Development whether he will consider speeding up the Main Upgrading Programme and Interim Upgrading Programme for Housing and Development Board flats in order to stimulate and promote more economic activities.

The Main and Interim Upgrading Programmes were introduced as part of the measures to share the nation's wealth with Singaporeans. They are highly subsidised and are funded from budget surpluses. Thus, it would not be appropriate to speed up the programmes in view of the current economic uncertainty and the fact that the Government is likely to incur budget deficits in fiscal years 1998 and 1999. At present, MND is preparing its FY99 budget plan for submission to the Ministry of Finance. Given the budgetary constraints, we have to manage our limited financial resources carefully according to the country's priorities. These priorities will take into account, amongst other things, what are the most effective measures to stimulate the economy, and will be coordinated across the various ministries in a concerted effort to achieve maximum impact.

asked the Minister for National Development whether, in light of the objective of promoting entrepreneurship, regulations regarding the use of residential housing for start-up businesses can be relaxed, particularly for businesses in the IT industry.

Under the current planning guidelines, residents are allowed to use their residential properties for start-up businesses so long as the businesses do not employ persons outside the households. However, they are not allowed to use their HDB flats as the registered addresses for their businesses.

My Ministry recognizes that advancements in IT have brought along increased opportunities for businesses to operate from home, and thereby reduce business costs. HDB will work with relevant Government authorities to review its regulations with a view to facilitate the use of HDB flats for start-up businesses, particularly for those in the IT industry.

asked the Minister for National Development what is the exact area of protected nature reserve land that was cleared for use for water storage facilities and if he will consider increasing the remaining nature reserves to compensate for the area so used.

The exact area that was cleared for the construction of the service reservoir is 11 ha. This area was specifically chosen to minimise the impact on the nature reserves. It consists of young forest with no key forest species. After the project is completed, about 7.5 ha will be fenced in as a protected area. The remaining area, which consists mainly of slopes, will be turfed to reduce erosion and reverted back to natural vegetation. NParks will speed up the regeneration by planting back with native plants to reforest the site, wherever possible.

As to the Member's query on whether the area of the nature reserves should be increased to compensate for the land to be taken up by the proposed water storage facilities, MND has no plans to do so. Firstly, the present case is an exceptional one and the land take has been minimised significantly. Secondly, the size of the nature reserves has to be determined by the value of the bio-diversity contained in it as well as the overall balance of competing requirements for land in Singapore. It is therefore not a sacrosanct constant that has to be maintained.

I would however like to reassure the Member that NParks will monitor and safeguard the integrity of the nature reserves, wherever feasible.

asked the Minister for Communications whether the proposed change in control of air space in southern peninsula by Malaysia will affect in any way our national security and airport services.

Air traffic service arrangements are drawn up under the auspices of the International Civil Aviation Organisation (ICAO) which is the international organisation responsible for the safety and efficiency of international civil aviation. The existing arrangement over Southern Peninsular Malaysia has been in existence since 1975.

Under this arrangement, Singapore undertook the responsibility to provide air traffic services without charge to all users, thus ensuring that air navigation in this area is conducted with the highest level of safety and efficiency. Everyone in the international civil aviation community, especially airlines, pilots and air travellers, benefits from this arrangement. It has also contributed to the growth of air traffic and helped develop economies and airports in the region.

Any changes to air traffic service arrangements are normally discussed and endorsed by ICAO because it involves issues of safety and efficiency and is of vital concern to all members of the international civil aviation community.

asked the Minister for Communications what arrangements the Singapore Government has with the Malaysian Government on the access to and management of the lighthouse on Pulau Pisang and whether there have been any recent moves by the Malaysian Government to restrict Singaporeans access to that island.

The island of Pulau Pisang belongs to Malaysia. Singapore currently operates the lighthouse on Pulau Pisang. Under an indenture dated 6th October 1900, the Sultan of Johor granted the plot of land on which the lighthouse stands, as well as the roadway leading to the lighthouse, to the Straits Settlement and its successor, Singapore. The total plot of land granted to Singapore amounted to just over two acres. According to the indenture, this arrangement continues in perpetuity as long as Singapore operates the lighthouse.

