Hansard, 1999-08-17

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 19991999 Mr Lew Syn Pau12 Aug13 Aug Mr Hawazi Daipi12 Aug16 Aug BG George Yong Boon Yeo13 Aug14 Aug 23 Aug31 Aug Mr Yeo Guat Kwang13 Aug15 Aug 21 Aug27 Aug Mr Ong Kian Min14 Aug16 Aug Mr Bernard Chen17 Aug18 Aug Mr R Sinnakuruppan18 Aug19 Aug Mr Davinder Singh 18 Aug18 Aug NameFromTo 19991999 Dr Tony Tan Keng Yam19 Aug21 Aug Mr Peh Chin Hua23 Aug28 Aug Mr David T E Lim31 Aug4 Sep Dr Ong Chit Chung6 Sep9 Sep Mr Heng Chiang Meng14 Sep25 Sep Mr Shriniwas Rai16 Sep25 Sep TAN SOO KHOON Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the dates stated: 6 August 1999 (1) Goods and Services Tax (Amendment) Bill; and (2) Exchanges (Demutualisation and Merger) Bill. 7 August 1999 Final Supply (FY 1998) Bill. TAN SOO KHOON Speaker Parliament of Singapore

asked the Minister for Finance whether the Government is planning to undertake in the near future a comprehensive review of the Companies Act and its related legislation.

Mr Speaker, Sir, the last round of amendments to the Companies Act was passed in November last year. The amendments involved, amongst other issues, the introduction of share buybacks, updating the law on the concept of "deemed interest"; extending the lifespan of employee stock options to 10 years; excluding trade franchises from the ambit of the Companies Act; and extending the life of unit trust prospectuses. My Ministry is presently working with other agencies such as the Monetary Authority of Singapore (MAS), the Attorney-General's Chambers (AGC), the Stock Exchange of Singapore (SES), the academic community and private sector practitioners on the recommendations of the Corporate Finance Committee (CFC). A CFC Working Group has been formed which meets regularly to work through the CFC recommendations. There will be consequential changes to the Companies Act as a result. As I mentioned in my reply to Mr Sin during the Budget debate earlier this year, I believe it is more prudent and practical to progress in stages to improve the Act and to introduce changes which are needed urgently, rather than try to do a comprehensive review all at once as this will take quite a long time. Otherwise, the total overhaul of the Act at this time will hold back other changes unnecessarily.

asked the Deputy Prime Minister (a) whether the imposition of service charges by banks on small savers will erode the value of savings and cause difficulty for lower income families to operate bank accounts; and (b) whether the new policy of the banks runs counter to the aim of a cashless society.

Mr Speaker, Sir, banks are commercial entities. Any services or products that they provide have to make business sense. The fees they charge for these services and products are commercial decisions. MAS does not interfere, but it expects all financial institutions to conduct their business activities, including dealings with customers, in a transparent and professional manner, and in keeping with the guidelines set by their respective industry associations. Banks, whether local or foreign, incur costs in servicing customers. They need to impose appropriate charges to recover these costs. Some foreign banks in Singapore have already been imposing charges on saving accounts for a number of years. These charges cover the costs of generating and mailing bank statements, operating teller counters, providing ATM services and so on. Until recently, local banks have been absorbing the costs of providing saving accounts to customers. These costs had been partially offset by cross-subsidies from larger accounts and non-interest bearing current deposits. But the increasingly competitive banking environment is making it difficult for them to cross-subsidize certain groups of customers with others while maintaining overall competitiveness. Banks are also under pressure from customers to pay interest on current accounts and improve their level of services, all of which involve additional costs. Some local banks have therefore decided to impose charges on these accounts. MAS has to allow them to do so, to compete on a level playing field with foreign banks. Banks will undoubtedly phase in the introduction of new charges, to maintain customer relationship and goodwill and allow them time to adapt. Banks will also have to actively find ways to service customers efficiently at the lowest cost possible to remain competitive. There is considerable competition among banks in Singapore. This competition will ensure that charges are reasonable and affordable, although not free. Customers can choose freely which bank to use. A bank that imposes excessive charges or offers poor services will lose customers. Customers also have a role in minimizing bank charges they incur. For example, customers who operate several small saving accounts concurrently may find it makes sense to consolidate these accounts into one. This will minimize the costs to banks of providing these accounts, and in turn the charges they impose. Banks service charges do not run counter to our push towards a cashless society. A cashless society will hinge on a reliable, secure, efficient and extensive electronic payment system. This involves some costs. The challenge is to build a system that will be more efficient, convenient, and economical to use than cash.

Sir, is the Government in support of the banks' imposition of such charges on small savers, and whether the Government will consider the impact on lower income families who need to operate a bank account to pay in their salary or whatever by allowing the banks to impose such charges by the MAS?

There is an impact whenever there is a charge which is levied, but it is not a matter for MAS to decide or not to decide, because MAS has never had any rule to require banks to provide free services. There are many banks in Singapore. Some are focused on the smaller savers and the smaller customer segment of the market. Some go for the middle or higher segment of the market. And they have to charge for their services. It is a facility which many wage-earners use because they receive their salaries, they have to pay their bills and so on. But, overall, our philosophy in Singapore has been that when there are costs, it is best that they are reflected. So, whether it is medical services, whether it is your utilities - electricity and water, whether it is telephones, they are all not for free, and yet everybody in Singapore has water, electricity, medical services and telephones. So there is really no argument to be made that banking services should be different.

Sir, I would like to ask the Deputy Prime Minister whether the provision of more manpower intensive services such as teller services at branches constitutes a significant proportion of the cost of providing services to retail customers in general, and whether banks will move towards not only providing more cost efficient alternatives but also educating their customers.

These are costs which the banks will increasingly have to estimate, recognise and minimise as the environment becomes more competitive. When it is a protected environment and you are just operating in the old way, and everybody puts his money into the same few banks, big and small deposits, then the banks are not under pressure and they can provide services apparently free, which really cost a lot of money. Every ATM transaction costs maybe $1.50 to the bank, because you have to provide the software, the hardware, the telecommunications, the services, reconciliation and so on. Every counter transaction costs several dollars. Some people tell me that it may be even more than $10, because there are so many branches and some branches have very few customers per day, and you have to pay the rent, utilities, salaries and so on. And the bank manager meets only 10-20 customers per day. So the costs are very high. In America, there are teller charges. If you go to a counter in order to do some transaction, you have to pay for that service. If you use an ATM, you also have to pay for that ATM. One way or the other, the cost will finally have to be reflected. Banks do not have infinitely deep pockets with which to generate largesse all round. These are adjustments which we can take a little bit of time but which, eventually, we have to make. Overall, I am convinced that the banking services will remain affordable. Singaporeans are not poor, and the banks have a great incentive to reduce their costs and find more efficient ways of providing these services so that they can break even and collect all the little deposits which are available outside there, because there is benefit to them if they can reach out that way.

Sir, may I ask the Deputy Prime Minister that if DBS were to do the same thing, would the Government, as the largest shareholder, use its influence?

The Government, as the largest shareholder, cannot act against the commercial judgment of the banks. DBS has only 40% Government ownership. So they have to act in their commercial interest. They have taken over POSBank. There is a certain understanding that POSBank has come with a social mission and DBS inherits this social mission. It is not something which they can wash their hands off. There are parts of it which need to be gradually rationalised, eg, the lower interest mortgage loans which POSBank used to provide and which DBS has said, over a period of a few years, it will have to adjust those to market rates. Also, on deposits and savings deposits, some adjustments will be necessary. But I am sure that they will take their time and do it in a moderate way.

Sir, is the Deputy Prime Minister saying, as I understand him, that because banks are commercial institutions, they should be free to charge whatever they like for whatever service they provide? Is he saying that any customer who has any complaint about any charge that is made has no recourse anywhere, but has to accept it? Is it not time, as I have asked before, that the Government considered appointing a banking ombudsman to receive any complaints from any customers about any charge imposed by any bank?

Mr Speaker, Sir, there are five major Singapore banks and 22 foreign banks with full licences which provide a full range of services. There are 3 million plus Singaporeans and if they do not like the way any bank is treating them, take their custom to another bank. And many banks, including foreign ones, will be very happy to make sure that you are properly treated and will not be unfairly charged, because it is foolish for them to do that. They lose business. If you feel that the bank is not being fair to you, you are fully at liberty to make a public row of it, and the matter will be debated. And you can make a representation to the Association of Banks. They will discuss it. But this is a free market, and that is the way the market works.

Sir, I have three supplementary questions. First, how many small account holders are we talking about? Does the Deputy Prime Minister have a sense of how many are, say, below $500? Secondly, would the Deputy Prime Minister consider the need for transparency and clarity in banking charges, especially to give small account holders simple terms which they can understand? Thirdly, he mentioned that the social mission of POSBank has been changed. Would he like to indicate how DBS and the Government, as a major shareholder in DBS, see the change in the social mission of POSBank?

Firstly, on numbers, I do not have the figures. It depends on where you draw the line. If you file a Question, I will try and look them up for you. Secondly, on clarity and transparency, I fully agree. That is one of the problems with the present arrangement. There is no clarity and transparency. You make a current account deposit and you can have $10,000 there and you are paid no interest, neither do they tell you that you should really be paid interest. In other countries, you would. But in Singapore, we just quietly do not talk about it. Now that has changed. It is incumbent not just on banks but on other financial institutions - brokers, stockbrokers, insurers, fund managers, unit trusts - that when they provide a service, they should state quite clearly what is their fee and what is your investment. For example, in unit trusts, one of the factors which an investor must consider is how much of their payment is fee. When you put in your contribution, it may be a significant amount that goes straightaway to fees. Or when you buy insurance from your broker, a significant amount of your premium may go to commissions to the broker or, if not, payments in some other form. So those should be made transparent, and similarly for banks. As for POSBank's social mission, as I have explained, we have not abandoned this social mission, but this is something which has to be evolved and adjusted over time. Where it has to do with the POSBank's mortgage loans where the social mission is really the weakest case, we are going to take some years to adjust them to market levels. In other cases, like taking deposits and encouraging savings, that is a mission which needs to continue. But what form DBS should choose in order to implement this mission is something which I am sure DBS is considering now.

Has the Government the responsibility to balance commercial interests against social interests? If so, what approach would the Government take in terms of the current issue of bank charges on the small savers?

I have explained to the Member that there is DBS Bank with POSBank and they have to consider how this role will be implemented for their POSBank account holders. For the others, it is a free market and they have to compete against each other. Whether it is PUB with utilities or Telecom with telephone charges, or any other essential service in Singapore, food, medical care, there has to be really a price which reflects the cost of providing that service. Because we have followed that philosophy, therefore, we have prospered and nearly everybody can enjoy in Singapore a full range of essential services to the families. 95% have telephones and television sets. So it is not a question of depriving people. It is a question of having the right system so that we can prosper and everybody will be able to enjoy these services.

Sir, on the issue of transparency, would it not be good for the banks, firstly, to make it very prominent by displaying perhaps on their premises the rules that they have in relation to not just small savers but all savers? Secondly, there is a code of banking practice which governs the relationship of banks with the customers but, to my knowledge, it is not even displayed or made transparent and available to the consumer. Would it not be timely to ask the banks to do that, Sir?

We can consider that. I am sure CASE will add their voice to this. It is really not just a matter of what you paste on your doors, but the whole approach towards the way you do business.

Is the Deputy Prime Minister aware that in other countries, the office of the banking ombudsman is maintained by the banks themselves? They see it as something which is very good for their own business. Has the Government ever thought of suggesting to the banks in Singapore that they should perhaps also move towards having a banking ombudsman?

Sir, if the banks feel that it is necessary, I think they will work it out themselves. In this case, we have an Association of Banks and they have a certain moral suasion. They have issued guidelines and I do not think there is any difficulty with banks not taking advice from the Association of Banks. But there is no complaint before us today that the banks have acted in a manner contrary to what they should do. That they have to charge cannot be disputed. There is no allegation that these are unreasonable charges or flagrantly exploitative. I understand that the Non-Constituency Member, as a matter of principle, thinks ombudsmen are good and they work in some countries. As I have explained before, in answer to him, we do not feel that we need one in Singapore.

asked the Deputy Prime Minister whether the Government will present a full comprehensive financial statement on the Suzhou project for debate in the House, showing clearly where the monies for investment by the Government and the Government-linked companies were taken from.

Mr Speaker, Sir, in my replies to Mr Jeyaretnam on 3rd August 1999 and earlier on 14th January 1998, I provided full details of the investments made by our statutory boards and GLCs in the Suzhou Industrial Park (SIP) project. To date these investments amount to US$147 million. The amount invested by each statutory board and GLC is small, compared to the size of its operations. They financed these investments in the normal commercial manner, from reserves accumulated in the course of operations and from bank borrowing. They did so based on commercial considerations, after critically evaluating the project's viability. Ten Singapore companies that are not GLCs, and four non-Singaporean multi-national corporations, also similarly invested in the project.

Mr Jeyaretnam also suggested that the full financial statement of the project be presented for debate in this House. This is not appropriate. It is for the companies which have invested in the project to examine the project's finances, not for Parliament. These are mostly listed companies, answerable to their shareholders for their own financial performance. For this House to debate the project's budget is to change a commercial undertaking into a government one. This is unjustified and unwise.

But does the Government not owe a duty to the people whose money the Government itself, either directly or through GLCs, has invested in the project? Does this House not need to have a full audited statement of accounts?

Sir, statutory boards and GLCs are set up specifically to have greater operational flexibility than Government departments and to be able to make commercial and business decisions like other companies. The responsibility of ensuring that they are competently and honestly run rests with the supervising Ministries of statutory boards. In the case of GLCs, it rests with their board of directors and ultimately their shareholders, including the Minister for Finance who is answerable to Parliament. If any MP has reason to believe that a statutory board or GLC is not being competently or honestly run, he should raise the matter directly in the House either by filing a Question or moving a motion, and he will receive a full answer, as the Member has received very full answers on the question of Suzhou Industrial Park. However, it is counter-productive for Parliament to second-guess commercial and business decisions which are properly the responsibility of the management and boards of the statutory boards and GLCs.

Does the Deputy Prime Minister accept or not that he is playing with the people's moneys and he has a duty to account to them for every cent?

Sir, the game is not over. I have explained several times in this House why we went into this project, what the difficulties have been, how we have tried to turn the project around and what solution we have now arrived at. The solution will take several years to work out. The final accounting is not done and the project has to run its course. There is no suggestion that the officials or the companies involved have been derelict in their duty, that they have done this without due diligence and without making proper commercial considerations. They have gone in on a proper commercial basis. These are statutory boards and GLCs which have to be assessed as statutory boards and GLCs, and not on the basis of individual projects. It is not Parliament's business to become a deputy auditor of these companies. They have auditors to make sure they have done things honestly. They have boards to make sure they have acted commercially in a wise way. I think if he looks at the track record of the statutory boards and the GLCs which have invested in Suzhou, he will find that overall they have done well. These are not bankrupt, broken-back companies. So I think we should leave them to do their business.

May I ask why was Parliament not informed and its sanction sought before the Government entered into this memorandum of understanding and gave up a substantial part of its equities?

Sir, I do not understand. We have not given up any equities.

asked the Minister for Education whether he will review the school admission policy in relation to children who are the fourth and beyond in the family.

Mr Speaker, Sir, the school admission policy, including the current Primary One Registration Scheme, does not have family size or birth order as factors for consideration. The Ministry of Education has no current plans to review this position.

Would the Minister agree that the policy of the Government is to have more children if you can afford it? Surely, according priority to these children would be a step in the right direction.

Mr Speaker, Sir, that is of course a suggestion which is possible, but we have no current plans to review our position. The position is a reasonable one in which all the children who go to school have the same amount of priority.

asked the Minister for Education (a) what was the trend regarding the number of EM3 language stream students for the years 1994 to 1998; (b) what schools these students were channelled to; (c) how many of these students enrolled into polytechnics; and (d) what steps his Ministry will take to enhance their educational and vocational development.

(for the Minister for Education): Mr Speaker, Sir, before I provide the information asked for by Mdm Chiang, I think we should remind ourselves, first of all, why we have the EM3 stream. Different pupils have different talents and abilities. We have to recognise this in order to help each child progress at a pace he is comfortable with, so that he may develop to his fullest potential. The EM3 stream is designed for pupils who are less academically-inclined. They are just different. For these pupils, we tailor a curriculum which is different from that of the EM1 and EM2 streams, so that they acquire the language and numeracy skills to prepare them for further technical or other training. By customising the educational programmes we deliver, we have helped more children complete 10 years of general education. Since Primary 4 Streaming was introduced in 1991, the percentage of dropouts at the primary level has decreased from 1.9% of a Primary 1 cohort in 1990 to 0.4% in 1998. There is flexibility in the streaming system. For those who may develop a little slower, there are "bridges and ladders" in place. For example, Normal (Technical) pupils who demonstrate the aptitude for academic studies have the opportunity to cross over to the Normal (Academic) course or even the Express course. Each year, about 5% of Normal (Technical) pupils cross over to Normal (Academic) stream. Outstanding graduates from ITE also have the opportunity to pursue a polytechnic education, and aspire for more challenging and rewarding technical careers. In 1998, about 550 students gained admission to the Polytechnics for full-time education, based on their ITE qualifications. Between 1994 and 1998, the percentage of pupils streamed into EM3 was fairly stable, averaging about 9% of all Primary 4 pupils. In absolute terms, the number of pupils streamed into EM3 increased from 3,648 in 1994 to 4,587 in 1998, due to an increase in the Primary 4 enrolment. Pupils streamed into EM3 at Primary 5 continue their studies in their own schools; they are not channelled to other schools. EM3 pupils are well-prepared for vocational development at each stage of the education system. From the first batch of EM3 students, about 100 completed their `O' levels through the Normal (Academic) course and were admitted directly into the Polytechnics earlier this year. Most would, however, typically proceed on to do the Normal (Technical) course in secondary schools, which builds upon their EM3 curriculum through a technically-inclined and practice-oriented curriculum. For example, Normal (Technical) course students study Computer Applications, a course which is not available to other secondary school pupils. The Normal (Technical) course was started in 1994 largely to cater to these students who otherwise would not have attended secondary school. Students who do complete the Normal (Technical) course can proceed on to post-secondary technical skills training at the Institute of Technical Education (ITE). The ITE Centres and courses underwent a major revamp which was completed in 1992. About 74% of all Normal (Technical) course students proceed to ITE. As I mentioned earlier, many more move on to the polytechnics. Upon graduation from ITE and the polytechnics, they can take up highly rewarding careers in technical and business fields, and help meet Singapore's needs for technically-skilled manpower.

Thank you, Minister, for the thorough reply. Could I ask two supplementary questions? First, could the Senior Minister of State tell me what are the critical familial and school factors that affect the learning abilities of these EM3 students? What can community agencies, like FSCs, do to reinforce the effort of MOE? And, second, does the Minister worry that the EM3 students may become a source of youth crimes and can we do more to keep them in schools longer?

We will welcome any help anybody can give. But from our experience of the first batch of the Normal (Technical) stream students who have moved on to ITE, , we have seen very encouraging results. 96% of them passed the first semester examination and 93% passed the second semester examination. Moreover, these students also participated very actively in the campus activities, and some even took on leadership roles in student councils. We believe that everybody should be given a chance, and that not everybody develops at the same pace. And I think our Normal (Technical) stream which started in 1994 has proven us right.

Two supplementary questions, Sir. First, would the Senior Minister of State agree that while the objectives of EM3 are laudable, there is unfortunately a social stigma attached to some who attend EM3? And second, if he agrees to that, what can be done in order to reduce this social stigma attached to being an EM3 student?

I think the social stigma is the result of a perception problem and a number of other things. First, there is need for a process of education even for the public and the parents. Perhaps the most important thing that has happened in the last two or three years has been the very positive publicity that the media has given to this group of students. I think we all recognise - and that is the type of publicity that has been given - that they are not useless, they are just different, which is what we try to emphasise. Moreover, there have been many success stories publicised by the media as well as by ITE and also the polytechnics which have shown many examples of people from this particular group who have successfully come through life. They are just different, and we are all built differently, and that is a message which we have to get through to everyone.

Sir, the Senior Minister of State in his reply said that 5% of students from the Normal (Technical) stream were transferred to the Normal (Academic) stream each year. I would like to know what is the number in the cohort of students each year who are being transferred from Normal (Technical) to Normal (Academic) stream. Secondly, is he satisfied that this number of students being transferred represents the optimum possibility for the students who academically have a higher ability at EM3 and are able to be transferred? Thirdly, is he satisfied that the Ministry of Education and the schools have put in enough resources and effort to educate EM3 students as well as Normal (Technical) stream students in the secondary schools, given the fact that they might have some problems in learning? Is there any special effort or special training for the teachers to cope with these students?

