Hansard, 1999-08-18

asked the Prime Minister whether the Government will consider sending its scholars to leading corporations in the West for training and exposure and subsequently placing them in Government-linked companies as part of their career development.

Mr Speaker, Sir, PSC scholarships are for the purpose of bringing talent into the public service. Nevertheless, the Civil Service has been seconding to leading private sector companies, officers who are able to contribute effectively to the companies as well as benefit from the exposure obtained. The list of companies that the Government has sent scholars to include Shell International in London, Singapore Airlines, Singapore Power, Straits Steamship Land, Temasek Holdings, Media Corporation (formerly SIM) and DBS Bank. The Civil Service will continue to provide such training and development opportunities, including postings and attachments, for civil servants to learn from and be in touch with the private sector, as well as the people sector.

Sir, would the Government consider creating a separate career path for these scholars who have signed up with the Civil Service as part of career development rather than to spend part of their service in the public service and then move on to the private sector subsequently?

I think this may be difficult because when somebody joins the public service, the expectation is that he will spend most of his career in the public sector. He does not have to be in the same department, but can be in many Ministries, even in statutory boards. And if we interpret it broadly, he can even be in some GLCs. But if a person wants to spend most of his career in the private sector, then he joins a bank, a multinational corporation, or a law firm. I think it is very hard to have an arrangement where you are half in and half out. You will have to have a home where you are based and, in the case of scholars, the home is the public sector.

I would like to ask the Deputy Prime Minister that when the scholars are being exposed to the private sector, is there a concern that they might be attracted to private sector and never come back to the Civil Service, and what is the experience of the Government so far with this attachment.

It is a concern. There had been previous occasions where we had seconded people and, at the end of the secondment, they said, "I am not coming back." And the person to whom he was seconded said, "I am not letting him go." This had happened in the past. Normally, there is an understanding that when we second somebody out or somebody is seconded to us there is a "no poaching" rule. You cannot at the end of the period say, "I am keeping this person." So I do not think we have any recent problems. But we have to continue to monitor this. Basically, we have to make sure that the public sector is competitive, the terms are good, the prospects and challenges are there and the people are willing to stay and come back to you. Otherwise, even if you do not second them, they will resign and be off.

The following question stood in the name of Mr Shriniwas Rai - 2. To ask the Minister for Education how many students in primary 1 cohorts for the year 1996, 1997 and 1998 did not attend kindergarten classes.

Question No. 2, Sir.

Wong): Mr Speaker, Sir, the number of Primary 1 students who did not attend kindergarten classes in 1997 was 397, or 0.8% of all Primary 1 students registered in mainstream schools. The corresponding figure for 1998 is 319, or 0.6%. Another 499 (1.0%) for 1997 and 329 (0.7%) for 1998 did not provide information on their kindergarten status, even after repeated reminders. Even if we include this group of children as not having attended kindergarten classes, the percentage of Primary 1 students registered in our mainstream schools, who did not attend kindergarten classes, is altogether less than 2%. Prior to 1997, information on kindergartens attended was not captured for Primary 1 students registered in mainstream schools.

asked the Minister for Manpower whether his Ministry will consider ratifying the International Labour Organisation Convention (ILOC) Number 100 on "Equal Remuneration", which deals with non-discriminatory payment of women and men's salary for work of equal value, and ILOC No. 138 on "Minimum Age", which protects children by establishing a minimum age for certain types of work.

Mr Speaker, Sir, Singapore has been a member of the International Labour Organisation (ILO) since 1965, when we became independent. We have ratified a total of 20 ILO Conventions including two of the seven core conventions, namely Convention 98 on the Right to Organise and Collective Bargaining, and Convention 29 on Forced Labour. As a member state of the ILO, Singapore participates in relevant ILO activities. We monitor the development of international labour issues closely and assess whether additional ILO conventions could be ratified. Convention 100 on "Equal Remuneration" aims to ensure a non-discriminatory payment of salary for men and women for work of equal value. In Singapore, working women enjoy good social status and income that are comparable to their male counterparts. Our employment practices emphasize payment of salary based on performance and meritocracy. Convention 138 on "Minimum Age" aims at protecting children by establishing a minimum age for certain types of work. We have no child labour in Singapore. Hence, it would appear that we may be in a position to ratify these two Conventions. However, ratification of ILO Conventions entails obligations to fully comply with all their provisions. My Ministry will carry out a thorough study on the requirements and our follow-up actions under each of the conventions, in consultation with NTUC, Singapore National Employers' Federation (SNEF) and other relevant agencies, before we can consider ratifying Conventions 100 and 138.

Sir, can the Minister inform the House about the number of complaints that his Ministry received on gender based discrimination over the past few years? Second, in future, does he foresee that more women will work part-time and flexi-time? How would the Ministry ensure that such workers are protected from discrimination based on gender? And the third question is on the prohibition of child labour. While it is not a problem in Singapore, can the Minister tell us the number of companies which has been found employing underaged youths in the past few years?

Mr Speaker, Sir, the Member has raised three supplementary questions. One is on the number of complaints received on gender based discrimination. Apart from a small number of complaints about gender discriminatory recruitment advertisements, my Ministry has so far not received any complaints concerning gender discriminatory employment practices adopted by any company. Members will recall that in March this year, my Ministry, together with the NTUC and Singapore National Employers' Federation, had jointly issued tripartite guidelines on recruitment advertisements. I am pleased to inform the House that since the release of these guidelines, recruitment advertisements which specify gender, age, race or religion had dropped from about 30% to less than 1%. We will continue to persuade the last few employers to adopt non-discriminatory practices when they advertise for new employees. The second supplementary question is on women doing part-time work and also flexi-time arrangements with their employers and how we will protect them from discrimination based on gender. Sir, currently, employees taking up part-time or flexi-work are covered by the Employment Act and its regulations. Their terms and conditions, in respect of statutory benefits, are pro-rated based on the number of hours that they work vis-a-vis the regular working hours of their full-time counterparts within the company. Our employment laws and practices are of course gender neutral. Sir, my Ministry is also looking into how our employment laws could be made more flexible to facilitate the employment of women in such work arrangements so that they can better balance work and family responsibilities. Finally, he asked the number of employers who have been found employing underaged youths in the past few years. Sir, under the Employment Act, a child below the age of 12 years shall not be employed in any occupation at all. My Ministry has not received any complaint of such underaged employment practices for more than 10 years. Under the Act, young persons below the age of 14 years are also not allowed to work in industrial undertakings. They can only be employed in light work suited to their capability and capacity. For young persons between the ages of 14 and 16 years, a small number are employed in industrial undertakings. Employers must notify the Commissioner for Labour with details of the young person and medical report to certify his fitness for the job. Last year, the Commissioner received notifications from 1,200 young persons to work in industrial undertakings. I should hasten to point out that almost all of them are working part-time in fast food restaurants and such kind of establishments. Fast food restaurants are classified as industrial undertakings under the Factories Act because cutting machines and other apparatus for food preparation are used in the premises. So employers of young persons between the ages of 14 and 16 years in fast food restaurants have to notify the Commissioner for Labour on this basis.

May I ask the Minister, when he says that our women in Singapore are paid comparable wages, is he able to assure the House that all employers in Singapore, whether they are in the private sector or public sector, pay equal wages to men and women doing the work of same value or the same work? Is that the fact? And, secondly, he says the Ministry, in conjunction with the NTUC, will make a study of the provisions in these two conventions. I do not know how long ago the conventions were promulgated. Why has it taken the Ministry all this while and has it started in its study of the provisions?

