Hansard, 1999-02-26

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 (1999)(1999) Mr Chan Soo Sen16 Feb17 Feb Mr R Sinnakaruppan17 Feb18 Feb 5 Mar6 Mar Mr Shriniwas Rai18 Feb25 Feb Mr Cyrille Tan Soo Leng22 Feb27 Feb Mdm Claire Chiang See Ngoh22 Feb5 Mar Mr Mah Bow Tan23 Feb25 Feb Mr Lim Hng Kiang23 Feb25 Feb Mr Zulkifli Baharudin 25 Feb25 Feb 28 Feb3 Mar NameFromTo (1999)(1999) Mr Davinder Singh 26 Feb26 Feb Mr Bernard Chen28 Feb3 Mar Dr Toh See Kiat28 Feb4 Mar Mr Kenneth Chen Koon Lap1 Mar4 Mar Mr S Iswaran1 Mar5 Mar Mr Goh Chok Tong1 Mar5 Mar 22 Mar28 Mar Dr Lily Neo1 Mar6 Mar 30 Mar3 Apr Mr Tan Soo Khoon2 Mar6 Mar Mr R Ravindran2 Mar14 Mar Dr Ow Chin Hock4 Mar8 Mar Mr Seng Han Thong21 Mar28 Mar Dr Wang Kai Yuen22 Mar26 Mar TAN SOO KHOON Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the date stated: 20 February 1999 (1) Carriage By Air (Amendment) Bill; (2) Environmental Pollution Control Bill; (3) Sewerage And Drainage Bill; (4) Presidential Elections (Amendment) Bill; (5) Central Provident Fund (Amendment) Bill; and (6) Prevention of Pollution of the Sea (Amendment) Bill. TAN SOO KHOON Speaker Parliament of Singapore

The following Question stood in the name of Mr Ahmad Mohd Magad - 1. To ask the Minister for Education whether his Ministry's assessment of the performance of Malay language students in schools will allow more students to take Higher Malay.

Question No. 1, Sir.

Mr Speaker, Sir, the Ministry has relaxed the criteria for allowing pupils to take Higher Mother Tongue. From year 2000, EM2 pupils who have scored a Band 1 in their mother tongue language, (Malay Language (ML), Chinese Language (CL) or Tamil Language (TL)) and at least a Band 2 in English Language and Mathematics, at the Primary 4 Streaming examination, will be given the opportunity to offer a Higher Mother Tongue Language at Primary 5. Currently, pupils who are in the top 10% of the PSLE cohort are allowed to offer Higher Mother Tongue (ML, CL and TL) at Secondary One. In addition, those who are in the top 11% to 20% of the cohort and who have scored an A* in the mother tongue language and an A in English Language are also allowed to offer Higher Mother Tongue at Secondary One. This applies to the Malay Language, Chinese Language and Tamil Language. In total, about 350 pupils in Secondary 1 are eligible to offer Higher Malay Language in 1999. We have now broadened this to include pupils in the top 21% to 30% of the cohort, subject to the same language requirements as for pupils in the top 11% to 20% group. This will allow 150 more Secondary 1 pupils to offer Higher Malay in our schools.

Sir, I would like to ask the Minister, compared to other subjects, for example, Mathematics, Science and English, are Malay students facing problems in learning the Malay language?

The Malay students in our schools have done progressively better over the years. But there is still room for improvement. Our Malay students can get more out of our education system than they are getting today. But their performance in the Malay language is not the factor that hampers their progression through our education system. In fact, it is the other subjects, English, Mathematics and Science, for example, which hamper their progression through our education system.

Can I ask the Minister whether, that being the case, a CL `B' equivalent in this case may not be necessary for Malay students and, secondly, if Mathematics, Science and English are some of the weaker subjects faced by Malay students, would the Minister consider introducing special programmes and syllabus to enable Malay students to cope with these subjects?

Whether or not ML `B' is required is a matter of continuing discussion which we are having. We have made no decision on that yet. Whether or not we want to have special programmes for Mathematics and Science and a special syllabus, perhaps a Mathematics `B' or Science `B'? We already have at the secondary school level Mathematics and Science at various levels. For example, we have Additional Mathematics and Mathematics D. We have the pure sciences, Physics, Chemistry and Biology, and we have the combined sciences, Physics with Chemistry, Physics with Biology, etc. So students can take a combination of subjects which suits their aptitudes and which they think they can do well in and which would be most appropriate considering what further education they want to go on to. For Mathematics and Science, it would not be beneficial to have a separate syllabus, particularly if it is tailored for Malay students, because it would not serve the purpose of providing a solid foundation that is necessary for progression, particularly in technical and science courses, in further education. But, say, in English, for example, for the EM1 and EM2 students, although we do not have a different standard, we do have a programme which is beginning to show quite good success at the lower primary level, Primary 1 and Primary 2, and it is called the learning support programme. This programme provides support through learning support coordinators to children who have difficulties in English and it provides them additional teaching and coaching in English so that they increase their reading age in English and that will help them in all their other subjects.

Sir, would the Ministry consider identifying more schools to offer Higher Malay now that the eligibility has been extended to pupils in the top 21%-30% cohort?

Sir, there are now currently 10 schools which are offering Higher Malay and four of them function as Higher Malay Centres to which students who are studying in schools close by come to as well. Our assessment is that the geographical spread and the number of schools are adequate, but if there is a need we will be prepared to increase the number of centres.

Sir, does the Ministry have any other plans to help create the Malay cultural elite through schools?

When we were discussing the Chinese Language review the Ministry has indicated that it would be prepared to consider a language elective programme in Malay at the junior college level if there is a demand for this. We have to study this. Some of the other measures which we were talking about include the bonus points for entry to courses in the university where Higher Mother Tongue would be useful, for example, in communications studies. These things would apply to all the mother tongue languages, whether it is Chinese, Malay or Tamil. This is still in discussion with the universities.

asked the Minister for Education whether his Ministry will build a Special Assistance Plan (SAP) school in the northern part of Singapore.

Mr Speaker, Sir, the Ministry has recently announced the establishment of a 10th SAP school, Nan Hua Secondary School, in the west zone. This, and the existing 9 SAP schools, have sufficient capacity and geographical spread to meet the needs of students who qualify for and wish to study in SAP schools. While there is currently no SAP school in the north zone, students living in the north can choose schools which are accessible by public transport, like Catholic High School and CHIJ St. Nicholas.

Sir, why was Nan Hua Secondary School chosen and not some other schools in the northern part?

We did a study of the pattern of students who may be eligible to take Higher Chinese and we looked at where the current SAP schools are, and we decided that Nan Hua was the school which was in the correct geographical location to cater for these students as well as having the appropriate history, characteristics and community support which would help to make it successful as a SAP school.

Sir, how many non-Chinese students are there in that school and were they given a place in the school which they wanted to go?

Nan Hua currently has 134 non-Chinese students studying in the school across all levels. This is about 10% of the entire population of the school. The existing students will not be disadvantaged in any way and the current arrangement for instruction in the other mother tongue languages will continue.

asked the Minister for Communications if he will consider amalgamating into a limited company Scheme B bus operators so as to serve the public better.

Phun) (for the Minister for Education): Mr Speaker, Sir, the Scheme B bus operators are mainly individual operators whose main business is to provide chartering and school bus services. They also serve some of the scheduled bus routes during peak hours to supplement the two major bus operators, SBS and TIBS. My Ministry does not see the need for them to amalgamate in order to improve their services. Nevertheless, there is nothing to prevent them to amalgamate on their own if they find it advantageous to do so.

Sir, would the Minister consider, like the taxi drivers who were individual operators and the system has benefited because of amalgamation, that it would be a good idea to encourage these Scheme B bus operators to form a company even if they are not coming on their own?

Sir, at the moment, there are already two bus companies, SBS and TIBS. They cover the whole of Singapore quite adequately. These Scheme B buses are to supplement their services for some routes where there is demand. It is a different situation compared to the taxi industry in the earlier days where you had individual taxi drivers and in order to organise the industry there was a need then to help them to come together to form a cooperative. But here it is a different situation and there is really no need for us to do that because they are the niche service, so to speak.

asked the Prime Minister whether he will make available to the House the report of the Minister for Finance on the purchases by the Senior Minister and by the Deputy Prime Minister BG Lee Hsien Loong of apartments in Nassim Jade and Scotts 28.

Prime Minister): Mr Speaker, Sir, with your permission, I would like to reply on behalf of the Prime Minister. The NCMP has asked the Prime Minister to make available to the House my report to the Prime Minister on the purchases by the Senior Minister and Deputy Prime Minister BG Lee Hsien Loong of properties in Nassim Jade and Scotts 28. Firstly, I would like to clarify that there is no single report as such. On 21st March 1996, the Prime Minister instructed me to investigate market talk suggesting that improprieties may have been involved in the purchases and that HPL may have violated SES rules in the transactions. I instructed Mr Koh Beng Seng of MAS to conduct the investigations. He reported to me his conclusion that no improprieties were involved in the purchases and that HPL had not contravened SES rules, and I informed the Prime Minister accordingly. Furthermore, this House had an extensive debate on the circumstances surrounding the Senior Minister and DPM Lee's purchases of the HPL properties over three days on 21st, 22nd and 23rd May 1996. At these sittings, both the Prime Minister and I gave statements to the House on the investigations carried out and our conclusions. Senior Minister and DPM Lee also made statements explaining their purchases. May I suggest that the NCMP carefully reads his Hansard.

The Minister says there was no single report. Are we to understand that there were a series of reports made to the Prime Minister or are we to understand that the purchases were simply discussed at informal meetings between him and the Prime Minister?

As I mentioned in my reply earlier, the reports were made to me by Mr Koh Beng Seng and there were several reports. The Prime Minister was informed accordingly. No evidence was found of any improprieties and that was quite evident from the debates which had taken place. May I suggest to the NCMP that he no longer waste this House's time in raising this issue which is for his political agenda.

I am grateful to the Hon. Minister for his suggestion but I think he should leave it to the Party and to me to make our own judgment. I have read the statement of the Prime Minister at this debate. May I ask - I do not know whether the Minister for Finance can answer this - why was the suggestion of the Senior Minister for a Commission of Inquiry not followed up?

There was no evidence whatsoever from Mr Koh Beng Seng's report to justify any such action. It would be a waste of time. Are you suggesting that Mr Koh is incompetent in his investigations?

May I tell the Minister that he should not be asking me questions. I am here to ask the questions. Would the Minister agree that Parliament is not a forum for an inquiry and that if the public had to be satisfied, a Commission of Inquiry would have been the proper forum?

If Parliament is not the proper forum, I do not know what is, especially in the circumstances where there is no prima facie evidence of any improprieties.

Sir, I think the Minister for Finance has made a very stinging statement about the Opposition. It does not mean that whenever the Opposition asks awkward questions, it is done for a political reason. We are here to ask questions and the Minister should thank the Opposition Members for asking awkward questions so that all these issues can be cleared up.

Order. Mr Chiam, what is your supplementary question on this subject?

Sir, I think it is unfair of the Minister to make that statement.

May I respond to Mr Chiam? I was not in any way referring to him or his Party. I was referring specifically to one individual.

And to the Workers' Party. May I ask the Minister whether he will agree that greater transparency which the Government proclaims is the desired object or necessary for good government would have been achieved by a full Commission of Inquiry with the public hearing the whole evidence that is laid before the Commission and deciding for themselves?

I fully agree on the need for transparency but three days of debate in Parliament should be more than adequate.

Would the Minister agree that satisfaction by the Prime Minister, albeit by the Prime Minister, is not the same as satisfaction of the public?

It has nothing to do with the satisfaction of the Prime Minister. I say it again that there is no prima facie evidence of anything that has gone wrong. So why are you pursuing the subject, especially when your Party Member has had the opportunity during the debate to raise these same questions?

Mr Jeyaretnam, can you proceed with your next question?

As you please, Sir. Question No. 5.

asked the Minister for Home Affairs what are the reasons for the reluctance of the Immigration authorities to issue Mr Ho Juan Thai a passport. The Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee) (for the Minister for Home Affairs): Mr Jeyaretnam is fully aware of the reasons why Singapore Immigration and Registration (SIR) has not issued Mr Ho Juan Thai a passport. Mr Jeyaretnam had been closely associated with Mr Ho, a member of the Workers' Party, and had acted as Mr Ho's counsel previously. SIR has not issued Mr Ho a Singapore passport for the following reasons: a) Mr Ho is required to respond to SIR's queries over the renewal endorsement in his expired Singapore passport. Mr Ho had publicly declared that he amended the expiry date of his passport, which expired in December 1976, to enter the UK in July 1977. If this is true, this may constitute an offence of forgery. b) Mr Ho has been an Exit Permit defaulter since August 1986. He is therefore required to answer for his Exit Permit offence upon his return to Singapore. c) Although no warrant of arrest has been issued against Mr Ho, the authorities would like to interview him over his racially inflammatory speeches at election rallies during the December 1976 General Election in which he ran as the Workers' Party election candidate in Bukit Panjang. Mr Jeyaretnam, acting as counsel for Mr Ho, was informed in 1986 why Mr Ho could not be issued a passport. Mr Ho himself was informed of the reasons in writing by the Singapore High Commissioner in London and MINDEF in 1992, when he applied for a new Singapore passport. The High Commissioner has also told Mr Ho that SIR is ready to issue him with a one-way Document of Identity to facilitate his return to Singapore if he so wishes.