The 5% represents about 180 or 200 students who have gone over to the Normal (Academic) stream. With regard to whether that is the optimum number or not, there is really no quota or anything of that sort, and it is simply based on the judgement of the teachers and schools of what the students are capable of and the pace at which they are capable of. There is no point in pushing students beyond the pace that they can cope with. We do not want to push students to the level where they either give up completely or fail. With regard to whether there are sufficient facilities and help given to this group of students, the answer is definitely yes. There are special facilities and courses provided in these schools, and some among these students are singled out and given additional help.

The Senior Minister of State mentioned about the importance of the process of education in helping to reduce the social stigma attached to some of the EM3 students. Would the Senior Minister of State then commit to intensifying this process of education in order to further reduce the social stigma attached to some of these students and help them build up their sense of self-confidence?

The quick and short answer, definitely, is certainly. But I think there is only so much you can do; you can over-publicise as well. I think the pace at which we are going is very satisfactory. But if there are any other suggestions, we will be very glad to hear them.

Sir, if you say that the children are different, could we not remove the word "EM3", because EM1, EM2, EM3 by labels do suggest a status difference? So instead of calling it EM3, why not call it something else?

Short of asking Mdm Chiang to suggest what the label should be, I can tell her one thing. Whatever label we come up with, everybody will soon find out. It is not so much a matter of a label. It is a frame of mind and we really need to constantly try to educate the whole population.

Mr Speaker, Sir, may I ask the Minister a supplementary question? There are Indian students who are offering Hindi, Punjabi and other Indian languages. Their marks are not weighted at Primary Four. Would the Minister consider reviewing the position in the near future?

I have been advised that is a separate question. If the Member would be kind enough to file a Question another time, we will answer it.

asked the Minister for Education (a) what is the educational policy for overaged children who are not admitted to normal school; and (b) if his Ministry will create a separate school to help such students who have failed or dropped out and who now wish to make a comeback, or give the mandate to a community agency to start such a school.

Mr Speaker, Sir, any Singaporean child aged 6 to 17 who wants an education in a mainstream primary or secondary school will be able to have it, so long as they are not more than two years above the correct age for that particular level. This rule is put in place for practical reasons because children who are much older than their classmates often have great difficulty fitting in socially. Nevertheless, applications for admission of pupils who are more than two years above the correct age for the particular level are considered on a case-by-case basis. Furthermore, at each stage of education, there are different streams available. The Member may wish to suggest different names for them, but there are different streams available to cater to students with different abilities and aptitudes so that they can study at a pace suited to them. For example, those students who are more able to do their `0' levels in four years do it for four years; those who need five years do it in five years. So that also ameliorates the age consideration and the overage issues. To put matters into perspective, the drop-out rate in our schools is low - 0.4% of a Primary 1 cohort at the primary level, and 3.5% at the secondary level. But then their education does not end there. There continue to be educational opportunities beyond that if they choose to do so. Overaged children can have a second chance for education. They can avail themselves of the different continuing education courses, like BEST (which take them up to PSLE level) and WISE (which take them up to secondary level). Those who have completed Primary 6 can also take up training at the vocational training centres, after which they can progress to the Institute of Technical Education. Community or private organisations which wish to start a school to cater to overaged children can do so. They need to be registered with the Ministry of Education, to ensure that they meet certain standards. In fact, there are already 3 private schools in Singapore, which offer a curriculum similar to mainstream primary and secondary schools, and these are Our Lady of Lourdes School, St Francis Methodist School and San Yu Adventist School. These schools do take in pupils who are overaged.

I would like to know from the Minister how many overaged students we have now who are not in schools.

I do not have the number of overaged students who are not in schools. For the overaged students who are in schools, there are about 500 who are overaged by more than two years at the primary level and about 300 at the secondary level. They are just the total number in the system which we have. I do not have the numbers who are not in school.

asked the Minister for Foreign Affairs whether the Government has provided or given any assistance to the military regime in Myanmar, apart from encouraging trade between Singapore and Myanmar.

Mr Speaker, Sir, as a fellow member of ASEAN and a close neighbour, Singapore shares with Myanmar our experience in a number of areas through our bilateral technical co-operation programmes. Such programmes are primarily focused on helping Myanmar upgrade its manpower and human resources and are funded by the Singapore Co-operation Programme and the Myanmar Technical Assistance Fund. Since 1993, some 1,850 Myanmar officials have received training in Singapore in areas ranging from agro-technology, communications, and trade and tourism promotion.

May I ask the Minister whether Singapore provides special training for the intelligence officers, the Special Branch, in Myanmar to cope with the dissidents, supporters of the NLD?

Mr Speaker, Sir, as far as I know, no such assistance is given.

May I know whether Singapore exports any arms to Myanmar?

Mr Speaker, Sir, I think it has been stated in this House before that as far as arms sales are concerned, it is a general policy of the Government neither to confirm nor deny arms sales to any country. And I do not intend to depart from that position. Let me assure this House, however, that Singapore pursues a responsible arms sales policy. We honour all international obligations and have always enforced international arms embargoes.

May I ask the Minister to tell us what is the rationale for not disclosing to this House? We know that, in Myanmar, it is not a lawful government which is in place. We have a military which has usurped the rights of the people. Do Singaporeans not have a right to know whether we are supporting this military government with our arms?

Mr Speaker, Sir, I thought my position is very clear. If there is a United Nations Security Council embargo which enjoins its members from exporting any arms to any country, we will, as a member of the United Nations, observe that embargo and any other sanctions which are part of our international commitments. As for the general policy which I indicated has been consistently observed by Singapore of not disclosing arms sales, this is a policy adopted by many countries. As for the second part of his question, the drift of his question shows that the Member has a strange notion of how modern day diplomacy and international relations are conducted. There are some 180 or more countries who are members of the United Nations, different sizes, shapes, forms of government, constitutional systems, degrees of representative governments, and most of them have international relations and interactions with each other. Countries do not place preconditions on the internal systems of government and policies when they establish diplomatic relations and have normal international interactions. This is a fact of international life. If this were not so and if countries placed conditions, then very few countries would be able to have diplomatic relations with others. This is not to mean that countries approve and endorse everything that another country does when they have diplomatic relations. Similarly, for Singapore, Myanmar is a member of ASEAN, it is a member of the South-East Asian community, and we have international relations and interactions with them just as the majority of the international community do so.

Is the Minister saying that the Singapore Government recognises the military regime, the usurpers, as the lawful government of Myanmar? And, secondly, will the Minister tell us whether this constructive engagement policy of ASEAN has borne any fruit, or has it only strengthened the will of the military to further suppress the people?

Mr Speaker, Sir, I have touched on the constructive engagement policy of ASEAN on several occasions in this House before and I will not repeat in detail what I have said. The constructive engagement policy of ASEAN is not intended to dictate to the Myanmar government what it should or should not do. It is referred to as a constructive engagement policy in comparison with approaches taken by other countries and regions, which is to either isolate Myanmar or to impose sanctions on them. ASEAN decided that it would adopt a different approach of integrating Myanmar within the ASEAN fold and, in that process, encourage Myanmar to see what other countries in ASEAN are doing and, hopefully, they will, in course of time, achieve normalcy. Within the ASEAN constructive engagement policy, different members of ASEAN have engaged in dialogue with Myanmar to convey suggestions on various matters of common interest. This is the ASEAN way. Whether it is the perfect method, whether it will bear fruit and whether it will be successful requires judgement after some years have passed.

May I ask the Minister whether it has been successful so far? And, secondly, is he not aware that at least two other member states in ASEAN are having second thoughts of the wisdom of this constructive engagement?

As to the latter part of his question, I will be interested to know if he can cite the chapter and verse because, as far as I am aware - I chaired an ASEAN meeting, both formal meetings and informal discussions as well as a retreat - I do not know of any ASEAN member which has said that it would abandon the policy of constructive engagement. In fact, on the contrary, in the retreat and informal discussions, we had very frank and candid discussions with each other, including Myanmar.

asked the Minister for Home Affairs how his Ministry ensures that paramedic and ambulance attendants of the Singapore Civil Defence Force are competent and exercise due diligence in deciding whether a person is in need of emergency help.

Peng Kee) (for the Minister for Home Affairs): Sir, the Emergency Ambulance Service of the Singapore Civil Defence Force (SCDF) is currently operated by SCDF paramedics as well as Ambulance Officers (AOs) seconded from the Ministry of Health (MOH). Sir, to ensure that they are competent, SCDF paramedics and AOs undergo rigorous training before becoming fully operational. SCDF paramedics are trained at SAF's School of Military Medicine. The paramedic training syllabus is recognised by the Paramedic Academy of Justice Institute, British Columbia (Canada), and endorsed by MOH. The training lasts 18 months and includes attachments to hospital Accidents and Emergency (A&E) departments and fire stations. After completing their training, the paramedics undergo a programme of assessment and testing by senior doctors from MOH before being certified operational. Sir, the AOs are registered nurses seconded from MOH. In addition to their nursing training, they undergo pre-operational training and the protocol conversion course similar to that of the paramedics. The AOs undergo stringent assessment by the Singapore General Hospital before being allowed to operate independently. Both the paramedics and AOs are regularly re-certified to ensure that their knowledge and skills are up to standard and updated. Sir, do they exercise due diligence? The paramedics and AOs are guided by a set of protocols and procedures drawn up by SCDF's Medical Advisory Committee which comprises a group of specialists from various medical institutions. Ambulance crew use essentially the same emergency/non-emergency verification system adopted by the hospital A&E departments. Nevertheless, the guiding principle for the paramedics and AOs is that, when in doubt, the patients are to be conveyed to the hospitals. Sir, besides rigorous training and operational guidelines, the SCDF also has an internal audit system to review cases where death occurs (eg, death on arrival). There are also frequent and regular spot checks on the professional care provided by the ambulance officers and paramedics. SCDF also monitors their performance through feedback from the hospitals. Sir, I would like to assure the House that our ambulance crew are competent and do exercise due diligence in deciding whether a person is in need of emergency help.

Sir, I would like to ask whether the Minister of State is aware of the recent case in which a student was attended to by a paramedic and who was certified to be all right but died later in hospital. If so, would he like to tell this House what had happened to the case?

Sir, certainly all of us are aware of the case. It is an unfortunate case. But as there may be a coroner's inquiry, I cannot say very much now in this House. But what I can say is that when the ambulance was called the Ambulance Officer who attended to the boy had properly carried out the assessment on him, according to the set of medical procedures approved by SCDF's Medical Advisory Committee. Her assessment was that it was a non-emergency situation.

After this case, does the Minister of State see the need to revise the guidelines because it may apparently be a wrong assessment resulting in the death of a person?

Sir, I think the question is premature. Like I said, there may be a coroner's inquiry. He is assuming that it is a wrong assessment. What I have said before is that the procedures are very clear and the instructions are that if in doubt, the patient will be conveyed to hospital.

asked the Minister for Communications and Information Technology if he will state the number of certification authorities for e-commerce and among these, how many have been licensed by the National Computer Board. The Minister for Communications and Information Technology (Mr Yeo Cheow Tong): Sir, currently, Netrust is the only public certification authority (CA) in operation in Singapore. CISCO Security and Singapore Post have recently announced their plan to operate another CA, called ID.safe, under a 50-50 joint venture. Both Netrust and ID.safe have indicated to NCB that they will be applying for CA licences, which is a voluntary licensing regime, under the Electronic Transaction (Certification Authority) Regulations 1999.

Sir, are there any new foreign entities who would like to apply as a CA? It looks like most of the CAs come from Government agencies or GLCs. Does it imply that most of the users today are Government agencies or GLCs and not commercial entities?

Sir, we have received enquiries from various organisations. But so far, only CISCO and Singapore Post have publicly announced their decisions. I suppose once the other companies have made up their minds and decided to go forward, they will then proceed to make their announcements. Secondly, in terms of the users, many of the users are in fact Government agencies but there are also many commercial operations, eg, the banks. Many of the banks are actually active users of the system as well.

Sir, do we have any restriction on foreigners applying as a CA? I understand that one of our neighbouring countries has actually restricted foreigners from applying so that only their own local CAs can operate.

Sir, as far as I know, there are no restrictions on foreign ownership.

asked the Minister for National Development whether the studio apartment scheme will be open to senior citizens not living in Housing and Development Board flats.

Mr Speaker, Sir, the Studio Apartment (SA) Scheme was introduced as another housing option primarily to cater to the needs of elderly HDB flat owners. The scheme allows them to sell their existing larger HDB flats, buy the smaller studio apartments that are purpose-built to serve their needs, and then use the balance of the sales proceeds to meet their old age needs. Since the launch of the Studio Apartment Scheme, HDB has received requests from MPs and members of the public to open the scheme to senior citizens who are non-HDB flat owners. HDB will bear in mind this request when it reviews its policy.

asked the Minister for Communications and Information Technology whether he will consider bringing forward the construction of Changi Airport Terminal Three which was postponed because of the economic crisis.

Sir, Changi Airport Terminal 3 (T3) was originally scheduled to be operational by the year 2004-2005. Due to the drop in air passenger traffic arising from the economic crisis, the Civil Aviation Authority of Singapore (CAAS) decided to delay the building of T3 for a year to 2006. However, traffic has improved over the first seven months of this year, going up by 9.5% over the same period last year. CAAS will continue to monitor the traffic situation closely and review the timing for T3 when a more definite trend of air passenger traffic is confirmed. I would like to assure the House that CAAS remains committed to ensure that Changi Airport is well able to meet the growing air passenger traffic demand. 1.30 pm

Order. End of Question time. [Pursuant to Standing Order No. 21(3), Question Nos. 12 to 16 have been postponed to the sitting of Parliament on 18th August 1999.]