Mr Speaker, Sir, with regard to equal wages for men and women, my Ministry has not received any complaint that companies adopt discriminatory practices. If the hon. Member is aware of such discriminatory practices being adopted by any employer, please bring it to our attention and we will look into the matter. As far as we are aware, employers in Singapore adopt the practice of paying their employees the same wages for the same kind of work being done. If the Member is alluding to the fact that when you look at the overall statistics, there is some wage disparity between male and female employees, let me clarify that wage disparity in the overall statistics of our labour force is not the result of discriminatory practices. It is due to the differences in the profile of male and female workers in Singapore. Many female workers drop out of the labour force when they get married and start a family. As a result, the current stock of female employees is generally younger compared to the male employees who are older because they stay in the labour force longer. So when we average out, the wage would indicate that the males tend to get a higher pay than the female. But that is because of this pattern of female workers dropping out of the labour force earlier than the male workers, and not because the employers deliberately pay them less. Furthermore, a lot of our female workers are also employed in the production and related-type of work and as a result, you will find that the overall earnings of female workers may be depressed. There again, it is not because they have been discriminated against but because of the nature of work that they do. If you go to an electronics factory, you will find that the vast majority of the assembly workers or production workers are females. So, they are paid according to the work they are doing. As to the study to look into whether we can accede to ratify Convention Nos. 100 and 138, let me point out to the hon. Member that there are many countries or nations who are members of the International Labour Organisation. They do not ratify all the conventions. Even the United States of America does not ratify all the conventions of ILO. In fact, the United States is one of the countries that has ratified the fewest number of conventions compared to many other countries. It is not surprising that we have not ratified all the conventions because each country's laws are crafted based on the special needs of the country. ILO provides a supranational legal framework. It is only when we feel fully comfortable and confident that our legal framework will not in any way clash with the legal framework imposed by ILO that we then proceed to ratify a convention. That is why I am saying that since we have reached this stage, there is no discrimination on the basis of gender, in terms of wages and also our minimum age laws will not clash with what ILO is espousing, that we can now look further into this matter to see whether in fact we should proceed to ratify these two conventions.

Mr Speaker, Sir, may I ask the Minister another supplementary question? Does he accept that unless there is a law which requires equal pay for men and women, there is very little point in women complaining to his Ministry? He says that his Ministry has never had any complaints so far.

Mr Speaker, Sir, let me explain again to the hon. Member that even ILO does not require countries to enact a legislation on equal remuneration if they want to ratify the convention. In some instances, ILO will only require a tripartite declaration to the effect that the wages will be based on the work performed rather than on the gender of the workers. There is no reason for us to adopt his approach that for every issue, we must create or establish a law to ensure that the matter is dealt with. We have, over all these years, made progress and demonstrated that the meritocratic system works and employees will be paid according to the value of their contribution to the company and no employer is going to deliberately circumvent this by paying his female workers significantly less than what he pays to his male employees if they are doing the same job.

asked the Minister for Manpower whether the Government has any intention to restore to workers the rights which were taken from them in 1968.

The Industrial Relations Act was amended in 1968 to provide a sound basis for enhancing industrial relations. The amendments drew a distinction between the functions of management and trade unions while balancing the interest of both parties. Thus, under the new provision, matters like promotion, transfer, hiring, retrenchment, dismissal and assignment of duties were classified as matters not for collective bargaining between trade unions and employers. To prevent abuses by employers, the amendment provided for workers and trade unions to seek redress through conciliation and adjudication, including appeals against unfair dismissal. The legislative amendments in 1968 also involved the rationalisation of the basic terms and conditions of employment and the rights and obligations of employees under the Employment Act. For example, an employee would be entitled to two days' pay for work on a holiday instead of three days' pay provided the employee does not absent himself without valid grounds immediately before and after the holiday. While employers were given the discretion to carry out their managerial functions without being subjected to collective bargaining, the right of trade unions to take industrial action was not removed. Such rights continue to be enshrined in the law. The main difference is that a union, which intends to take strike action, must first obtain the consent and mandate of its members through a secret ballot. This requirement of a secret ballot is in line with the democratic principle that such an extreme action should reflect the collective wishes of the members. The need to seek the mandate of members through secret ballot before an industrial action has also been introduced in other countries such as Malaysia, Australia and the United Kingdom. With regard to executives joining the rank-and-file unions, Members will recall that I had already, in reply to the hon. Member, Mr Yeo Guat Kwang on 3rd August, informed the House that my Ministry is studying the issue. We have convened a Tripartite Committee to consider how to bring our laws on union membership up to date especially with regard to executives joining unions and the areas for which union representation should be allowed. The 1968 amendments of the Employment Act and Industrial Relations Act succeeded to strike a fair and equitable balance between the interest of workers and employers. As a result, we have enjoyed more than 30 years of harmonious industrial relations, steady economic growth and higher incomes for workers. Our legal framework has been a key factor for BERI to rank the Singapore workforce as No. 1 in the world for almost 20 years. Hence, we should only make changes which will better equip us to deal with the evolving workforce and business environment.

May I ask the Minister: did the trade unions not have all these rights before 1968: the right to negotiate for better wages, the right to be consulted on dismissals and transfers, before the law was amended in 1968? Did they not have these rights? And were they not taken away from them? Is the Minister aware that the Senior Minister, some years ago, said in a BBC interview that he had to tell the workers then that they should give up these rights because the British were withdrawing their bases and it was necessary for Singapore to do something about its economic programme which would be affected as a result of the withdrawal? The implication, he said, was that they would be restored once the economy improved and the situation made it possible for the rights to be restored. How long have the workers got to wait?

Mr Speaker, Sir, the right of workers to negotiate for better wages is enshrined in the law. That is our system of collective bargaining and it is being exercised regularly by workers as represented by their unions when they negotiate for their collective agreement. None of that right has been taken away or eroded. With regard to dismissal and transfer, I have already said in my main reply that this was in fact removed for good reason because it was considered to be rightfully the functions of management. The way they promote, transfer, hire, retrench or dismiss employees should be a managerial decision or management function. But at the same time, we have provided a mechanism for employees who feel that they are wrongfully dismissed or their services unfairly terminated to make an appeal to the Ministry for their cases to be studied and investigated and the Ministry would then take action to ensure that if they were in fact wrongfully dismissed or their services unfairly terminated, they would be fairly compensated or reinstated as the case warrants. As to the point he mentioned about what the Senior Minister stated, I did not have the exact context of what was said on that particular occasion. But what I want to say here is that whatever changes that we make to our labour law must be changes that can help us to better compete in a globalising environment. You know that the world is undergoing rapid changes. There are no longer barriers to movement of capital and technology. If we were to change our labour laws and as a result of the change, introduce a lot more confrontation, adversarial relations between the unions representing the workers and the employers, we may, in effect, be putting ourselves at a disadvantage. Prior to 1968, our labour law had severe inherent weaknesses. These weaknesses resulted in constant bickerings, confrontations and disputes between the unions and employers. Unions were exploiting loopholes in the law. Workers themselves were also exploiting loopholes in the law. Let me give the Member an example. Prior to 1968, workers could claim triple pay for working on a holiday. The outcome of it was that there were many reported instances of workers absenting themselves on the day before and the day after the holiday, but turning up to work on the holiday itself to collect triple pay. So, in effect, he got two off-days for working one day. I do not think this kind of practice should be encouraged and we proceeded to amend our law to plug such loopholes in the law. I think what we have today is a better framework for managing our industrial relations. In the past, before 1968, the trade unions were not required to have a secret ballot before they took extreme industrial action in launching a strike. In fact, many trade unions took action without securing a mandate first from their members. They called their union members out on strike without any due regard to the interest and welfare of the workers, and the consequences to the company. Trade unions in those days, before the 1968 amendments, also intervened on issues which, as I have said earlier on, should rightly be within management domain, such as hiring, promotion, transfer, dismissal and even the assignment of duties. Those were the days where trade unions would confront and challenge employers over issues, such as redeployment of their members within the company. I do not think we should try to reinstate such provisions in the law because that would result in unending disputes between workers and the employers. And this was what happened in the 60s. The legal framework in existence then resulted in endless disputes leading to confrontation and strikes at the workplace. Let me give the Member an example. In 1955 alone, there were 275 strikes, resulting in a loss of almost one million man-days. In one year alone, there was a loss of one million man-days. In 1961, the industrial disputes also resulted in 116 strikes, and the loss of more than 400,000 man-days. So, that kind of legal framework resulted in an adversarial and confrontational industrial relations climate. I do not think that will equip Singapore to deal with today's competitive economic conditions. If anything, perhaps the hon. Member may be trying to hamper our economic prospects by advocating a return to the bad old days of industrial relations. We can surmise what would be his reasons. What is quite clear, obviously, is that in an adversarial and confrontational industrial relations climate, very often political parties are able to exploit unhappy trade union members and even the leadership, and this is precisely what happened in the 60s where political parties were able to influence various trade unions and to use them for their own political objective. I am not saying that the hon. Member is in fact having such a strategy in mind. But I am saying that if we take his advice and proceed to do what he is urging us to do, then we are likely to end up in a situation where the trade union movement, instead of serving the welfare of the workers, could well end up being an instrument to be used to advance other people's interest and agenda, and not necessarily that of the workers.