Would the Minister identify the provision of law under which a citizen of Singapore can be denied a passport?

Sir, I think Mr Jeyaretnam very well knows the answer. It is found in the Passports Act, read with the Passport Regulations (Regulation 5).

If Mr Ho has committed any offence, the answer is to prosecute him and ask for extradition of him from the United Kingdom to Singapore. I take it there is an extradition treaty. Why deny him a passport?

That is exactly what we want to find out and have asked him to return. We are prepared to issue him a Document of Identity for him to return to Singapore, after which the authorities would question him to ascertain whether or not he has committed any offence and, if so, what offences he has committed. So, Mr Ho should come back and we can get to the bottom of it.

The Minister of State also says that the agency would like to interview or question him. I would like to know whether or not the Government still considers Mr Ho Juan Thai a threat to the internal security of Singapore.

That is the very reason why we want to interview him. He has to come back, he would be interviewed, and then we would decide.

May I ask the Minister, following the Member's question, what is the threat that Mr Ho poses? Is it the same threat that the Worker's Party poses to the People's Action Party?

I have outlined the circumstances why the authorities want to question Mr Ho. There are three instances and they are all in the answer.

May I ask the Minister whether he really thinks that he has answered the question?

The answer is obvious.

Mr Jeyaretnam, if you have no more questions, could you proceed with your next question?

Yes, all right, because we are not getting the answers, Sir, Question No. 6.

asked the Minister for Home Affairs whether there are any good reasons for denying Mr Abdul Razak b Ahmad entry into Singapore.

Affairs): Abdul Razak Ahmad, a Malaysian, was expelled and banned from entering Singapore with effect from 18th November 1966, because he took part in subversive activities while studying at the Law Faculty of Singapore University. Entry into any country is a privilege and not a right granted to foreigners. It is the view of this Government that Abdul Razak is an undesirable person who should not be granted the privilege of entering Singapore.

Would the Minister say why this Order was made against him? Was it not because he was part of a group asking for greater academic freedom in the universities in those days?

As I have said in my answer, he has engaged in subversive activities. Abdul Razak was actively involved in the Nanyang University students' agitation for the restoration of the Nanyang University Students' Union and also in Ngee Ann College's agitation in 1966 for the college to be made a full-fledged university. This resulted in several processions, demonstrations and indeed a violent clash between students and the riot Police.

Would the Minister of State say whether a demand for greater academic freedom in the universities is considered by the Government to be a threat to the security of Singapore?

Sir, it was not just a matter of debate about more freedom. As I have said in my answer, there were demonstrations, processions and fights. So it is a different thing altogether.

What is wrong with them in maintaining their protests by way of demonstrations, if it was necessary?

Sir, Mr Jeyaretnam is in this House, using our time to espouse the cause of a foreigner who, in 1966, participated in certain acts which were a destabilising factor in Singapore, and after that he also had in several ways made several unfriendly remarks. And indeed in 1986, he instigated and led a protest against Singapore over the then Israeli President Chaim Herzog's visit.

May I ask the Minister whether Abdul Razak applied to the Government to review the Order? Has he himself applied? The second question is whether the Government would consider, in view of the changed circumstances, allowing him entry on conditions?

After the ban was made in 1966, in fact, he was allowed in Singapore on four occasions for various reasons. He did apply to ask for the ban to be lifted, but the Government in 1984 turned it down.

Would the Minister consider, in view of the changed circumstances, whether it is still a risk to let him come in?

He has not applied. If he applies, we can consider it. But in terms of what he has done in 1966, the reason for the ban is fully justifiable.

Would the Minister explain why another student, Mr Chan Kian Hui who was also sent out of Singapore, had that Order revoked after a month's time, when Mr Razak has been prevented from coming in all these years?

If Mr Jeyaretnam files a question, I will give a reply.

It was mentioned that Abdul Razak was arrested for agitating the conversion of Ngee Ann College to a full-fledged university. May I ask what is wrong with that? Does it affect the security of a country?

As I have mentioned, it is not just about making a point for raising the status of the College, but what he did was he was involved in certain agitations which resulted in processions, demonstrations, fights and riots. And he is a foreigner too.

May I ask the Minister whether he was prosecuted for these riots and fights? Why was he not prosecuted?

One wonders why Mr Jeyaretnam is spending so much time of the House espousing his cause. Is there some interest?

May I remind the Minister that it is not for him to ask me questions. We know that banishment or prohibition orders against several other people have all been revoked or taken back. Why is this man in particular?

Sir, surely the circumstances must be different. Just because some orders have been revoked does not mean that we must do it for this man.

asked the Minister for Trade and Industry (a) how many Singaporeans and Malaysians are employed at the six water-works in Johore and (b) whether the Singaporean and Malaysian workers are employed on the same salary scheme.

Industry (Mr Tang Guan Seng) (for the Minister for Trade and Industry): Mr Speaker, Sir, the Public Utilities Board has 355 employees at the six water installations in Johore. 331 are Malaysians. 23 are Singaporeans. One is a Malaysian permanent resident. The same salary scheme is applied to all employees, regardless of their nationality.

Sir, why can the Ministry not employ Singaporeans, rather than giving a chance to 331 Malaysians to work there? The opportunity for Singaporeans to work there is gone.

As PUB is operating in Johor, employment should also be given to the locals.

asked the Minister for Communications if he will consider lowering the Electronic Road Pricing fines for motorcyclists. The Parliamentary Secretary to the Minister for Communications (Dr Yaacob Ibrahim) (for the Minister for Communications): Mr Speaker, Sir, the ERP system requires a motorist who uses an ERP expressway or road to install an IU in his vehicle and insert a CashCard of sufficient value. Therefore, motorists as well as motorcyclists who drive through an Electronic Road Pricing (ERP) gantry during the operating hours without an In-Vehicle Unit (IU) and a CashCard of sufficient value in the IU are committing an offence. We should not impose different penalties for the same offence as it is only fair that all offenders are treated equally, whether they drive a car, a lorry or ride a motorcycle. Nevertheless, LTA will continue to consider all appeals against ERP offences on the merits of each case.

Sir, how many motorcyclists have been summoned up to date?

Sir, from November 1998 to January 1999, out of a population of 132,385 motorcyclists, only 6,740 have committed ERP offences.

Sir, there is a difference between motorcycles and motorcars. Motorcycles are fitted with IUs but the CashCard can be stolen easily if they forget to take it out. Could the Ministry invent an IU so that the CashCard could be safe?

Sir, I am sure that if there is such a unit in the market, we will consider it seriously. But the best way to prevent theft is actually to remove the card after it has been used.

Sir, it is because of theft that I have asked for a lower fine for motorcyclists.

Sir, on the whole, we have been fair to all users of the ERP. As and when they have committed an offence, LTA has exercised a lot of flexibility in their appeals. In fact, just to add to the numbers that I have mentioned earlier, out of the 6,000-odd motorcyclists who committed ERP offences, about 1,500 appealed and 725 were actually successful in their appeals.

asked the Minister for Community Development if he will state the number of cases dealt by the Maintenance of Parents Tribunal.

Mr Speaker, Sir, since its establishment on 1st June 1996 until the end of 1998, the Tribunal for the Maintenance of Parents received a total of 424 applications for maintenance. 152 of these applications were registered in the first seven months of its operation, ie, from June to December 1996. In 1997, the number dropped to 138, and then to 134 in 1998, the following year. As at the end of January this year, the Tribunal received only six applications. As at the end of 1998, the Tribunal has dealt with 410 or about 97% of the applications. Only 14 applications or 3% of the cases are pending mediation and/or hearing. Of the 410 cases dealt with, the Tribunal ordered maintenance for 320 applications or about 78% and dismissed 61 applications. The remaining 29 applications or about 7% did not proceed because of withdrawal, death or some other reasons.

2.05 pm

"to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1st April 1999 to 31st March 2000", recommendation of President signified; 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 provide for making supplementary provision to meet additional expenditure for the financial year 1st April 1998 to 31st March 1999", recommendation of President signified; presented by 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 Betting and Sweepstake Duties Act (Chapter 22 of the 1985 Revised Edition)", recommendation of President signified; presented by 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.

Order read for consideration in Committee of Supply [Allotted Day].

Supplementary Estimates of Expenditure for the financial year 1st April, 1998 to 31st March, 1999, contained in Paper Cmd. 1 of 1999. No notice of amendment has been received. Question, "That the sums stated for the Heads of Expenditure as shown in Paper Cmd. 1 of 1999 stand part of the Supplementary Main Estimates", put and agreed to. Question, "That the sum of $280,999,980 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Main Estimates of Expenditure for the financial year 1998/1999", put and agreed to. Resolution to be reported. Question, "That the sums stated for the Heads of Expenditure as shown in Paper Cmd. 1 of 1999 stand part of the Supplementary Development Estimates", put and agreed to. Question, "That the sum of $1,323,921,090 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Development Estimates of Expenditure for the financial year 1998/1999", put and agreed to. Resolution to be reported. Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker, Sir, I beg to report that the Committee of Supply have come to certain resolutions. Resolutions reported. "That the sum of $280,999,980 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Main Estimates of Expenditure for the financial year 1998/1999". "That the sum of $1,323,921,090 shall be supplied to the Government under the Heads of Expenditure for the Public Services shown in the Supplementary Development Estimates of Expenditure for the financial year 1998/1999".

Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

Question put, and agreed to. Resolutions accordingly agreed to.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to amend the Infectious Diseases Act (Chapter 137 of the 1985 Revised Edition) and the Infectious Diseases (Amendment) Act 1992, to strengthen the public health control of Acquired Immune Deficiency Syndrome (AIDS) in Singapore. The Infectious Diseases Act was passed in 1976 to prevent the introduction and spread of all infectious diseases in Singapore. AIDS, which is caused by the Human Immunodeficiency Virus (HIV), became a notifiable disease under the Infectious Diseases Act in 1985. In 1992, the Act was amended to include provisions to tighten the control of AIDS and to provide for the confidentiality of infected persons. However, changing trends of HIV infection in recent years require us to make further amendments to the Act in order to strengthen the public health control of AIDS in Singapore. Before I go into the details about the Bill, let me brief the House on these trends and therefore the need for changes to the existing law. HIV/AIDS situation in Singapore The number of HIV infected Singaporeans has been increasing over the years since 1985 when the first case was reported. Between 1985 and 1990, a total of 61 cases were reported. The rate of increase has accelerated since then. In 1991 alone, 42 new cases of HIV/AIDS were reported, as against the total of 61 cases between 1985-1990. Over the last four years, the number of cases shot up to more than 100 per year. Last year, 1998, the number climbed to nearly 200. The exact number was 199. In total, there were 930 Singapore residents notified to be HIV infected between 1985 and 1998, of whom 423 had asymptomatic infection, 196 had full blown AIDS and 311 had passed away. In addition, a total of 2,813 foreigners had been tested to be HIV positive while they were in Singapore. About 80% of such foreigners were work permit holders and applicants. They have already left Singapore. The pattern of transmission of the HIV infection has changed over the years, from a predominantly homosexual infection to one that is mostly spread by heterosexual transmission. Over the last three years, heterosexual transmission accounted for an average of 78% of all new cases. Most of these cases had unprotected sex with prostitutes and casual acquaintances in Singapore or abroad. The pattern of heterosexual infection itself has also changed. The proportion of married men among new cases of HIV infection among male Singaporeans has increased from 10% in 1991 to 30% in 1998. With this shift of the infection to the married population, infected men are bringing the infection home to their wives. A further tragic consequence is that there are more reports recently of children with HIV infection. The first HIV infected child was reported in 1991. Since then, eight more cases have been reported between 1997 and l