Mr Speaker, Sir, on 16th July 1999, President Ong Teng Cheong held a press conference announcing that he would not stand for re-election as President. At this press conference, the President spoke of what he described as a "long list" of problems he had encountered in trying to protect past reserves. In particular, the President raised four issues: (a) It would take the Accountant-General "52 man-years" to produce the list of physical assets of the Government. (b) One "unpleasant" encounter where he had to withhold approval of a statutory board budget because it would have caused a draw on its past reserves. (c) Whether Net Investment Income (NII) should be treated as current reserves or past reserves. (d) His "disappointment" that the Government did not need him to unlock the past reserves to finance its package of cost cutting measures, because it had changed its treatment of NII. These issues concern the working of the Presidential safeguards to protect past reserves. The Constitution had been amended in 1991 to provide for a directly elected President who would have discretionary powers to veto the use of past reserves and the appointment of key officials in the public service. Such a move was without precedent in any country. It was a novel experience for both President Ong Teng Cheong, the first person directly elected by the electorate to this new office, and the Government. The past six years have therefore been a mutual learning experience for the Government and the President. Many problems were encountered and resolved. Both sides have worked together to interpret the constitutional provisions, and to develop working procedures for carrying them out. The agreed understanding is contained in the set of Principles for determining and safeguarding the accumulated reserves, which was published as a White Paper. I will now give the House a full account of the four issues raised by President Ong, to clarify what had actually transpired. In the Government's view, these problems were neither fundamental nor intractable. They arose mainly because of differences of opinion on the accounting of Government's physical assets, and difficulties that arose in operating the new system. They were inevitable consequences of the two-way learning process. Obtaining an Inventory of Government's Assets The President had said it had taken the Accountant-General "more than two, three years" to inform him what the Government's reserves consisted of. He said that when he asked for an inventory of the physical assets, the Accountant-General had responded that it would take "52 man-years" to produce. He had replied, "Never mind. Go ahead", and finally he received the list plus diskettes a few months before the 1997 elections. Members of this House must wonder why it would take "52 man-years" to produce a listing. The President's office had requested a listing of physical assets from the Accountant-General, Mr Goh Khee Kuan, on 18th June 1996. At a meeting with the President on 14th August 1996, less than two months later, the Accountant-General provided a listing of State buildings, while the Commissioner of Lands provided a listing of State lands. Updates were subsequently sent to the President's office. At this meeting, the President remarked that to protect past reserves, the reserves should ideally be denominated in dollar value. In response, the Accountant-General conceded that following accounting principles, one should take the value of what was protected at that point in time, but it would take 56 man-years (not 52) just to value the existing properties. He added that for the purposes of protection of the reserves, it did not matter when the valuation was actually made, and it could be at the point of sale. This was recorded in the minutes. "56 man-years" does not mean it takes 56 years to complete the task. A man-year is a measure of the amount of work to be done, and not of the time it will take to do it. It means that it takes 56 men working for one year, or 28 men working for two years, or one man working for 56 years. It is not unreasonable for a team of 56 men to take one year to value the entire stock of land and buildings owned by the Government. The land was in some 50,000 parcels, including miscellaneous parcels like roads, drains and even some reservoirs. Such land parcels had to be verified through actual surveys. Thus, the President's recollection of what the Accountant-General had said was mistaken. The Accountant-General did not say that 52 man-years were needed to produce a listing of physical assets. He actually said that it would take 56 man-years to conduct a complete valuation of the physical assets. Furthermore, at the time he said this, he had already produced the listing that the President had requested. He did not produce it only after two or three years, or only after the President insisted upon it. It is therefore clear that the Accountant-General and the Government departments have cooperated fully with the President, and have not in any way sought to hinder the President in his job of protecting the reserves. The question whether to revalue all State properties at each changeover of Government had arisen earlier. On 15th July 1996, the Auditor General had written to inform the Ministry of Finance and the key statutory boards and Government companies (Those listed in the 5th Schedule of the Constitution.) that he would require all state properties to be revalued at market value as at the date of changeover of the Government. He cited the Constitution, the impending general election, and the Audit Act. The Ministry of Finance sought the Attorney General's advice on the Auditor General's directive. On 30th September 1996, the Attorney General's Chambers advised that, in so far as the directive concerned land, such a complete revaluation was unnecessary as a matter of law. It did not result from a Constitutional need to protect the reserves, as the question whether past reserves were being drawn down did not arise unless a piece of land is actually about to be sold off or alienated. Furthermore, the proposed revaluation was a waste of resources, as firstly the reality was that much of state land would remain as state land, and secondly the value of each piece of land depended on planning and zoning restrictions, which the Government could change. The Ministry forwarded this opinion to the Auditor General. The Auditor General then revoked his directive to revalue all properties at changeover, stating that there was now no legal basis to do so. How to protect State lands and buildings in the reserves is a complex issue which the Government and President's office subsequently studied in much greater depth. The final arrangements agreed upon make up an entire two-page paragraph (Paragraph 10 in Part A.)of the White Paper on Principles. Withholding Approval of a Statutory Board Budget President Ong said that public officers should change their mindset, and report to the President any improper transaction which may draw down the reserves. He said that he suspected that some public officers in the Executive, including some ministers, considered the President a nuisance. The President cited as an example one "unpleasant" encounter when he had to withhold approval of the budget of a statutory board. Its expenditure of $27 million had exceeded its income surplus of $23 million, which would have caused a draw on its past reserves. He said he was prepared to approve the drawdown, but there were problems because of its accounting system. He brought the matter to the Government's attention, and the matter was resolved and he approved the budget. The statutory board in question is the Central Provident Fund Board. The chronology of events is as follows. On 8th November 1996, the CPF Board put up its budget for 1997 to the President for routine approval. The budget showed an operating surplus of $23 million. The submission was accompanied by a declaration signed by the Chairman, Dr Andrew Chew, and the General Manager, Mr Lim Han Soon, that the budget was unlikely to draw on the Board's reserves which were not accumulated during the current term of office of the Government. On 6th December 1996, the Principal Private Secretary to the President informed the CPF Board that the Council of Presidential Advisors (CPA) had noted that the Board had budgeted a capital expenditure of $27 million, which exceeded the budget surplus of the year by $4 million. The excess would have to be funded by the Board's accumulated surpluses. But with a changeover of government scheduled to take place soon, all of the Board's accumulated surpluses would become past reserves. Therefore, the CPA wanted the Chairman and the General Manager of the CPF Board to clarify the basis on which they made their declarations, "knowing full well that there will be a General Election soon". The General Manager replied on 7th December 1996 to explain that the CPF Board accounts were on an accrual basis. In accrual accounting, capital expenditure is depreciated over the useful life of the asset, rather than in one lump sum in the year of expenditure. The operating surplus of $23 million projected by the CPF Board had already charged annual depreciation of $11 million against the year's income. Therefore, there was no drawdown on past reserves, whether the elections were held or not. The General Manager further explained that even on a cash basis, the CPF Board would still project a budget surplus of $7 million. On a cash basis, we would indeed deduct the $27 million capital expenditure from the projected operating surplus of $23 million, but we would also have to add back the depreciation of $11 million. Otherwise we would in effect be deducting the capital expenditure more than once, erroneously. The CPF Board's budget and accounts were thus in order and there would not be any drawdown on the CPF Board's past reserves. However, the President did not accept the CPF Board's explanation. He wrote to the Prime Minister on 16th December 1996, stating that he would approve the budget because the expenditure was not wasteful and was in the public interest. However, following the Constitution, he would be gazetting his opinion that the budget was likely to draw on the past reserves of the CPF Board after the changeover of Government. The Government did not agree with the President's approach. The Prime Minister replied the next day repeating the explanation given by the CPF Board, and requested the President to hold back gazetting his opinion. He suggested that since there seemed to be a difference in interpretation of the budget, we should get the Accountant-General or the Auditor-General to state whether or not there would be a drawdown on reserves following the changeover of Government. The President replied on 20th December 1996. He agreed to hold back gazetting his opinion, and stated that he would also hold back his approval of the budget until the issue was resolved. In response to the Prime Minister's proposal to seek the views of the Accountant-General and the Auditor-General, the President wrote as follows: "My duty does not include clarifying with the professional bodies the principles and interpretation. That duty lies with the Government." The President also explained his reservations over accrual accounting as follows: "My concern here is that this approach (i.e. accrual accounting) will allow a profligate Government to hide its lavish spending under the guise of capital expenditures. In the final analysis, it is the Government which would have to recommend whether this is a principle that should guide my actions. And in the absence of clearly enunciated and mutually agreed principles and procedures for dealing with such matters, I would rather err on the side of stringency. If the principles had been settled earlier, this uncertainty about what is or is not a draw would not have arisen." Accrual accounting is a standard practice not only in statutory boards in Singapore, but in commercial firms worldwide. Companies and statutory boards have auditors whose duty is to ensure that what are declared as capital expenditures have in fact been properly spent on capital items. Furthermore, under the Constitution, the Chief Executive Officer and Chairman must declare whether the budget is likely to draw on past reserves, and board members and CEOs have a duty to inform the President of any proposed transaction which is likely to draw on past reserves. As an additional safeguard, the appointments of the Chairman, Board and CEO of the key statutory boards and Government companies are subject to the President's veto. In view of the President's stand, the Government took an explicit decision reaffirming that statutory boards and Government companies should continue to prepare their accounts and budgets on an accrual basis. This has since been incorporated in the White Paper on Principles. On 27th January 1997, the Prime Minister wrote to the President seeking his agreement to accrual accounting, and explaining the safeguards in place. On 30th January 1997, the President replied stating that he had approved the CPF Board's budget and agreeing to the principle of accrual accounting. But he still said that "the concern that a profligate government could hide its lavish spending under the guise of capital expenditure was not fully addressed." This account of events makes clear that no public officer failed in his duty to report a possible drawdown on reserves to the President in this instance. The Government does not understand why the President regarded this genuine difference of opinion as "unpleasant". Net Investment Income - Is it Current or Past Reserves? The President raised the question of whether Net Investment Income (NII) should be treated as current reserves or past reserves. He said that he had been told that according to the Generally Accepted Accounting Principles (GAAP), NII constituted current reserves, but he was not sure, as he was not an accountant. The proper treatment of NII is not a question of opinion. It depends on the constitutional definition, and on what constitutes standard accounting practice. On these matters, the Government does not act arbitrarily on its own. It takes legal advice from the Attorney General's Chambers, and professional advice from the Accountant-General and the Auditor-General. Similarly, the President and the CPA can obtain legal and professional advice, should they wish to. The Constitution does not envisage either the Ministers or the President and the CPA having to be their own lawyers or accountants. Let me explain what exactly NII is. NII is the interest and dividend income earned from investing Government's reserves, net of expenses on investment and debt servicing. NII does not include any capital gains or losses that may be made from the disposal of investments, which are classified as Investment Adjustments. Under the Constitution, the President has custodial powers over "reserves which were not accumulated during the current term of office of the Government". The Attorney General's advice is that this definition does not cover NII, because NII is accumulated during the current term of office of the Government. This is so even when this NII is derived from investing past reserves that are themselves locked up. Therefore, the President's second key does not extend to NII. The President has not challenged this legal opinion. Treating NII as current income is also the standard approach under Generally Accepted Accounting Principles. The President also said that the Government had locked up NII as part of past reserves since 1992, but last year decided that "the NII should now belong to the current account". This is not accurate. The actual situation is as follows: Under the Constitution, NII is and has always been current income. The Government has not changed this treatment. However, it has carefully studied whether it should do so, and lock up part of NII as protected reserves, especially that part of NII earned from investing past reserves. This is a complex issue. We have to project the likely state of the economy and the budget position of the Government over the long term, to assess how much revenues the Government will have and what it will need to spend. This involves many uncertainties. We must also weigh carefully the proper balance between restraining a profligate government on the one hand, and allowing a responsible government enough flexibility to operate on the other. The matter is not pressing, and if we decide hastily and make a mistake, it will be difficult to reverse later. It was the Government, not the President, who first raised the issue of NII in January 1992, well before President Ong took office. Against a backdrop of comfortable surpluses, the Government decided to take the more conservative stance of locking up all the NII earned from past reserves, and to amend the Constitution for this purpose, not immediately, but after about a year of implementation. However, subsequently the Government did not follow up to amend the Constitution. Revised projections of revenue and expenditure showed that earlier expectations of continuing large surpluses had been too optimistic The Government therefore looked for more flexible alternative ways to protect the NII. The matter has been discussed at length between the Ministry of Finance, the Cabinet and the President's office. The Government seriously studied including a more stringent definition of NII in the White Paper on Principles. It finally decided against doing so, because the present uncertain economic outlook made long-term budget projections difficult. A second reason was that doing so would cause the Principles to go beyond the Constitutional provisions. The Principles cannot override the Constitution; they can only give effect to them. A future government would not be bound by the definition of NII in the Principles. The President and CPA have given their opinions, including the suggestion to lock away half of the NII from past reserves. The Government has carefully considered their views. The suggestion to lock away part of the NII has merit. But we have to find the right basis for determining how much to lock away, as a fixed proportion like 50/50 may not be appropriate for all circumstances. The Government therefore has not yet made a final decision. In March 1999, the Government informed the President's office that while it had earlier been inclined not to change the status quo treatment of NII, it had relooked at the calculations and concluded that there could be a case for protecting NII or a significant part of it. This would require a Constitutional amendment, rather than a provision in the Principles which would have no legal force. The Government needed time to study how best to protect NII. This study could lead to an amendment of the Constitution next year. Therefore, while NII continues to be current reserves, the Government is aware of the problem which the President has highlighted, and has been working with him and the CPA to find a solution. No Need to Draw on Past Reserves Because of NII? The President also expressed his "disappointment" that the Government declined his offer to unlock past reserves to finance its package of cost cutting measures, and said that the Government was able to do so because it had changed its treatment of NII to count as current reserves. This is not the Constitutional and financial position. As I have just explained, NII has always been current reserves under the Constitution. In any case, the Government has not needed to fall back on NII at all, whether these constitute past or current reserves, to fund its special packages and the budget deficit. Through careful financial stewardship, the Government has accumulated sufficient budget surpluses within its current term of office for this purpose. The budget surplus does not include any NII, because NII has always been an item "below the line" in the Government budget. I informed this House during my FY99 Budget Debate round-up speech on 9th March 1999, that between 25th January 1997, which is the day the present Government took office, and 31st March 1998, the Government had generated an operating budget surplus of $6.3 billion. After taking into account the expected deficits in FY98 and FY99, we would still have a cumulative surplus of $368 million as at 31st March 2000. As it has turned out, in FY98, instead of the budget deficit of $466 million originally estimated, we achieved a budget surplus of $925 million. Hence, by the end of FY99, we now expect to have a cumulative budget surplus, since this Government took office, of $1.8 billion, excluding NII. Therefore, the Government has had no reason to ask the President to unlock past reserves, regardless of the treatment of NII. This is a positive outcome of our prudent policies, and not a cause for "disappointment". Conclusion I have explained that while there were difficulties between the President and Government, they arose from honest differences in views. The Government has extended full cooperation to the President and the CPA, and made no attempt to obstruct or show disrespect to the President. Despite the problems encountered, the Government remains committed to protecting past reserves and making the institution of the President with custodial powers a success.

Mr Speaker, Sir, as Members know, I had originally wanted to make this statement on 3rd August, but decided to postpone it because the President's wife had just passed away. Ideally, this statement should be made later because President Ong Teng Cheong is still in bereavement. But the President's term will expire on 1st September and it would not be proper to make the statement after he has left office. Dr Richard Hu has addressed the specific items raised by the President at his press conference on 16th July. But having listened to him, some Members of the House and the public may still wonder why the President should choose his end-of-term press conference to criticise the Government in this way. It could not just be the initial difficulties experienced by the President. After all, the problems happened three or four years ago. The public will continue to speculate that there must be more problems with the relationship between the Government and the President which it does not know about. Public reactions to President's statements The media have already reported some of these comments and conjectures. For example, Mr Viswa Sadasivan, Chairman of the Feedback Unit's Political Matters Group, told the Straits Times: "If a President who is a former Deputy Prime Minister can be given the push around in that way, I shudder to think what a newcomer to the scene would face." Dr Kevin Tan of NUS told the Straits Times [30th July]: "The trouble is: either the President should be a figurehead President, or an executive President. To do a little bit of both is terribly confusing." Mr Simon Tay told Asiaweek [30th July]: "There are two implications here - bad and good - that shock people. The bad one is that even though Ong was an insider, it was still hard [for him] to get straight answers. The good one is that Ong did not see himself as a rubber stamp". Mr Simon Tay also published an article in the Straits Times [6th August] together with Mr Zulkifli Baharuddin, stating that "the elected presidency remains an institution whose powers are not yet fully worked out and accepted by all." The Asian Wall Street Journal [9th August] reported that the President had talked of a "long list of problems" at his press conference, and linked this to the President's decision not to stand, stating: "Many political analysts believe that Mr Ong wanted a second term but was discouraged by senior political figures." PERC, the Political and Economic Risk Consultancy based in Hong Kong, has marked down its rating of Singapore, in a recent report [Asian Intelligence, 28th July] comparing national institutions in different Asian countries. PERC stated that while Singapore's institutions were still professionally run, there were controversies suggesting that they may face some challenges in future. PERC cited the President's revelations of "behind-the-scenes struggles he had with the government and bureaucracy during his term of office. Apparently, the former deputy prime minister took his job of protecting the nation's reserves . rather more seriously than many had expected when he was chosen for the post back in 1993." Need for Government to respond We should not regard it as unusual for the President to publicly acknowledge differences between him and the Government. It shows the independence of the Presidency in the two areas in which he is vested with custodial powers, and this will help future Presidents. Unfortunately, President Ong's criticisms, both direct and implied, went beyond these differences. The Government has to guard its honour and integrity jealously. If there are doubts over its probity, the Government cannot command respect and would lose its moral authority to govern. So the Government has consistently defended itself whenever its reputation has been unjustly called into question. I am duty bound to respond to the points raised publicly by the President at his press conference. I am pained and saddened to have to do this now, at such a difficult moment for the President personally. Indeed at the time of the press conference, his wife was already gravely ill. But it is a responsibility I have to discharge. Implications of President's Statements The President's statements have left the following thoughts in the public mind: (1) The Government had been unhelpful and uncooperative with the President in the discharge of his duties. (2) Public officers, including possibly some Ministers, regarded the President's checks as a nuisance. (3) The Government might have withheld information from the President. (4) The Government had disregarded the independent views of the President; and (5) The President's difficulties with the Government may have caused him not to seek another term, since his health was "fine". Teething problems The tone of the President's comments puzzled me. I thought the Government and the President had developed a good working relationship. Mr Ong Teng Cheong had done a good job in his six years as President. We had worked together to make the new institution of the President with custodial powers succeed. I did not expect him to cast doubts on the Government, that it was unwilling or reluctant to give him full access to all information and documents for him to discharge his constitutional duties. There were indeed difficulties in working the new system of Presidential safeguards in the initial two or three years. This was due to the complexities of the issues involved. The Government had set up a new system. The President was new to the job; indeed the job itself was new. These initial difficulties were not unexpected. In our speeches at the swearing in ceremony of the President on 1st September 1993, both the President and I referred to the challenges and likely problems ahead. I said: "My Government has not the slightest intention of using the financial reserves . to finance wasteful, unproductive programmes. We will not squander the financial reserves which we have so painstakingly accumulated. . I do not intend to bring about a situation which will give you cause to exercise your veto powers. I have no doubt, however, Mr President, that if you are ever in disagreement with what my Government proposes to do in the areas spelt out in the Constitution, you will not hesitate to exercise your constitutional authority. Mr President, you and my Government will have to work together to give effect to the letter and spirit of this new system of checks and balances. I pledge you my fullest support and cooperation and that of my Government." The President replied in his speech: "The legislation creating the institution of the Elected President is still new. While its philosophy and intent are clear, the detailed Constitutional provisions have not yet been fully tested out. Nor is there established precedent on how the Elected President actually exercises his powers. Both the President and the Government will have to feel their way forward. I look forward to developing a sound working relationship with the Prime Minister and his Government. As we accumulate experience with the new system, we can refine the arrangements, and define through practice and precedent how the Elected President will function." Indeed this is what the Government, and I believe President Ong, have sought to achieve over the past six years. Most of the difficulties that arose were resolved after discussion and explanation. I regarded them all as teething problems. As we solved them, we refined and elaborated on the arrangements and workings of the Presidential safeguard. Many of the items in the White Paper on principles for determining and safeguarding reserves first arose from careful deliberations by both parties to deal with such practical problems. As a result of our experience working the new system, we amended the Constitution several times to refine the provisions - in 1994, 1996, 1997 and 1998. The President supported all the changes, except for one - the amendment to Article 22H. This concerned the President's power to veto proposed legislation which circumvented or curtailed his discretionary powers. The President took the view that he could veto the proposed amendment to Article 22H. However, in the interest of testing out the system, he requested that the matter be referred to the courts for a ruling, and indicated that he would abide by whatever ruling that was made. The Constitution was amended to set up a constitutional tribunal. The matter was referred to a tribunal of three judges, which ruled that the President could not veto the proposed amendment to Article 22H. Notwithstanding these successive refinements to the scheme, we still cannot consider the system of a custodial President fully tested out and in its final form. It is still running in, and may well need further fine-tuning to make it workable. That is why the Government has not yet entrenched the provisions in the Constitution, to give the President a veto over proposed amendments to his discretionary powers. Differences healthy - Full cooperation rendered The Government does not expect the President to agree with it on every issue where he exercises custodial powers. That from time to time the two should hold different opinions on these issues is healthy, and to be expected. The President is assisted in his duties by a Council of Presidential Advisers (CPA) of six members. These are men of substance who have distinguished themselves by their balanced judgment. The President and Prime Minister each appoint two members. The Chief Justice and the Chairman of the Public Service Commission appoint one each. The President then appoints the Chairman of the Council from among the six members. Under the Constitution, the President has to consult the Council before making his decisions concerning reserves and key appointments. Differences between the Government and the President are therefore not personal, but reflect the independent judgment of the President and the Council. My Ministers and I treated all queries and requests of the President and CPA seriously. Whether the Government agreed or disagreed with the President, his queries and requests had to be answered. And they were answered. At no time did the Government withhold information or co-operation from the President or show him any disrespect. Contrary to what Mr Simon Tay and Mr Zulkifli Baharudin wrote in the Straits Times of 6th August, the Government fully accepts the custodial powers of the President. It was the Government which created this new institution to oversee two areas: reserves and key appointments. The Government worked out its powers and enacted the provisions in the Constitution. So it wants the new institution to succeed. It has absolutely no reason to obstruct the President. Information Withheld? Procedures Exist President Ong urged public officers to change their mindset and see it as their constitutional duty to help the President protect past reserves. He said: "It is not possible for the President's office with a very small staff to know what's going on. The civil servants know what is happening in the ministries and departments. We have discovered in the past that, if they don't tell us, most of the time we would not know. And by the time we know, it may be too late."

This implied criticism of the Government is not justified. I agree that if a civil servant knows that his political masters are drawing down reserves behind the President's back, he should inform the President. But I do not think that every transaction of the Government, or every land sale, should be reported to the President. This would go beyond what is required of all civil servants, and also beyond the scope of the duties of the President as laid out in the Constitution. There are established procedures for drawing up Government budgets, approving expenditures, and acquiring and disposing of assets. The accounting officer of a ministry is the Permanent Secretary, not the Minister. The accounting officer is responsible for the ministry's budget and its expenditure, as well as the proper accounting and management of public money and assets. The Government budget is prepared by the Ministry of Finance. When it is presented to Parliament, the Minister for Finance is required by the Constitution to certify whether or not there has been a drawdown on past reserves. That is provided for in Article 147. Furthermore, Article 148G of the Constitution imposes on the Auditor-General and the Accountant-General a duty to inform the President of any proposed transaction which to their knowledge is likely to draw on past reserves. Members of key statutory boards, the boards of key Government companies, and their CEOs have a similar duty, as required under Articles 22B and 22D. All these appointments are subject to the President's veto. It is up to these officials to devise their own systems, staff support and channels of information in order to discharge their constitutional duties effectively. Therefore there is adequate mechanism for keeping the President informed of what is happening in Ministries and Departments in time, rather than after the fact. The Presidential safeguard is designed to work through officials in the Government whom he has vetted and can rely upon, and not through a large parallel staff in the office of the President. Using NII In Regional Crisis? The President said that his greatest disappointment was his inability to use the second key during the economic crisis. He said this was because the Government had decided that Net Investment Income (NII) should go into current reserves instead of past reserves. The implication was that the Government had changed the rules in order to circumvent the second key mechanism. The President did tell me that he would agree to draw down the reserves, should the Government need to use them to fight the regional crisis and prevent Singapore from going into recession. I thanked him, but told him that the Government would try its best not to draw on past reserves. As Dr Richard Hu has explained, the Government had accumulated substantial budget surpluses since the 1997 elections, before the crisis struck. The budget surpluses exclude net investment income, which are "below the line" items in the Government accounts. But the accumulated surpluses were enough to pay for the budget deficits we expected last year (FY 98) and this year (FY 99), beyond the current term of the President. Thus we have not needed to use the net investment income at all. Whether the net investment income was earned from current reserves or past reserves made no difference to this. The President was thus mistaken in thinking that it was because the Government had redefined net investment income to be current income that it did not need him to use the second key. Some people may think that had the President used the second key, we would not have needed to cut CPF contributions. Let me explain that drawing on past reserves would not have solved our economic challenges. It would only generate a false sense of well-being, when our real problems are to ensure that companies survive and Singaporeans have jobs. Our business costs had become too high. We had to bring them down to restore our competitiveness. We reduced Government taxes and charges. But we also had to cut wages and CPF contributions, which form a major part of business costs. We could not avoid tightening our belts. The proof of a policy is in its outcome. Our rational response to the economic crisis is working. Our economy is recovering strongly, and we have earned the respect and confidence of investors and economic analysts. The President meant well in offering to unlock past reserves for the Government to use to counter the crisis. But it is for the Government to decide whether reserves need to be used under any given circumstances. A Custodial, Not An Executive President Some of the comments and reactions after the President's press conference have shown misunderstanding or confusion over the President's role under the Constitution. For example, Dr Kevin Tan, in Straits Times of 30th July, maintained that we should either have a figurehead President or an executive President, and that to do a bit of both is terribly confusing. Allow me with the authority of the Attorney General to correct this ill-informed view. There should be no confusion. The true Constitutional position is very clear. The President exercises custodial, not executive powers. Only the Government exercises executive powers. Under the Constitution, the Cabinet shall have the general direction and control of the Government. In contrast, the President's custodial powers are reactive and blocking powers. The President does not have any executive power. I made this clear when I moved the Constitutional amendments in this House on 4th October 1990 to provide for a President with custodial powers. I then said: "Let me stress here, however, that the Bill does not transfer the power of government to the Elected President, nor vest in him absolute veto power. Firstly, even though the President is elected by the people, he is not the Head of Government. He is the Head of State. He is not the Chief Executive of the country. The Prime Minister is. The initiative and responsibility of governing Singapore stays with the Prime Minister." This is in the Hansard of 4th October 1990 [Cols 464, 465]. This is why the Constitution retained the principle, which existed before we created the custodial President, that the President always acts on the advice of the Government, except where the Constitution explicitly provides otherwise. Article 21 of the Constitution states: "21.-

May I ask the Prime Minister a question or two? I understood him to say that the Cabinet would have been happier if the President had decided to seek re-election. But the Cabinet was concerned whether he was medically capable. But the President had said in his statement that his doctors had given him a clean bill, that his cancer was in complete remission and the President clearly indicated that his health would not stand in the way of his becoming President. May I ask the Prime Minister to explain to this House on what basis or information did the Cabinet conclude that he would not be capable of discharging his duties?