Sir, before I ask the Hon. Minister supplementary questions, may I thank him for not casting aspersions on my sincerity. The Minister mentions 1955. Does he realise that in 1955, I was around in those days, the present Senior Minister was the legal advisor to a great many trade unions. The PAP then was championing the rights of workers, wanting greater rights for them. My second question is this. The Minister says anyone unfairly dismissed can appeal to his Ministry. I have asked, time and time again, why can we not have an Unfair Dismissal Act. Why is it that our workers cannot be given their rights, but be allowed to depend upon the patronage of the Ministry concerned?

Mr Speaker, Sir, I was also around in 1955. Certainly, I was much younger than the hon. Member. The point that the first generation leaders of the PAP, including the then Secretary-General and Prime Minister, were very involved in the trade union movement does not invalidate my point. They were there to serve the interests and the rights of the workers who had engaged their service, unlike others who were there to use the trade unions and their organisations to advance their own political agenda at the expense of the interests and the rights of the workers. So there is a difference. And if the hon. Member is not aware of it, I would urge him to read Senior Minister's memoirs, because it is set out quite clearly what the Senior Minister tried to do in his younger days in championing the rights of the workers. Sir, on unfair dismissal, this has been a question that he has trotted out at every opportunity, and since it is the same question, I am bound to give him the same answer, because the answer cannot vary just because he trots out the same question on a different occasion. The answer is that workers who feel that they have been unfairly dismissed have a very efficient and low cost mechanism to which they can appeal to seek redress. Our experience at the Ministry is that the mechanism has worked very well, in fact, over the last 30 years. We deal with thousands of cases a year, and our decisions have always worked in the interest of both parties. We have been able to secure a mutually satisfying resolution to many of these disputes. Whether it is unfair termination or dismissal, we have always been able, after conciliation, to reach an agreement between the employer and the employee in the vast majority of cases. So we see no reason now to proceed on a different tack, the one that is advocated by the hon. Member, to enact a new law for dealing with such cases. We already have a mechanism that works, a mechanism that is efficient, low-cost and expeditious. So, why do we need to create a new framework?

asked the Minister for Health whether there are plans to develop geriatric specialization services at Alexandra Hospital.

Mr Speaker, Sir, geriatric services have been developed at Alexandra Hospital. The Department of Geriatrics, set up in 1994, provides comprehensive specialised outpatient and inpatient medical care to the elderly. The Geriatric Day Hospital also provides outpatient geriatric assessment and rehabilitation for those who need not be hospitalised. Special focus is given to the more common disabling medical conditions in the elderly, such as stroke management, bone and joint problems, dementia and other mental problems, and continence management. The Department in Alexandra Hospital is also the focal point for various community support services for the elderly in the western sector.

Sir, can I ask the Minister, in the light of the neighbourhood greying in the city area, whether there are further plans to develop such a service?

We have three regional hospitals - Alexandra Hospital for the western area, Tan Tock Seng Hospital for the central area and Changi General Hospital for the eastern area - to serve the geriatric needs of the people living in these areas. So far, the level and the extent of the services seem to meet the needs of the community, including the various community outreach programmes.

Sir, may I ask the Minister whether there are enough geriatric departments in our hospitals to service the elderly patients at the moment? And should we not increase and prioritise this area of health care in view of the fast increasing numbers of the elderly in Singapore?

Sir, we recognise that Singapore's population is aging. That is why we have set up the three geriatric departments at the three regional hospitals, and we are building up the geriatricians as well as geriatric-trained nurses to meet the needs of the community. We are confident that we can provide the necessary support to the aged in Singapore.

asked the Minister for Finance whether he will consider complete tax exemption for annuity to encourage people to be self-sufficient for old age.

Mr Speaker, Sir, currently, our primary savings scheme is the CPF. Government has given generous tax treatment to the CPF system. Mandatory contributions to CPF and income earned from CPF funds are tax exempt. In line with this, the streams of income paid out from annuities bought with the CPF Minimum Sum are tax exempt. An Inter-Ministerial Committee on Ageing Population is studying the adequacy of retirement provisions for Singaporeans in the light of a greying population. If tax benefits are useful to encourage people to build up their retirement savings and use them prudently when they retire, the Government would consider them. In particular, we will study whether to extend the current tax exemption for annuities bought with the Minimum Sum to annuities bought with CPF savings beyond the Minimum Sum.

Sir, may I ask the Minister what is the timeframe for his consideration?

I cannot give a specific answer at the moment. It should probably be some time around the Budget.

May I ask the Minister whether he or the Health Ministry has taken note of the recent report by the Samaritans of Singapore, that the suicide rate among the elderly is much greater than in other groups? What does the Ministry or the Government propose to do about that?

I do not see the relevance of this to the question posed by Dr Lily Neo. I suggest that the hon. Member submit a Question on this issue.

I agree with the Minister. I do not see the relevance.

asked the Minister for Health (a) whether foreign doctors practising in Singapore are subject to the same regulations and medical ethics as local doctors, and (b) what machinery his Ministry has to regulate these standards on practising doctors.

Mr Speaker, Sir, all doctors, whether Singaporeans or foreigners, are subject to the same regulations and medical ethics. The Singapore Medical Council (SMC) will only register doctors who have met the required standards before they are allowed to practise in Singapore. Medical registration is granted to overseas trained doctors, Singaporeans or foreigners, if the applicant -

Sir, may I ask the Minister whether the Johns Hopkins Hospital is under the jurisdiction of the Ministry of Health, as it may have come under the Foreign Direct Investment Scheme? Are the Hospital and its medical staff subjected to the same laws and practice guidelines as for local hospitals and local medical personnel?

Mr Speaker, Sir, the answer is yes. The practitioners in Johns Hopkins Hospital will be required to be registered by the SMC, just like any other medical professional who wants to practise in Singapore. Similarly, the Johns Hopkins clinic itself will have to undergo registration by the Medical Audit and Accreditation Unit of my Ministry. So Johns Hopkins will have to follow the same rules, as any other practitioner and any other clinic in Singapore.

Sir, I would like to ask the Minister if he is aware of any practices by the practitioners in Johns Hopkins Clinic to solicit business in a way that other doctors in Singapore are not allowed to?

Mr Speaker, Sir, I guess the Member is referring to the recent press report about a petition by 50 medical practitioners regarding the advertisement put up by Johns Hopkins. Let me say that there are two elements in that complaint. One is whether we use the same rules for the people practising in Johns Hopkins Hospital. There is this allegation that it is an uneven playing field. SMC has replied to the complainants on 3rd August 1999 to say that the same rules were applied to the registration of doctors. To-date, SMC has only registered two John Hopkins specialists. Both of them have the American Board certification in internal medicine and medical oncology, which are recognised specialist qualifications. So the two specialists in Johns Hopkins Hospital have been duly registered based on the same rules that we apply for Singaporean specialists. As to the allegation about the advertisement, this matter is still under investigation by my Ministry's Medical Audit and Accreditation Unit.