998. All of them have been infected perinatally. Families have been devastated by the HIV infection. We have had at least two families where all members were infected. This emerging trend needs to be addressed. Another major concern that has arisen recently is HIV transmission through blood transfusion. In 1997, my Ministry reported the first case of HIV transmission through blood transfusion. Two persons became infected after they received blood from a donor who was in the window period of the HIV infection. This is despite the stringent measures taken by the Singapore Blood Transfusion Services (SBTS) to exclude donors with risk factors because the donor had lied in this case. The HIV infected donor admitted to a total of six offences under section 182 of the Penal Code. He was charged in court early last year and given a sentence of 12 months. This penalty is hardly commensurate with the harm the donor had caused to the two recipients who received his blood. In 1997, my Ministry was also notified of a health care worker who was HIV infected. All the health care worker's patients, who were exposed to the risk of acquiring the infection through clinical procedures that were carried out on them, were informed, counselled and offered HIV screening. This look back programme to trace the contacts of the health care worker cost my Ministry $400,000. Fortunately, none was infected. Sir, with the changing pattern of transmission of HIV infection in Singapore, we have to address these new and emerging issues pertaining to the HIV infection here. My Ministry has reviewed the law and put up new strategies to ensure that the health of our people is not compromised. Timely actions need to be taken to prevent further spread of the disease within the population. My Ministry has studied the existing Infectious Diseases Act and has proposed several amendments to the existing Act to tighten the control of HIV infection in Singapore. Several countries responding to the AIDS epidemic, like the United States, Britain and Australia, have legislation to protect the public. Legislation in these countries has been enacted to allow for the disclosure of the HIV status of a patient to the spouse, sexual partner or contact. Provisions have also been made for disclosure to health care providers and other personnel who had come in contact with blood or body fluids of an infected person, and to the next of kin upon death of the infected person as well as in the interest of public health if it is threatened. Even in the United States where there were earlier laws to protect the civil liberties of HIV infected persons, new legislation has been introduced more recently to identify, notify and make it an offence for those who intentionally place others at risk of contracting the infection. Infectious Diseases (Amendment) Bill Sir, I will now deal with the main provisions of the Bill. Currently, a person who furnishes false information at the Blood Bank is charged under section 182 of the Penal Code. This carries a maximum penalty of $1,000 and/or a maximum jail sentence of six months. My Ministry proposes to make this an offence under the Infectious Diseases Act so that the appropriate penalty commensurate with the severity of the offence can be meted out. In the Amendment Bill, under a new section 10A, it is an offence to furnish false or misleading information in relation to the donation of blood. The maximum penalty under this section is a fine of $20,000 or a term of imprisonment not exceeding two years or both. Consequent to such a new provision, section 20C of the principal Act is amended to raise the penalty for a person who knows that he is HIV infected and yet donates blood or does any act that is likely to result in the spread of the disease from $10,000 to $50,000. Exceptions to Medical Confidentiality The identity of the person with AIDS/HIV infection is protected under section 20D of the existing Act, where disclosure of identity and HIV status is allowed only to specified categories of persons. To address the public health issues that have arisen over recent years which I have described just now, my Ministry proposes that new exceptions to medical confidentiality be included. The main objective of such new exceptions is to prevent transmission of the infection through irresponsible behaviour by persons who are infected and to allow those who have been exposed to the risk of the infection to be informed early, counselled and tested. With the availability of newer anti-retroviral drugs, early diagnosis will allow such victims to be treated to delay the progress to full blown AIDS. The treatment will also allow for a better quality of life on the part of the patients. Under clause 7(d) of the Amendment Bill, new provisions have been provided to allow the disclosure of the HIV status and the identity of the HIV infected person to his/her spouse and contacts. This amendment is to cater to the increasing incidence of HIV infection among married persons. From our experience, the infected person is sometimes reluctant to inform the spouse or contact despite numerous counselling sessions and advice from the doctors. Some have even refused to do so. Under the existing Act, my Ministry is unable to take any further action should the patient refuse to inform his or her spouse or contact. The new provision will allow the doctor to disclose the HIV status of the patient to the spouse or contact if the patient refuses to do so despite repeated counselling by the doctor. My Ministry strongly views that the spouse or contact who has been exposed to the risk of infection has a right to know so that they can be counselled and screened for the infection. Those who are not infected can take the necessary precautions to protect themselves against any further exposure to the HIV while those who may be infected will have a chance to undergo anti-retroviral therapy while they are in the early stages of the infection and make the relevant choices. For example, for infected wives who are pregnant, early diagnosis will allow a choice to abort the pregnancy or to take prophylactic measures to prevent transmission of HIV to the baby. My Ministry will continue to counsel those who are infected on the importance of disclosure so that they inform their spouses and contacts themselves and to bring them forward for counselling and screening. However, we will need to apply this legal provision if the counselling fails. Clause 7(d) of the Amendment Bill also enables the disclosure of the identity of a HIV infected person to the health care workers who have previously treated him/her, or to any other person who, in the act of rendering emergency assistance to a HIV infected person, has therefore been exposed to the risk of infection with the HIV. Other new provisions under clause 7(c) of the Amendment Bill would allow my Ministry to disclose the identity of HIV infected foreigners to the Controller of Immigration for the purposes of the Immigration Act, and the disclosure to the next of kin of the HIV infected person in the event of death, because special burial arrangements have to be made to ensure that public health is safeguarded. Under the Amendment Bill, the Minister is empowered to authorise the publication of information which may identify the HIV infected person in instances where the health or safety of the public is threatened. I would like to assure the House that this provision would only be evoked under extreme circumstances, such as when an infected person wilfully continues to place others at risk of contracting the infection, and the disclosure can only be done with the Minister's approval. Re-disclosure of information To ensure that there is no abuse despite the increase in the categories of persons to whom information on the HIV infected person can be disclosed to, the Bill has included a provision under clause 7, subsection 9, in which no person to whom any information on a HIV infected person has been disclosed, shall re-disclose such information to anyone except to persons stipulated in the Act. Unauthorised re-disclosure will be dealt with seriously. The penalty is a fine of $10,000 or imprisonment for a term not exceeding three months or both. In conclusion, with the increasing incidence and changing pattern of HIV infection in Singapore, the amendments to the Infectious Diseases Act are necessary to ensure that the health of our people is not compromised. All of us, doctors, neighbours and friends, members of the public, should continue to empathise with HIV patients and their families. AIDS is a dreadful disease that causes great suffering and social stigma to the victims and their loved ones. We must continue to help them and treat them humanely and with great compassion. My Ministry will ensure that the new provisions under the Infectious Diseases Act will not be abused and the rights and confidentiality of the infected person are protected as far as possible. At the same time, we will continue and step up our public education on AIDS, so that all Singaporeans will become fully aware of the danger of the infection and take preventive measures to avoid the risk of being infected. Sir, the proposed amendments to the Infectious Diseases Act will enable my Ministry to step up the public health control of AIDS in Singapore. It will help to prevent further transmission of the infection among the population, and allow those who may be innocently infected to seek screening and early treatment. It will also enhance further the safety of our national blood supply. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I support the amendments proposed by the Senior Minister of State. The Senior Minister of State has mentioned about the rise in incidence of AIDS in Singapore, which is alarming by itself. But let me refer Members to some statistics for the world which point out even more starkly the spread of AIDS. Many of us are aware that the spread of AIDS is increasing but not to the extent that is being done in certain areas. For example, this survey was done by Time magazine and published in the Annual 1996. The number of people living with HIV AIDS in North America as at the end of 1996 amounted to 750,000 people. The change from 1992 to 1996 was minus 13%. That means, they have actually a reducing incidence of people with AIDS. Maybe they died. The death in 1996 was 61,000. In Western Europe, the total number of people with AIDS is half a million. The change from 1992 to 1996 is 2%, and death in 1996 was 10,000. This shows that at least, for the time being, the increase in AIDS in people has stabilised for the developed countries in North America and Western Europe. In the Sub-Sahara Africa area where AIDS started actually, the number of people living with AIDS now amounted to 14 million. Changes from 1992 to 1996, 37%; and death in 1996, 783,000. The interesting one is for South and South-east Asia. By this, I think India and Pakistan, and also all parts of Southeast Asia included, the number of people living with AIDS and HIV is 5.2 million. But the change between 1992 and 1996 was 261%, which is the highest among all the continents; and death in 1996 was 43,000. This could be because of detection, but the high increase could not hide the fact that the spread of AIDS in this region is getting out of control. Singapore is particularly vulnerable because we are exposed to the region. We have people coming into Singapore in far greater numbers, and Singaporeans are travelling abroad even more frequently. The possibility of being affected by this disease will be only increasing with time, rather than lessening. Therefore, I fully endorse the Ministry's policy to enhance the punishment for not revealing this illness to the spouses or contacts and to empower our Immigration Officers to be on the lookout for foreigners coming in. The punishments recommended are not as harsh as those under the Misuse of Drugs Act. In fact, AIDS is worse than drugs. It is a death sentence. The moment you get it, that is it. And if we are so conscious in controlling drug abuse and drug trafficking, and we have been successful at it, all the more reason we should make sure that we apply the same methods to an even more dangerous disease - AIDS. Therefore, I fully support the enhanced punishment proposed by the Ministry. But, I think, ultimately, it is much better to look at prevention rather than cure. In this case, cure is not even secure. Whatever punishment you have is only after the event. As the Minister says, it is better to see how we can prevent the disease. This brings us into the social realm. The Government cannot legislate this. The best thing to do it is, as the Chinese say, if you do not want people to know about it, do not do it. If you do not want it to happen to you, do not do it. The first thing is if we can maintain spouse fidelity, we will never have a chance of passing any of these things to our children, to our wives and to the children; a proper lifestyle, perhaps, when you travel to countries where the incidence of AIDS is very high. But these are human behaviour which the Government cannot force on our people because they have the freedom of choice. But HIV to me is almost a death sentence which in this case not only affects oneself, it affects all those with whom they come into contact. I do not think the Government will take much joy in getting more revenue from fines. That is the least of the problem. But I think the more adverse impact coming from this is: should AIDS spread through the children, through the spouses and families, the resultant social problems that arise would be a much bigger price to pay. And I think we should do what we can to ensure that this is minimised. The message to Singaporeans at large is the laws are meant to protect you but, ultimately, you have got to protect yourself. The Government cannot do that. I support the Bill.

Mr Speaker, Sir, I would like to declare my interest. I am a family practitioner. Disclosing patients' medical records is a breach of medical confidentiality. Medical confidentiality is the cornerstone of medical practice, that is, we doctors never reveal any patient's problem even to close relatives who call up to find out what is wrong, unless the patient's consent has been given, and this builds up trust between a patient and his doctor. However, as disease patterns change, and new illnesses, like AIDS, which pose a danger to the society at large, doctors are prepared to compromise and surrender their medical confidentiality under very special circumstances. This is for the better good. This Bill, amongst others, seeks for more exceptions to medical confidentiality with regard to patients suffering from AIDS, Human Immunodeficiency disease. But in seeking this breach of confidentiality, this Bill very carefully avoided indiscriminate disclosures by imposing strict guidelines as to who, when and how these disclosures can be made. Thus, in section 20D of the Infectious Diseases Act, and under clause 7, amendments to section 20D of the original Act, there is a list of personnel and departments where such disclosures can be made under certain conditions. This is very reassuring and I support the amendments. However, let me bring Members to the attention on the Explanatory Statement on pages 6 and 7. This is where I want to seek clarification from the Minister. If you look at the Explanatory Statement in the two pages I have mentioned, there is a phrase "any other sexually transmitted disease". It is not present in the Amendment Bill itself. Thus, clause 7, which amends section 20D, as stated in the Explanatory Statement, and I quote: 'provide for more exceptions to medical confidentiality [in subsection (1)] in relation to information that would identify a person who is suffering from AIDS, Human Immunodeficiency Virus Infection or any other sexually transmitted disease.'. Mr Speaker, Sir, this last phrase "any other sexually transmitted disease" is all encompassing. Unlike AIDS, many sexually transmitted diseases are not fatal with modern management of the illnesses and thus pose no serious danger to society. Take, for example, this Protozoa infection called Trichomonas. It is sexually transmitted but easily treatable and is fairly common even among married couples. I am not sure whether, according to what I interpret from the Explanatory Statement, that this Trichomonas infection needs to be disclosed. In fact, I wonder why this particular statement was introduced in this Bill. It seems to be out of place. In the original Act, the Infectious Diseases Act (Chapter 137), all infectious diseases listed in a specific form must be notified to the Ministry. And this is correct, as it allows the medical body to monitor the pattern and spread of these diseases. I have a form here for Members who want to know or want to see it. They can come and see me afterwards. In this form, there was no mention of Trichomonas infection. Therefore, to make matters clearer and to avoid any ambiguity in interpretation in the future, I would suggest that we add the word "designated" before "sexually", so that the phrase would now read: "any other designated sexually transmitted disease". I think this is much clearer. Mr Speaker, Sir, the Ministry is now run by non-doctors at the top as administrators. If they choose to interpret the Bill according to what is stated, then we may face problems in future, and this goes for the other future medical Bills. Finally, Sir, I wish our Bills can be drafted in a manner which is easy for lay people like myself to follow. The number of times I have to turn the pages to understand which section relates to which, and which clause must be inserted into which statement, I find all this tiring. I am sure in my discussion today when I mentioned those sections, some of you are also quite blur. Mr Speaker, Sir, I must confess that each time I read a Bill, I find that to get a coherent understanding it eats too much into my time and understanding. Mr Speaker, Sir, I support this Amendment Bill and hope the Minister will look into what I have suggested, that is, inserting the word "designated" before "sexually".

Order. On behalf of Hon. Members, I welcome Deputy Vatanyar Saidovich Yagya, and the members of his delegation from the St. Petersburg Legislative Assembly, who are present in our Gallery. [Applause].

Debate resumed.