Mr Speaker, Sir, yes, the President had told the public at his press conference regarding his present health situation. But the Cabinet had two medical reports, one from the President's doctor in the United States, Dr Saul Rosenberg, and the other from his physician in Singapore. We studied the reports and it was quite clear from the reports that if you should focus or project the President's health condition into the future, there was a very strong likelihood that he would not be able to perform his duties normally. In a sense, it is like looking at a glass of water, whether it is one-third full or two-thirds empty. The Cabinet had to take the advice of the doctor and take a very careful view of what the President's future condition would be like. And it is on the basis of our understanding of the President's future medical condition, as given in the medical reports, that the Cabinet decided that it could not support the re-election of the President. But it is a matter for the President to decide. He could still have decided to stand for re-election and it would be his right if he wanted to stand for re-election. But we have given our views on the basis of what we think would be his future medical condition, as advised by the doctors, and that Cabinet could not support his re-election.

Mr Speaker, Sir, I would like to ask the Prime Minister whether the Government has been inconsistent when they supported President Ong Teng Cheong's attempt at the Presidential office six years ago knowing that he already had a similar medical condition and now, given that the condition has not changed, it is not supporting his bid for a second term.

Mr Speaker, Sir, we have not been inconsistent. We knew of the President's condition in 1992 when he was first struck with low-grade lymphoma. And again, from medical advice, we knew the likely progression of low-grade lymphoma that, in the first six years of this disease, there would have been no great problem for the President to perform the functions. But the next six years would not be quite the same. If you ask his doctors, they would tell you that, in the nature of things, the next six years would not be the same as the last six years. And it is on the basis of the next six years that we are concerned with. The doctors were right in their assessment, as shown in the last six years. The President had performed his duties quite normally.

I would like to thank the Minister for Finance and the Prime Minister for their clarifications. I would like to ask the Minister for Finance - unfortunately I do not have the Budget book here to refer to - what is the approximate size of the Net Investment Income and is it found in the Budget book. More importantly, I would like to ask the Prime Minister how come the President, who is supposed to safeguard the reserves, was mistaken regarding the definition of Net Investment Income. And how come he did not realise that there was no need to draw down reserves as a result of the cost-cutting measures because there was actually, as Dr Richard Hu pointed out, a budget surplus? It would seem to me that that kind of information would be readily available to the President whose official and constitutional function is to protect the reserves. I am rather puzzled by this state of affairs and more importantly, the Prime Minister has mentioned that he and the President have been friends and colleagues for a very long time, but it seems to me that there has actually been a breakdown of trust between the Government and the President where this is concerned so that matters of definition, matters of information as it were, do not seem to be readily conveyed across the various offices. Could the Prime Minister please explain? I think it is more than just a question of differences of definition or opinion. I am rather puzzled that there is a very significant difference, not so much of opinion, but of a breakdown of trust.

Mr Speaker, Sir, I am equally puzzled and I am still puzzled as to why the President did not understand fully the meaning of the NII as explained by Dr Richard Hu. The President did not deal with me directly on most of the issues. He dealt with the civil servants, normally through his Principal Private Secretary. I would normally come into the picture when they could not resolve certain issues. And of course when it came to my attention, I would then look at the matter and involve other Ministers who were concerned to resolve the issue. I do not think there was this breakdown in trust. It may be differences in the approach to the problems. And as far as the Government was concerned, there was never any reluctance in our case to cooperate. Where we disagreed we explained our disagreement. We finally sorted out whatever issues that we had. I do not get a sense that there was this breakdown in trust. It is just different approaches to the problems.

The NII is in the first page of the Budget book, below the line. You can just add up the figures year by year. It averages between $3 and $5 million a year.

May I ask the Prime Minister whether the Government has in any way put pressure on President Ong not to stand again?

Mr Speaker, Sir, that would be very unfair to the President, and unfair to the Government too because whatever pressure we put on the President, he is a not a man who succumbs to pressure. And as shown, he has an independent viewpoint on many issues. On the medical condition of the President, I did not want to be too explicit since the President is not standing for re-election. I think it would be unfair to him. But being less explicit, Members here may not understand what exactly is the position and why there is this difference. I would say that there was a difference in interpretation of the medical reports. We have to be advised by the doctors and we had to ask questions that we were not sure as to what certain words meant. We were also advised by his doctor that for the next six years, there would be a strong likelihood of certain events taking place. The President, from his point of view, can quite rightly look at the other aspect that these are all statistics. And from his point of view, he is the best judge of his own health. He said he felt "fine" and I have no reason to doubt him that he felt "fine". It is a question of how we interpret the medical reports. But in our case, we were guided by professional advice and not just how we felt over the medical reports.

Mr Speaker, Sir, I would like to ask the Prime Minister whether this issue of staff support for the President would be helpful because in the past when there was no elected President and there was no need to safeguard the reserves, the President only had one Principal Private Secretary. I am not saying that we should have a full presidential staff, but perhaps some more senior support for him would be helpful in his interaction with the other civil servants who are on a senior level.

Mr Speaker, Sir, in the past, the President had just a personal secretary. There was no Principal Private Secretary. The difference is that the PPS is an Administrative Officer. Your private secretary looks after your office management and so on. We felt that it is not necessary for the President's office to have a large staff because if you begin to man the President's office in order to check the civil servants, we must have a super Auditor-General to check on the Accountant General. You need to have your own lawyer to check on the AG's office and you begin to build a White House staff, as you call it, which would then have its centre of power, and it is totally unnecessary because the key appointments are subject to the veto powers of the President. Under the system that we have devised, the President should work through the people in Government. I too only have a Principal Private Secretary. I have a Press Secretary but I felt that he would be underworked, and I have given my Press Secretary three jobs. He is my Press Secretary. He is also holding a position as Deputy Secretary in the Ministry of Information and the Arts so that he can know what is going on and keep me informed of news. And I still find that he is underworked. So I thought he should also be the Chief Executive Director of the People's Association. And because he is from the Ministry of Foreign Affairs, he also attends briefings regularly in the Ministry of Foreign Affairs. This is how we use staff. We do not just have people who sit around looking for little faults here and there. It is totally unnecessary. The President has the right to use staff in the Government to get whatever information which he wants. He does not require a big staff. Likewise, I have a right to go to any Ministry and demand information to be given to me and circumventing the Minister, if necessary. I do not require a big staff to run the Government.

Mr Speaker, Sir, since the only concern of the President's re-election is health and the only reason cited by the Prime Minister for the Cabinet not to support the President's re-election is health, may I know whether the Government intends to publish the medical reports to clear the public misperception.

On the same note, Mr Speaker, Sir, may I ask the Government whether it is setting a precedent that good health is a key criterion for persons seeking high office in Singapore?

Mr Speaker, Sir, the Government has no intention to publish the medical reports of President Ong Teng Cheong. He is not seeking re-election. It is irrelevant now to publish the medical details of the President's health. As for the other question whether we are setting a new precedent, I think health is important but it is not a constitutional requirement. We have not put this in. It is very difficult for us to devise a way where we have to define health before a person can stand for election. But I would suggest that any potential candidate who wants to stand for election as President should be asked the question by the press. What is your health condition? Do you have an underlying condition which you know, over time, will lead to problems? Nobody can forecast how a heart will tick over time, or whether or not you may get cancer. Nobody can forecast. But at that point of time, do you have an underlying condition which you know must progressively lead to bigger and bigger problems for you. I think it is a fair question for the press to ask. I do not think at this stage it is wise for us to change the Constitution or the Presidential Elections Act to make it a requirement for health to be declared publicly.

I would like the Prime Minister to clarify, since the projected health condition was the reason for the Government withholding its support for President Ong seeking a second term, what has the Government done to satisfy itself of similar consideration before extending its support to a candidate in the forthcoming elections.

Mr Speaker, Sir, the Government has no authority whatsoever to demand Mr S R Nathan, as a candidate, to tell us what his health is. But of course privately, I have asked him when I saw him. I said, "What is your health condition?" He told me that he is able to discharge his responsibility. I asked, "Any underlying condition?" He said, "No." He had a heart bypass operation some years ago, but he has been to the National Heart Centre and has been cleared by the doctors. At this point in time, there is no legal basis that I can compel him to tell me what it is, but he has told me what his health condition was. So, personally, I believe his health is good and the press can ask him. If he goes to the nomination centre tomorrow, whether he is returned opposed or unopposed, the press can ask him about his health condition. It is a relevant question for the press to ask.

May I ask the Prime Minister again on the question of the President's health. The Prime Minister said that the Government had two reports. Were they conflicting reports from the report given by the President's own doctor? And who did the interpretation? Was it the Attorney General or did the Government seek an opinion from someone qualified, eminent in this field outside Singapore, to decide between the two reports? Did the Government report say that the President's powers would be affected and there was a likelihood that he would not be able to discharge the powers as President? Finally, may I ask the Prime Minister - he has been very candid - whether the Cabinet decided on Mr S R Nathan because they would find it less of a problem having him as President?

Mr Speaker, Sir, there were two medical reports which I saw and one of them was from Dr Saul Rosenberg. He is the foremost authority in the world on lymphoma cancer. The other report is by the President's personal physician in Singapore, Dr John Wong, and he of course is also an authority in Singapore on oncology. The two reports were similar. They were not conflicting reports. We had Dr John Wong in Cabinet to interpret his report and the report of Dr Saul Rosenberg for us, and we were advised by an oncologist, not an Attorney-General. We were not qualified and, personally, there were many terms which were beyond me, and we had to satisfy ourselves by asking questions and getting the doctor to explain in layman's terms what the likely condition of the President would be. Have I missed out any point? An hon. Member: S R Nathan?

What about S R Nathan?

May I just say a little bit more?

No, please sit down. I will explain so that you do not have to say a bit more! We have looked at S R Nathan very carefully and we chose him, because of the man's maturity and his balanced judgment. And we know that if he had to exercise his constitutional duties where he disagrees with us, he would exercise it in accordance with the authority which he has. I have no doubt about it. If we had any doubts, we would not have appointed such a person. We are not looking for yes man, as Members of the House would know. We are looking for people with independent views who can add to the system, not sycophants. We want people with that ability to perform the role of that particular institution, and S R Nathan, in our view, and in my personal view, qualifies eminently.

Sir, may I ask the Prime Minister to define to this House the status vested on the wife of the elected President? What is the status of the First Lady?

Mr Speaker, Sir, I am unable to find this definition in the Constitution. As far as I am concerned, she is the wife of the President. And as a matter of courtesy, many of us refer to her as the First Lady. But, in effect, the First Lady has no status in the Constitution, unlike the Minister, Prime Minister or the President.

Mr Speaker, Sir, first, in view of the uniqueness and infancy of the Presidency and the likelihood of differences of opinion between the President and the Government, does the Prime Minister see a need now to review the CPA, so that they are better able to handle the differences between the Government and the President? Secondly, because the senior civil servants report directly to the Prime Minister, whether he could call upon the CPA to have senior civil servants report to them to answer issues of difficulties that the President may face.

Mr Speaker, Sir, up to now, I do not think there is a need for us to review the composition of the CPA. It has worked fine. The President has sought advice from the CPA, and whenever Budgets were submitted, the CPA went through them quite carefully and gave their advice. Whether we need to change this later on, I would not know. It depends on our experience in running the system. The CPA can, through the President's Office, call up any civil servant to answer any questions, if it wants to. There is nothing against that. I think the Accountant-General and the Auditor-General periodically might have been called up to explain certain statements or figures. It has the right to call up civil servants.

Mr Speaker, Sir, I am puzzled over the puzzle of the Prime Minister. The Prime Minister is puzzled why the President, who was the Deputy Prime Minister, did not understand clearly that the Government does not need to draw on past reserves, and thereby made such statements. And he is also puzzled as to why the President decided to cast doubts on the Government. Based on the sequence of events the Prime Minister has given, in terms of whether to support the re-election, I wonder whether the Prime Minster is implying that the reason why the President has cast doubts and raised so many issues and decided not to stand for re-election was because the Cabinet failed to support his re-election, I would also like the Prime Minister's opinion on whether or not the routine function of the elected President should be made more transparent, so that Singaporeans would know what the elected President is doing, rather than at the end of the term, the elected President comes out with something which has already passed. My third concern is that although the Prime Minister says that the elected President can work through the Government system, the civil servants and all that, I wonder how would the elected President know if the Government or a statutory board decides that it has to sell land or dispose of assets within the budgeting period. Would the Prime Minister clarify?

Mr Speaker, Sir, on his first question, it is one that can only be answered by the President. I would not know why he did not understand the NII and I would not know why exactly he chose to criticise the Government. But I thought it is necessary for the Government to state its position on a very basic area where we had disagreement, and that is whether we supported his re-election or not. The rest is for people to draw their own conclusions. On the question of leaving matters to the last and at the end of the term of the President before we discuss them openly, I think when there are disagreements, if it justifies being aired publicly, they will be aired publicly. It is up to the President to decide. In the case of Article 22H, it was discussed openly in Parliament. So it depends on the issues concerned, and we have always come here each time we have certain problems over certain definitions or conventions, and we have come here to keep the public informed. There should be no misunderstanding whatsoever if the public were to go back to the statements made earlier to see how the system should be worked. And because of the press conference, certain doubts have begun to creep in. It therefore gave us the opportunity to explain once again to the public. On transactions during the Budget period, the civil servants have a constitutional duty to inform the President if, in their view, a particular transaction will draw down reserves. If a transaction like selling land at below cost will draw down the reserves, that civil servant has a duty to inform the President's Office or the President. In this case, it will be the Accountant-General or whoever is in charge of the statutory board that owns the land involved.

What if he fails to report?

If he fails to report, then I think he has committed an offence under the Constitution.

Mr Speaker, Sir, in my view, the most crucial point in this whole issue is the standing of the Government and our institutions among international investors. There was a suggestion by the Prime Minister that PERC has already indicated that the standing of our institutions and our Government has been affected. My question is whether the Prime Minister is planning to take any concrete measures or moves to strengthen and improve our institutions, if damage has already been done by this debate.

Mr Speaker, Sir, at the moment, there is no need for us to think of ways to strengthen the institution. It is how the institution is being implemented which is important. The fact that we are debating this institution is part of the process of working the system. The President has taken certain issues into the open. He has let his views be known. We react in a way that we should. We come to Parliament. We explain why and we explain away the mistaken perception of the President. So it is more on how this system will be implemented. And when we have a new President, I have no doubt that he would have a new style of managing certain things in the two areas that he has got the powers. And we will still work the process through and, if necessary, we will come to Parliament and explain. At this stage, I do not think we need to change any particular Article in the Constitution to strengthen the institution.

Mr Speaker, Sir, this is not an occasion for me to clarify my own views, but I hope the Prime Minister could clarify some of the points that he has brought up. First, I think it is very important that the Prime Minister has emphasised that this is a new and unique institution. The principles have just been published in a White Paper and the points he clarified after the President's comments are new to me and the whole House. I think if I have to make comments again, it would be different in the light of the clarifications the Prime Minister has made. With that point, let me ask three questions. First, I hope the Prime Minister, as CEO, stands by the duties under Article 146 that the civil servants must report. A few minutes ago, he said that he thinks it is an offence. But can I ask him, as the CEO, to state very clearly to the civil service that this is taken as a clear offence and a breach of the constitutional duty. That point has to be made just as importantly, as he has said that the President must have the moral courage to be independent when necessary within his limited powers. Secondly, I hope the Prime Minister will consider that there is a need at times to air both agreements and disagreements. I recollect that in the last ---

Mr Tay, can you ask your questions, please?

Yes, Mr Speaker. I hope the Prime Minister will take occasion to share points on which the elected President agrees with the Government that his action is not necessary, just as disagreements may surface later. Thirdly, I would ask the Prime Minister whether in the next six years, the next term of the elected President, the Government will entrench the Presidency within the Constitution and therefore strongly establish an accepted office for the elected President.

Mr Speaker, Sir, my statement just now had made it very clear that civil servants, ie, CEOs of particular Ministries or statutory boards have a constitutional duty to perform and, as CEO, I have made it very clear, as I have done in my statement, that if they have any reason to suspect that reserves are being drawn down, wittingly or unwittingly, they must indeed tell the President. In fact, it is a constitutional duty. If a civil servant who is required to do so does not do so, he is derelict in his duty. The suggestion by Mr Simon Tay that we should, from time to time, raise in this House points which have been agreed to between the President and the Prime Minister, I think we can consider that. If it involves a matter of principle, I think we should let it be aired over here. But if it is just merely agreements on routine matters, I do not think we need to come to the House or we need even to go public on that. But where a principle is involved, a new principle in particular, where we have settled between the President and the Government, I think it is useful to keep the House informed. Thirdly, whether we would entrench the Presidency in the Constitution, in terms of our inability to change the Article without his permission in the next term, I would not want to commit myself at this stage. I think it is better for us to work the system and be very satisfied that we have a good system before we entrench those powers in the Constitution. Otherwise, it is very difficult for us when we find that we should in fact do things in a different way to try to change the Constitution, because the President can block it. So I would rather err on the side of caution. I would say that we should try to entrench that within the next six years, but I would not want to commit myself at this moment.

Sir, this is a follow up question on the functions of the CPA. Can the Prime Minister say to what extent the views or opinions expressed by the President at his press conference were those of his own or they actually reflected the collective view of the CPA?

Sir, I would not know the answer. But if I have to guess the answer, I think it was the President's own view.

Sir, I would like to ask a question about the NII. The Minister for Finance, Dr Richard Hu, said that the Government has got enough surpluses to tide over 1998/99 and the NII was held to be past investments from 1992 onwards. But suddenly it has now been changed to present reserves. What is the rationale behind this?

No, it is not the rationale. You have just turned the question around. NII has always been current reserves. That is according to the Constitution. So there is no dispute over that.

I would like to come back to this issue of the unpleasant encounters that the President had. The Prime Minister mentioned that civil servants have a constitutional duty to report to the President in the event of a drawdown of reserves. But has the President the right to query public servants directly regarding the areas of his constitutional duty? Secondly, would the Prime Minister undertake to investigate what were these unpleasant encounters that the President had or, maybe his Principal Private Secretary had, and also to ensure they would not occur again?

Mr Speaker, Sir, when we talk about civil servants having the responsibility under the Constitution to report to the President, it is not all civil servants but only those who are designated with the responsibility to do so under the Constitution. The President has the right to call up anyone for information which he wants. It is for him to exercise that right if he needs to get further explanation of certain issues or figures. As for the unpleasant encounters, I would not know unless the President raises them with me, privately or publicly, which he has done through the press conference. I thought he would probably have identified the major unpleasant encounters in his long list of problems at the press conference, and we have addressed those episodes in Parliament earlier.

Mr Speaker, Sir, I would like to go back to the question of the President's health. If the condition of the President's health is crucial to the consideration of support given by the Cabinet to a candidate, why was not the present candidate, who is 75 years old and is known to have had a bypass, required to submit a medical report, even if he is not required by the Constitution to do so? Instead, we require the same of President Ong.

Mr Speaker, Sir, there is no legal basis for us to get the candidate to submit a medical report. We have asked him, and he has satisfied himself that he is physically and medically fit to stand for election.

Sir, while I accept all the explanations that the Minister for Finance has given on the technical issues that were raised by the President, I think one issue that still remains to be answered is that of the mindset changes that the President talked about, ie, the attitudes of the civil servants and some of the Ministers that he had encountered during his term in office. Does the Prime Minister intend to address these issues of attitude among the civil servants?

Sir, it is a matter of conjecture that some civil servants and Ministers found his attitude to be a nuisance. Unless I go around asking the civil servants and Ministers whether they indeed found the President's checking on them a nuisance, I would not know whether it is true or not. So it is not necessary for me to send out a general circular to the civil service and the Ministers to change their mindset.

As health was the main reason why the Cabinet rejected, and also at the point in time, like what the Prime Minister said, we had supported the President even though he had lymphoma, as a doctor, we have always been taught that low grade lymphoma would be difficult to cure, but it generally runs a fairly long course. In this instance, what I want to know, and I think it is also public interest, unless the course of the disease has taken a drastic change to become a high grade disease, or the disease cannot go into total remission, there would be little reason for Cabinet not to support him, if the lymphoma remains as it was in the past. Perhaps the Prime Minister would like to clarify this.