Order for Second Reading read. 1.17 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill seeks to amend the Stamp Duties Act to give legislative effect to the introduction of Electronic-Stamping (E-Stamping) and to allow the Commissioner of Stamp Duties (the Commissioner) additional powers in administering the Stamp Duties Act (the Act). The Act is also amended to introduce a general anti-avoidance provision (similar to that in the Income Tax Act) to minimise instances whereby parties scheme to reduce or avoid the payment of stamp duty on any dutiable instrument. The introduction of electronic stamping, or E-Stamping, is another initiative to boost the use of information technology in the public service. E-Stamping will replace the current physical stamping of documents with franking machines or revenue stamps. A stamp certificate will be issued on-line to certify that a dutiable instrument has been duly stamped. When fully implemented, E-stamping allows users, mainly lawyers and other tax agents, to e-stamp dutiable instruments in the convenience of their own offices. E-Stamping also goes hand-in-hand with electronic payment of stamp duty. This would not only minimize the exposure to risk related to manual processing of dutiable documents and payments, but also enhance the efficiency of collection of stamp duty. Amendments to the Act are necessary to give legislative effect to E-Stamping. Stamp duty is an important source of Government revenue. Sufficient safeguards must be put in place to prevent revenue leakage. To facilitate the administration of the Act, the Commissioner of Stamp Duties would be given additional administrative powers to conduct investigations and to prevent evasion of stamp duties. Amendments are made to the Act to provide for duty payable by a deceased person to be recoverable from his estate so long as the assessment is made within three years after the death. It also requires a company's liquidator to make full provisions for the payment of duty before distributing the company's assets to shareholders. In addition, the Act is amended to confer on the Commissioner powers similar to the Comptroller of Income Tax to enable him to call for and have access to books, accounts and records. There have been instances where parties scheme to reduce or avoid the payment of stamp duty on dutiable instruments. Clause 15 of the Bill enacts a general anti-avoidance provision, similar to that in the Income Tax Act, to allow the Commissioner to disregard any arrangement that is directly or indirectly structured to avoid, evade or reduce the liability in stamp duty and to make appropriate adjustments. Several penalties for offences have not been revised for many years. These penalties would lose their deterrent effect if they do not increase in tandem with increases in general income level. Some new penalties are introduced in relation to the improper use and counterfeiting of E-Stamping certificates. The Act is thus amended to revise existing penalties and introduce new ones. The Bill makes the following amendments to the Stamp Duties Act: (a) Introduction of new sections 6A - 6D to give legislative effect to the new E-Stamping System. Other general amendments to sections 2, 7, 11, 12, 38, 46, 48 and 57 are also made in connection with the introduction of E-Stamping. (b) Introduction of new sections 70A, 70B and 70C to confer on the Commissioner powers similar to those of the Comptroller of Income Tax to call for, and have access to, books, accounts and records. Provisions are also introduced to allow duty payable by a deceased person to be recovered from his estate so long as the assessment is made within three years after his death, and to require a company's liquidator to make full provisions for the payment of duty before distributing the company's assets to shareholders. (c) Introduction of a new section 33A, similar to section 33 of the Income Tax Act (Cap. 134), to allow the Commissioner to disregard any arrangement that is directly or indirectly structured to avoid, evade or reduce the liability in stamp duty and to make appropriate adjustments. (d) Amendments to sections 62, 63, 66 and 77 to revise existing penalties upwards to commensurate with the severity of various offences. New sections 64, 65 and 65A are also introduced for offences arising from the improper use and counterfeiting of E-Stamp certificates, furnishing of false information and obstruction to the Commissioner and his officers in performing their duties under the Act. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I rise in support of the Bill. Before commenting on the provisions of the Bill, I would like to declare my interest as a lawyer in private practice where I advise clients on commercial transactions and corporate restructuring. Sir, my comments relate to clause 15 of the Bill which proposes to insert a new section 33A. The first thing that struck me about the proposed new section is its similarity to the anti-avoidance provisions contained in section 33 of the Income Tax Act. Section 33A purports to give the Commissioner of Stamp Duties the same wide discretionary powers given to the Comptroller of Income Tax to disregard and/or vary transactions entered into by the taxpayer and to make such adjustments and to impose additional tax, if necessary. This raises a number of concerns with members of the business community, and I would like to raise these concerns in this House. Sir, as income tax and stamp duties affect the financial position of the taxpayer, tax and stamp duty planning has become an integral part of modern day commerce and finance, where products and transactions are becoming ever more complex and sophisticated. It seems to me that the oft-cited dictum of Lord Tomlin in the English House of Lords case of IRC vs. Duke of Westminster (1936) has even greater resonance when applied in the context of anti-avoidance rules in stamp duty. In that case, the judge said that "Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioner of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax". Over and over again, the courts have said there is nothing sinister in so arranging one's affairs so as to keep taxes as low as possible, because nobody owes any public duty to pay more than the law demands. These principles apply even more so to stamp duties as they are a tax on documents and not the underlying transactions per se. Besides encroaching on the above established principles, the new provision also seems to me to be particularly antecedent to the spirit of encouraging greater freedom and creativity in the financial sector in Singapore. Recently, it has been recognised that there needs to be a radical change in mindset towards financial regulation in Singapore. The new approach will be central to the long term development of Singapore into a world-class financial hub. It is hoped that the change would remove the self-imposed shackles on the financial institutions here and lead to more new and creatively structured financial products. In view of this change in approach, it seems to me to be taking a step backwards to give the Commissioner such wide powers in an area that impacts on so much of commerce in Singapore. Sir, in the short and medium terms also, we must not forget that we are still in a critical period of recovering from the economic crisis of the last two years. Already there are observations that the momentum of corporate restructuring has slowed and companies are becoming less committed to reform as the short term outlook becomes better. By itself, restructuring involves many difficult decisions, and companies should not be burdened with the additional uncertainty in this area of stamp duty planning. Sir, in achieving a particular commercial result, there may be many different ways of structuring the transactions leading to it. Tax mitigation is admittedly one of the more important factors in deciding which way to carry out the transactions. The proposed section 33A raises concerns as to how the Comptroller or the Commissioner will view such commercial structures, some of which have become a matter of common practice today. For example, an outright sale of a property by way of conveyance will attract stamp duty ad valorem at the rate of approximately 3% of the consideration. So if the purchase consideration is $1 million, the stamp duty chargeable is about $30,000. However, if the property is owned by a special purpose investment holding company, the shareholders can sell all the shares of the company to the purchaser instead who will then obtain effective ownership and control of the property. The sale of the shares will attract stamp duty at a substantially lower rate of 0.2% of the value of the shares. So if the property asset is valued at $1 million, but the company has bank borrowings and other liabilities of $500,000, the total net value of the shares will be $500,000, and the stamp duty chargeable on the transfer of all the shares is only $1,000. Using this example, could the Minister clarify whether the exception in the new section 33A(3)(b) might help? This subsection states that section 33A "shall not apply to any arrangement carried out for bona fide commercial reasons and had not as one of its main purpose the avoidance or reduction of duty". But in subsection (2), "arrangement" means "any scheme, trust, grant, covenant, agreement, disposition, transaction and includes all steps by which it is carried into effect." Does this mean that the Commissioner of Stamp Duties will scrutinise any particular intermediate step and rule that that particular step has been put in place for the purpose of reducing stamp duty? In the sale of property example above, although the bona fide commercial reason for the whole arrangement is the transfer of the property, the main purpose of choosing a sale of the shares of the property-owning company, and not the property itself, may very well be to reduce the amount of stamp duty payable. In another example, for financing of a project development, the bank will usually take as security, among other things, an assignment of the building contract, an assignment of the sale proceeds, as well as a mortgage over the land. If the legal assignment were stamped as a primary security, it would attract ad valorem duty at the rate of 3% of the contract value. It is thus common for banks to take the mortgage as the principal security and nominate the others as secondary security. Stamp duty on mortgages is capped at $500, and the other documents will attract nominal stamp duty of $10 each. There are many more examples of stamp duty planning schemes which are widely used in commerce and by individuals to minimise the amount of stamp duty payable, as allowed by law. The business community is rightly anxious about the new provision because it is vague and silent about these tried and tested schemes. Could the Minister clarify the scope of the new section 33A and also place on record what would not be within its ambit? Sir, like income tax, stamp duty is wholly a creature of statute and it is an established principle of statutory interpretation that clear words are needed to impose tax liability on a person, and that any ambiguity should be resolved in favour of the taxpayer. On this point, I would have liked this Amendment Bill to address the perennial uncertainty in relation to the share reconstruction exemptions under the present section 15 of the principal Stamp Duties Act. Because of the uncertainty in the definition of "scheme of reconstruction", many companies and practitioners have had to write in to the Stamp Duty Office to seek confirmation as to whether a particular restructuring exercise falls within the exemption afforded by section 15. Unfortunately, the criteria adopted by the Stamp Duty Office appear to have shifted internally over time and now include a condition that the restructured group should not be publicly listed within two years after completion of the restructuring. This is surely an area in which our existing legislation is due for clarification. In this regard, we might look to the Hong Kong example, where under their Stamp Duties Ordinance, there is much clearer and more certain "90% shareholding" rule. Commercial transactions are of course extremely varied. I understand it is not possible for the Minister to clarify each and every transaction in this House. The Commissioner of Stamp Duties should therefore issue clear guidelines from time to time on the provisions of the Act. These measures are crucial in ensuring that our tax laws are transparent and could be interpreted with a sufficient degree of certainty by foreigners and locals alike. I believe a predictable and stable tax environment is fundamental to the continued development of the financial and other business sectors in Singapore. Sir, I support the Bill.