The lighthouse is a navigational aid for ships passing through the Malacca Straits. At any one time, the Maritime and Port Authority of Singapore deploys two lighthouse keepers on Pulau Pisang. The two-man lighthouse crew is rotated every 10 days. There is a long-standing arrangement between the Singapore and the Malaysian authorities to allow the lighthouse keepers to travel directly between Singapore and the lighthouse by boat. This arrangement is still in force and has not been changed.

asked the Minister for Communications, in view of the deteriorating economic crisis, if the Minister will consider suspending the implementation of the Electronic Road Pricing system to the Central Business District for a period of 12 months.

The ERP system is a traffic management tool. It is not to generate revenue. Its primary purpose is to bring about a smoother flow of traffic, and more efficient use of our road network so as to support economic activities and to maintain a clean and safe environment.

ERP is a major component of the Government's traffic management policy, which emphasises usage rather than ownership restraint. Part of this policy has already been implemented this year in the form of major vehicle tax reductions and ERP rebates. For example, an average 1600 cc car will pay about $440 less in taxes due to the road tax reduction of $240 and ERP road tax rebate of $200. An average heavy goods vehicle will save about $580 in annual road tax due to the road tax reduction of $280 and ERP road tax rebate of $300. In addition, the Registration Fee for new heavy goods vehicles was reduced from $14,000 to $140. The overall package will cost the Government about $1 billion over 5 years.

The majority or 76% of motorists who do not use the ERP will enjoy the full savings. 15% of motorists who make only one ERP pass per day will also save as the rates are no more than their previous ALS/RPS charges. In fact, we have introduced lower ERP rates on the expressways to spread out traffic to the shoulder periods when traffic volume is lower. For the CBD, we have lowered ERP rates generally and shortened the ERP hours on Saturday.

The rest of the motorists who make more than one ERP pass per day will have to plan their trips carefully and adjust their travel patterns to minimise their ERP cost. Some businesses will need time to adjust to ERP. Hence, we decided to phase-in the ERP charges for commercial vehicles and taxis over the next 4 years.

The ERP system is a fairer and more equitable system than the previous manual ALS and RPS. It is part of our revised traffic management policy, which reduces the cost of motoring for those who choose to make less use of our roads and help keep traffic free-flowing. As such, my Ministry will not suspend the implementation of the ERP on the CBD. However, we will monitor the traffic conditions and adjust the rates to ensure that motorists are not charged more than is necessary to keep traffic free flowing on our roads.

asked the Minister for Manpower whether the Government plans to have any subsidised retraining programme for executives and professionals, similar to the Skills Redevelopment Programme (SRP) for lower-skilled workers.

The Skills Redevelopment Programme (SRP) was launched to address the issue of long-term employability of less-educated workers. Workers with less than secondary education number almost 600,000 or 40% of the present Singaporean workforce. They are particularly vulnerable because they lack adequate skills and, as a group, face the most difficulty in coping with the economic restructuring. The SRP focuses on equipping them with basic, nationally recognised and portable skills so that they can move on to higher-skilled jobs.

The Government is aware that in the present economic climate, executives and professionals are also concerned about their employment prospects. A number have lost their jobs and may be finding it difficult to secure alternative employment, at least at a salary or seniority equivalent to that of their previous job.

However, the Government is of the view that a structured, broad-based retraining scheme similar to the SRP for executives and professionals is not necessary. The circumstances for executives and professionals are rather different from those of the less-educated workers. Unlike the less-educated workers, executives and professionals do not, as a group, lack skills. They are also expected to take greater responsibility for their own skills upgrading and career development.

In this period of economic downturn, executives and professionals should be prepared to adjust their expectations. They should not be too choosy about jobs. If need be, they should be willing to accept lower salaries and more demanding duties. If they need assistance in finding jobs, they can approach the Employment Service Department of my Ministry, which will do its best to match them with appropriate vacancies.

The critical issue for executives and professionals is to continuously update and enhance their existing stock of skills in order to keep up with new developments and demands. My Ministry is studying ways to widen the opportunities to do so. For instance, in some countries universities and polytechnics have a system that allows their graduates to return every few years in order to update their knowledge in their chosen field. MOM and MOE will study the feasibility of providing more opportunities for such refresher courses or updating of knowledge for our skilled workforce.

asked the Minister for Communications (a) whether there were any problems when Changi International Airport first opened; and (b) what numbers of luggage, if any, were lost on the first day of operation at the Airport.