Mr Speaker, Sir, the President's low grade lymphoma has indeed transformed into high grade lymphoma more than a year ago.

Sir, the Prime Minister said just now that unless he sends a circular to civil servants to find out whether anyone finds the President a nuisance, he would not know. I would like to ask him if he would tell us, in this House, whether he has asked any Minister here who finds President Ong troublesome and a nuisance.

I do not think it is necessary. If he wants to ask this question in the House he should get the Speaker to go around asking each one of us whether we do so or not. I think it is totally irrelevant. The point is, no Minister has withdrawn any cooperation from the President, and when most Ministers see him, we call him "Mr President". There is no disrespect shown to the President whatsoever. So it is totally irrelevant for us to try and guess whether Ministers regard the President's performance of his duty as rather vexing to them. I think we have always cooperated, and we should cooperate, and we will continue to cooperate with the new President.

Mr Speaker, Sir, I am sure the people of Singapore would have been very glad to hear the Prime Minister say in this House that the Government was not looking for sycophants to run for the post of President. If that is the case, what was the need for the Cabinet to shortlist certain people and then finally decide on Mr S. R. Nathan as the Cabinet's choice? Is it not better to leave the judgment to the electorate to decide who should be their President? Is the Prime Minister aware that there is a feeling among great many Singaporeans that they have been completely left out, cheated, of their chance to choose the President?

Mr Speaker, Sir, the President has two roles. One is ceremonial, serving as a symbol of Singapore. The other are the custodial functions that he has under the Constitution. The two roles are now merged into one person and any Government would want to ensure that whoever becomes the President is somebody who can do Singapore proud, and can do the job competently. So we, as a Government, would therefore always have a vested interest to ensure that the right man emerges to become the President. But there is nothing to stop Mr Jeyaretnam from finding someone who qualifies under the rules to stand for election against somebody whom the Government supports, and the people can decide. In this instance, Mr Jeyaretnam has failed to find somebody who can become a contestant in the arena against Mr S. R. Nathan. There is no rule against it. It is within our right to try and get the best candidate for Singapore. Singaporeans are not cheated. In fact, our lament is not enough people are coming forward who can do Singapore proud in performing the role of the Presidency.

May I suggest to the Prime Minister that if he is sincere in what he said, the Government should now remove the restrictions on who should stand as President. The basic qualifications are laid down in the Constitution as for Members of Parliament. Let the public decide - not the Prime Minister, not the Senior Minister, nor the Cabinet - as to who should be the President.

Mr Speaker, Sir, we have gone through these arguments when we debated the criteria for the Elected Presidency. I do not think we need to repeat them. We are looking for honourable men and women who can perform a particular function. You do not just want to have somebody who has bought and sold some shares, some private tutors or failed politicians, to demean the post of the Presidency, and let the people decide. We regard the Head of State as a very important institution and it is best that we have the right person who fulfils certain criteria to stand for election for that particular post, and the matter has been decided over here. Parliament has decided. The people have elected the PAP. This was an issue way back in the 1988 election. We won. We defeated the argument by Mr Jeyaretnam. So the people have spoken on this issue. We have got this through in Parliament.

Is the Prime Minister saying that this Government is not prepared to trust the intelligence of our people?

We do not trust the opinions of certain politicians.

Sir, Singaporeans heard of the President's problem through a press conference and today we are hearing the Prime Minister's clarification. I certainly think there is a better way for Singaporeans to know about the problems faced by the President and the Government. Is there a way we can find where we could discuss these problems, know about them, without having risk agencies downgrading us and without causing concern among the population?

Sir, that is the choice for the President. He has chosen to go public with the press conference. I have chosen to come over here to explain and face MPs in answering any questions that they may have. I do not choose a press conference to rebut the points raised by the President.

One last question. Mr Tay.

One of the details in the President's press conference which caught the attention of the people was the reference to the reply of the civil servant saying that it would take 52 man-years. We have heard clarifications that it was 56 man-years. May I ask the Prime Minister, given that the President has a right to access the information under Article 22F of the Constitution, is it, in his opinion, the right thing for a civil servant to tell the President roughly how much time it would take to answer his question? Is that fulfilling the duty under Article 22F? Secondly, whether in his own experience as Prime Minister, civil servants come to him and before answering his questions, tell him roughly how many man-hours it would take?

Sir, I have seen a copy of the minutes of the meeting where the President asked for the information to be given. I have read the minutes and there was no indication whatsoever that the Accountant-General was being disrespectful or rude. The President wanted certain information and it is quite right for the Accountant-General to explain that, "Mr President, Sir, if you would like to have all the lands owned by the Government valued, it would require 56 man-years." I saw the minutes. The minutes were approved by the President. It was entirely obvious to me that this was a very normal discussion between a respectful civil servant and the President.

Mr Speaker, Sir, the exchanges this afternoon establish two important principles. First, this new institution which we have established can function. In a way, it was perhaps as well that the President chose in his farewell press conference to vent his frustrations. He left the Government with the unpleasant task of having to rebut him in public. I have heard the exchanges this afternoon, and I would like to add these few points. The integrity of the Government is of crucial importance to Singapore. Many people do not like what they call the authoritarian, dictatorial attitude of the PAP, which I have led since 1959. That was 40 years ago. We started with a reserve of about $50 or $60 million in the kitty. We are now able to guard for the future of Singapore, and the troubles we may run into from time to time, over S$150 billion. It's not as big as the Saudi oil reserves, but it is not peanuts. So before my colleagues and I became unable to function, we discussed amongst ourselves whether we could trust a future generation to exercise the same prudence, the same care, over what we have accumulated and may need in the future. It is an open secret that some of my colleagues think that I am attempting something which is futile. Because if a generation is determined to spend its way through its patrimony, it will go back from rags to riches to rags. But at least we should have some mechanism to get the people to pause. Let me explain how a government works. I had been in charge of the CPIB from 1959 to 1990. It has not got a huge, enormous apparatus ferreting out what is going on in immigration and the customs, and in tenders. But it has experienced investigators who can detect signs, and you can always be sure that when something wrong is taking place, and somebody is being shortchanged, that matter will come out. Dr Lee Tsao Yuan worries about whether the President is given the right information. Let us suppose for one moment that what my colleagues and I feared did take place - that we have a spendthrift, reckless, adventurous, opportunist government that is willing to spend its way to prosperity, and is stripping off the family heirlooms. Does anybody in this House believe, in the culture that we have created, that public servants will quietly see their pensions go down the drain? Because as these reserves are drained away, the value of our currency will drop, as the rupiah dropped. They are going to take every step to protect their future, and will do so. And that is how the CPIB works. Have no doubts, I have no doubts, people will go and see the Auditor-General, lower officials, if the Permanent Secretary or the CEO of a statutory board is not on the job, and say, "Look, this is something dreadfully wrong. And this will lead to all of us being left with nothing." But, as Mr Lim Kim San and Dr Goh have argued with me before we brought these provisions to the House, a good mobiliser can play ducks and drakes with the electorate and swing it around against the President and his Council of Advisors, and can get it through a referendum, then all is lost. But if you have these checks, you have certain hurdles, obstacles, then I hope that there will be people in this House, in spite of a large majority for the Government, who will say, pause, think about it before you take this step. Unlike Indonesia, Malaysia or Thailand, you have nothing to pledge to the World Bank. You have not got hidden reserves of oil, gas, uranium, copper or gold. It is that kind of climate of integrity, high standards that is our best protection. So we put up with a lot of frivolous, irrelevant attitudes from some opposition members. What we have embarked on is for a very serious purpose. Why should I, before I stepped down from office, put impediments in the way of my successor, if I did not believe that this obstruction, this inconvenience, could prove to be a very valuable break, a circuit breaker, if the need were to arise? Today's exchange, as a result of what the President said on 16th July, was useful as part of the education of our people.

May I ask the Senior Minister - I am glad he is in the House - in his interview to the press he has said then that the President is not a check on the Government, that it must be the Opposition who will be the check on the Government. Is he then saying that the President was never intended to be a check on the Government?

I think there is something obtuse about the Non-Constituency Member. In the context of the Q&A, I pointed out that those who were hoping that the President could act as a counter-force to the Government, they were wrong, because all he can do is to protect the reserves and protect the integrity of appointments. If you want a counter to the Government, a check against the Government, you must have them in the Opposition, and the Opposition to be an effective counter must offer a credible alternative, which unfortunately Mr Jeyaretnam, since 1972 when he first stood for elections, has lamentably failed to do. Therefore, however I answer him, it does not really matter, because at the end of the day, does he present an alternative? This is really at the heart of our problem, that until there is a viable alternative to the present Government, to the PAP, it is imperative that the PAP must have checks and balances within itself, or all would have gone down in the last 40 years. For 16 years from 1965 to 1981, when Mr Jeyaretnam was first elected, there was no Opposition in this Parliament, but we had the system, of everybody being informed, the wheels of the system were kept going. When he came in, the system was functioning. I did not believe that the one-party system that many African countries had constitutionally legislated for was good for the country. It is bad for the PAP MPs if every time they went for election, only PAP candidates can stand against them. The very fact that they can be contested, and that the people want some opposition, keeps them on their toes. So the system works. It behoves us to remember that the system works only if there are men and women of integrity to man it. And that is easy to lose. Look at Vietnam, look at the People's Republic of China, they were led by men who were prepared to sacrifice everything for a cause. In power, with the cultural revolution, standards went down. In power, after they opened up in Vietnam, the whole country is awash with corruption and they have had to hang their bankers, their customs officers. I think we can take pride that we have been able in 40 years of PAP government and maintained the integrity of the institutions of the state.

May I seek clarification from the Senior Minister? Is the Senior Minister implying that even with the PAP, the dominant party, continuing as Government, he has no confidence and that the PAP may one day produce a government that will squander the reserves, thereby you need the checks and the circuit breakers?

I fully concede that. I cannot tell Mr Low Thia Khiang what his grandson will be. I know what he is. I do not know what his son will be, never mind his grandson. A society goes through many phases. Those who missed the hardships of the Japanese Occupation will not understand my generation. Those who were born after the PAP formed the Government may believe that better roads, schools, hospitals, facilities come as the natural order of things. I do not blame them. Therefore, this setback which we had, which could become much more serious, was a reminder of how things could go dreadfully wrong. One day President Suharto was supreme; in 1997 he mismanaged a crisis. In May 1998 the country began to unravel. It is a natural sequence of the passing of the generations. He had to face a generation of Indonesians that no longer shared with him - the fight against the Japanese, against the Dutch - but a generation that had increasing frustrations and anger at what they saw was mismanagement of their resources. Can I say that my successors will be as fortunate in passing on the baton to their successors? Can Mao Zedong predict that Deng Xiaoping would inherit his mantle because he castigated him and rusticated him three times? Can Deng Xiaoping predict that Zhao Ziyang would fail him? Or that Jiang Zemin would stay for so long? Can Jiang Zemin be certain that his next president will be as wise and astute? Nobody could foresee what happened. Therefore, we try our best to have institutions in place. They are not perfect. In the end, they may all fail. Then your and my grandsons will be the worse for it.

Mr Speaker, Sir, the Senior Minister, I am glad, has finally conceded a place for the Opposition. But he says there is no viable alternative. May I ask who is responsible for this? Is it not his Government which has gone out of its way to prevent a viable alternative coming up in this country?

I would have thought by his persistent questioning he has given the answer to the public.

Point of clarification, Mr Speaker. I would just like to clarify the point whether the Elected President is a check and balance against the Government or not. I fully understand the point that the powers of the President are custodial. But I would like to quote from Hansard of 4th October 1990 from the then First Deputy Prime Minister, now Prime Minister [Hansard Vol. 56, No. 7, col. 461]. I quote: "My Cabinet colleagues and I believe that a good system of government must have checks and balances. There are inadequate checks in our present parliamentary system of government. [This is in argument of the Elected President.] Bear in mind that in introducing this Bill, the present Government is in fact clipping its own wings. Once the Constitutional amendment is effected, this Government will have some of its powers checked. The new Prime Minister will need to seek the concurrence of the President in certain key areas of government. I will be the first Prime Minister to be subject to these new checks and safeguards. It is this same desire of wanting to check the potential abuse of power which prompts us to introduce additional checks on the government in three new areas, not mentioned in the first White Paper [referring to the ISA, proposed Maintenance of Religious Harmony Bill and CPIB investigations]." So, pardon me if I am obtuse, Senior Minister, but I thought I would like to ask for clarification on this point.

This is a technical point which Members should know. The Prime Minister, when he was First Deputy Prime Minister, made this statement when he moved the Second Reading of the Bill. He is not a lawyer by training. Therefore, he uses words in a non-legal way. If I had delivered that speech, I would not have used those words because "clipping one's wings" would evoke in my mind the swans we have at Botanic Gardens. They are there because they cannot fly away. And I would not have used that metaphor because I would not want a Prime Minister who cannot get up on his feet and do what he wants. The powers are enshrined in the Constitution. Never mind what the Ministers or Prime Minister say when they move a Bill. The Bill goes through the process. It goes to a Select Committee. It comes back. Finally, it goes through the Third reading. It is usually a perfunctory ritual. But it underlines the fact that you have read this for the Third time and these are the words that define the powers. Therefore, I was surprised to see this academic constitutional lawyer from our university - and I was alarmed when I read he is teaching our students constitutional law - that he had not read our own Constitution and that he believed that the President was partially ceremonial and partially executive. If he had read the provisions, he would know that in no Article or sub-Article of the Constitution is the President given executive power. He has a certain veto, a certain blocking power. Partly because I was, by training, a lawyer, so as the principal provisions were enacted, I took some care to make quite sure that this mechanism we were putting into place would not obstruct a government from doing what it legitimately should be able to do. Take the Constitution, read it, quote the Constitution to me and if we disagree on the meaning, there is the court. You cannot quote the Prime Minister and say, "On that basis, I ask the President to clip his wings." I strenuously recommend against that.

May I ask the Senior Minister, when he says that the President has no executive power, is his decision to say "no" to the Government's proposal to use the reserves not an exercise of executive power?

I am not here, Mr Speaker, to show that I am a better lawyer than the Non-Constituency Member. The Prime Minister has quoted the Attorney-General's authority to read out certain passages, and the Attorney-General is prepared to go to court and argue that the President has no executive power. I was a lawyer. I have ceased to practise the law. I still understand certain basic principles but I always take advice, especially before I sue for defamation. I always consult people who are specialised in that practical branch of the law and who assure me that I have a foolproof case. Then I proceed.

May I ask the Senior Minister why has he not proceeded with his case?

I leave that to my lawyer, Senior Counsel Davinder Singh, who has great competence and is acknowledged as one who is extremely circumspect, knows exactly how to put a defendant in his place.

Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng].

Order. I propose to suspend the Sitting and will take the Chair again at 4.15 pm. Sitting accordingly suspended at 3.54 pm until 4.15 pm Sitting resumed at 4.15 pm