Mr Speaker, Sir, I would like to declare that I am a medical practitioner. I stand to support the Infectious Diseases (Amendment) Bill. In my opinion, the amendments in this Bill will give better protection of the public with regard to Human Immunodeficiency Virus (or HIV) infection. We know that there is no cure at present for those suffering from Acquired Immunodeficiency Syndrome (or AIDS) because of HIV infection. Therefore, any improvement towards protecting innocent people, through no fault of their own, from getting the deadly HIV infection, is welcome news. Indeed, I believe that having stringent measures in place to deter inconsiderate or ignorant people from harming others through HIV infection is prudent and timely. I agree with my parliamentary colleague, Mr Bernard Chen, that the action by such people amounts to giving their victims the death sentence and such action, whether intentional or inadvertent, must be considered illegal, to say the least. Sir, I would like to contribute the following concerning the amendments: Insertion of new section 10A The insertion of this section 10A to create an offence when blood donors supply false or misleading information and to set a maximum penalty under this section as a fine of $20,000 or a term of imprisonment of two years or both is necessary and timely. It is necessary because there is this `window period' when presently available tests cannot detect an early HIV infection. Although with new technology, this `window period' will become shorter, it is extremely important that blood donors give truthful information, through detailed questionnaires. This is, unfortunately, still the only way to minimise the risks of innocent blood recipients from being infected. It is timely because any means of deterring a repeat of that tragic incident in 1997, as mentioned earlier by the Senior Minister of State, when two blood recipients contracted HIV infection because a blood donor had lied about his promiscuous habits, is most welcome. Sir, some people may argue that such strict deterrents will result in fewer much needed blood donors. However, much as we need blood donors, the safety of blood recipients must be protected as a matter of highest priority. The majority of blood donors volunteer as good Samaritans. They want to be contributing a good service to the society. They want to be saving someone's life. With such good intentions at heart, the severe penalty imposed on errant donors will not interfere with their willingness to continue as blood donors. It is necessary, however, for the public to be assured that the intent is not to penalise blood donors liberally but to dissuade those with high risks to abstain from blood donation. I hope the Ministry of Health can step up in its campaign in this area. Amendment to section 20C Sir, this section provides an enhanced penalty of up to $50,000 in fine where a person who knows that he has HIV infection or AIDS donates blood or does any act that is likely to result in the spreading or transmission of those diseases. Although it is good to have this clause, the resultant effects would depend on the next task for the Ministry of Health. This task would be to ensure that the targeted group gets the message. For example, the warning about the penalty may need to be prominently marked on the blood transfusion registration forms; the warning may have to be posted in the wards of the Communicable Disease Hospital and the same warning may need to be clearly explained to newly diagnosed HIV patients. Sir, my question to the Senior Minister of State is, in those recalcitrant cases that do not heed any warning and are callous in their behaviour within society, what further preventive measures can be meted out? Could these offenders be made discretely identifiable to the relevant authorities or persons? Could these offenders be forcibly put behind bars? Since confidentiality will be an issue here, who with the privileged information can report them? Amendment of section 20D The amendments here include the addition of four more exceptions to medical confidentiality for HIV infected patients in subsection 1 and the insertion of new subsection (12) to provide for medical confidentiality and disclosure of the identity of infected patients. Mr Speaker, Sir, such a large list of new provisos indicates the tremendous difficulties involved in this very sensitive issue. The newly inserted subsection (6) allows medical practitioners to disclose information identifying the infected person to his spouse, former spouse or other persons who have experienced a significant risk by being in contact with him. This is welcome news especially when these contacts of the inflicted may generally be the highest at risk of being infected. Among 90% of the known cases in Singapore are males. In 1998, there were 830 males with HIV infection and in the past two years, eight children were detected to have HIV infection. Sir, I feel this amendment may help lessen the number of females and children from potential infection. The argument against this new subsection may be that people who suspect they themselves may have HIV infection would be reluctant to come forward for fear of being disclosed. This, however, has been addressed through certain safeguards. One of them is the requirement for the medical practitioner to counsel and inform the infected person of his intent to make such disclosure to the spouse, former spouse, or other contacts. Otherwise the medical practitioner shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding three months or to both. Mr Speaker, Sir, I would like to ask if the Senior Minister of State would consider three further aspects on this Bill. (1) Not included for a further consideration with these amendments is the subject of consent for diagnostic investigations for HIV infection or AIDS. I feel that a responsible approach together with these amendments in place should provide sufficient protection from breach of confidentiality of a person with HIV infection or AIDS. Sir, on the other hand, it is important to protect those who are at risk of exposure and it is important to protect the public by keeping the infectious disease from spreading. The ease to diagnose, to identify and to treat the infected and their contacts would be the key to effectively deal with these aspects. HIV infection or AIDS should be treated like any other infectious diseases. The consent for diagnostic tests should be implied when a person gives general consent for medical or surgical treatment. There should not be a need for specific consent. Only then, Sir, can all those involved in the management of the disease feel at ease to handle the condition in a normal way. Only then, perhaps, can the infectious disease be effectively managed and contained. (2) Each country deals with this disease in its own way and the solutions for one country may not be relevant to another or to us here. Sir, though fortunately not an endemic problem, the incidence of HIV infection or AIDS is increasing in Singapore. We should take every measure possible to keep it in check. Our population and our problems are unique to us and there is scope for us to take more stringent and radical steps to combat the increase of the disease. (3) There is a need to inform and advise all doctors and healthcare workers on new regulations pertaining to their profession in simple terms. Many of them would not know about the amendments to this Bill and the details contained therein. Perhaps the Ministry of Health would keep all relevant parties well informed. I hope the Senior Minister of State would enlighten me in these areas. Sir, I support the Infectious Diseases (Amendment) Bill.

Thank you, Mr Speaker, Sir, for giving me this opportunity to speak. Mr Speaker, Sir, having listened to the very moving speech by the Senior Minister of State in which she painted the picture of the AIDS patients, and having heard Mr Bernard Chen who also graphically painted the picture that is emerging, I have no doubt that this House would support this Amendment Bill. Sir, we have moved from the days when we had malaria as an infectious disease. In fact, the first legislation was introduced in 1915 when Singapore was largely a seaport. Today, she has become one of the largest airports in this part of the world. We are getting people from all over the world and our citizens are also travelling. It is therefore important that we should legislate and take care. Mr Speaker, Sir, what is required is social education. We have to inform the public at large the need to take preventive measures. Sir, section 10A, which is a new piece of legislation, lays down that any person who supplies any material information which he knows to be false or misleading may be fined up to $20,000 or imprisonment for a term not exceeding two years or both. I think the existing Penal Code does not have the severity which this Bill introduces. I support this amendment because the Penal Code provisions are really inadequate. And it is very important for us to have enough deterrents. But when I move to section 20C, Sir, I am a bit apprehensive. From $10,000, we are increasing to $50,000. This is too drastic and I hope the Senior Minister of State will explain to the House the necessity of taking such a large quantum move. Sir, Members have spoken on the other details and I do not want to belabour the points. Generally, it is important that we should have a legal framework for medical practitioners and other officials to work within the framework of law and it is important that we lay it down. I share Dr Tan Cheng Bock's concern. As a lawyer, I find difficulty in comprehending this piece of legislation. We are moving to plain language, and I hope that our draftsmen will try to make it as easy as possible. If we have difficulty, what about the man-in-the-street, Sir? I know the Attorney-General has been trying his level best to have simple plain English and I would again urge the draftsmen to have mercy on us. Sir, with these words, I support this Bill.

I would like to thank the Members of the House who spoke in such strong support of this Bill. We all realise that Singapore is open to the world trend of increase in AIDS/HIV infection, and therefore we must do our utmost to try to contain the problem, to prevent its spread among the population and to educate people to avoid the risk of infection. I agree completely with Mr Bernard Chen, Dr Lily Neo and also Mr Shriniwas Rai that public education is very, very important. We will do our best in this respect to help prevent the disease and its spread. Now, let me address some of the specific points brought up by my colleagues here. Dr Tan Cheng Bock talked about the Explanatory Statement where "any other sexually transmitted disease" is mentioned. He said that he could not find this phrase in this Amendment Bill and he was concerned that this is too blanket a statement which would seem to allow the disclosure of a whole range of sexually transmitted diseases on the same ground or at par with HIV infection. Actually this Amendment Bill is an extension of the 1992 Amendment Act where, in section 20D, it is mentioned "or is suffering from a sexually transmitted disease" which is any other STD. I would like to point out that there is a reason for this. By inserting "any other sexually transmitted disease" is to cater for a situation when, apart from HIV, some time in the future, we may discover another very deadly disease that we have to control on the same ground and use the same measures as we control HIV. So that is a contingency. But, in practice, as Dr Tan mentioned, in the Notification of Infectious Diseases form, which is gazetted and which every medical doctor receives, it is clearly stated that for the other sexually transmitted diseases, such as gonorrhoea, syphilis, non-gonococco urethritis and so on, there is no need to disclose the full name, the identity card or passport number, address, etc, of the patient. The only exception for full information is on HIV. I am not sure about the STD that Dr Tan mentioned. I could ask my officers to look into this and whether it is specifically mentioned in the form. There is no need to add the word "designated" before "sexually transmitted diseases" in this amendment or in the law itself because it is fully understood that the list of diseases will be gazetted and that the law will apply to these gazetted conditions. Two Members have complained about the language of this Bill. I will feedback this to the Attorney-General's Chambers. In fact, I also spent quite a lot of time trying to read through this Bill. May I address some of Dr Lily Neo's points. Again, I thank her for supporting this Bill. As for her point about the severity of the new penalties on blood donors who give false information or wilfully donate blood even though they know of their own HIV status, my Ministry will revise the Donor's Health Assessment questionnaire to include the new provisions of the amended Act. Even in the existing blood Donor Health Assessment Questionnaire, we have already warned them about the danger of donating contaminated blood which is not suitable for transfusion and if they do so, they would be liable to prosecution and would face serious consequences. We will update our Donor's Health Assessment Questionnaire to include the new penalties and so on, that we have amended today. HIV patients at the Communicable Disease Centre (CDC) are always warned during the counselling sessions that it is an offence to carry out any act that may transmit HIV infection to others, such as sexual intercourse, without first informing their partner of the status, or to donate blood. Again, in our counselling at the CDC, we would make sure the counsellers, doctors and nurses will inform the patients of the new provisions in this Bill. In the event of a HIV patient who behaves carelessly and most irresponsibly, then this amendment Bill allows the Minister for Health to disclose the identity of the HIV infected person to relevant persons, including the public, so as to ensure that public health and safety is preserved. It is a preventive measure to publish information which leads to the identification of the person but it will call for the Minister's authorisation and it would be done only under extreme circumstances when the person behaves carelessly and most irresponsibly. On Dr Neo's comment that there is no need for specific consent for HIV testing when a person seeks medical or surgical treatment, I would like to emphasise that HIV infection is different from any other infectious diseases in that there is at present no cure and that it carries a very strong social stigma. Therefore, HIV testing and its outcome have a very traumatic impact on the person. It is almost like a pronouncement of a death sentence, as some Members have put it. Persons undergoing such tests should therefore be fully aware of the nature of the test and be counselled before and after the HIV test is carried out. Counselling is crucial because it will help the patient cope with the situation and help him change his risk behaviour and lifestyle to prevent further spreading of the disease. Under the law, it is necessary in all circumstances to obtain consent of the person before taking his blood for laboratory testing. This includes testing the blood for HIV. This act, if done without the patient's consent, constitutes a battery of tort and an offence of voluntarily causing hurt under section 323 of the Penal Code. From the medical ethical point of view, when a patient seeks medical attention, doctors have a duty to inform him what tests are being done and what is the nature of this test. So this is in the spirit of a good doctor-patient relationship. In the case of HIV testing, informed consent is required to also protect the doctor in case there is a denial by the patient later. HIV testing is put on par with a surgical operation as it has serious implications should a positive result turn out. Finally, on her point about the need for more stringent and radical steps to control the spread of AIDS in Singapore, we should not be complacent about the situation but it is a fact that the extent of the AIDS epidemic in Singapore is comparatively smaller than many other countries in the region, because we took steps to control the situation very early, from the day go in 1985, shortly after AIDS itself was identified. So, we have taken the necessary AIDS control measures and we have been reviewing and fine-tuning the strategies based on the changing trends of the HIV infection over the years. I am confident that with this amendment Bill, we would be able to further tighten the AIDS control situation for public health purposes in Singapore. Of course, we will inform all the medical practitioners and health care workers of the new provisions and keep them updated. Finally, let me come to Mr Shriniwas Rai's point about the severity of the penalty. I think he agrees with the new section 10A, that is, for people who give false information when they give blood donation, the penalty will be raised to $20,000 or to imprisonment of two years or both. But he does not quite agree with section 20C that raises the present penalty for a person who knows that he is HIV-infected but he still insists on giving blood at our blood bank. Mr Rai does not agree with raising the penalty from $10,000 to $50,000. He said that it is too severe. I think the heavy penalty underscores the seriousness of the crime. This person has already been counselled against giving blood. He knows about his own HIV status. He knows it himself and he still persists in donating blood. When he goes to the blood centre, he is made to understand the consequences. He is given the blood donor's health assessment form where he has to sign a declaration about his blood donation. If he knows that he is HIV infected, he is supposed to refrain from donating blood and there are legal penalties involved and he knows. He is supposed to read this form, and be counselled before signing the form. But he still does it. It is very dangerous because this could cause the death of the person who receives his blood. Of course, if the the blood is infected, we are able to detect it because of our stringent tests. But in the extreme case, if it escapes detection, the consequences would be too heavy. If he does it wilfully, with his eyes open, then I must question what is the motive. We must guard ourselves against such irresponsible behaviour. I think I have addressed all the points.