Changi Airport commenced operations on 1st July 1981. Airport operation was smooth except for a problem with the Flight Information Display System (FIDS). A manual back-up arrangement was activated, airport staff were deployed to assist passengers and overall airport operation was not affected.

Our records show that Changi Airport served 19,000 passengers and handled 29,000 pieces of baggage on its first day of operation. There was no problem with lost baggage. We received no complaints from airlines or passengers. Neither were there any media reports about lost baggage, although the opening of Changi Airport attracted a lot of media attention.

asked the Minister for National Development how many Housing and Development Board flats, both new and resale, were transacted during the period 1993 to 1997.

A total of 283,000 HDB flats were transacted during the period 1993 to 1997, comprising 127,000 transactions involving new flats and 156,000 resale flat transactions.

The number of new HDB flats sold was 19,600 in 1993, 24,000 for 1994, 28,800 in 1995, 26,500 in 1996 and 28,200 in 1997. For resale flats, the number of resale applications approved was 20,500 in 1993, 30,400 in 1994, 30,800 in 1995, 38,900 in 1996 and 35,100 in 1997.

asked the Minister for Law how many private properties, both new and resale, were transacted during the period 1993 to 1997.

The volume of transactions for new and resale private residential properties is as follows: Year New Units Resale Total Units 1993 7,440 11,506 18,946 1994 9,860 11,879 21,739 1995 7,522 10,183 17,705 1996 9,565 10,134 19,699 1997 5,520 5,697 11,217 This information is obtained from caveats lodged at the Land Titles Registry and data compiled from surveys by URA of licensed housing developers. Figures on other types of private properties are not available.

asked the Minister for Law what is the tenure of the land occupied by the Malayan Railway in Singapore.

There are over 50 lots of Malayan Railway Administration land in Singapore under various types of titles. With respect to lands occupied by the Malayan Railway, save for a couple of branch lines which are on 99-year lease terms, these lands are held under 999-year Crown leases issued to the Federal Lands Commissioner, Malaysia. The 999-year leases are subject to a covenant that should the land cease to be used and not be required for the purposes of the Malayan Railway Administration, the land may be resumed by the Government of Singapore. The 99-year leases also provide that the land be used only for railway purposes.

asked the Minister for Law what are the plans of his Ministry when the lease of Green Fairway Golf Club, presently managed by the Singapore Turf Club, expires in 1999 in view of Singapore Turf Club relocating to Kranji.

The Green Fairway Golf Club is on land in Bukit Timah belonging to the Singapore Turf Club on 999-year lease or freehold. When the Turf Club relocates to Kranji in 1999, it will return all its land in Bukit Timah to the State, including the land occupied by Green Fairway Golf Club. The longer term plan is for the land to be used for residential purposes. In the interim period, pending such redevelopment, Land Office plans to allow the continued use of the land for the golf course and the driving range. In that event it will consider tendering it out or appointing an agent to manage these facilities.

asked the Minister for Trade and Industry if he will give details of the proposed desalination plant in Singapore.

PUB will be building the first desalination plant in Tuas. It will employ the dual-purpose multi-stage flash (MSF) distillation process, which is a tried and proven technology for large-scale desalination plants. The MSF plant will have a capacity of 30 million gallons (136,000 cubic meter) per day. For greater efficiency, the plant will co-generate electricity, of which about 170 MW will be exported to the electricity grid. The plant is scheduled to be completed by 2005. In addition, a pilot reverse osmosis (RO) plant, with a capacity of 1 million gallon (4500 cubic meter) per day, will also be built to obtain operating data based on local seawater quality. This will help to optimise the design of any pre-treatment facility which may be required for large-scale RO plants.

asked the Minister for Trade and Industry whether his Ministry will provide statistics regarding (i) the number of companies which have established Regional Headquarters (RHQ) in Singapore from 1990 till July 1998; (ii) the breakdown of RHQ in Singapore from 1990 till July 1998, based on country of origin as well as type of industry; (iii) the number of companies which have relocated their RHQ out of Singapore to other destinations after the onset of the regional currency crisis; and (iv) the number of companies which have relocated their RHQ to Singapore after the onset of the regional currency crisis.