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, last year when moving the Copyright (Amendment) Bill, I said that it was not the last word on the subject and that we will have to evolve our copyright legislation in the light of changes in on-going technology. Since then, an inter-agency Committee led by the Registrar of Trade Marks and Patents studied international trends and developments. They proposed the changes in the Bill to meet the new challenges presented by the development of new technology and the increasing popularity of electronic commerce. The proposed amendments address the more urgent needs of copyright owners and users of copyright materials in the on-line environment. It will improve copyright protection and enforcement measures for copyright owners in cyberspace, thereby promoting the use of the Internet by businesses. It will also promote greater legal certainty for both copyright owners and users of copyright works, as well as intermediaries such as network service providers, concerning the application of copyright protection in the digital environment. In formulating these proposals, the Committee considered various international models, including the 1996 World Intellectual Property Organisation Copyright Treaty and the 1996 World Intellectual Property Organisation Performances and Phonograms Treaty. The Committee has a wide representation. In addition to representatives of the relevant governmental agencies, the Committee also included representatives from the National University of Singapore and the media. The Committee also consulted the Law Society and various industry players on the substance of its proposals. Sir, this is a Bill arrived at after an extensive consultative process. Amendments to improve copyright protection in cyberspace Having made those introductory remarks, let me move on to the proposed amendments. I would first deal with the first group of amendments, i.e, those intended to improve copyright protection and enforcement measures for copyright owners in cyberspace. The first aspect is that concerning temporary or electronic reproduction right. One of the key rights of a copyright owner is the exclusive right to make copies of his works. It is presently not very clear if this exclusive right extends to electronic copies and transient copies made in the electronic environment. The Bill clarifies this by extending the right to cover electronic reproduction. Such an extension will give copyright owners an effective means to control the copying of works that they make available on the Internet and through electronic transmissions. Protection for compilations In recent years, development in computer technology and the advent of the Internet has led to a proliferation of multimedia works. The issue of copyright protection for multimedia works has become increasingly important. A multimedia work can be made up of different types of underlying works, such as sound recordings, photographs, film clips and write-ups. Each of these underlying works presently enjoys individual copyright protection but the multimedia work itself, that is, the effort expended in selecting and compiling these individual underlying works together, may not be protected by copyright. Clauses 3 and 4 of the Bill address this anomaly by replacing the existing definition of "literary work" in section 7 of the Act with an expanded definition set out in a new section 7A. Currently, "literary work" is defined to include a compilation in words, figures or symbols. There is uncertainty as to whether this is confined to compilation consisting solely of literary works (in which case, multimedia works would not be protected), or if it also includes compilation of different kinds of work (in which case, multimedia works will be protected). The Bill therefore provides a new definition which says that "literary work" includes a compilation of any form of works. This will afford copyright protection to multimedia works. This new form of protection will be limited to the intellectual creation involved in the selection or arrangement of the contents of the multimedia work. The protection will be in addition to and independent of the copyright protection which the individual underlying works may already enjoy. Protection for electronic rights management information Copyright owners are increasingly using electronic rights management information to protect their rights in cyberspace. Electronic rights management information includes information attached electronically to a work which identifies the work, the author or copyright owner and any terms and conditions relating to the use of the work. Clause 34 of the Bill provides for civil remedies against tampering with electronic rights management information. The legal protection of electronic rights management information will help copyright owners better protect their rights in cyberspace. Amendments to provide legal certainty Sir, I turn now to the second group of amendments aimed at providing greater legal certainty for the application of copyright protection in the digital environment. Browsing exception We all know that the use of the Internet has become increasingly prevalent. It has become an invaluable source of information and entertainment for many in the world today. I am told that every time a person views a web page on the Internet, he causes at least six copies of the web page to be made. Consequently, there is some uncertainty whether copyright is being infringed when one browses through the Internet. The new section 193E introduced by clause 21 of the Bill makes clear that copyright is not infringed when end users cause incidental copies to be made in order to view, listen or utilise works made available on the Internet. Limitation of liability for network service providers and removal of infringing materials by network service providers I now come to what are probably the central provisions of the Bill. Network service providers play a vital role in the on-line delivery of content for copyright owners. It is therefore important that the legal framework gives network service providers certainty about their liabilities and responsibilities to copyright owners. Clause 21 of the Bill therefore introduces sections 193B to 193D to address these concerns. These amendments ensure that network service providers are not liable for any kind of incidental copying that may occur in the technical processes of carrying out their activities (for example, caching). The amendments distinguish between materials to which the network service provider provides access and materials which are hosted by a network service provider at the direction of a user. In the latter case, section 193C allows the protection to be lifted if a copyright owner files a Statutory Declaration that those materials are infringing. A network service provider faced with such a Statutory Declaration can do one of two things. He can immediately remove the materials as demanded by the copyright owner. If he does that, he retains his protection under section 193C against copyright infringement actions. At the same time, section 193D protects the network service provider against any action brought by persons who want the material to remain on the network. By adopting this course of action, the network service provider ensures that he cannot be sued for copyright infringement for materials hosted by him. Alternatively, the network service provider can choose to ignore the Statutory Declaration. Once he does this, he loses the legal protection conferred on a network service provider by section 193C. This does not mean that the network service provider automatically becomes liable for copyright infringement. What it means is that the network service provider's liability will then have to be determined in accordance with the other general provisions in the Copyright Act, and it also means that he can no longer rely on the special immunity given to a network service provider. Why would a network service provider choose this course of action, and thereby throwing away the network service provider immunity and risk being found liable for copyright infringement under those general legal provisions? He may want to do so, for example, if he is confident, that the material is not infringing. A person who makes a false Statutory Declaration can be punished for doing so. Sir, the new sections 193B to 193D finely balance the rights and interests of copyright owners, users of materials and network service providers. They provide legal certainty for both network service providers as well as copyright owners, while preserving at the time, a certain level of freedom of action for network service providers. Transfer of electronic copies Clause 21 of the Bill further introduces a section 193F to facilitate the transfer of works in the digital environment. This clarifies that if a person who has bought an electronic copy of materials transfers it, the transferee will have the same rights as those enjoyed by the transferor provided the transferor does not keep any copy for himself. "Reasonable portion" Let me touch on some minor amendments to extend existing copyright concepts to make them relevant to the digital environment. The first concerns the concept of "reasonable portion". Currently, the Copyright Act permits copying of a reasonable portion of a copyrighted work under certain circumstances. As a guideline, a "reasonable portion" is defined by reference to the number of pages of the work. Such a measurement may not be possible in the electronic environment. Clause 3 of the Bill therefore extends the definition for works in the digital format by using the measurement of electronic bytes. Exceptions for libraries and archives The second amendment concerns the exception for libraries and archives to make a copy of a work for preservation and other purposes and the exception for anyone to make a copy of an unpublished work kept in a library or archive for research and private study in sections 47 and 48. These amendments remove or replace words like "microform" and "manuscript". Exceptions for educational institutions The third amendment concerns the ability of educational institutions to make copies of works within prescribed limits for educational purposes. Clauses 10 and 11 of the Bill extend this permission to include copies of works on networks controlled or operated by educational institutions. This will facilitate educational institutions using Internet and other new technologies to conduct distance learning courses and other educational activities. Performers' protection Last year, we introduced provisions in the Copyright Act to protect performers' rights. These provisions are found in Part XII of the Act. Based on feedback which we have received, a number of measures are introduced in this Bill to fine-tune the provisions concerning performer's rights and to allow those rights to be protected more effectively. First, in order to conform with international norms, performers' rights are extended to allow performers to have recourse against commercial dealings in pirated recordings of their performances and to make such commercial dealings an offence. Secondly, the present restriction in the Act against assignment by performers of their right to sue is removed. This will allow performers to take action through collective management agencies. Thirdly, the Bill also allows a broadcaster and a performer to agree to a period of retention for recordings of his performance made for broadcast which is longer than the statutory prescribed period. This amendment will give effect to existing commercial practice. Border enforcement measures Last year, the Copyright Act was amended to introduce border enforcement measures. These are in sections 140A through 140R of the Act. These provisions allow a copyright owner who suspects that a shipment of pirated goods is coming into Singapore to alert the Customs and Excise Department so that the goods can be seized. Certain safeguards have already been built into the provisions when they were introduced last year. Based on feedback and experience, two further safeguards are introduced by clauses 18 and 20 of the Bill to ensure that the border enforcement provisions are not abused. The first safeguard will empower an authorised officer to require a complainant to give security in relation to damages which he may be ordered to pay for wrongful seizure. The second safeguard is to allow a person aggrieved by the seizure to apply to the court for compensation if the complainant fails to follow up on the seizure by taking infringement action, or having taken infringement action, the court then rules against the complainant or if the complainant withdraws the action. Other Amendments Sir, to wrap up, may I quickly touch on the remaining amendments in the Bill. Clause 13 deletes section 108(2) so as to widen the scope of the public performance rights of authors. Clauses 15 and 17 amend sections 120 and 136 to widen the category of items on which the court may make a delivery up order. The amendment to section 136 further allows an application for search warrant to be made in any court. Currently, such applications can only be made before a magistrate. Clause 22 amends section 199 to provide that a broadcaster's right to re-transmit a broadcast by cable without infringing copyright in the underlying work is restricted to broadcasts originating in Singapore. Future directions Sir, in closing, let me say that this Bill reinforces Singapore's commitment to provide a strong intellectual property rights regime to encourage the growth of a knowledge-based or information economy and to promote e-commerce and creative innovations. As technologies are ever evolving and as new issues surface as a result of the constantly changing environment, I must say that this Bill is by no means the last word on the subject. We will continue to monitor international developments and we may have to propose further refinements to our copyright regime to cope with the technological developments as and when the need arises. We are committed to ensuring that our copyright law will be responsive to the changing needs of industries and we will continue to evolve to take into account new developments. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I rise to support the Minister's motion and the three purposes of this Bill. I would like the Minister to address, however, certain wider concerns and make certain clarifications which will help in the future interpretation of the Act in the market place. I am also glad that the Minister says that this Bill is not the last word, and I therefore think that even if these issues are not addressed today, they can be addressed in a future copyright amendment. It is important to realise that copyright was a right created to protect the authors of books, and it has been slowly extended over the years and centuries to include dramatic performances, sound recordings, films and now the further extension into the world of e-commerce and the Internet. It is very important to realise too that some of the older concepts have to be changed, because as the Minister has mentioned, every time we browse and surf the Internet, we are actually breaching somebody's copyright, because we are copying his material on to our computer. It is therefore good to have this Bill but I think it may one day be important for us to think of a sui generis protection, not to extend copyright but to think of a specific right to protect computerised material. In particular, I would like to raise certain issues in clause 3 of the Bill which redefines the proposed section 7 of the Copyright Act. Under the proposed section 7(2), there is an attempt to indicate what reasonable portion means in the context of electronic material. In the old world of paper, we could say that 10% of a book would be a substantial copy, and anything beyond that is not a reasonable portion to use. However, I am a little concerned that we are now trying to extend this paper world rule into the electronic medium and trying to say that instead of 10% of the material, we now talk about 10% of the bytes. And 10% of the bytes, to me, is really an arbitrary and rigid definition for an electronic medium. For example, if I take two pages from a book of 100 pages, that is not an infringement under the 10% rule. But two pages from an electronic work of similar length may actually contain two pages in format which contain a lot of bytes. It could be, for example, in PDF format, video, sound or animated graphics, which require a lot of bytes. Or perhaps in these two pages, the author has embedded his digital watermark and therefore there are a lot of bytes in there. And just by taking two pages from the book, not knowing that he has embedded this digital watermark, I have infringed his copyright. I would like the Minister to assure us that this indeed is not the case. Otherwise, a blind extension of the old rule is not good enough. Under clause 4 which is a new section 7A, there is an attempt to include multimedia material in the definition of "compilation". Most web sites today would be compilations of some sort. There will be different things in there - texts, graphics, animations, video and so on. And it would really be useful to say that these things are also protected. Again, I would like to explore the further question which is whether we should really try and extend the concept of literary work to these areas, or whether we should actually start thinking of a special right, perhaps a database right and special computer compilation right. Some countries have indeed database law. However, computerised material does not contain just computer databases. And under section 7A, that appears to be the intention. The compilation should be of various relevant materials which includes sound recordings, cinematograph films and so on. But sub-section (3) of the proposed section 7A deals with compilation or table wholly of relevant materials or compilation or table of partly relevant materials, or compilation of data. The definition of "data" here is not stated but I suppose reading in the context, it refers to computer data and therefore you either have a compilation of relevant materials wholly or in part or just purely computer data. Sir, I do believe however that the word "data" is not just simply a technical word for bytes and bits of computer data, but it also means nuggets of facts and figures which together form information. And therefore that is the plain English meaning of this word and it would mean therefore that a compilation can either be of relevant materials like video, tapes and sound recordings and/or data. And so when this section deals with compilation as disjunctive references, I take it that it misses out on the fact that a database or an Internet site may contain video and data at the same time. Perhaps the Minister could also clarify this rather technical point. Secondly, "relevant material" here is defined but I think it probably misses out on certain aspects of computer databases and web pages, and that it does not appear to me to cover animated graphics or unpublished computer programmes basically on the exclusio unius principle, ie, in the first definition of "relevant material", it refers specifically to a work, "including a computer program". Therefore, subsequently, when it says in paragraph (d) "a published edition of a work", there would be no reference to a computer program. The third point I want to make about this Bill is that in clause 10, in the proposed section 51(3) and (4), there are certain exemptions given for teachers who teach in educational institutions. Sometimes they do have to make copies of copyrighted material and we do need to give them some protection from being prosecuted or sued for breaching somebody's copyright. I hope, however, and this is not clear in the Bill, there is protection for a teacher who is teaching a class using a laptop and - besides the fact that he has got to download a website and other relevant copyrighted materials on his laptop - sometimes, he may actually need to access on-line, say, eg, a website to demonstrate the features of the website. Sometimes not all classrooms have got the on-line connection, or perhaps there is an on-line connection but the teacher feels that when he teaches, he wants to be sure that he can logon to that website without having to wait for traffic to clear, without having all kinds of unexpected problems. So he may actually want to download the whole site onto his laptop, and then refer to it in the course of his lectures. As I read currently, clause 10, it does not seem to protect him in that sort of situation, because when he downloads a whole website to protect himself from unexpected downtime, for example, he would actually be breaching the 5% or the 500-page rule. The fourth point I want to make is on clause 21 which is the proposed section 193B. There is this further elaboration of what a network service provider will be protected against. When I first read this Bill, Sir, I realised that there is a general immunity to network service providers given in section 10 of the Electronic Transactions Act. And when I heard the Minister's speech in this House, I have the understanding - and I hope the Minister will correct me if this is the wrong understanding - that there is the general immunity in the Electronic Transactions Act, and what we are legislating here is that in certain circumstances where copyright is concerned, we have a special immunity for certain network service providers who feel that they can come under this protection and therefore it does not prejudice his general defence under the Electronic Transactions Act. If it does prejudice his position, then I would urge this House to include the words "without prejudice" to the Electronic Transactions Act as a prefix, so to speak, a clause which prefixes this new section. Sir, my final point is that under clause 21 of the Bill which proposes a new section 193C, particularly subsections 2(a) and 2(c), there is mention of control and I seek the Minister's clarification. "Control" is not defined and it could well be technical. Most of the time it is a technical control. But would it be possible for somebody to argue in court that because the ISP has put in certain contractual provisions, for example, to prohibit a user from accessing pornography on pain of damages, that he therefore has control and is out of this defence? The second point under this clause I want to raise is that there is a procedure of what I would call a notice to take down. In other words, if a network has got infringing material and the copyright owner says, "I send you notice to take it down, you must do so." As it is phrased currently, I think there is some room for abuse. First of all, it is possible where the stakes are high enough for somebody to allege infringement and therefore send a statutory declaration purportedly signed by him. And then there is no timeframe to take down the pages and there is no procedure to challenge this notice to take down. It, first of all, should be necessary, not just to have a statutory declaration, because a person, where the stakes are high enough, may say, "I am happy to be fined for perjury, but I want to stop this competitor in his tracks." So it would be necessary for a properly authenticated statutory declaration, or perhaps a court order. Secondly, it would be important to clarify how an overseas copyright owner can get a statutory declaration that is valid under Singapore law. What happens if his own law does not allow for or does not permit a statutory declaration? There is also a need to make sure that there is a certain time frame to respond and a redress mechanism perhaps for abuse of the notice to take down. This procedure can also be evaluated in a court of law. Finally, on clause 21, I would certainly hope the Minister can clarify, because the words "network service provider" are not defined, whether perhaps a search engine provider would be such a network service provider. In the circumstances where a search engine provider may actually allow a user of the Internet to download certain copies of other people's copyrighted materials, would a search engine provider then be deemed to be a violator, infringer or a facilitator of that infringement? I hope that with these clarifications, the Bill would be a far more understandable provision when it is applied in the market place.

Mr Speaker, Sir, I stand to support the Copyright (Amendment) Bill. However, I would like the Minister for Law to deliberate on several areas of the Bill. Clause 3 - Section 7(2A)(a) states what constitutes a reasonable portion for copying as not exceeding 10% of the total number of bytes. May I ask the Minister why this portion is fixed at not more than the 10% stipulated? Section 7(2A)(b) states "in a case where the work is divided into chapters, exceeds, in the aggregate, 10% of the total number of bytes in that edition but contains only the whole or part of a single chapter of the work". This is rather ambiguous, if not confusing. Does this mean that copying of 10% of each chapter is allowed or that the total copying of the whole edition regardless of the number of chapters should not be more than 10% of the whole text? Clause 10 - Section 51(5) specifies that a person cannot make a copy of any other part of that work "within 14 days after the day on which the previous copy was made." I would like the Minister's deliberation on this time interval. In my opinion, a shorter period like seven days would, in fact, be better as it facilitates the users' need for research. Clauses 15 and 17 - In section 120(1), the words "predominantly used" have not been defined. Similarly, the words were used again in section 136(a) and not defined. Clause 23 - Section 201B is unsatisfactory because it would cause some injustice. When the partnership or the body corporate has been charged or punished, the individual should be spared. Punishment to both individual and the partnership or body corporate would result in duplicity of charges and punishment. If the individual should be culpable, then he should be held responsible and not the partnership or body corporate. However, if it is intended to be a collective punishment, then the partnership or body corporate be punished and not the individual. Sir, I support the Bill.

Mr Speaker, Sir, I thank both Dr Toh See Kiat and Dr Lily Neo for their comments. Before I deal with their specific points, since the issues they have raised touched on fairly technical matters, let me make a few preliminary comments. First, I am not an expert on some of these technical issues and I will bow to my colleagues on technical issues such as digital watermarks, animated graphics and so on. But let me assure my colleagues that these and other questions of details have been carefully considered and formulated by an inter-agency Committee which included experts from different agencies, such as the National Computer Board, staff from the National University of Singapore who are well versed in computer law as well as representatives from other agencies. The next point I want to make is that on the solutions and approaches which I referred to and which are to be found in the Bill, I do not expect them to please or satisfy everyone because there are so many different ways and approaches to solving these very difficult problems in the context of ever changing technological developments. Also, different countries are grappling with these issues and have adopted diverse approaches. We could, of course, wait for months and years to see how the dust has settled in other countries. But because of the considerations which I have alluded to in my speech just now as well as last year, we want to have an effective and up-to-date copyright regime and intellectual property right regime. We have to make changes as and when the need arises. So we cannot wait for all the developments which have taken place and then decide which is the most perfect solution. It is really a matter of judgment. In arriving at the approaches, we have taken into account the developments in other countries as well as the existing scheme in our Copyright Act because our approach has been that if the existing scheme for other forms of copyright has worked fairly well, then we will try to follow as far as possible a similar approach and we will try to be consistent. But as I said, this is not the last word on the subject. Having said that, let me turn to some of the specific points raised by Dr Toh See Kiat, in the order in which he referred to. First, he talked about clause 3 (section 7) on "reasonable portion". Of course, he has a point as to whether we could leave "reasonable portion" undefined for electronic documents or whether 10% of the bytes is arbitrarily rigid. Let me explain that the approach we have taken is to define "reasonable portion" for electronic works because we wanted to provide in the legislation a minimum level of certainty. Therefore, the definition, I should stress, is not exhaustive. It is expressly provided that the definition does not limit the meaning of the phrase "reasonable portion". If, say, more than 10% of the number of bytes is copied, the court could still regard that as copying only a reasonable portion, because it all depends on the circumstances of the case. I am advised that such flexibility will address the special cases which Dr Toh See Kiat referred to, such as the example concerning digital watermarks. Then he referred to questions of compilation, whether it is conjunctive or disjunctive in clause 4 (new section 7A). Let me say that this definition in subsection 3 is actually intended to capture any compilation that falls within either paragraph (a), (b) or (c). The definition should not be made conjunctive, because if we did so, then it will imply that the compilation must satisfy all three paragraphs before it can be protected, and that is not the intention. Dr Toh also made a point about "relevant material". The way the phrase "relevant material" is defined in section 7A(3) is to include a work and a work is defined in section 7 as meaning a literary, dramatic, musical or artistic work. Therefore, graphics would be an artistic work and is a relevant material. A computer program is a relevant material regardless of whether it is published or not. A published edition of a work is specifically mentioned because there is a separate copyright in the typographical format that lasts 25 years in a published edition. There is no need to state computer program again in paragraph (d) since paragraph (a) already mentions a computer program, and that will cover published and unpublished computer programs. Dr Toh See Kiat also spoke about clause 10, new section 51(3) and 51(4), and talked about the teachers' possible problem. Let me say, in reply, that the 5% rule applies in the print media as well. Thus, in the print media, if he looks at the provisions of the Act, the teacher can only make multiple copies of 5% of a work for teaching purposes without infringing copyright. But it is felt that there is no reason not to apply the same restriction in an electronic environment. I should also point out that new section 51 only applies to making a copy on a network controlled or operated by an educational institution. I realise that Dr Toh See Kiat would favour a more liberal regime where even if he were to download it onto his personal laptop, from a policy point of view, it would be difficult to give a blanket exemption for downloading for teaching purposes. But let me at the same time point out that teaching online is facilitated because if the teaching is done through real time access to websites, they can always rely on the exception for browsing. Dr Toh See Kiat referred to clause 21, new section 193B, and whether we should insert the words "without prejudice". I should point out that the proposed new section 193B is wider than section 10 of the Electronic Transactions Act because there is no requirement that the material is a third party material which is found in section 10 of the other Act. Therefore, there is no need to insert "without prejudice" since it is not narrower than section 10. It is wider. In other words, this provision is more detailed only because it is meant to apply exclusively to the question of copyright. The Electronic Transactions Act has a different objective. Dr Toh also talked about terminology control, technical contractual provisions, ISP prohibiting users from accessing pornography, and so on. I think the answer to this is to say that the control required is over the network. The conjunctive end for operator and control in section 193C(2)(a) is the operative element. Therefore, it must be a network operated by the NSP as well. An NSP is only obliged to remove materials from such a network. He also talked about the requirement of statutory declaration. I would say that we should not read too much into the term purported as a statutory declaration really has to be authenticated. As Dr Toh See Kiat knows, it has to be authenticated by a Commissioner of Oaths. Having a requirement for court order, in my view, would be too cumbersome as the real idea here is to give copyright owners a quick redress before they take out copyright infringement actions. So nobody has said about statutory declaration. But I do not think people in Singapore take statutory declarations that lightly because there are penalties which follow if one makes a statutory declaration fraudulently. The requirement of a statutory declaration, in my view, itself should suffice to prevent abuse because there is a redress for prosecution for false statutory declaration. Any aggrieved party can also take out a civil action for malicious prosecution against a defender who has made a false declaration. As this provision concerns Singapore's network service providers, I think it is reasonable for us to expect the copyright owners would contact the network service providers through agents located in Singapore. It is foreseeable that in practice, such declarations may be made for collective management agencies. As I have said, mechanisms for redress for abuse of notice can be taken care of by civil action. In the United States, as he referred to the system in the US, there is a challenge mechanism because the notice is not required to be a statutory declaration as far as I understand the United States system, and there is less safeguard against abuse. But as we have incorporated the safeguard in the notice through the requirement of a statutory declaration before a Commissioner of Oaths, the challenge mechanism involving NSP may not be necessary. That is the explanation. As to the timeframe in which the NSP should act, I think a reasonable time is a tested formula, and I doubt if a NSP would not act within such reasonable time when it receives a statutory declaration. Turning to the questions raised by Dr Lily Neo, first, she also touched on clause 3 (section 7, subsection 2A) on "reasonable portion". Let me repeat here again that section 7(2A) is an extension of existing section 7(2A) into the digital environment. The 10% yardstick is actually taken from section 7(2A) which provides that a reasonable portion includes a copy of not more than 10% of the number of pages in a work. The approach of taking 10% as a yardstick, of course, was taken sometime back when we enacted this particular provision in 1987. It is felt that this provision has worked quite well all these years. And when we decided to insert the new section 7(2A) to make the term "reasonable portion" relevant to the digital environment, it was felt that there was no good reason to depart from the yardstick of 10% which has been used all these years. While it is clear that copying only 10% for the purpose of research and private study will not amount to infringement, I want to stress that this does not mean that copying more than 10% will automatically result in infringement. In other words, where more than a reasonable portion is copied for the purpose of research and private study, we then deal with the issue whether the copying is a fair dealing in the light of circumstances of the case. And as Members know, there are other provisions which relate to fair dealing. Dr Lily Neo also touched on provisions which talk about work being divided into chapters and so on, whether it is ambiguous, if not confusing. Here again this phrase is a mirror of section 7(2B), the existing provision. The amendments merely extend the application of an already existing provision to enable its application in a digital environment. What the provision really says is that "reasonable portion" means a single chapter of the work or 10% of the work, whichever is the greater. But this is based on an existing approach already to be found in the Bill. On clause 10, Dr Lily Neo raised the question of 14 days and 7 days. Here again I want to point out that the 14-day limit is the approach already to be found in existing section 51. The Bill merely extends the existing provisions so as to make them applicable in an electronic environment. Section 51 is more appropriate for multiple copying by educational institutions. If her concern, as I understand it, is about the problems which researchers and students may face, I wish to point out to her that students or researchers can rely on the fair dealing provision in section 35 for private study and research. And in section 35, there is no 14-day limit. Then Dr Lily Neo referred to clauses 15 and 17 concerning section 120(1) on the phraseology "predominantly used" and why this has not been defined. We have not defined this term because in some instances, and this is one, it may be better to leave it to the courts to apply the provisions to the facts of individual cases. It is not possible really to give a definition to every term because circumstances may vary so vastly. In appropriate circumstances, for example, in the case where a photocopying machine has been found to be predominantly used for making infringing copies by the defendant on the particular facts of a case, the court can order that photocopying machine, for example, to be delivered up to the plaintiff. Dr Lily Neo then referred to clause 23. It is a provision relating to offences committed by partnerships or body corporate. Let me say here that this provision is not new in our laws. An equivalent provision can be found in the Trade Marks Act and the Patents Act. In fact, you can find similar approaches in at least 20 other pieces of legislation in our statute books. The provision really gives flexibility whether to charge only the corporation or the individual, or both. Sometimes the facts of the case would make it appropriate to charge only one or the other. Sometimes it would be necessary to charge both the corporation and the individual to ensure that either one or the other is not let off unfairly. Let me stress that this is not what lawyers referred to as a "strict liability" provision. In other words, the partners who are directors and who are proved to be ignorant or who have attempted to prevent the commission of the offence would not be caught by this provision. In other words, the prosecution will have to produce evidence against these people before they are convicted. I think I have touched on the main provisions. But my reply should not be taken to dismiss their ideas and suggestions out of hand. There are many different approaches to these difficult, tricky issues of copyright. The fact that we have adopted these measures shows that we would like to give these approaches a try. We have made amendments as a result of feedback and experience to some of the other provisions which we enacted sometime ago. And so it goes on. Copyright is one area of the law which is fast evolving. So we will see how these provisions work. I hope that in the light of experience, they will work effectively. But our consultations with the industry and other professional bodies as well as the different agencies and Ministries will continue. And it may be necessary after a decent interval of time to come back to this House if we find that the provisions need updating.