Mr Speaker, Sir, I am not a tax expert like the hon. Member Mr Ong Kian Min. So I will not touch on the taxing aspects of this Bill. I see this Bill however as an opportunity to reform and streamline our laws for the world of Internet trading and to prepare our country and our business and public sectors for electronic document and information management systems. So even though this Bill, as it stands before the House, is primarily one to deal with the physical attachment of E-stamps to physical documents through electronic processes, I would like to urge the Minister to perhaps look wider and further especially in future exercises to amend the Stamp Duties Act and the different Acts dealing with taxes, duties and Government charges. Clause 4, for example, deals with the stamping of documents. And in the First Schedule of the main Act, there is mention of the stamping of contract notes. I would just like to ask the Minister if he would clarify if these contract notes were to be electronic, whether these would also need to be stamped, or whether the duty would be waived. There is a new section 6B proposed in clause 5 of the Bill, and this also deals primarily with the electronic procedures for the E-stamp certificates where the electronic stamping of documents will one day be possible for documents that are created online. So if future developments lead that way, as they would especially when we have Internet stock trading and so on, then there would be a need to perhaps clarify the terminology of this provision when it deals with the word "certificate", for example, whether such certificates could be extended to electronic equivalents. Currently our Electronic Transactions Act does not permit most of the documents in the First Schedule of the Stamp Duties Act to be electronic. But there could come a day when perhaps even the Ministry of Finance finds it comfortable to do something like this in a paperless fashion. Perhaps even there might come a day when the Government needs to include new instruments to be stamped, so I think there is a need to clarify if these certificates would one day be completely electronic and online. Clause 30 of the Bill deals with certain powers for the Commissioner to exercise. As the Minister has said, it is based on the Income Tax Act and the powers of the Comptroller of Income Tax. I think section 70C that is proposed, especially subsection (2), is a good provision to have in this Bill and in the Income Tax Act and in any of the other tax Acts that we have, in addition to any other Acts that deal with customs duties, excises, Government charges and fees, and so on. The reason I say this is that it makes it very clear that the Comptroller or the Commissioner of each of these respective Acts has got the power to look at computer records. By implication, therefore, computer records for tax purposes or tax documents are permitted and legal in the law. And I have to say this in this House because there is a very strong misapprehension amongst many lawyers, auditors and businessmen that it is fine to have an information technology-based information system or document management system, but these systems are good only for in-house records. But the moment you need to deal with the Inland Revenue Authority of Singapore and the Customs Department, you must produce paper. So, despite the provisions that we already have introduced in the Electronic Transactions Act and Companies Act permitting electronic record keeping, such people still have the misapprehension that they cannot do so and therefore it would be good if the Minister could clarify at this opportunity presented before the House to clarify these points. With that, Sir, I support the Bill.