Between 1990 and July 1998, more than 100 companies were awarded the Regional Headquarters (RHQ) incentive. American and European companies account for the bulk of the RHQs awarded. They are from a diverse range of industries including Electronics, Engineering, Chemicals, Life Sciences and Automobiles. None of these RHQs have left Singapore for other destinations after the onset of the regional economic crisis.

asked the Minister for Home Affairs, from January 1996 to July 1998, how many spousal violence cases were reported and what was the profile of abusers by sex, age, occupation and nature of abuse.

5,052 spousal violence cases were reported from July 1996 to July 1998.

Statistics on the number of spousal violence cases prior to July 1996 and the profile of the abusers are not available. MCD is currently spearheading the development of a family violence database system which will capture information on the profile of abusers. This is expected to be completed in early-2000.

asked the Minister for Health whether the Government will study the potency of Viagra before allowing it to be imported to Singapore as it may have long-term health and social implications.

As Viagra is a new drug, the Ministry of Health is conducting a comprehensive evaluation to review the safety, quality and efficacy of the drug for registration in Singapore. The evaluation will take into consideration all scientific and clinical data submitted, including information available from other established drug regulatory agencies. The evaluation will also consider the clinical applicability of the drug to our local population and the benefits of the drug versus its potential side effects. The Ministry will also take into consideration the views of local clinical experts and that of the Medicines Advisory Committee, an expert committee appointed under the Medicines Act to advise the Ministry on registration of drugs for use in Singapore.

asked the Minister for Manpower what is his Ministry's stand on the Malaysian Trade Union Congress' decision to bring up to the International Labour Organization a dispute of the withdrawal of West Malaysians' Central Provident Fund contributions.

Recently there was a newspaper report concerning a comment by the President of the Malaysian Trade Union Congress (MTUC) that he would be taking up the CPF withdrawal issue with the International Labour Organisation (ILO). He was also reported to have accused the Singapore Government of discriminating against West Malaysians in the CPF withdrawal rules. His accusation is completely baseless. As I have explained in this House, West Malaysian CPF members are distinguished from other foreign CPF members because of the historical links between Peninsular Malaysia and Singapore. West Malaysians in fact are given preferential treatment over Singapore members. They can withdraw their full CPF savings from age 50, without having to set aside the minimum sum, provided that they have not worked in Singapore for at least 2 years prior to the withdrawal request. Singaporeans can only do so at the age of 55, after setting aside the prevailing minimum sum. All foreigners working in Singapore, including West Malaysians, were well aware of these rules upon assuming employment in Singapore since 1971. They are therefore bound by the withdrawal rules that they had accepted when they first came to work in Singapore. Changes to the CPF withdrawal conditions for West Malaysians are being discussed between PM Goh Chok Tong and PM Dr Mahathir Mohamad in the context of wider co-operation between Singapore and Malaysia. Once an agreement is reached, this issue can be resolved conclusively. In our view, there is no basis for the MTUC to file any complaint with the ILO. As far as we are aware, there is no constitutional procedure under the ILO for a trade union of one country to file a complaint against the Government of another country on a bilateral issue. Notwithstanding this and in the event that the MTUC does file a complaint with the ILO, the Singapore Government will respond accordingly.

asked the Minister for Communications what is his Ministry's response to the Malaysian Government's proposal of reclaiming control of the air space surrounding the southern part of the Malay Peninsula.

Air traffic service arrangements are drawn up under the auspices of the International Civil Aviation Organisation (ICAO) which is the international organisation responsible for the safety and efficiency of international civil aviation. The existing arrangement over Southern Peninsular Malaysia has been in existence since 1975.

Under this arrangement, Singapore undertook the responsibility to provide air traffic services without charge to all users, thus ensuring that air navigation in this area is conducted with the highest level of safety and efficiency. Everyone in the international civil aviation community, especially airlines, pilots and air travellers, benefits from this arrangement. It has also contributed to the growth of air traffic and helped develop economies and airports in the region. Any changes to air traffic service arrangements are normally discussed and endorsed by ICAO because it involves issues of safety and efficiency and is of vital concern to all members of the international civil aviation community.

asked the Minister for Community Development, since the amendments to the Women's Charter in May 1997, how many referrals have been made to his Ministry by the Subordinate Courts for mandatory counselling of abusers; how his Ministry implements and evaluates the effectiveness of the counselling programme; and if a plan has been put in place to increase the pool of counsellors and support resources for handling such cases.