Point of clarification, Sir. In referring to a classroom situation, the Minister has mentioned that in the print medium situation, the teachers are allowed 5% copying and that where online teaching is used, the teacher would have ample protection. I am just concerned that in the situation we are in today, we want to have a nation of IT users and teachers must therefore have the utmost freedom to teach and use facilities that sometimes may not be there, in a sense that not all classrooms have online connections and not all students can afford. In a print medium situation, the students can buy books if more than 5% is used. But not all students will be able to afford an online connection, especially one without wires in a classroom situation.

His concern is noted. I will discuss it with the Committee. It is really a question of balancing. From the point of view of promoting the interests of our educational institutions, the ideal situation of course is if they do not have to observe copyright at all! But we have to balance the interest of users of copyright in the private sector, individual users, corporate users, educational users, state users of copyright as well as the rights of copyright owners. This is really the heart of copyright legislation - how do you balance competing interests to strike a balanced regime that promotes and protects the interest of copyright owners, and at the same time does not hinder the dissemination of knowledge, acquisition of knowledge and eventually the advancement of our national interest.

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. - [Prof. S. Jayakumar]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Land Surveyors Act was enacted in 1970 to provide for the registration of land surveyors and to regulate the provision of cadastral survey works in Singapore. Cadastral surveys are surveys to record land boundaries, subdivision lines, buildings and related details. The Act requires surveyors to be registered with the Land Surveyors Board before they are allowed to undertake cadastral surveys. However, the Act does not require surveyors who undertake non-cadastral surveys to be registered. Non-cadastral surveys include topographical, engineering and hydrographic surveys. These surveys are related to cadastral surveys as they share the same set of survey control points and are invariably related to the parcel boundaries. This is especially so with the introduction of modern equipment using new technology such as global positioning system (GPS) and Information Technology. These two types of surveys are increasingly overlapping in scope. Surveyors carrying out non-cadastral surveys should therefore be conversant with the cadastral survey system and practices. Their surveys will then be consistent with cadastral survey plans, thereby reducing inconsistency and errors. Sir, as surveyors undertaking non-cadastral surveys currently need not register with the Land Surveyors Board, the Board cannot discipline any non-registered surveyor for any negligence in undertaking non-cadastral survey works. Indeed, the Board cannot take disciplinary action even against registered surveyors for any negligence in undertaking non-cadastral survey works as the Act only regulates cadastral surveys. These errant surveyors can currently continue to undertake even cadastral survey works. Conversely, registered surveyors who are suspended from practice by the Land Surveyors Board can still undertake non-cadastral survey works. This situation is not desirable for the surveying profession.

5.17 pm These amendments will also check the undesirable practice of non-cadastral survey works being certified by registered surveyors who have not supervised or been involved in the actual surveys. For example, in April this year, a registered surveyor was sued for an erroneous setting out survey plan signed by him but carried out by a surveying technician operating on his own. Subsequently, two rows of terrace houses up to roof level were demolished. The case was settled out of court. The Land Surveyors Board received a complaint against the registered surveyor but could not act as it was a non-cadastral survey. This case is bad enough. Let us not wait for a major disaster to happen before doing something about it. For the above reasons, there is a need to amend the Land Surveyors Act to regulate surveyors undertaking non-cadastral survey works. Clause 9 has the effect of requiring surveyors undertaking any survey, whether cadastral or non-cadastral, to be registered as Registered Surveyors and to hold valid practising certificates. This will improve the quality of non-cadastral survey work as all registered surveyors will have to comply with rules made by the Land Surveyors Board for non-cadastral survey work. Besides upgrading professional standards and ensuring accountability of all practising surveyors, thus promoting public interest, this measure will also increase the pool of Registered Surveyors. Sir, indeed, upgrading of skills, especially professional expertise, is a fact of life in Singapore. This happens in other professions too. Currently, rightly so, surveyors registered under the Act must possess acceptable qualifications specified in the Land Surveyors Rules. They must also pass prescribed examinations conducted by the Land Surveyors Board. The requirement to register surveyors who undertake non-cadastral surveys will take effect immediately for new entrants to the surveying profession. For practising surveyors who are currently not registered, a 4-year extension will be granted for them to prepare for and pass the prescribed examinations. Sir, the requirement to upgrade and register will mean adjustment on the part of those affected. Some may not be happy. They include members of the Society of Surveying Technicians. However, they, like their professional counterparts in the Singapore Institute of Surveyors and Valuers, should make the effort to upgrade by taking the necessary courses and examinations. That is why the requirement to register will only take effect in four years' time. This is ample time. For those who have demonstrated that they have made the effort but still fail to make the grade within these four years, they can apply to the Minister to extend this grace period for another two years. I will move an amendment to the Bill in the Committee stage on this later. For those surveying technicians who do not have the necessary academic or professional qualification, I understand that Singapore Polytechnic is prepared to conduct a part-time Advanced Diploma course to enable them to obtain the necessary academic qualifications. Sir, the other main amendment is to provide for the registration of field assistants, renamed assistant surveyors, under the Act. They are also called Surveying Technicians in the industry. In practice, field assistants making field measurements in cadastral surveys have been registered since 1972. This Bill makes registration and the Board's approval before a registered surveyor can employ an assistant surveyor to undertake both cadastral and non-cadastral work a requirement. Field assistants are employed by registered surveyors to enter land and buildings, to demarcate property boundaries and to make and record field measurements. Such field data are used in survey computation and plan drawings by office staff. As field data are the primary data source of any survey work, field assistants should possess prescribed qualifications and be registered under the Land Surveyors Act. Like the earlier amendment, this will improve the quality of survey services in Singapore. Currently, about 40 out of 400 field assistants provide surveying services on their own account, independently of any firm of registered surveyors. As an effect of the Bill is to require all forms of survey to be conducted by or under the supervision or direction of a registered surveyor, some of them may be concerned that their firms would be phased out. Sir, MinLaw has taken time to carefully consider this concern. Here, an important point to note is that the Act will not take effect immediately, but only after four years. As I had mentioned earlier, during this time, field assistants who want to practise on their own after the transition period should upgrade themselves professionally by taking the part-time Advanced Diploma course at the Singapore Polytechnic. I understand that the Land Surveyors Board had asked Singapore Polytechnic to run this course for interested field assistants. It will take about three years to obtain the necessary qualification for registration. On top of that, as I mentioned earlier, anyone who despite good efforts fails to pass the prescribed examinations can apply to the Minister for an extension of up to two years. Sir, the Singapore Institute of Surveyors and Valuers has been consulted on these amendments and supports them. Major users of non-cadastral surveys such as MINDEF, HDB and JTC also support the amendments. Sir, I beg to move. Question proposed.

Mr Deputy Speaker, Sir, I support the Bill. This amendment brings the practice of land surveyors in line with all the other professionals like the architects and engineers. In the past, architects and engineers used to have two different classes. They used to have Class 2 registered architects who consist primarily of those who have worked in the profession mainly as draughtsmen for many years. They have not gone through any formal training but have gained sufficient knowledge and experience to undertake simple architectural work. At that time, building projects were relatively small and simple. But as Singapore progresses and becomes a global city, building projects become larger, in terms of size as well as complexity. The demand and standard of architectural works have also become higher and higher. As a result, this class of architects has slowly been phased out and the registration for architects is now only confined to architects who are graduates from accredited universities with sufficient experience and have passed a professional practice examination. Therefore, it is timely for the land surveyors, whether they do title survey or non-title survey, to be subject to the same regulatory standard. As building projects become more and more complex, the skills and experience of surveyors doing non-cadastral surveys are just as demanding, if not more than cadastral surveys, because of the magnitude of the project size. For example, a mistake in the setting out of a building, whether in the siting or, more critically, in the dimension, will create serious legal and financial consequences. The mistake, quoted by the Minister of State, on the erroneous survey of the two rows of terrace houses will be pale in comparison to the mistake made on a high-rise multi-million dollar project. The amount of money involved would be enormous. It is argued that, in cases like this, there is recourse for the aggrieved party to turn to common law. However, apart from the legal dispute, there is also the question of professional liability and accountability for negligence. Therefore, it is important that all practising surveyors be governed by a regulatory board that oversees these practitioners, similar to that of the architects and engineers. Like any other such changes, there will be people who would be affected in the transition. I am glad that the Minister of State is moving an amendment to allow those who are caught, ie, those without sufficient qualification, to seek an opportunity to upgrade themselves so that they can be qualified for registration. The present surveying course in the university will only require four years to complete. Therefore, I believe that those experienced practitioners in the present surveying firms would have the necessary experience and skills to upgrade themselves and be able to pass the prescribed examination after attending the three-year part-time courses in the Singapore Polytechnic. I am also glad that the Singapore Polytechnic has provided this part-time Advanced Diploma course to cater to these surveyors. However, despite the Minister of State's explanation, I am still not convinced by the provision in clause 16A that assistant surveyors must be approved by the Board before they are being employed. As registered architects and engineers assume full responsibility for all their undertakings, whether they are executed by them personally or with the help of their assistant architects or engineers, and whose employment does not require approval from their respective Boards even though they also perform field work on behalf of the professionals, why then is approval from the Land Surveyors Board be required for the employment of assistant surveyors? I hope the Minister of State can further comment on this point.

Thank you, Mr Deputy Speaker, Sir. I shall be very brief. The Minister has pointed out the need to have this Bill. I am glad that this Bill will help in raising the standards of land surveyors in Singapore. Sir, in countries like Singapore, with its small size and very densely built, it is important that land surveyors have a high standard, like the other professions. I am very relieved that the Minister of State has also assured that those who are caught in the transitional period will be given a further chance of another two years because somebody has written to some of the MPs here. And I am glad that the Minister has acceded to this. Sir, the law will require every land surveyor to be registered. It will prevent any person from being employed as a registered surveyor or an assistant surveyor without the approval from the Board. This is very important. Most professional bodies require certain registration and I am glad that this provision will help in lifting the standard. What we would urge the Land Surveyors Board to do is to have courses conducted from time to time, just like the medical and legal professions are doing. It is important for us to have registered surveyors. It is very important for us in Singapore to improve ourselves by attending courses. With that, I support the Bill, Sir.

Mr Deputy Speaker, Sir, I support in principle the Land Surveyors (Amendment) Bill which basically aims to raise professional standards of all works performed by the land surveyors in Singapore. This is in line with our current efforts to achieve world-class standards of service in all our institutions to maintain our international competitiveness. However, in our keenness to introduce legislative changes to achieve a higher standard of practice and service in a particular industry, due consideration must also be given to the interest and welfare of the existing service providers and workers who have contributed to the growth of the industry. This is not only to avoid or reduce undue hardships to those adversely affected by the legislative changes of the industry but also to help them to accept and adapt to these changes so that they can continue with their service and contribution to the industry. With this amendment to the Land Surveyors Act, all land surveyors including those who do not conduct cadastral surveys, will be required to be registered under the Act. Currently, only land surveyors who conduct cadastral surveys need to be registered. The existing definition of "cadastral services" within the Land Surveyors Act (Chapter 156) would be rendered obsolete, and the amendment would then be applicable to all types of survey services. Directly affected by this new ruling would be those surveyors who may have a track record of relevant and time-tested surveying experience, but lack the requisite professional qualification to register themselves with the Land Surveyors Board in order to enable them to continue their practice in the surveying industry. Under the new ruling, even the registered surveyors would also not be able to employ any assistant surveyor unless the Land Surveyors Board is satisfied that the person to be employed as an assistant surveyor possesses the necessary qualifications recognised by the Board. These constitute substantial changes from the current industry practice and require careful thought especially in terms of their impact on both the service providers and the end-users of the industry. Mr Deputy Speaker, Sir, I would therefore like to ask the Minister whether he could provide statistics on the number of non-registered surveyors and assistant surveyors who will be adversely affected by these legislative changes and what sort of measures are being taken to help those surveying professionals adapt to these changes so that they can continue their practice to make useful contributions and earn a living in their field. I would also like to ask the Minister whether his Ministry has studied the supply side of the surveying profession in introducing such a legislative change. Is there already a shortage of qualified professional surveyors to meet the growing industrial needs? Moreover, I wish to ask whether the new restriction will lead to a severe shortage of supply, thereby hindering the construction work and increasing the price and cost of the surveying works. Clause 10 does provide a transitional provision, whereby all land surveyors who conduct surveys, other than cadastral surveys, be permitted to engage in carrying out such surveys for a period of four years from the date of commencement of the Land Surveyors (Amendment) Act 1999. However, in my opinion, an interim period of four years may be insufficient for the land surveyors who are currently not registered surveyors to prepare themselves for the new industrial criteria. I am however, very pleased to note the latest amendment in the Bill which states that upon receipt of application filed before the expiry of the four-year period, the Minister would consider granting an extension to the original transitional period of four years by another two years, and making it six years in total. Mr Deputy Speaker, Sir, while I fully advocate the rationale for upholding the excellent service standards in the land surveying business, especially in Singapore's service-oriented economy, we must also ensure that those who will be adversely affected will be given the necessary assistance to adapt to the changes, and that the costs of delivering such services are kept competitive.

Mr Deputy Speaker, I support the Bill as amended. Mr Deputy Speaker, I want to associate myself with some of the comments made by NMP, Mr Tay Beng Chuan, just before me and I will try not to repeat the points. I think that clearly in this time of economic crisis, we have two quite different but intertwining concerns of the Singapore economy as a whole. First is to help people keep their livelihood and the second is to upgrade to be ready for the new competition. In this broader context, I find that the Bill makes sense. It does affect existing people. It affects the surveying technicians which others have spoken about. It makes them unable to continue their practice as individual shops or their own businesses in non-title surveys. And therefore, it does affect their livelihood. These are a small but a necessary number of sometimes very experienced individuals who know the ground well and who know their work. And they have, in that sense, a legitimate concern. In particular, one of their concerns is that legislation seems to go beyond what the Australian and UK requirements are as regards surveys and the registration of surveyors. If I could invite the Minister of State to comment on that. If that is so, why is it necessary for Singapore to go beyond the Australian and UK requirements? But at the same time, while we are affecting the livelihood of this small but necessary group, as I mentioned, the other impulse and requirement in Singapore's drive to become world-class is to upgrade to be competitive. And here, I think that we should, in principle, support the idea of registration and on improvements. The Minister without Portfolio, Mr Lim Boon Heng said it quite well in a crisis. He said that our degrees are in a way time-barred. They are not a guarantee of perpetual employment or perpetual relevance to the economy that is emerging. In this sense, the push for upgrading is the correct one. What we then need is to assist people who want to make that upgrade, that is, to make that possible for them with the minimum disruption. There would, of course, be disruption and not everyone would be happy to have his or her normal livelihood and normal way of life disrupted. But I think the amendments proposed by the Minister of State - to have a time period upon application, possibly six years, and the new course to be conducted by the polytechnics for the advanced diploma - are necessary and sufficient. But there is another hurdle of course after that. After the qualifications, there would still be the examinations set by the Board and I would ask that these examinations be fair and foster suitable standards, given that there would be in some ways a larger variation of quality and qualifications of people coming into the examinations. That is to say, in the past where it was mainly people of university degrees who sat for the examinations and only a small number of them qualified, we are going to have examinations set for a number of candidates without university degrees and, instead, with advanced diplomas. The effort of the Minister to accommodate these changes is a very good one and shows that the Ministry is trying to accommodate differences. This is not to preserve a monopoly of a small clique, either the existing technicians or the existing surveyors. I think we must agree that a closed shop in either sense would be a bad thing for the construction and development industry of Singapore and Singapore as a whole. Only a small number of people benefit from a closed shop. We would be benefiting if we were to professionalise in a way that is competitive and allows the pool of professional and qualified people to be increased and to give the existing technicians a chance to compete on fair and even terms. With this, I support the Bill.

Sir, may I declare my interest as an employee in a construction and property development company which would have, on many occasions, used the services of these surveyors and, in fact, our own staff do perform non-cadastral surveys and they are unregistered at present. Sir, I want to thank the Minister of State for his explanation. In particular, I really want to thank the arrangement that his Ministry has made with the Singapore Polytechnic for the advanced diploma course and also the additional amendment to extend the period from four to six years upon application. I must say that I fully agree with the need to register practitioners in this profession for the reasons mentioned by the Minister of State. However, my apprehension is not in the need to register but in the method of registration. Right now, the amendment as it is requires these people to be registered as assistants of currently registered surveyors or people who qualify under current standards to be registered with the Land Surveyors Board. I understand that though there are more registered surveyors, actually the number of registered surveyors currently practising, that means providing professional services for a fee, is only about 20. This means that there is a possibility that if we cannot get more into the market, we might end up a closed shop and a very uncompetitive market situation. Hence, I would like the Minister of State to assure this House that if such a situation arises, he would change the method of registration to, for example, having a second registry for non-cadastral surveys or even certain types of non-cadastral surveys. Then at least these people who perform the simpler non-cadastral surveys can be registered in their own names and probably maybe different standards be set. But of course, they cannot do the more complicated or more complex tasks and also certainly not the title or cadastral surveys. In this way, at least there would be sufficient practitioners in the market to provide a competitive environment. The reason that I am asking for this is that survey work is a whole range of very simple surveys to very complicated surveys. It is not like architectural work where the minimum standard involved is relatively much higher. But there is a range. For example, in the construction company that I work for, we do a lot of very simple non-cadastral surveys on site and these are done by our own professionals. They could be civil or structural engineers, and they can do this. It is not that they cannot do it. Of course, the starting point is that the proper cadastral survey is done by a fully registered professional. But from the reference points, it is really not difficult for somebody who is trained in engineering to do very simple surveys within the site. So, once you remove the word "cadastral" from the Act, as it is the intention of the amendment, then the question arises: would this type of very simple non-cadastral surveys be caught now by the legislation? Does this mean that anybody doing this type of work, whether the person is providing a service for a fee or whether the person is doing it as a staff of, let us say, a construction company has to be registered? Would the current engineers that are doing it now, where they actually are very fully competent to do it, have to be registered too? And if so, would they have to take any additional examinations because, as I said, these are all very simple survey works and anybody with some understanding of simple engineering skills should be able to do it. In this respect, I would like the Minister of State to confirm that the registration only applies to those professionals offering professional services for a fee and they do not apply to staff of companies that actually do such simple surveys for their company. May I give an analogy that if a doctor were to prescribe medicine for somebody, even if it is a matter of just a panadol pill, then obviously, he needs to be a registered practitioner. But if I feel sick, and on my own, I take panadol, it is self-medication. Certainly, I do not need to be a registered doctor to prescribe panadol for myself. So, in this respect, it is the same thing. If I ask somebody to provide a non-cadastral survey for me, then I am asking a professional for his services. Then he should be registered. But if one of my staff, for example, were to do a simple non-cadastral survey on my construction site, then it is as if that the company is prescribing self-medication. I would certainly like the Minister of State to confirm that there is no need to register such persons. Sir, to reiterate, I support the intent of the Bill to register all those who provide professional surveying services. I am only concerned with the implementation of the intent. I therefore hope that should the implementation be less than satisfactory, the Minister of State or his successor would present another amendment Bill to this House at a future date.