Mr Speaker, Sir, I agree with the Member for Pasir Ris GRC that the public should only pay taxes in accordance with what the law requires, and no more. However, I would point out that stamp duty is an important source of Government revenue. In fiscal year 1998, stamp duties worth $950 million were collected. And in fiscal year 1997, it amounted to $1.7 billion. The general anti-avoidance provision, which is similar to that of the Income Tax Act, is introduced to ensure that there are sufficient measures to safeguard revenue and to deter parties from scheming to reduce or systematically avoid payment of stamp duty on dutiable instruments. The introduction of new section 33A is neither to stifle bona fide commercial transactions nor to hamper corporate restructuring. It simply empowers the Commissioner to disregard and make adjustments to certain arrangements which are clearly carried out solely or principally to evade tax. Tax avoidance schemes are purely tax-driven with little or no commercial value or rationale. This is unlike tax planning where the transactions or schemes have some commercial basis, and where the issue is structuring the most tax-efficient arrangement in accordance with the relevant tax laws. Generally, tax planning, if carried out within the confines of existing laws, would not be caught under section 33A. In assessing whether a particular scheme or arrangement would fall under the ambit of section 33A of the Act, the Inland Revenue Authority would amongst other things look at the presence of artificiality or contrived transactions to reduce or avoid tax liabilities but which have little or no commercial basis. I would like to stress that the aim of the new section is to reduce blatant or contrived tax avoidance arrangements which can lead to systematic or significant revenue losses to the Government. It is not intended to affect genuine and normal commercial transactions, but because anti-tax avoidance transactions are getting more complex that the Commissioner needs a general anti-avoidance provision to enable him to effectively counter tax avoidance, and also to serve as a deterrent in order to safeguard revenue. Members may recall that this same issue was debated in the House in 1988 when the current anti-avoidance provision was put in place in the Income Tax Act. The concerns then were that this would be a major impediment to the development of our commercial enterprises. But the concerns have proved unfounded. Since 1988, IRAS has not seen the need to invoke the general anti-avoidance provision. Thus, it has been very effective simply as a deterrent. Likewise, section 33A in the Stamp Duties Act will not be invoked unless it is absolutely necessary. To reduce any uncertainty, IRAS would also be prepared to assist any individual or company wishing to consult them on specific transactions as to whether their transactions would fall under the ambit of the new section 33A, provided details of the transactions are clearly presented to them. The Member has given two scenarios to illustrate his points. In a property sale example, the purchaser may choose to acquire all shares of the company owning the property and pay the lower stamp duty of 0.2%. However, if it is subsequently proven that the purchaser has schemed with the seller to pay stamp duties at a lower rate, such a scheme would fall within section 33A. This could arise, for instance, when many such special purpose property holding companies are set up and frequently traded, amongst other factors. With regard to the Member's other example on the financing scheme for project development, the borrower is assigning certain assets to the bank as a security. If the assets are reconveyed back to the borrower upon full settlement of the loan, such an assignment by way of security is stamped with the mortgage duty and capped at $500, and not the 3% ad valorem stamp duty. The 3% conveyance duty is applied only when the assignment is effectively a sale. Section 15 of the Stamp Duties Act provides relief from payment of ad valorem duty on transfers made pursuant to a scheme of reconstruction or amalgamation. The concession is granted on the principle that there is no substantial change in ownership after the reconstruction. Hence a key criterion for remission is that at least 90% of a company must be involved in one single reorganisation exercise. To prevent abuse of the stamp duty remission, a two-year freeze on the ownership is also imposed on the restructured companies and to ensure that the beneficial interest in the shares or undertaking acquired remains substantially with the same people. Hence the condition that the restructured group should not be publicly listed within two years. The criteria in section 15 are constantly reviewed and revised, if necessary, to meet the changing circumstances and needs of the business community. Successful applicants under section 15 only pay a fixed duty of $10 on each transfer. Whereas a transfer of an undertaking consisting of immovable properties and shares will attract stamp duty at 3% and 0.2% respectively on the value of the undertaking sold. This represents substantial savings. In order that the concession is not open to abuse, it is essential that the applicants make a formal application setting out the scheme together with all relevant documents to justify that the restructuring qualifies under the relevant sections. Hence, the need to make a formal application in writing. There have been cases where claims for section 15 were made despite that the conditions spelt out for remission were not met. In the case of Hong Kong, the relief is confined to conveyance between associated bodies, and does not include amalgamation between unassociated parties. To qualify, one corporate must own at least 90% of the issued capital of the other. To our knowledge, adjudication is also required in the Hong Kong legislation. Members can be assured that IRAS will assist and advise companies seeking their assistance on specific transactions. In fact, IRAS regularly liaises with lawyers and tax agents of companies on matters relating to corporate restructuring. Many of them are well aware of the conditions governing exemptions or remissions of stamp duties. They are made transparent to all applicants. I will now refer to the questions raised by the Member for Aljunied GRC. Presently, stamp duty is payable only on instruments effecting transfers, sales, leases, mortgages of immovable properties as well as stocks and shares. I assume the hon. Member is therefore making reference to contract notes on stocks and shares. If an electronic contract note or any other electronic instrument is an instrument for stamp duty purposes, it will accordingly attract duties. However, for the Member's information, stamp duty for contract notes for stocks and shares is currently suspended until 30th June 2000. With regard to whether the definition of "stamp certificate" is too restrictive, let me briefly explain to Members how the E-Stamping system works. E-Stamping is an integrated electronic system on the Internet. The whole process is performed electronically, starting with the submission of document details, computation of duty and late penalty, followed by electronic payment and ending with the issuing of the stamp certificate electronically. The stamp certificate is issued on-line and users can choose to store the records electronically or in printed format at their premises. Thus the E-Stamping system can be easily extended to all on-line instruments. I would also like to thank the Member for his suggestion to include a provision similar to section 70C(2) in the other Acts, such as the Income Tax Act, the GST Act and the Customs Act. I am pleased to inform Members that there are currently provisions under the Income Tax Act and the GST Act to allow taxpayers to keep their records electronically. IRAS has, in fact, in consultation with the Institute of Certified Public Accountants in Singapore, issued two sets of guidelines in July 1999. As long as these criteria are met, taxpayers can apply to the Income Tax authority to keep their records electronically. Similarly, the Customs Act provides for the Director-General of Customs to permit records to be kept electronically.

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; reported without amendment; read a Third time and passed.

Order for Second Reading read. The Minister for Trade and Industry (BG George Yong-Boon Yeo): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Public Utilities Act empowers the Public Utilities Board (PUB) to discharge its roles as the Water Authority and as the Regulatory Authority of the electricity and piped gas industries in Singapore. This Act was last amended in 1995 when the electricity and gas operations of PUB were corporatised. In the last four years, we have gained experience in the regulation of the electricity industry and some amendments to the legislation are needed. The amendments proposed are mainly to: (a) put in place further regulatory measures in the evolving electricity industry and to address the industry's need for high quality electricity supply; (b) increase the penalty for the offence of damaging a high-voltage electricity cable; (c) protect the property rights of the Board and facilitate the maintenance of water mains; and (d) protect the interest of consumers. I will first go through the amendments that are required in the Board's function as the Regulatory Authority for the electricity and gas industries. Regulation of Supply At present, there is no provision in the Act to regulate the supply of electricity generated outside Singapore to any person or premises in Singapore, or the supply of electricity generated in Singapore to any person or premises outside Singapore. It is proposed that the present definition of "supply" in section 2 of the existing Act be amended to enable the PUB to regulate such supply of electricity. With this amendment, without being licensed by the PUB to do so, no person may supply electricity generated outside Singapore to any person or premises in Singapore, and no person may supply electricity generated in Singapore to any person or premises outside Singapore. Power Dips & Cable Damage Feedback from industry indicates that companies, particularly those in high-tech industries which rely heavily on sensitive computerised control systems, have been adversely affected by voltage dips in their power supply. Voltage dips, unlike power outages or blackouts, are momentary reductions of the voltage levels in the power supply system, which can disrupt the functions of sensitive computerised control systems. Voltage dips occur some 25-30 times a year. They have a severe impact on some industries, particularly high-tech, process industries like the wafer fabrication industry. According to the Economic Development Board (EDB), voltage dip-related losses suffered by five high-tech companies between August 1997 and November 1998 amounted to some $3 million. This figure does not include the cost of production downtime, labour and delayed product deliveries. The production downtime can amount to as much as 10% of the monthly output of a wafer fabrication company. In 1998, 57% of voltage dip complaints arose because of cable damage. Although the number of voltage dips caused by cable damage is relatively small (5 out of 36 in 1996, 2 out of 21 in 1997 and 4 out of 30 in 1998), the effect of such damage to high-voltage cables can be major. For Singapore to continue to attract high-tech, knowledge-based activities like wafer fabrication, we must ensure the high quality and reliability of our power supply. To minimise damage to high-voltage cables in the course of construction work, section 95 of the Act will be amended to differentiate the requirements for earthworks in the vicinity of low-voltage electricity cables from those in the vicinity of high-voltage electricity cables. A new section 95(A) is proposed to require PowerGrid Ltd, which is the owner of high-voltage electricity cables, and contractors to work together to prevent damage to cables. This new section will regulate earthworks and cable detection work within the vicinity of any high-voltage electricity cable which belongs to or which is under the management or control of a public electricity licensee. Offenders face a fine not exceeding $100,000, or imprisonment for a term not exceeding five years, or both fine and imprisonment, if they do not follow the legislated procedures. The serious consequence to the economy as a result of damage to high-voltage cables makes a severe penalty necessary. A deterrent penalty of $1 million is therefore proposed for damage to a high-voltage cable. Section 107(3) will be amended to enhance the current fine of $200,000 to $1 million. The enhanced fine is the same as that provided under the Telecommunication Authority of Singapore Act for damaging telephone cables. At the present level of penalty, some contractors are tempted to risk hitting a cable rather than suffer project delay and payment of liquidated damages. A fine of $1 million will deter such irresponsible behaviour. With the amendments, offenders will face a maximum fine of $1 million, imprisonment for five years, or both. The maximum five-year term of imprisonment for high-voltage cable damage remains as before. At the same time, section 95 as amended will reduce the maximum term of imprisonment for damaging a low voltage cable from three years to 12 months, as this is less serious. Apart from a deterrent penalty, we will require reasonable precautions to be taken against damage to high-voltage cables. These are covered in the amendments to section 69. Firstly, a public electricity licensee which lays any high-voltage electricity cable on any private land or premises will have a duty to:-

Mr Speaker, Sir, I rise to express my support for the Public Utilities (Amendment) Bill presented by the Minister for Trade and Industry. Allow me first to declare my interest that I am a board member of the Public Utilities Board. One of the main objectives of the proposed amendments is to minimise the number of incidents of damage to underground high voltage electricity cables. It is my understanding that the damages to the cables in the past have been largely caused by earthwork contractors in the course of construction work. Damage to these cables would cause voltage dips to be felt over large areas and the effect is felt island-wide when the damage is to 230 kv cables. The extent of the impact is evidenced by the disproportionately large number of voltage dip complaints received relative to the incidents which give rise to the voltage dips. As the Minister has explained at length, the impact on high-tech industries due to such voltage fluctuations is particularly severe. Feedback from industry indicates that the production facilities of high-tech companies such as wafer fab companies, sensitive micro-electronics component manufacturers and others are highly susceptible to voltage dips caused by damage to underground cables. The interruptions of electricity supply upset these companies' production schedules and delivery commitments and result in costly losses in production time and work in progress items which often have to be discarded. Sir, for us to be able to continue to attract high technology and high value-added investments into Singapore, we have to ensure that the quality of our electricity supply remains consistently high. The proposed legislation as presented by the Minister is therefore necessary and timely. It would require the earthwork contractors and PowerGrid Limited which owns the electricity cable network to work together to proactively prevent damage to the electricity cables. On that note, Sir, I support this Amendment Bill.