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. - [Dr Aline Wong]. Bill considered in Committee; Bill reported without amendment; read a Third time and passed.

Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with Section 4 of the Foreshores Act (Cap 113) approves the reclamation by the Government of the foreshore and seabed, west of Pulau Pesek Kechil, Pulau Ayer Chawan and Pulau Sakra containing an area of about 975.4 ha as shown coloured pink on the plan marked `LAND OFFICE RECLAMATION PLAN NO 1/99', which is deposited in the Land Office, Singapore. Sir, Parliament at its sitting on 28th May 1993 approved Stage 1A of the reclamation for 166.59 ha of foreshore/seabed between Pulau Seraya and Pulau Merlimau, Pulau Ayer Chawan, Pulau Ayer Merbau and Pulau Sakra to form the proposed Jurong Island. Stages 1B, 1C, 2A, 2B and 2C to reclaim 440.4 ha of foreshore/seabed between Pulau Seraya, Pulau Ayer Merbau, Pulau Ayer Chawan, Pulau Sakra, Pulau Pesek and Pulau Pesek Kechil were approved by Parliament at its sitting on 27th February 1996. Stage 3A to reclaim 34 ha of foreshore/seabed north of Pulau Merlimau was approved by Parliament at its sitting of 19th November 1997. Stage 2B4 to reclaim 7.59 ha of foreshore/seabed south of Pulau Ayer Chawan was approved by the Minister for Law on 26th October 1998 as it is less than 8 ha. Majority of the reclamation works for these stages have been completed and proclaimed as State land in 1998, except for Stages 1B, 2C and 3A which are scheduled for completion in April 1999. The reclamation to form the Jurong Island is to meet the projected demand for industrial land in Singapore. It will turn the amalgamated Jurong Island into a world-class chemical and petrochemical complex, with related supporting industries. It is now proposed to proceed with Stage 3B of the proposed reclamation to reclaim the foreshore/seabed west of Pulau Pesek Kechil, Pulau Ayer Chawan and Pulau Sakra as shown coloured pink on the plan marked `LAND OFFICE RECLAMATION PLAN NO 1/99', a copy of which is displayed in the library of this House. The proposed reclamation will yield an additional 975.4 ha of land for industrial development. Fills required for the proposed reclamation will be imported. The Jurong Town Corporation will be appointed as agent of the Government to oversee the reclamation works. The reclamation works, estimated to cost approximately $1.3 billion, will commence immediately and is scheduled to be completed in December 2001.

Question put, and agreed to. Resolved, That this Parliament, in accordance with Section 4 of the Foreshores Act (Cap 113) approves the reclamation by the Government of the foreshore and seabed, west of Pulau Pesek Kechil, Pulau Ayer Chawan and Pulau Sakra containing an area of about 975.4 ha as shown coloured pink on the plan marked ` LAND OFFICE RECLAMATION PLAN NO 1/99', which is deposited in the Land Office, Singapore.

Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,779,000", "$2,404,700", "$841,300" and "$17,000" in the second column and substituting the figures "$1,568,000", "$2,137,900", "$952,500" and "$241,200" respectively. Sir, it is proposed that a provision of $1,672,,400 be supported for Class I expenditure. This is $211,000 less than the FY98 provision because the President has decided to apply the wage cut on the Privy Purse. The provision for Class II expenditure (Salaries for Personal Staff) is expected to decrease from $2,404,700 to $2,137,900 mainly due to the wage cut implemented for the Civil Service in January 1999. A provision for $952,500 is required for Class III expenditure (Expenses of Household). This represents an increase of $111,200 or 13.2% over the FY98 provision as higher maintenance expenditure on Istana grounds and utilities charges are expected. For Class IV expenditure (Special Services), a budget of $241,200 is allocated which includes a provision of $235,000 for the replacement of the President's official car. It is therefore necessary to vary the provisions in the Schedule in the Civil List and Pension Act (Chapter 44) as indicated in the Motion before the House.

Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$1,779,000", "$2,404,700", "$841,300" and "$17,000" in the second column and substituting the figures "$1,568,000", "$2,137,900", "$952,500" and "$241,200" respectively.

Order, I suspend the Sitting and will take the Chair again at 4.00 pm. Sitting suspended accordingly at 3.16 pm until 4.00 pm.

Sitting resumed at 4.00 pm

Mr Speaker, Sir, I beg to move, That Parliament approves the financial policy of the Government for the financial year 1st April, 1999 to 31st March, 2000.

In contrast to 1997 when we were relatively unscathed, the Singapore economy experienced the full impact of the regional crisis in 1998. Economic growth last year slowed sharply to 1.5%. On a year-on-year basis, GDP growth has turned negative for the last two quarters of 1998, after registering negative quarter-on-quarter growth for the first three quarters of 1998. The sharp contraction in regional demand was the key cause of our economic weakness. The crisis-afflicted economies of Indonesia, Thailand, Malaysia, Korea and Hong Kong all suffered recessions in 1998, with significant output declines throughout the year. The economic situation in Japan also worsened considerably, with rising concerns about its banking system. Through our close economic linkages, problems in these six Asian economies impacted on Singapore, particularly for the more regional-oriented services sectors. For example, overall trade shrank by 7.5% in 1998, visitor arrivals declined by 13%, while activities in the Asian Dollar Market contracted by 10%. Retrenchments reached an all-time high of 28,300 as rising competitive pressures, coupled with the fall-off in business demand, led to consolidations in business operations. Job insecurity and lower wage growth caused a 0.1% decline in private consumption spending. As demand declined, prices fell and the Consumer Price Index contracted by 0.3% for 1998. A significant fall in domestic asset prices added to the bearish sentiment and exacerbated contractionary pressures associated with the economic decline. The combination of external and domestic contraction has produced Singapore's second economic recession since independence. Unlike the 1985 recession, the current downturn is primarily a result of the sharp moderation in external demand. In several regional countries, structural economic and financial problems have been complicated by more fundamental political and social factors. These will take a longer time to resolve.

Notwithstanding the bleak picture in 1998, some positive signs have emerged over the last three months that the crisis is stabilising. The quick succession of US federal rate cuts and the co-ordinated interest rate reduction initiated by European central banks toward the close of last year helped to allay concerns of a global credit crunch and set the stage for a rapid, albeit fragile, recovery of financial markets in early 1999. Financial indicators have also stabilised in the region. Interest rates have dropped sharply, improving liquidity and reducing debt-servicing expenses. Confidence has been further boosted, particularly in Korea and Thailand, by credible progress on policy reforms, sizeable trade surpluses and strengthening foreign reserves. In Singapore, some economic indicators are starting to improve. The Composite Leading Index (CLI), which leads economic activity by about nine months, increased marginally in the third quarter of 1998 and picked up momentum in the fourth quarter, after three consecutive quarters of decline. Increased new orders, lower manufacturing unit labour costs and improvements in business expectations helped fuel the turnaround in the CLI. There are also nascent signs of a recovery in the global electronics industry. Demand for disk drives and semiconductors is on the upturn, following the corrections in inventory overhang and healthy new orders from the US. The global semiconductor industry is forecast to grow by 15% in 1999, after contracting by 6% last year (Source: Dataquest.). Global shipments of disk drives are expected to rise by 18%, with revenues growing by 7% (Source: TrendFocus). Despite these positive signs, 1999 may well turn out to be another difficult and challenging year for Singapore. We are in a period of sharp discontinuities. Many uncertainties in the external environment can still unravel, including significant economic, social and political risks. Their outcome will substantially affect our prospects this year. Global Financial Market Volatility Financial markets, especially in the emerging countries, are still fragile and prone to bouts of nervousness, as is evident from the recent episode of the Brazilian Real flotation. More importantly, the process of de-leveraging and portfolio re-balancing in response to heightened volatility and risk aversion in emerging markets is not yet complete. This will restrict the region's much needed access to international capital. Health of the US Economy With Japan stagnating and EU adjusting to its new monetary union, the US remains the linchpin of the global economy. Some analysts have remarked that "what happens in the US is make-or-break for the world economy this year". (Financial Times, "Cracks in Wall Street", 7 January 1999, Samuel Brittan.) The current US expansion has entered its 92nd month, the longest peacetime expansion since the 1850s. Rapid above-potential growth, however, has led to some macroeconomic imbalances in the US economy. The savings rate has turned negative. Current account deficits are at a record high. The US economy is widely expected to moderate to slower growth this year. This is viewed as a welcome breather for the overheated economy. There are, however, several downside risks to this projection for a soft landing in the US economy. For one, a sharp correction in the US stock market may push the US economy into a sharp contraction rather than a benign easing. An estimated 40% of the average US household's net worth is in the stock market. The negative wealth effect from a substantial correction on Wall Street is potentially large. The OECD has estimated that a 20% fall in US equities could lead to a 1% reduction in US GDP as a result of lower consumer spending. (December 1998 OECD Working Paper, "Stock Market Fluctuations and Consumption Behaviour: Some Recent Evidence".) This does not account for the impact on investments or the secondary knock-on effects, particularly on global financial markets, which are likely to be substantial. Aside from the equity risk, there could also be significant repercussions on the US banking sector and economy if Brazil falls into full-blown recession and drags down the rest of Latin America. The US extended 51% of its total overseas lending and directed 21% of its exports to Latin American countries. In terms of corporate exposure, 20% of US' earnings from direct investments abroad were derived from Latin America. The linkages are significant and pose a potential threat to the health of the US economy. Economic Recovery in Japan Japan accounts for 64% of Asia's output and absorbs about 12% of Asia's exports. It is a key source of capital investments and loan financing for Asia. After last year's package of counter-cyclical policy measures, the Japan Economic Planning Agency (EPA) has estimated that with sufficient stimulus, real GDP growth of 0.5% in FY1999-2000 should be achievable. The Diet has passed a stimulatory budget worth 82 trillion yen for the coming fiscal year. If the Japanese economy recovers as expected by the EPA, it can be the locomotive to pull Asia out of its slump. However, the chances are that economic stagnation will continue for some time. Competitive pressures may undercut export earnings. Rising bond yields have raised long-term borrowing costs, while over-capacity in the manufacturing sector is dragging down profits. Consumer and business sentiments are bearish, weighed down by bankruptcies and high levels of unemployment. These factors make prospects for a near term recovery very uncertain. Socio-Political Developments in the Region The success and pace of economic reforms, restructuring and recovery in the region hinges on restoring and maintaining social and political stability in the affected countries. Popular support and social order are pre-requisites to carry out tough reforms, implement rational policies and restore confidence. This is a challenge which all the crisis-hit Asian economies are grappling with. The biggest uncertainty is Indonesia, where social and political tensions threaten to undermine financial and economic reforms. The coming June elections will be a milestone in determining how the fragile political and social conditions develop. If the elections proceed smoothly, the newly elected government can ride on its popular mandate to rebuild the economy. However, there are considerable stress points ahead. In particular, the possibility of civil unrest derailing the reform and recovery process is worrisome. An unsettled Indonesia will colour the entire ASEAN region, including Singapore. Amidst this backdrop of uncertainties, the Ministry of Trade and Industry has maintained a 1999 GDP forecast of between -1% and +1% for Singapore. If the global and regional environment remains benign and none of the major risks I have outlined above materialise, and in particular the situation in the region stabilises and begins to turn around, then it is conceivable that our GDP growth may exceed +1% in 1999. On the other hand, if some of the critical uncertainties in the external environment do unravel, then Singapore will face a more dismal economic backdrop and GDP may contract by more than 1%. On balance, we feel that -1% to +1% is an appropriate forecast in an uncertain situation.