Sir, I rise to express the concern of the Society of Surveying Technicians. I believe they have also written to other Members of this House and most of the points have been raised by speakers before me. But I just wish to raise three points with the Minister. Firstly, I would like to know whether the cost of surveys would increase because of this amendment Bill, as the number of survey firms would be limited. Secondly, I would like the Minister of State to assure this House that the existing practitioners would not be at the mercy of the registered surveyors after the Act is amended. Because the Bill, as it is now, requires them to be registered with the registered surveyors as assistant surveyors. It seems to me that it is all under the registered surveyors' power or they are at their mercy. The market talk has been that the registered surveyors are waiting for money to come, because they are bound to make a lot of money as they will be the only ones who will be able to practise when the amendment Bill comes into effect. Thirdly, I would like the Minister to consider a suggestion which was made by Mr Heng Chiang Meng. Is it possible for us to have different classes of surveyors, instead of just registered surveyors that encompass everything? Like in other trades, we have technicians, electricians and we also have professional electrical engineers. There are different classes of professionals. Is it possible to consider having different classes of surveyors doing different types of surveys? They can register directly with the board and practise, and they can do whatever submissions that are needed.

Sir, I thank all the speakers who have spoken. The different speakers who have spoken have injected various viewpoints to the discussion, some of which we have considered carefully after receiving representations. What I want to say at the outset is that, as captured very poignantly by Mr Kenneth Chen and also repeated by Mr Simon Tay and others, the key objectives of the amendments are, firstly, to promote accountability of surveyors. Currently the situation is not tenable, because there are people doing non-cadastral works who are not accountable to the Land Surveyors Board. Secondly, promote public safety and interest. Mr Chen, who is an architect, brings this up very well, that as Singapore progresses in terms of building styles and complexity, there is a need to upgrade our surveyors. Apparently simple mistakes can result in enormous losses. And the example I gave in my speech illustrates this point, where two rows of shophouses had to be demolished. I think I should start my speech on this point - the basic objectives of the Bill. Having said this, I want to debunk any allegation that this Bill is to protect those who are already registered. This is related to what Mr Tay Beng Chuan has said. He asked whether the amendments would result in a shortage of registered surveyors. In fact, the intent of this Bill is to require all professional surveyors who are offering survey works of whatever form, whether cadastral or non-cadastral, to register. Currently, only those who are doing survey works of the cadastral type need to register. There are currently about 30 of such unregistered professional surveyors offering non-cadastral survey works, who are not yet registered, which means that they will have to register. What they will do is to take the necessary examinations. They will also familiarise themselves with cadastral work, and then they will register. They will therefore add to the 50-odd registered surveyors who are currently on the register, so that there will in fact be more professional surveyors. That is the first point. This will not reduce the pool but will increase the pool. The second aspect of this is that these amendments will indeed give impetus to field assistants to register. In the Act, they are renamed "Assistant Surveyors" and called in the industry "Surveying Technicians". The impetus will be there for them also to register, particularly those who want to practise on their own. As I have said in my speech, there are about 400 such field assistants currently. In fact, many will be quite content with doing what they are doing now. They are working in Government departments and statutory boards, or they are working as field assistants for registered surveyors and they are quite happy doing that. So they will not want to take the examinations to upgrade themselves to become professional surveyors. But there will be some who will rise to the occasion and indeed these surveying technicians who have been operating on their own, if they still want to continue operating on their own, then it is quite likely that they will take the route which is open to them. The Singapore Polytechnic is organising the advanced diploma course for them. The good news for Mr Simon Tay is that the Singapore Polytechnic is working towards a situation where they will incorporate the examinations which normally the surveyors will take at the end into the course. Because it is a part-time 3-year course, it will be comprehensive enough to also incorporate the legislation examination and the field work aspect into the course. I do not think it has been finalised yet, but I think they are working towards that, so that it will actually give incentive for those who want to continue providing survey works on their own to register. This is an important point because this will in fact give the impetus, not only for upgrading, but for more to become registered. Hence, we will have a larger pool of people offering a higher quality of work, thereby enhancing competition and keeping costs competitive. The other main point is the point that Mr Heng Chiang Meng makes, where he talks about the large variety of survey works. He asks whether or not a separate register can be kept for people who want to do simple survey works. I should, first, clarify that there are two registration exercises. The first is to be registered as professional surveyors, and the other one is registration as field assistants for those who are working for or employed by registered surveyors. That is how the amendment Bill is structured. Mr Kenneth Chen realises this, because under the new section 16A, all registered surveyors who want to engage or employ field assistants will need approval of the Board, and thereafter a register is kept for them. Mr Chen asked why this needs to be so. I have mentioned in my speech the reasons why this has to be so, because these field assistants are the ones who actually do the field work on the ground. And in the nature of the profession, they work very much on their own, no doubt under the direction and supervision of the registered surveyors, but the registered surveyors cannot be there all the time. The data that they collect on the field is very important. It will be the original source data based on which the office staff will do the computation and draw up the field plans. So there is a need to ensure that field assistants are of a certain standard. Having said this, here the standards will not be raised. Registration for field assistants doing cadastral work has been required since 1972. So it is a matter of extending it now to field assistants doing non-cadastral work. The requirements are quite basic - a diploma in surveying work from the polytechnic. If not, then they need to pass a course in cadastral survey conducted by the Singapore Institute of Surveyors and Valuers. These are not overly strict requirements for field assistants. Mr Simon Tay asked whether, in Singapore, we are running ahead of other countries. In fact, we are not the only country doing this. Our system is quite close to the Australian system, and there are three states in Australia which also regulate both cadastral and non-cadastral surveys. Having said this, I think we need not be apologetic that we are progressive. As Members have quite rightly captured the spirit here, the fact is that, in Singapore, we are land scarce and high density, and we have little room for error in the positioning of buildings, structures in our estates and infrastructural developments. As has been said, the cost of remedying such defects can be enormous. I think what we are doing is justified, more so because of the increasing overlapping between cadastral work and non-cadastral work. Sir, in the old days, we could have people say, "I just do non-cadastral work." But with the advent of modern technology, eg, the Global Positioning System (GPS), the use of modern equipment, the overlap is becoming increasingly large. There is indeed a need for those who do non-cadastral work to also know about cadastral work and what it entails. Sir, this point addresses Mr Heng's question. He has asked whether we are going to make further amendments to the Act. I do not think we want to have a separate register for people who say that they are doing simple works. What I can ask the Land Surveyors Board to consider is to see, without jeopardising public interest and safety, for these very simple minor works which do not require certification by a registered surveyor, maybe levelling of drains and so forth, whether or not we could provide an exemption from the Land Surveyors Act for these simple works. But I think this is something that I cannot give an assurance now. It is an idea that Mr Heng has suggested which the Land Surveyors Board can study, because under the Act, the Minister, if he deems it suitable, can make an exemption. But the important point is that public safety must not be jeopardised. Sir, I think I have addressed all the points.

Sir, will the cost of surveys go up?

I have mentioned just now that the amendment will result in more surveyors entering the field and providing quality survey work. So with more surveyors doing the work, cost will be kept competitive. Nobody can assure you that cost will not go up or cost may go down. I think it is a function of the marketplace. What we can say is that it is not a monopoly or closed-shop situation.

Sir, I do not think the Minister of State has answered my question regarding those people doing very simple, non-cadastral work, not as professional services, but as staff members; for example, as the engineer in a construction company doing work within its own construction site. These people are not providing professional services. But as I have said, these people are doing some simple work, for example, some measurements here and there from certain reference points, as part of their job. Under the present definition, these are actually survey works. I am trying to say that for this type of work you do not need a registered surveyor to do it. There are quite of lot of this type of very simple work.

Can I ask the Member whether these people who are doing the survey work are offering their services?

These are the staff in the construction company.

So they are in-house.

They are more or less in-house. I want to know whether these people would be required to be registered.

This is one situation which I will bring to the Land Surveyors Board's attention. They can look into it and respond to the Member accordingly.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee]. Bill considered in Committee.

Clauses 1 to 9 inclusive ordered to stand part of the Bill. Clause 10 -

Sir, I beg to move, In page 6, after line 14: to insert - "(2) The Minister may, upon an application made before the expiry of the transitional period by any person referred to in subsection (1), extend the transitional period of 4 years referred to in that subsection for that person to practise as a land surveyor in respect of surveys other than cadastral surveys for a further period not exceeding 2 years.".

Sir, as I have indicated in my Second Reading speech, a small group of surveying technicians currently practising on their own have expressed the concern that their firms may be phased out after the Bill is passed. The Bill already provides a four-year grace period for these surveying technicians to either join firms which are run by registered surveyors or, if they wish to continue practising on their own, upgrade themselves to become registered surveyors. It will take about three years for a surveying technician to obtain the necessary qualifications. The grace period of four years should be sufficient in most cases. The amendment gives the Minister the power to extend the grace period on a case-by-case basis for a further two years. This will provide more time for those who have actively tried to upgrade themselves during the four-year transitional period but, despite their hard work, failed to do so within the four years. Clause 10, as amended, ordered to stand part of the Bill.

A consequential amendment will be made: In page 6, line 9, after "10.", to insert "-

Order for Second Reading read.

Sir, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 1999 seeks to give legislative effect to the income tax changes announced in the 1999 Budget Statement. It also incorporates eight other amendments to the Income Tax Act. Tax changes announced in the 1999 Budget Statement I shall begin with the tax changes announced in the 1999 Budget Statement. There are a total of nine tax changes which require amending the Act. I will start with the tax changes affecting individual taxpayers. I had announced a personal tax rebate of 10% for the Year of Assessment 1999 to help taxpayers tide over the temporary difficult period. Clause 25 amends the relevant section of the Act for this purpose. To give further emphasis to the importance of lifelong learning and skills upgrading, I had also announced that with effect from Year of Assessment 1999, the maximum tax deduction allowable for certain education expenses for individuals will be raised from $2,000 to $2,500. Clause 15 amends the relevant section of the Act for this purpose. There are seven tax changes affecting the corporate sector. I had announced further refinements to the bond market tax incentives. The refinements include extending 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 Singapore operations, and the introduction of the 'Approved Bond Intermediary' (ABI) scheme. 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' and there would be no need for an ABI to satisfy, on a transaction-by-transaction basis, the test of 'substantial arrangement in Singapore'. Clauses 5,19 and 21 amend the relevant sections of the Act for this purpose. I also announced the introduction of an automated procedure for the existing Tax Exemption Scheme for Syndicated Facilities. This is to give arrangers upfront certainty on whether a facility qualifies for tax exemption. Clause 16 amends the relevant section of the Act for this purpose. To encourage companies to locate and perform their headquarters functions in Singapore to service network companies worldwide, I announced tax exemption for Operational Headquarters which perform at least one substantive global function in Singapore. This change takes effect from Year of Assessment 2000. Clause 18 amends the relevant section of the Act for this purpose. To encourage finance companies to build up their level of general provisions further and thus strengthen the overall soundness of the financial system, I had announced that the annual limits on tax deductions for general provision of finance companies will be temporarily suspended for two years. Also, the overall limit on tax deductions for general provisions of finance companies will be raised to 3% of qualifying assets. These changes are effective from Year of Assessment 1999. Clause 9 amends the relevant section of the Act for this purpose. To support Singapore's drive towards higher value-added activities in the shipping sector, I announced the extension of 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. This change takes effect from Year of Assessment 2000. Clauses 3, 5(b) and 6 amend the relevant sections of the Act for this purpose. I had announced the extension of the One-Year Accelerated Depreciation Allowance Scheme to the purchase of new commercial goods vehicles and buses to replace an existing 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. Clause 13 amends the relevant section of the Act for this purpose. To encourage more financial institutions to take on the role of Singapore Government Securities (SGS) Primary Dealers and to provide a significant incentive commensurate with the obligations undertaken by SGS Primary Dealers, I announced tax exemption on the income derived by SGS Primary Dealers from trading in SGS. Clauses 19(b) and 19(d) amend the relevant sections of the Act for this purpose. Tax changes not announced in the 1999 Budget Statement I shall now deal with the other tax changes, which had not been announced in the 1999 Budget Statement. The first tax change pertains to the Special Allowance for Hotel Refurbishment announced last June as part of the package of off-Budget measures, to encourage hotel operators to refurbish their premises during the lull period. Clause 10(a) introduces a new section 14M to grant approved hotel owners tax deduction of up to 150% of qualifying expenditure incurred on or after 1st July 1998 on the refurbishment of their hotels. The second tax change pertains to the payment of upfront land premium introduced by JTC and HDB. To assist companies improve their competitiveness, JTC and HDB have allowed its lessees to opt for an upfront land premium for the entire tenure of the land. Under existing tax rules, such premium would not be tax deductible nor would it qualify for tax depreciation. To provide that lessees would not be worse-off tax-wise if they were to opt to pay land premium upfront, a new section 14N is introduced to extend tax deduction to the amortisation of upfront land premium paid by JTC and HDB lessees for industrial land leases of less than 30 years. Clause 10(b) introduces a new section 14N for this purpose. To increase companies' ability to adjust their equity base and debt-equity ratio, and improve companies' return on capital, the Companies Act has been amended to allow companies to buy back their ordinary shares using their distributable profits. In tandem with this, the Income Tax Act needs to be amended to provide for the tax treatment of share buybacks, such that share buybacks or capital reduction made out of profits would be treated tax-wise as a dividend distribution. The treatment of receipts from buybacks in the hands of shareholders will depend on the mode of share buyback. For example, in a normal "market purchase" where it is not possible for the companies to identify the shareholders from whom they are buying back the shares, what the shareholders receive on the disposal of their shares will be treated as sales proceeds, like any other disposal which they make on the stock exchange, and not a receipt of dividends. The shareholders will not be taxed on the sales proceeds unless they are assessable to tax on profits from the sale of shares. Neither will they receive any tax credits. The same tax treatment will also apply to selective "off-market purchases" as well as share redemption. Clauses 4(b) and 4(c) amend the relevant sections of the Act to provide for the tax treatment of payments made pursuant to buyback of shares, capital reductions and redemption of shares. Sir, companies have also requested the Stock Exchange of Singapore allow for "market purchases" through special trading counters, which will allow listed companies to identify the shareholders from whom they are buying back the shares. I note that transactions through special trading counters could provide considerable room for tax arbitrages and abuses. These include risk-free arbitrages, artificial arrangements with low-tax persons to transact in shares through the special trading counters to maximise tax refunds, as well as the room available to those trading in shares to tax plan or arbitrage arising from their ability to deduct the cost of their shares from the receipts for shares sold through the special trading counters. This concern of tax abuse has in fact also been highlighted in the media. To prevent revenue leakage through such abuses, the Ministry of Finance and IRAS will be studying the issues thoroughly before share buybacks through Special Trading Counters may be allowed. The next tax change pertains to the existing tax incentive for SIMEX members. At present, SIMEX members who trade with non-residents are granted a concessionary tax rate of 10% on such trading income. Clause 17 amends the Act to make clear that the tax concession is also applicable to transactions made by SIMEX members with Approved Fund Managers acting on behalf of their non-resident clients. The next tax change deals with the tax treatment of cars. In tandem with the Land Transport Authority's vehicle tax rationalisation exercise in March 1998, changes were made to the tax treatment pertaining to company cars, rental cars and motor cars used for instructional purposes. Clauses 4(a), 7(c), 11(a), 11(b), 12 and 14 amend the relevant sections of the Act for this purpose. A 10% corporate tax rebate for the Year of Assessment 1999 was announced as part of the cost-cutting package in November last year. Clause 24 amends the relevant section of the Act for this purpose. The next tax change pertains to the 10% cut in employers' CPF contribution with effect from 1st January 1999, which was announced as part of the cost-cutting measures announced in November 1998. Arising from the cut in CPF contribution, clauses 7(a) and 7(b) amend the Act accordingly to reduce the maximum deduction allowable for employer's contribution to CPF, or any designated pension or provident fund. The last change pertains to Non-Tax Assessment. Currently, the Comptroller of Income Tax issues a notice of assessment only to taxpayers who have been assessed positively to tax. In the case where an assessment does not give rise to any tax payable, the Comptroller would only issue a letter (rather than a notice) of non-tax computation to the taxpayer. The taxpayer is not required to object within 30 days to the letter of non-tax assessment if he disagrees with the computation. The 6-year time limit within which the Comptroller can make an assessment or an additional assessment is also not applicable in the case of a non-tax assessment. To give greater finality to both the Comptroller and the taxpayers for non-tax assessment cases, clauses 22 and 23 amend the Act to provide for the Comptroller to issue a notice to a taxpayer even if there is no tax payable by the taxpayer and for the 6-year time limit to also apply to non-tax assessment cases. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee.

Clauses 1 to 3 inclusive ordered to stand part of the Bill. Clause 4 -

Clause 4, Amendment No. (1). Dr Hu.

Sir, I beg to move, In page 8, to leave out line 13 to the end of line 27, and insert - "(b) a dividend received by the shareholder where the buyback is an off-market purchase made in accordance with an equal access scheme authorised in advance by the company at a general meeting of the company.". Sir, this amendment is to delete mention of the tax treatment for share buybacks to special trading counters until possible tax abuses involved with the share buybacks through special trading counters have been thoroughly considered. Amendment agreed to.

Amendment No. (2). Dr Hu.

Sir, I beg to move, In page 9, to leave out line 6 to the end of line 22, and insert - "(6) Where a shareholder sells his shares to the company in an off-market purchase referred to in subsection (3) (b) -

no deduction shall be allowed to him in respect of the costs he incurred to acquire the shares he sold to the company; and

the cost of each remaining share in the company held by the shareholder immediately after the sale shall be ascertained by the formula A/N where A is the aggregate cost of all shares in the company held by the shareholder immediately preceding the buyback of his shares; and

N is the number of remaining shares in the company held by the shareholder after the buyback of his shares.". Sir, the reason for amendment No. (2) is similar to amendment No. (1). Amendment agreed to. Clause 4, as amended, ordered to stand part of the Bill. Clauses 5 to 25 inclusive ordered to stand part of the Bill. Bill reported with amendments, read a Third time and passed.

Mr Deputy Speaker, Sir, we will come back tomorrow for the remaining Bills and motions. Resolved, "That Parliament do now adjourn." - [Mr Wong Kan Seng]. Adjourned accordingly at Twenty-one Minutes past Six o'clock pm.

asked the Minister for Foreign Affairs if he will indicate the latest development on bilateral talks between Malaysia and Singapore.

I refer the Member to my reply, at our last sitting, to the question from Mr Harun Ghani. I then informed this House that senior officials from Singapore and Malaysia have had three rounds of discussions this year on the package of bilateral issues. I had also informed the House that they would probably have a fourth round of talks later this month in Kuala Lumpur. This remains the situation. We are waiting for the Malaysians to revert with specific dates. During the discussions to-date, both sides stated their positions on the various issues included in the package. More work needs to be done to bring our positions closer together. As I had informed at our last sitting, my Malaysian counterpart and I agreed during his visit to Singapore last month that our officials should try to narrow the gaps on the issues so as to arrive at a win-win package deal. This remains our expectation and our approach.

asked the Minister for Education, for each of the years 1996, 1997 and 1998, if he will state the numbers of teachers in primary and secondary schools and junior colleges that were (i) recruited; (ii) resigned; and (iii) retired.

The table below shows the inflow of trained teachers to schools, and the resignations and retirements from schools over the last three years. The overall staffing situation in schools has improved over the years. Total Inflow of Trained Resignations Retirements Teachers into Schools 1996 Primary 844 229 193 Secondary 343 288 119 JC/CI (*) 109 71 10 Total 1296 588 322 1997 Primary 774 205 345 Secondary 903 305 186 JC/CI (*) 153 45 16 Total 1830 555 547 1998 Primary 908 199 423 Secondary 630 253 268 JC/CI (*) 184 45 14 Total 1722 497 705 (*) JC/CI: Junior Colleges and Centralised Institutes as both offer `A' level programmes.