Mr Speaker, Sir, in the light of deregulation of electricity supply in our nation, it is inevitable that the regulations are changing to suit the new operating environment. Hence, I can see this new Public Utilities (Amendment) Bill will serve to provide more precise definition and to place more duties and responsibilities on the public electricity licensees. Section 3A in particular requires the licensees to ensure that they would not do any act that would adversely affect, directly or indirectly, the security and stability of electricity supply. As the Minister presented earlier, this is an important point because Singapore is a modern nation which cannot afford to have major voltage dips or blackouts. The Bill goes further in section 69 to ensure that the public electricity licensee maintain the cables with due care and protection and to mark out the location of electricity cables in some prescribed form. And this is a very positive step forward towards more manageable and predictable underground excavation and earthwork as broadly defined in this Bill. Until now, there have been grievances that the location maps of the underground cables, especially those laid a long time ago, during the British days, are very big and inaccurate. Mishaps often occur when excavations took place at locations not suspected of underground cables. The prescribed manner stated in section 2B(b), I hope, would be akin to something like a chartered survey map, and not those that would make reference to, for example, the nearest tree or fire hydrant. This latter method suffers from the shortcoming of losing the location of the cables when the so-called reference tree or fire hydrant is removed. Hence, it follows naturally that in new section 95, it is a requirement to have cable detection works carried out prior to any earthwork at the low and high voltage cable areas. This Bill particularly spells out a new procedure for excavation near high voltage cables. It requires a proper notice to be served on the licensee before commencing excavation and to get information from the licensee on the locations of the high voltage cables. Of course, it is a requirement to engage licensed cable detection workers to perform detection work. The new section 95A(5) further requires a licensee to promptly give the location of the high voltage cables to the person who serves the notice and to advise on the precaution to be taken to avoid damage to the cables. With this provision, it now becomes reasonable for the person performing the excavation to follow the procedures set out in section 95A and he now has a defence in court when charged for damaging a cable. This is well and good. However, I have four queries. The Bill requires one to serve notice on the licensee if he is to carry out excavation near high voltage cables. But how would he know that it is a high voltage cable area? Secondly, which licensee does it belong to? And thirdly, what if the licensee disclaims the accuracy of the information he gives to the person who carries out the excavation, and this is often done? Fourthly, how capable are the cable detection workers and what kind of liabilities do they have? What would be considered reasonable performance of a cable detection worker? This amendment would be more complete if it can answer the above four questions, especially the last one whereby a person performing the earthwork may be deemed not to have taken reasonable precaution and exercised due diligence to avoid the offence, should a cable detection worker be found negligent in carrying out his work. The deterrent penalty for damaging a high voltage cable is raised to $1 million. The jail sentence remains the same at five years. It would only be reasonable if the Bill would further define this area to avoid any doubt or any presumption of guilt. Mr Speaker, Sir, please let me now switch from speaking on electricity cable to water mains. This new Amendment Bill introduces a new section 32A which basically requires one to remove any structure, object or accumulation that exists in the vicinity of a water main or connecting pipe if the Board deems that it hinders or obstructs access. I think this clause is far too broad. It does not define the word "vicinity" nor the words "hinder access". If an underground pipe is to burst near an existing home and the easiest access can be obtained by demolishing part of the house, then it appears that this amendment would apply and the poor house owner will, at his own cost, move out of the house or hold on to the house to facilitate access. Another possible scenario here is this. When a house owner engages an architect whose design happens to infringe this condition, because of the weakness of this clause, then who is responsible for the removal of the structure? Is it the architect or the house owner? Would this clause be precise enough for insurance purposes if the architect is to carry a professional liability insurance policy? Having made the above comments, I wish that the Minister would consider them before legislating the Bill.

Mr Speaker, Sir, I just want to make a short clarification. I understand the Amendment Bill is to severely punish contractors who damage high voltage cables. How about a power supply company that causes a voltage dip which is equally damaging to the economy and the company concerned as well? I would like to know what is the penalty. I believe that it is in the Bill. How about for those voltage dip cases which the Minister cited just now that were not caused by damaged cable? For those cases, was penalty imposed on PowerGrid and, if so, what was the penalty imposed?

Mr Speaker, Sir, I would like to thank the Members for their support of the Bill. Mr Chuang Shaw Peng asked how would an earthwork contractor know that he is in the vicinity of high voltage cables. He has to find out from the licensee, which means, PowerGrid Private Limited and PowerGrid is under an obligation to speedily provide the detailed information and the information must be detailed to enable the cables which are in the vicinity to be accurately marked out by licensed detection workers. Which licensee? There is only one right now which is PowerGrid. They own all the high voltage cables in Singapore. Mr Chuang asked what happens if the licensee disclaims the accuracy of the information he provides to the contractor. He cannot. Under the law, he is required to provide accurate information. As for the training of cable detection workers, this is done by PowerGrid. In fact, under its licensing conditions, it is responsible to provide training on cable detection and the person would only be granted a licence as a cable detection worker if he has successfully completed the prescribed course conducted by PowerGrid and holds the required qualifications and relevant experience. Mr Chuang then asked what if the licensed cable detection worker was negligent. I think, if this can be established legally, that should be a defence for the contractor. As for the amendment to the section on water mains, to begin with, structures or objects should not in the first place be built or positioned in such a way that water mains cannot be maintained or repaired. When we talk about "in the vicinity of water mains", it is with respect to whether it affects the ability of PUB to maintain or repair these mains. Mr Chuang also asked in the event that the architect designs a structure which causes an obstruction, then who should be liable? That really is a private matter to be resolved between the owner and his architect. Equally, whether insurance should cover such liabilities is also a private matter, defined in contract. Mr Low Thia Khiang asked whether the power supply company is under an obligation to provide reliable power. Yes, they are. As to what the penalty involves, I do not have them with me here now. And as to the past incidents, and follow-up action PUB has taken with respect to voltage dips not caused by cable damage in the past, I do not have the details here. But if he submits a question on this, I would be very happy to answer him.