Since the regional crisis erupted in July 1997, the Government has monitored its development closely and calibrated our response carefully. At the last Budget, we made some adjustments to keep our business environment competitive, but emphasised a conservative fiscal stance as it was too early to determine the full impact of the crisis. In June 1998, Government implemented a $2 billion off-Budget package of cost-cuts and spending measures. These were not intended as the final package. Regional developments at that juncture remained volatile and we needed to assess how events would develop. While we deliberated over policy options during this period, we identified the critical issues: to maintain the framework for continued economic activity; help companies tide over the crisis and minimise unemployment; and enhance our capabilities and competitiveness for future growth. With these strategic intentions in mind, the Committee on Singapore's Competitiveness (CSC) has recommended comprehensive measures to help Singapore regain its competitiveness, weather the crisis and emerge stronger. Besides keeping Singapore cost competitive and maintaining economic activity, we have to compete more effectively by growing the revenue side of the business equation. Cut Business Costs First, it is vital to cut business costs to stay competitive in a period of reduced overall business demand. The Government implemented a comprehensive $10.5 billion cost reduction package in November last year, covering all the key elements of business cost, including wages, rentals, utilities and transportation costs. This was in response to the CSC proposals to help companies survive the crisis and to preserve jobs. This major package will take time to show results. Many of the cost cutting measures only came into effect on 1st January 1999. It is still too early to assess their beneficial impact on businesses and the economy. Hence, this Budget will not contain any additional major new cost-cutting initiatives, although it will not neglect appropriate rebates to individuals, which had not been included in the November package. The cost reduction package has received the wholehearted support of Singaporeans. Workers have accepted the 15% reduction in overall wages. The spirit of tripartism is strong and resilient in Singapore. We have always emphasised policies to reduce stickiness in wages and improve the flexibility in the labour market. We have progressively built up a flexi-wage component over the years, and avoided restrictive mechanisms such as minimum wages, wage mark-ups or job security legislation. This has given us unique flexibility to adjust our wages quickly in the current downturn, to preserve our competitiveness. This has not only reduced business costs but also helped arrest the fall-off in labour demand. Without the necessary wage adjustments, even more jobs would have been lost and the unemployment rate would have risen to more than the 3.2% actually registered in 1998. Our cost-cutting package has been well received by both analysts and investors. A recent Merrill Lynch report commented that as a result of the cost-cutting measures, "unit labour costs should plunge back to the 1992-93 level, substantially boosting the economy's cost competitiveness". Another report by ABN-AMRO noted that "Singapore is demonstrating that with the package it can adjust its prices and costs quickly. The package will help boost confidence in the economy". Investors too have reacted positively. The substantial cost savings, particularly from the CPF cut, will help businesses ride out this difficult period. The package has also helped the Economic Development Board (EDB) convince investors that Singapore offers them an attractive business proposition, even in the midst of the recession. Ensure Access to Working Capital Second, it is necessary to improve access to working capital. Government has significantly enhanced the Local Enterprise Finance Scheme (LEFS). This includes raising the overall credit line available, increasing the maximum loan quantum per company and widening the scope of the scheme to cover more local enterprises. In addition, EDB and the Productivity and Standards Board (PSB) have been active in helping participating financial institutions obtain a better understanding of the loan applicant's business case. Feedback indicates that these changes to LEFS have met the needs of local companies. Between April and December 1998, more than $470 million of LEFS loans were approved to local enterprises. In particular, short-term LEFS loans increased by up to 600% during this period, reflecting the short-term cash needs of local companies. To strengthen the equity base of promising local enterprises (PLEs) and help them enhance their capabilities and growth, EDB will step up the pace of its co-investment in PLEs. It will take up short-term equity stakes of up to 30% in these companies. After an appropriate period, EDB will exit from these investments, for example, by selling its shares back to the PLEs. This enhanced co-investment programme will support companies in both the manufacturing and hub services sectors. Market Diversification Third, we need to diversify our export markets. Singapore needs to develop strong trade and business linkages to all parts of the global economy. This will make our economy more resilient, and help to offset cyclical slowdowns in any particular region or industry. The Trade Development Board (TDB) will be adopting a three-pronged approach to ensure that Singapore maintains its competitive edge in the global trading arena. This will involve accessing emerging markets, expanding demand into traditional markets such as the US and EU, and consolidating resources in regional markets. To strengthen market access, TDB has expanded the scope of its Trade Development Incentive (TDI) to help companies promote trade and participate in specialised programmes such as international franchising and brand marketing. Since FY96, TDB has approved some 250 cases amounting to $11 million under the TDI. Government has allocated an additional $20 million to TDI over the next two years. TDB will also be stepping up its market development efforts to increase companies' awareness of opportunities further afield. In 1998, around 800 companies participated in TDB's business missions and international exhibitions. This year, TDB will be organising some 100 trade missions and international fairs. About 30 such events will be targeted at the traditional growth markets, such as the US and EU. Another 40 events will be targeted at emerging markets in East Europe, South Asia, Middle East, Latin America and Africa. Investment Promotion Next, we need to step up investment promotion to sustain and upgrade the flow of investments into knowledge-driven activities and create challenging jobs for Singaporeans. To spur more investments in manufacturing and services, Government has re-introduced the Liberalised Investment Allowance Scheme (LIAS). This provides a 30% across-the-board investment allowance for expenditure on productive equipment. In addition, Government has also allowed for a higher, discretionary allowance of 50%, for approved investments that meet certain requirements, such as higher contribution to value-added. In 1999, EDB will intensify its investment promotion efforts, including stationing more officers overseas in the US, Japan and Europe, in order to achieve its target of $7.5 billion in manufacturing investments and $1.5 billion in total business spending this year. In line with the vision set out by the CSC for Singapore to develop into a globally competitive knowledge economy, EDB has also recently unveiled its Industry 21 (I21) Plan. The vision of I21 is for Singapore to be a vibrant and robust global hub for knowledge-driven industries. EDB will develop Singapore's manufacturing and exportable services sectors with a strong emphasis on technology, innovation and capabilities. Reflecting this shift, jobs created will have a higher proportion of skilled workers. Capabilities Building Finally, capabilities building. We will use the crisis period to upgrade both our physical infrastructure and human capital, so that we can compete in the global economic arena on the basis of world-class capabilities, while managing our cost competitiveness. Education and economic infrastructure will continue to remain a priority in Government's development expenditure programme this year. To build economic infrastructure, $1.9 billion worth of new development projects were approved in the off-Budget measures in June 1998. These included major projects such as the incorporation of IT into primary and secondary schools, upgrading of university facilities and further investment in Singapore ONE. In FY99, Government will continue to invest in economic capabilities for the long term. We will increase development spending by a substantial $1.2 billion to $13.9 billion. This is the highest development budget to date. We will continue to invest more in education, up from $1.7 billion to $2.2 billion, to provide better schools, campus infrastructure and facilities, teaching equipment and to roll out the IT Master Plan. These education projects will prepare our next generation for the challenge of a knowledge-based economy. We will also spend more to increase our industrial land stock with on-going reclamation at Jurong Island, Tuas View and Changi East. Likewise, we will increase spending on rail infrastructure, including the North-East MRT line and the Changi MRT extension. Another key challenge is upgrading our manpower to keep workers employable. With the rapid pace of economic restructuring, the current unemployment can turn into structural unemployment over time, as unemployed persons may be mismatched with new job vacancies because they do not possess the right skills. This is a pressing issue. A disproportionate share of retrenched local workers in 1998 were older than 40 years of age and with less than secondary education. The duration of unemployment has also increased to 8.9 weeks in mid-1998, compared with 7.5 weeks a year earlier. As long-term unemployed workers lose their job skills and become stigmatised by employers, this could lead to increasing and persistent unemployment rates, a phenomenon seen in European unemployment for the last 15 years. We must press on with Continuous Education and Training (CET) and skills upgrading to tackle this problem of structural unemployment. While the threat is more immediate for older and lower-skilled workers, it is no less urgent for our executives and professionals. They too must hone their skills and expertise in order to develop new capabilities and anticipate the rapidly changing demands in the workplace. As such, our CET plans encompass the entire spectrum of the workforce - from young to old, and from semi-skilled workers to managers and professionals. Specific Government initiatives launched under the CET umbrella include the following: an initial budget of $120 million pledged for the expansion of the Skills Redevelopment Programme which pays special attention to unskilled and semi-skilled mid-career workers; and $800 million for the Initiatives in New Technology (INTECH) grant scheme targeted at manpower development in leading edge technologies, of which $50 million has been earmarked for EDB's new Training and Attachment Programme (TAP) which helps fund the cost of training new engineering graduates recruited by MNCs at their overseas plants. In addition, the Ministry of Manpower (MOM) is working out a broad funding mechanism to support the development of national manpower capabilities as part of the Manpower 21 (M21) exercise. The M21 Report will be announced in due course. Programmes in the pipeline include setting up a Skills Certification System to establish a skills progression path and skills acquisition benchmark for the workforce; the Strategic Manpower Conversion Programme to incentivise the deployment of under-utilised professional manpower into strategic sectors with skills shortages; and supporting learning providers to create and augment the infrastructure and curriculum for lifelong learning. Our aim is to build up a national framework for continuous enhancement of knowledge and skills. The goal is to educate, train and retrain workers so that they can continue to take on new jobs or enlarged duties. This is the essence of lifelong employability.

1999 is likely to be another difficult year. Despite signs of improvement in the external environment, the outlook remains uncertain. The CSC has set out the key thrusts to help Singapore overcome the crisis and prepare for competition beyond. We must work together to implement them vigorously, but retain the flexibility to adjust our tactics if the external environment changes again. The benefits of the cost cuts will flow through to the Singapore economy and businesses this year. The key now is to grow our business revenues by expanding our export markets and sustaining investments. To underpin these key thrusts, we need to build up our economic capabilities, both in terms of infrastructure and manpower skills. To achieve this, the workers, management and Government must all work together. Then, we will weather this difficult period, and realise our vision for Singapore as an advanced and globally competitive knowledge economy.

Mr Speaker, Sir, I move on now to the Budget for Fiscal Year 1999.

Since the Budget Debate last year, the Government has responded to the regional crisis with two packages of stimulus measures to stabilise the Singapore economy. In June 1998, I announced a $2 billion off-budget package which carried an impact of $1.6 billion on our FY98 budget. In November 1998, just three months ago, DPM Lee presented to this House a $10.5 billion cost-cutting package. This was in response to recommendations of the Committee on Singapore's Competitiveness. The package has an impact on the FY99 budget of $1.8 billion. We did not wait until the FY99 Budget to implement these measures because timely response to the unfolding regional crisis is critical. Our approach is to monitor developments closely and respond with measures to maintain the competitiveness of the economy relative to our export competitors. The measures announced were designed to lower overall business costs. The aim is to help businesses tide over this difficult period and to keep as many people employed as possible. While we grapple with the immediate problems of the economic slowdown, we must not lose sight of longer term challenges. After the region recovers, our competitors in Asia will emerge stronger and fitter if they undertake the economic reforms and restructuring needed to pull them out of the economic crisis. We must therefore resist the temptation to overdraw on our reserves to offset unavoidable wage cuts, or allow ourselves to succumb to the lure of welfarism which we cannot reverse later on. Instead, we should be taking steps to enhance our capability for long-term competitiveness. Before I move on to present details of the FY99 expenditure programme, allow me to recapitulate briefly the basic tenets of our expenditure policy. Our aim is to foster the growth of the private sector by keeping the public sector lean and trim, whilst maintaining a high quality of public service. We will live within our means by ensuring that budgets are balanced over the long term. Expenditure will be focused on fostering future growth by investing heavily on developing our human resources, in economic infrastructure and other areas which yield lasting returns. I will now highlight the salient features of this year's expenditure budget.