Since the introduction of mandatory counselling up to July 1998, the Family Court has referred 199 cases for counselling. Of these, 144 cases were for counselling of perpetrators only, and 55 were cases where both the perpetrators and victims were referred for counselling. The mandatory counselling programme is still relatively new. It would be too early to assess its full effectiveness at this point in time. In administering the programme, the Ministry processes and undertakes initial assessment of all cases referred by the Court before referring cases to counsellors from the Ministry or appointed social service agencies for mandatory counselling. The Ministry coordinates and monitors the work of the appointed social service agencies and the counsellors. Training programmes are in place to develop a pool of qualified social workers and counsellors with the competence and skill to deal with family violence cases. MCD has organised a number of training workshops, case-conferences and regular dialogue sessions with social service agencies. It has also commissioned agencies like the Counselling and Care Centre and the Family Resource and Training Centre to conduct a number of specialised courses for social service agencies. Among the courses covered are Management of Family Violence, Couples in Violent Relationships and Working with Perpetrators. There are now 25 social service agencies providing mandatory counselling up from 15 in July 1997. All agencies providing mandatory counselling services receive Government funding on a per capita basis.

asked the Minister for Education (a) what is the number of schools offering Tamil as a mother tongue in primary and secondary schools and the number of students who are studying the language; and (b) whether the Government will consider allowing more primary schools to offer Tamil as well as allowing one of the polytechnics to offer it as a part-time course so as to encourage growth of Tamil scholars in Singapore.

Tamil is taught in 147 primary schools and 77 secondary schools. In addition, Tamil is taught at the Umar Pulavar Tamil Language Centre and 5 other secondary schools which serve as Tamil Language centres for pupils from secondary schools which do not offer the subject. Currently, 13,671 primary school pupils and 7,558 secondary school pupils study Tamil.

The Ministry of Education will introduce Tamil language teaching in primary schools where there is a sufficient demand from pupils to offer the subject. As the focus of our polytechnics is on training practice-oriented middle managers and technologists for the Singapore economy, they are currently not engaged in offering Diploma-level programmes in languages, whether on a full-time or part-time basis. There are no plans to do so in the near future.

The Member would be pleased to know the National University of Singapore is starting a South Asian Studies Programme next July, which will include optional Tamil modules. This will allow those with an interest in Tamil to pursue it at NUS, while serving our broader objective of fostering interest in studies on South Asia.

asked the Minister for Education, when a student is expelled from school, whether his or her offence is made known to all other schools and whether it will prejudice his/her application for admission to another school.

When a pupil is expelled from school, the parents usually appeal to Principals in other schools, often nearby, to accept their child. If a school is prepared to consider accepting the pupil, the Principal will ask the sending school to give some background on him before making a final decision. This is to understand the nature of the pupil's problem and to decide on the best way of helping him. At this point the pupil's offence is revealed to the Principal of the receiving school only. The Ministry does not publicise the offence of the offender. If parents fail to find a school on their own, they will turn to MOE for assistance. The pupil, together with his parents, would be interviewed by the School Inspector or another appropriate officer, to determine whether the pupil is remorseful and sincere in wishing to continue studying. We also have to determine if re-admitting him to a school will pose a risk to the safety and well-being of other pupils in the school he is seeking admission to. Once we are satisfied that the pupil should be helped, we will assist him in finding a place in another school with a vacancy. When MOE approaches other Principals to accept the pupil, the offence is revealed to them for the same reasons as indicated earlier.

asked the Minister for Education if his Ministry will help, through subsidies or the provision of suitable vacant school premises, approved community service agencies to operate Youth Education Centres which can help school drop-outs to study and resit Primary School Leaving Exam, O and A level exams.

MOE currently provides subsidies for 2 types of pupils: pupils in the mainstream schools and those in special education schools which are run by Voluntary Welfare Organisations (VWOs) registered with MOE. The Ministry does not provide subsidies to community service agencies to operate Youth Education Centres which can help school drop-outs to study and re-sit examinations. National Youth Council (NYC) is looking into the problem of out-of school youths. We understand that the TOUCH Community Services have been asked to work together with Marine Parade CDC to set up a Youth Learning Centre (YLC) for youths who have dropped out of schools. The proposal will be forwarded to NYC for consideration. NYC will liaise with other Government agencies to help them in their efforts. Attachment - The Trading and Suspension of Mid-Continent Shares on SESDAQ (Cols. 985 - 988)