At 20.5% of GDP, total expenditure in FY99 is estimated at $29.2 billion. This is an increase of 5.6% or $1.5 billion over FY98. The increase is mainly due to a rise in development expenditure, which I will elaborate later. As in previous years, the largest allocations go to defence and education at 25% and 19% of total Government spending respectively. As security provides the basis for our nation's economic growth and prosperity, it is important that we maintain a strong defence capability. Defence spending will therefore continue at the FY98 level of $7.3 billion, accounting for 5.1% of GDP. As the future of Singapore will depend on the quality of our human resources, we will continue to invest more in education. For FY99, we have budgeted $5.7 billion for expenditure on education. Education's share of GDP has increased steadily from 3.0% in FY97, to 3.4% in FY98 and to just under 4.0% of GDP in FY99. Our medium-term target allocation for education is 4.0% of GDP. Spending by the Ministry of Manpower to promote manpower development has almost tripled from $58 million in FY97 to $170 million in FY98, and is allocated $150 million in FY99. In order to sustain growth against rising competition, our economy will have to constantly restructure towards higher value-added economic activities. The importance of upgrading and re-training our workers to ensure employability in an increasingly knowledge- based economy cannot be over emphasised. Overall, the social and community services sector is allocated the largest share of 39% of the budget, increasing its share over FY98, on account of higher spending on education and public housing. In the same order as last year, the security sector is next with 32% of the total budget, and economic and infrastructure development comes in third with 19%. Operating expenditure Operating expenditure is budgeted at $15.2 billion, a small increase of $300 million or 2% compared to FY98. Half of this increase is on account of a re-distribution of defence spending from development to operating expenditure. The other half of the increase is due to a central provision of $125 million kept by MOF to provide for new Government programmes which might arise in the course of the year. Due to the policy of wage restraint in the civil service, manpower cost will remain at $3 billion, despite providing for a net increase of 4,400 posts. The main increases are some 5,000 teaching posts and 400 posts for immigration and prison officers. This is partially offset by the deletion of some 900 posts in PWD, with its corporatisation from 1st April 1999. While running costs on the whole will rise by some $350 million to $14.0 billion, transfers will dip slightly by $50 million to $1.2 billion due largely to an extraordinary contribution of $79 million in FY98 to NTUC and ITE for the Skills Redevelopment Programme. Still, the level of transfers remained some 18% higher when compared to FY97. Subsidies to restructured hospitals take up about half of transfers, while a sum of $170 million is allocated to public housing subsidies such as subventions to town councils. Another $120 million is allocated to MCD for disbursement to community self-help groups, voluntary welfare organisations and needy individuals under various financial assistance schemes. As a share of GDP, operating expenditure will rise to 10.7%, up from 10.4% in FY98 and 9.7% in FY97. This is largely the result of slowing GDP growth, as operating expenditure has not risen substantially in absolute terms and is practically held at a standstill compared to FY98. It has been our policy to constrain operating expenditure to grow in tandem with, and no faster than GDP growth, in order to keep public sector expansion in check. However, during periods of economic slowdown, we can accept a rise in the operating expenditure's share of GDP so as to avoid a degradation of basic public services and to support additional expenditure for early recruitment of teachers and other staff. Development expenditure Total development spending will amount to $13.9 billion, an increase of $1.2 billion from $12.7 billion in FY98. However, compared to FY97, the FY99 development budget is a hefty $5 billion or 50% more. In fact, Government has been increasing development spending over the last 5 years. Development spending has grown on average by about 30% each year since FY94. The FY99 development budget is about 3.5 times higher than development spending 5 years ago in FY94, when it amounted to only $4.0 billion. I should point out that the large sums allocated to development spending is not to pump-prime the economy because this would have limited effect as we are a small open economy. Instead, our aim is to invest in strategic development projects, especially those with long gestation periods, such as land reclamation and IT in education. These are investments which would reap benefits several years down the road. Against this backdrop, every sector of development spending has grown compared to FY97. The largest increase is spending on the social and community services sector, which has doubled from $3.1 billion in FY97 to $6.0 billion in FY99. In percentage terms, the social and community services sector is allocated the largest share of 43% of the development budget. The other major allocation goes to the economic and infrastructure development sector at 34%. Spending on education increased from $1.0 billion in FY97 to $1.7 billion in FY98, and to $2.2 billion in FY99. This is a 31% increase over FY98. Of this, more than $1 billion goes towards development of schools and campuses, and another $350 million on IT Masterplan and IT projects in schools and tertiary institutions. A provision of $170 million is set aside to build residential and hostel facilities in schools and campuses, and $250 million for new projects comprising mostly buildings and further IT investment in tertiary institutions. Spending on public housing increased from $850 million in FY97 to $1.9 billion in FY98, and to $2.3 billion in FY99. Deficit financing to HDB accounts for $1.2 billion, mainly due to a surge in demand under the CPF Housing Grant Scheme. Continuing HDB upgrading is allocated $430 million and compensation under the Selective En-bloc Redevelopment Scheme is allocated $370 million. The $400 million increase in public housing spending is mainly due to increased provisions of $150 million for compensation under the Selective En-bloc Redevelopment Scheme and $270 million for deficit financing to HDB. Spending on environment has also risen steadily from $650 million in FY97 to $1.0 billion in FY98, and is set to level off at $980 million in FY99. The Fourth Refuse Incineration Plant at Tuas accounts for half of this sum, while the other half goes to improvements and expansion of sewerage and drainage facilities. The economic and infrastructure development sector no longer occupies first place in development spending because of the large increase in allocation to the social and community services sector. Nevertheless, the sector is still allocated a sizeable sum of $4.7 billion. This is lower than spending in FY98 by $220 million, but 23% higher than the $3.8 billion spent in FY97. The sector is led by strong spending on communications and trade and industry projects at $1.8 billion and $1.7 billion respectively. The North-East MRT Line and the Changi MRT extension projects account for two-thirds of the $1.8 billion development budget for communications. In all, rail projects account for $1.4 billion, while another $270 million goes to road improvements and development of bus interchanges. Provision is also made for continuing reclamation at Changi East. Spending on trade and industry projects has slipped by $350 million compared to FY98. However, this does not reflect a lower commitment by Government, but rather the result of huge savings in lower tender prices for recent reclamation projects awarded for Jurong Island Phase III and reclamation at Changi East. More than half of MTI's development budget will go to reclamation at Jurong Island, Tuas View, Changi East and Sentosa Cove. Spending on these reclamation projects will increase from $810 million last year to $930 million in FY99. Other major projects in this year's budget are the Economic Development Assistance Scheme, the Tourism 21 Plan to re-develop Chinatown attractions, the Mega Exhibition Centre and the Singapore ONE project. Spending on the general services and security sectors accounts for the remaining allocation at 12% and 11% respectively of the development budget. The allocation for general services will see an increase of $730 million from FY98. This is largely accounted for by $500 million to be held centrally by MOF for new projects, which Ministries may embark on in the course of the year, and $260 million more for the New Supreme Court building project. Spending on internal security is expected to remain at the same level as the last two years. Provision is made for on-going projects such as the Civil Defence Shelters Programme, and new complexes for the Ministry of Home Affairs, Police Headquarters, Singapore Civil Defence Force Headquarters and Traffic Police Headquarters. Provisions are also made for the redevelopment of the Changi Prison Complex and Command Control and Communication Systems to improve the operational capability of the Police, Singapore Civil Defence Force and Central Narcotics Bureau.

Order. I suspend the sitting and will take the Chair again at 5.00 pm. Sitting accordingly suspended at 4.48 pm until 5.00 pm

Sitting resumed at 5.00 pm

Mr Speaker, Sir, let me now turn to the fiscal position and the proposed tax changes. Revenue collection is projected to fall from $27.2 billion in FY98 to $24.1 billion in FY99, a $3.1 billion or 11.4% decline. As a percentage of GDP, revenue collection will decline from 18.9% in FY98 to 16.9% in FY99. As operating and development expenditures in FY99 are budgeted at $29.2 billion or 20.5% of GDP, an operating deficit of $5.1 billion or 3.5% of GDP is projected for FY99. The fall in operating revenue is attributable to slower economic growth expected in FY99 and the revenue impact of the various off-budget measures announced by the Government to stimulate the economy. In particular, the $10.5 billion cost-cutting package announced in November last year to reduce business cost will have a negative impact of about $1.8 billion on the FY99 budget balance. The budget deficit will be funded entirely from surpluses accumulated by the Government in its current term of office. As I have noted earlier, our fiscal policy is to live within our means and aim for a balanced budget in normal years, accumulating surpluses in good years of strong economic growth and drawing against reserves in years of economic downturn. We should now allow the effects of the packages of stimulus and cost-cutting measures already announced to work through the system before we decide whether further measures are necessary. But even as we adopt short-term measures to deal with current difficulties, we have to keep our eyes on the future, develop the infrastructure necessary for our future growth, enhance our capabilities and put in place a conducive framework for businesses and individuals in Singapore to thrive. Only then will we be well placed when the region recovers from the economic crisis. I will therefore be introducing changes to some tax incentives to promote the development of certain high value-added sectors of our economy. At the same time, Government is mindful of the difficulties faced by individuals and households in the current economic downturn. The cost-cutting package announced in November 1998 was focused mainly on reducing business costs. I will therefore be announcing several measures to help individuals later in my speech. Let me now deal with tax changes for companies.

Corporate Tax Rebate As announced in November last year, the Government will give a 10% rebate on corporate income tax, excluding Singapore dividends, for the Year of Assessment 1999. Tax Incentives to Promote the Bond Market In the FY98 Budget, I announced several tax incentives to promote the development of an active bond market. The incentives included tax exemption on interest income earned by non-residents from qualifying debt securities and on fee income derived by financial institutions from arranging debt securities in Singapore. I am now pleased to announce further refinements to these bond market tax incentives. Currently, tax exemption on interest from qualifying debt securities paid to non-residents only applies if the non-residents do not have permanent establishments in Singapore. To facilitate a wider distribution of qualifying debt securities, I have decided to extend the tax exemption to include non-residents who have permanent establishments in Singapore, provided that such non-residents do not purchase the securities using funds from their Singapore operations. Qualifying debt securities are currently defined as debt securities which are substantially arranged by financial institutions in Singapore. In some cases, this condition gave rise to uncertainties about the availability of the incentives. This is because the global character of institutions and markets makes it necessary for the arrangers to use staff based outside Singapore, or employed by affiliated companies, to successfully execute the transaction. To rectify this situation, I have decided to create an "Approved Bond Intermediary" (ABI) scheme to complement the existing regime. Under the ABI scheme, the Monetary Authority of Singapore (MAS) will evaluate a financial institution's debt origination and trading capabilities in Singapore on an overall basis. Once a financial institution has been awarded ABI status, all debt securities lead managed by it would be treated as "qualifying debt securities". There would be no need for an ABI to satisfy, on a transaction-by-transaction basis, the current test of "substantial arrangement in Singapore". This will enable ABIs to provide their clients with greater certainty regarding our tax incentives, and will also serve to emphasize Singapore's goal of encouraging financial institutions to increase their debt market capabilities here. The above refinements will be effective from 27th February 1999 up to 27th February 2003. ABI status may be awarded to financial institutions upon application to MAS. MAS will publish further details in a circular. Tax Exemption on Income Earned by Primary Dealers in Singapore Government Securities (SGS) from Trading in SGS The Singapore Government Securities or SGS market is a key element in Singapore's domestic debt market. To develop a robust bond market, it is important to first establish a liquid SGS market to define a benchmark yield curve to which private issuers can make reference when pricing their bond issues. Currently, income earned by all financial institutions from trading in debt securities, including SGS, is taxed at a concessionary tax rate of 10%. Government recognises that Primary Dealers play an essential role in SGS markets, by fulfilling the role of market makers and driving the process of price discovery and trading liquidity. To encourage more financial institutions to take on the role of SGS Primary Dealers and to provide a significant incentive commensurate with the obligations undertaken by SGS Primary Dealers, I have decided to exempt from tax income derived by SGS Primary Dealers from trading in SGS. The incentive will be effective from 27th February 1999, for a period of four years. Tax Exemption Scheme for Syndicated Facilities The Tax Exemption Scheme for Syndicated Facilities was introduced in 1983 to encourage financial institutions to base their syndication activities in Singapore. The scheme has operated successfully and there has been a steady increase in syndication activities in Singapore since its introduction. Last year, I announced that the scheme would be extended for a further five years until 2003. Currently, MAS approves each syndicated facility on a case-by-case basis. To give arrangers upfront certainty on whether a facility qualifies for tax exemption, I am introducing an automated procedure. Under the automated procedure, facilities which meet certain defined criteria will automatically be granted tax exemption, without the need to obtain case-by-case approval from MAS. The automated procedure will take effect from 27th February 1999. MAS will publish the details of the procedure in a circular. Tax Incentive to Promote Boutique Fund Management Since the early nineties, fund management activity has grown rapidly. Compared to 1991, there has been a five-fold increase in the amount of funds managed in Singapore to $124 billion in 1997. This is expected to grow further, despite the Asian economic crisis. Many large and internationally reputable fund management companies have established a presence in Singapore. The Banking and Finance Subcommittee of the Committee on Singapore's Competitiveness has, however, recommended that Singapore should also encourage the growth of boutique fund managers. Boutique fund managers are primarily indigenous fund management companies set up and run by professionals who typically have considerable experience in the fund management industry. Nurturing boutique fund managers will create more diversity and also contribute towards the growth of our local fund management industry. I have therefore decided to exempt from tax, the qualifying income derived by foreign investors from funds managed by qualifying boutique fund managers. The types of income qualifying for exemption will be the same as that under the Approved Fund Manager scheme. The scheme will be effective for a period of five years from 27th February 1999 and will be administered by MAS. MAS will be releasing the details separately. Tax Deduction for General Provisions Made by Finance Companies Since 1997, finance companies have been given tax deduction for general provisions made against their loan and investment portfolios. This is subject to an annual limit of the lower of 25% of qualifying profits or 0.5% of qualifying loans and investments, as well as an overall limit of 2% of qualifying loans and investments. This has encouraged finance companies to make adequate general provisions to cushion against unexpected losses in their operations. The Singapore economic environment has, however, been adversely affected by the downturn in the regional economies. In view of this, it is prudent for finance companies to build up their level of general provisions further. To encourage them to do so, the annual limits of 25% of qualifying profits and 0.5% of qualifying loans and investments will be temporarily suspended for a period of two years with effect from Year of Assessment 1999. In addition, the overall limit of 2% of qualifying loans and investments will be raised to 3% from Year of Assessment 1999. These changes will provide finance companies greater flexibility in making general provisions to cushion against potential losses that could arise owing to the poor economic environment. This will strengthen the financial position of finance companies, and the overall soundness and stability of the financial system. To qualify for the above concessions, the finance company must satisfy the existing statutory minimum capital funds requirement of $50 million and minimum capital adequacy ratio of 12%, as prescribed under the Finance Companies Act. I will now move on to corporate tax changes for other sectors of the economy. Tax Exemption for Global OHQs The Operational Headquarters (OHQ) scheme was introduced in 1986 to promote the services sector as one of the twin engines of growth. Under the OHQ scheme, companies awarded OHQ status will enjoy a 10% concessionary tax rate on their qualifying income. At present, most companies awarded OHQ status have been based in Singapore to service the Asia Pacific region. To encourage companies to locate and perform their headquarters functions in Singapore to service network companies worldwide, I have decided to enhance the existing OHQ incentive by granting tax exemption to OHQs which perform at least one substantive global function in Singapore. The incentive will be granted for a maximum period of ten years, and will take effect from Year of Assessment 2000. Companies may apply to EDB for this incentive after Budget Day. Approved Contract Manufacturer and Trader (ACMT) Scheme Contract manufacturers play a key role in our manufacturing sector. Some of our homegrown contract manufacturers have become global players. These companies usually contract to perform value-added manufacturing activities on semi-finished goods consigned to them, and then export the finished goods to their overseas clients. In recent years, contract manufacturing has become more complex. For example, instead of exporting the finished goods, it is not uncommon for contract manufacturers to be asked by their overseas clients to deliver the finished goods to customers in Singapore. This local delivery is considered a taxable supply under our GST laws. However, in some instances, the overseas clients to whom the finished goods belong do not designate an agent in Singapore to account for the GST on their behalf in respect of the local delivery. The contract manufacturers in such a situation would have to bear the GST on local delivery and have no recourse to claim it back. This GST burden could make our contract manufacturers less competitive internationally. To help our local contract manufacturers remain competitive, I have decided to introduce a scheme, called the Approved Contract Manufacturer and Trader (ACMT) scheme, to relieve contract manufacturers whose businesses are substantially with overseas clients, of this GST burden. Under this scheme, the local delivery of the finished goods to the customers of the overseas client and the fees for the value-added activities on the goods will be deemed to be outside the scope of GST and GST will not be chargeable. Instead, the overseas client's customers who purchase and receive the goods in Singapore will account for GST by way of a "reverse charge". Besides contract manufacturers, this scheme will be made available to traders who also engage in value-adding activities substantially for overseas clients, and face the same GST problem as the contract manufacturers on their local deliveries. The scheme will be administered jointly by IRAS, EDB and TDB. Further details of the scheme will be released separately by the administering agencies. Waiver of GST for Goods Removed from Bonded Warehouse The development of a logistics sector with extensive networks is critical to our continued growth as a global trade centre and hub port. To encourage logistics operators to expand their business in Singapore and use Singapore as a base for their operations, I have decided to waive the GST chargeable on goods removed by traders registered with the Major Exporter Scheme (MES) from bonded warehouses operated by logistics companies. With this waiver, MES traders will be able to use their MES status to remove goods from bonded warehouses operated by logistics companies free of GST. The GST waiver will remove an existing disadvantage faced by local logistics companies, vis-a-vis overseas suppliers of the same goods, as under the current situation, MES traders by virtue of their MES status do not have to pay GST upfront when they import the goods directly from overseas suppliers. Extension of Tax Incentive for Exhibition Organisers to Cover International Conferences The staging of international conferences in Singapore complements the many international exhibitions and trade fairs currently held here. Together, they play the important role of enhancing Singapore as the hub for knowledge and trade exchange for the international business community. I have therefore decided to extend the tax concession granted to approved exhibition organisers to companies organising and managing international conferences in Singapore. The approved companies will be granted a concessionary tax rate of not less than 10% on their incremental income. This will provide further impetus to develop Singapore into an International Exhibition and Conference City. The extension to the tax concession will take effect from Year of Assessment 2000. Tax Exemption for Floating Production Storage Offloading Vessel and Floating Storage Offloading Vessel Singapore has come a long way in developing as a maritime centre. According to United Nations Conference on Trade and Development (UNCTAD), we have moved from the 19th position in 1991 to become the 13th most important maritime nation. Today, a critical mass of established international shipping companies exists in Singapore, providing a wide spectrum of shipping services. To support Singapore's drive towards higher value-added activities in the shipping sector, I have decided to extend the existing Approved International Shipping Enterprise Scheme to cover income derived from the operation of Floating Production Storage Offloading vessel and Floating Storage Offloading vessel (or FPSO/FSO) in Singapore. These are primarily crude oil tanker vessels which have been specially converted for deployment in the offshore field for production and storage of crude oil. The operation of FPSOs and FSOs therefore requires the application of both advanced maritime and technology-driven expertise. The development of the FPSO/FSO industry in Singapore will not only serve to broaden the scope of shipping activities in Singapore, it will also complement Singapore's role as the world's third largest oil refinery and trading centre. To qualify for the incentive, the company must have substantial operations and possess a team of professional expertise in Singapore. The incentive will be granted for a period of ten years and will take effect from Year of Assessment 2000. TDB will administer this incentive. Extension of One-Year Accelerated Depreciation Allowance Scheme to Replacement of Diesel-Driven Vehicles With a growing vehicle population in Singapore, total emissions from vehicles will creep up over time. This will adversely affect our ambient air quality and may become a health hazard. We therefore need to impose strict emission standards on new vehicles and at the same time, reduce the number of older vehicles on the roads. Diesel-driven commercial goods vehicles and buses are allowed to be used on the roads for up to twenty years. Old and inefficient diesel-driven vehicles are a major source of pollution as they generate a disproportionately large amount of particulates and other pollutants that are harmful to health. The cost of replacing an old vehicle with a new one is high. As a result, older vehicles are generally not taken off the roads before the end of their statutory lifespan. One way of encouraging owners of older vehicles to do so is to provide a tax incentive to partially defray the high cost of replacing vehicles. I have therefore decided that with effect from 27th February 1999, the one-year accelerated depreciation allowance scheme would be extended to the purchase of new commercial goods vehicles and buses, on the condition that the new vehicle is replacing an old diesel-driven vehicle which was registered before 1st January 1991, and which either has at least one year of valid COE left or is eligible for COE renewal. Ministry of the Environment will administer the scheme.

Personal Tax Rebate In 1997, the Government gave a 10% across-the-board rebate on individual income tax as a reward for individual effort and to share the budget surplus. Last year, despite the worsening economic conditions, the Government gave a 5% rebate on individual income tax to provide a measure of relief to taxpayers. Although some signs of stability have emerged, there still remain critical uncertainties in the external environment. Nevertheless, I have decided to restore the personal tax rebate to 10% for the Year of Assessment 1999, similar to 1997, in order to help taxpayers tide over this temporary difficult period. The estimated revenue loss to Government is $275 million. Following the GST-related changes made to personal income tax, currently about 65% of individuals no longer pay income tax and therefore would not benefit from the income tax rebate. To extend help to these individuals, the Government will grant the same rebates on HDB rentals and town council Service and Conservancy (S&C) charges as in 1997 to citizens staying in rented and owner-occupied HDB flats. The rebates will be as follows: a) One-Room Flats Two months' net rent and three months' net S&C charges. The rental rebates will be made on 1st June and 1st September, and the S&C rebates will be made on 1st June, 1st September and 1st December this year. b) Two-Room Flats One month's net rent and three months' net S&C charges. The rental rebate will be made on 1st June, and the S&C rebates will be made on 1st June, 1st September and 1st December this year. c) Three-Room Flats Three months' net S&C charges. The S&C rebates will be made on 1st June, 1st September and 1st December this year. d) Four-Room Flats One month's net S&C charges. The S&C rebate will be made on 1st June this year. e) Five-Room Flats One month's net S&C charges, to be made on 1st June this year. The estimated cost of these rental and S&C rebates is $39 million. The rebates will be given after deducting the GST offset rebates, the S&C grants associated with the utilities rebates and a special S&C monthly rebate, which I will now elaborate. Special Rebate on Town Council Service and Conservancy Charges To provide further help to tide over the present difficulties, Government will give a special rebate to Singaporeans living in HDB flats through town councils. The town councils will offer a one-off additional monthly rebate for citizen households living in 1 to 5-room flats for a period of one year, starting from 1st April 1999. The special rebates, which are about 10% of current gross S&C charges, are as follows: $2 per month for 1-room flats, $3 per month for 2-room flats, $4 per month for 3-room flats, $5 per month for 4-room flats and $6 per month for 5-room flats. These rebates will cost Government an additional $40 million. Extension of GST-Related Offsets and Rebates for Two Years In view of the difficult economic conditions, Government had announced in November last year that the transitional measures in the GST offset package, consisting of rental and S&C rebates for 1 to 3-room HDB households, would be extended by two more years. The rental and S&C rebates are as follows: a) Rental Rebates For 1-room flats: a rental rebate of $12 per month. For 2-room flats: a rental rebate of $8 per month. b) Rebates for S&C Charges For 1-room flats: $8 per month. For 2-room flats: $7 per month. For 3-room flats: $4 per month. The estimated cost of these rebates is $22 million per year. Low income households which are not living in HDB flats can continue to receive help from the Citizens Consultative Committees (CCCs) Assistance Scheme, which was set up in 1994 when GST was implemented. Offset Package for Utilities Rates Revision The Government had in June 1997 announced the revision of water tariffs and the water conservation tax to uniform flat rates for all users. There have so far been two increases in July 1997 and July 1998. The next increase is scheduled for 1st July 1999. Despite the economic downturn, we must press on with our water conservation efforts and raise water tariffs and conservation tax as planned. The water tariffs, including conservation tax, will increase by 15.3 cents to 24.4 cents per cubic metre for domestic consumers. The non-domestic water rate will increase by 5.8 cents per cubic metre to reach the target rate of $1.52 per cubic metre. As part of the water conservation effort, the waterborne fee will also be raised as scheduled, by 5 cents per cubic metre for domestic consumers and 9 cents per cubic metre for non-domestic consumers with effect from 1st July 1999. The Government will continue to help lower income households cope with the increases in water charges. In 1997 and 1998, a package of annual utilities rebates and monthly S&C grants were given to citizens living in 1 to 4-room HDB flats to offset the increases in electricity and water rates. To help the lower income groups cope with the economic crisis, the Government has already announced in November 1998 that the package of utilities rebates and monthly S&C grants given in 1997 and 1998 will be continued for another two years. The cost to Government is estimated at $73 million per year. As water charges are scheduled to increase further in July 1999, the Government has decided to double the utilities rebates from $100 to $200 for 1 to 3-room HDB flats and from $50 to $100 for 4-room HDB flats in 1999. This will cost Government an additional $41 million, and is more than sufficient to offset the increase in water costs for lower income households. The utilities rebates will be credited against the utilities bills of eligible households for the month of September which are payable in October. The balance of the rebate not consumed within the month will be carried over until it is fully used up. Grants for S&C charges to HDB lessees and tenants, ranging from $36 to $66 a year, will continue to be given. The grants will start from July 1999 and will be $3 per month for 1-room flats, $4 per month for 2-room flats, $5.50 per month for 3-room flats and $4 per month for 4-room flats. Those lower income groups which do not live in HDB flats and hence are unable to benefit from the utilities rebates and S&C grants can obtain help from the CCC Assistance Scheme. Tax Deduction of Certain Educational Expenses for Individuals For Singapore to transform successfully into a knowledge-based economy, the need for continual training and skills upgrading cannot be over emphasised. Besides facilitating and providing funding for numerous training schemes, the Government would also like to encourage individuals to take the initiative to improve their skills and knowledge. Currently, a tax deduction of up to $2,000 is allowed for actual expenses incurred by individuals in pursuit of further academic and professional qualifications, or vocational qualifications related to their business, trade or employment. I have decided to raise the tax deduction cap to $2,500, to give further emphasis to the importance of lifelong learning and skills upgrading. The higher deduction cap of $2,500 will take effect from Year of Assessment 1999. The revenue loss is estimated to be $4 million.

Property Tax Rebate The 55% property tax rebate on industrial and commercial properties, first announced in the June 1998 off-budget measures, will be extended by another year to 30th June 2000. Stamp Duty for Contract Notes As announced in the November 1998 cost-cutting package, the suspension of stamp duty on contract notes for share transaction will now be extended by another year to 29th June 2000.

Mr Speaker, Sir, the Government has carefully calibrated its response to the regional crisis. We have taken actions commensurate with the situation we faced. We did not over react. As a result, we have won the confidence of both Singaporeans and the international community in the way we have managed the crisis. While there are some signs of stability emerging over the past few months, there still exist many risk factors and uncertainties in our external environment. We cannot afford to be overly sanguine about the economic prospects for 1999. If things should take a turn for the worse, the Government has the accumulated financial resources to cope with the crisis. 1999 will be a test of our determination and of our nerves. We must not abandon the fundamental policies that have served us well in the past. At the same time, we have to be nimble and flexible in dealing with the situation as it develops. We will continue to invest in our future, by developing a world class infrastructure and enhancing the capability of our people and workforce. I am confident that Singaporeans will pass the test, and we will emerge from the crisis stronger and leaner. Sir, I beg to move. [Applause.]

The Question is, "That Parliament approves the financial policy of the Government for the financial year 1st April, 1999 to 31st March, 2000." In accordance with paragraph (1) of Standing Order No. 86, the debate now stands adjourned. Debate to be resumed on what day, Dr Hu?

Monday, 8th March, 1999, Sir.

So be it.

Resolved, "That Parliament do now adjourn to Monday, 8th March, 1999." - [Mr Wong Kan Seng]. Adjourned accordingly at Twenty-two minutes to Six o'clock pm to Monday, 8th March, 1999.