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. - [BG George Yong-Boon Yeo]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 2.16 pm The Senior Parliamentary Secretary to the Minister for National Development (Assoc. Prof. Koo Tsai Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Objective The Bill seeks to amend the Building Control Act to put in place measures to minimise incidents of falling air-conditioning units from certain premises or buildings. Rationale Since 1994, 8 cases of fallen air-conditioning units have been reported. Out of the 8 cases, 7 occurred because the wooden frames these units were mounted on have decayed over the years. These 7 cases occurred in populated HDB estates. It was fortunate that no one was injured or killed. Sir, we have introduced several measures since 1990 to forestall the problem of falling air-conditioning units. We required all new air-conditioning units in HDB flats to be mounted properly on stainless steel brackets. An additional measure was introduced in 1997 to ensure that trained workers were engaged to install new air-conditioning units. This is to ensure that the units were properly installed so as to minimise the risk of falling air-conditioning units due to poor workmanship in installation. However, the stock of wooden frames installed before these measures were introduced will remain substantial for some time to come. These air-conditioning units therefore represent a growing risk to the public as the condition of the frames deteriorates with time. To minimise the possibility of further accidents from happening, wooden frames should be replaced with properly-installed brackets made of stainless steel. Main Features of the Bill Sir, let me now elaborate on the main features of the Bill. Clause 1 names the Bill as the Building Control (Amendment) Act 1999. The clause also allows the Minister to bring the Bill into operation by notification in the Gazette. Clause 2 addresses the meaning of "air-conditioning unit" for the purpose of the Building Control Act. In addition, the clause also transfers the definition of the "Building and Control Authority" and "trained workers" from the Schedule to the main Act for the purpose of the new provisions regulating air-conditioning works which I shall elaborate on later. As air-conditioning units do not affect the structural integrity of a building and their installations are considered really to be minor works, clause 3 continues to exempt air-conditioning works from Part II of the Building Control Act. That is, there is no need to submit building plans for installing air-conditioning units to the BCA. Sir, I shall now elaborate on the main provisions regulating the installation of air-conditioning units under clause 4 of the Bill. Clause 4 introduces a new Part IIA to be inserted into the Building Control Act. New Part IIA New Part IIA contains six sections. New section 21A limits the application of the Part to air-conditioning units that would pose a danger to the public. As air-conditioning units installed in landed properties would not pose a danger to the safety of the general public, these are exempted from the provisions of this Part. The same goes for units that do not protrude outwards from buildings or premises. New section 21B makes it mandatory for any person who desires to install air-conditioning units to engage a "trained worker" to properly install the air-conditioning unit. A trained worker holds a certificate from the Building and Construction Authority for the installation of air-conditioning units. This section consolidates what we have already introduced in 1997, to prevent accidents of falling air-conditioning units due to poor workmanship in installation. The provisions I have elaborated so far cover air-conditioning units that are to be installed. I will now move on to section 21C which deals with existing air-conditioning units. Although we have previously issued advices to many flat owners to retrofit existing wooden air-conditioning frames with properly-installed brackets made of approved material, namely, stainless steel, many air-conditioning unit owners have not been forthcoming in taking up the advice. Currently, about 45,000 air-conditioning units in HDB estates and under 20,000 air-conditioning units in private estates are mounted on wooden frames. These would pose a danger to the general public as the wooden frames deteriorate over time. As such, section 21C requires the owner of the building or premises where air-conditioning units are mounted on wooden frames to replace these frames with properly-installed stainless steel brackets. A grace period of one year from the date of commencement of this Act will be given to the owner of the building or premises to carry out the retrofitting works. New section 21D allows the Commissioner of Building Control to require retrofitting works for any other dangerous air-conditioning units. New section 21E provides in the main body of the Act an existing requirement that the trained worker shall, upon completion of the installation or retrofitting works, submit a properly completed installation report to the Commissioner of Building Control. The penalties for any person who contravenes section 21B(1), 21C, 21D or 21E(1) are prescribed in new section 21F of the Building Control Act. Under this section, any person who contravenes or fails to comply with the said provisions shall be guilty of an offence and shall be liable upon conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding six months or to both. Clause 5 allows the Minister to make regulations in relation to the installation and retrofitting works for air-conditioning units. The Minister can also make regulations stipulating the duties and responsibilities of the trained workers in carrying out their works. Consequential amendments are made under clause 6 of the Bill, which tidies up the references to air-conditioning units made under the existing Schedule to the Act. In conclusion, the Bill is necessary to protect the general public from the potential injury that could be caused by falling air-conditioning units. Although we could also let the problem resolve itself as the older air-conditioning units mounted on wooden frames break down and are replaced by new and better supporting structures, we are concerned that further accidents might occur. The Bill is thus introduced to accelerate the replacement process and ensure a safer environment, especially in the HDB estates where many air-conditioning units mounted on wooden frames still exist today. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I rise to support the Building Control (Amendment) Bill 1999. First of all, I commend the Government for taking proactive action on the subject of falling air-conditioning units in HDB estates before anybody is injured. We are told that these incidents have occurred because the wooden frames that the air-conditioning units were mounted on have decayed over the years. Such decay of wooden frames is not surprising, given the kind of hot and wet weather we have in Singapore. I have a few queries and clarifications to make regarding the main features of the Bill. In new section 21B, the Bill requires such air-conditioning units to be installed by a trained worker. The Bill does not give details about the pre-requisites or qualifications for such a trained worker, except that he is a person who holds a certificate issued by the BCA. Would this be linked to any NTC qualification later to make the requirement more clear and transparent? What is the number of trained workers that we have in the industry right now? Would there be enough trained workers so as to keep such installation works at reasonable price levels? Section 21C also says that the installation will use "such material as may be prescribed." Given that wood is not suitable in such a climate, what will be the new acceptable materials that can be used in its place? I believe that this is not given in the Bill. Can the Bill be a bit more specific on this matter? Apart from the deterioration of timber frames, I understand that the brackets can also corrode and give way, posing the same danger to residents. Will the Building Commissioner consider requiring building owners to inspect and maintain air-conditioners and their mountings on a regular basis? The Bill does not seem to address the issue of service or maintenance of air-conditioning units after installation. Obviously, apart from having the units installed securely, they should also be installed in a manner that allows them to be serviced safely. There should be adequate provision for working space to prevent incidents of falling tools and components as well as to ensure that the worker can attend to the unit without exposing himself to undue danger. The design of such air-conditioning units should also incorporate devices that allow for proper installation. The Building Control Authority may want to seek the assistance of the PSB and the product design of such air-conditioners. Sir, I am given to understand that apart from incidents of falling air-conditioning units, there have also been instances of falling casement windows in HDB flats. They pose an equally severe threat to the safety of residents. Would the Commissioner of Buildings consider imposing similar legislative control regarding the proper installation and maintenance of such windows? With these comments and queries, I support the Bill.

Mr Speaker, Sir, I support the Bill. I think it is timely to introduce some control on the fixing of air-conditioners in HDB estates. It is indeed a frightening thought of an air-conditioning unit falling down from a 10-storey flat and hitting someone below. The accident is bound to be fatal. The requirement for the installation of an air-conditioning unit by trained workers is a move in the right direction. However, that alone will not be able to ensure that the unit is installed according to the required specifications, notwithstanding that a report has to be made after the installation. Some form of inspection has to be made in order that the installation requirement be followed. I think the HDB and town councils are in the best position to provide this safeguard. Sir, I would like to take this opportunity to request the Senior Parliamentary Secretary to consider looking into two other aspects, apart from ensuring the structural soundness of the installation of air-conditioners. First, noise pollution. Very often, air-conditioners, if not properly fixed or due to its age and lack of maintenance, will generate tremendous noise and vibration. This will invariably be a nuisance to the adjoining flats, especially to those without air-conditioners and have to sleep with their windows open. Secondly, drainage problem. A lot of air-conditioning units are not provided with proper drainage, ie, provision of a tray to drain off water, resulting in water splashing onto the flat below them, especially units which are not properly maintained. I hope that some form of control and regulatory measures are introduced to address these two very widespread problems. Sir, I support the Bill.

Mr Speaker, Sir, I highlighted this issue during the Budget debate last year, and asked the Ministry to do something about it. The then Parliamentary Secretary, in his response, had indicated that the Building Control Authority would look into the possibility of legislating the requirements for window air-conditioning units installed in high-rise buildings. Sir, it was sheer luck that in all the eight cases of falling air-conditioning units, no one was injured or killed. I therefore welcome this Bill as it will help to enhance the safety of living in a highrise environment. However, I have some clarifications to seek from the Senior Parliamentary Secretary. Section 21B requires a trained worker to fix the work. A "trained worker" means a person who holds a certificate issued by BCA. My question is: will experienced service providers who are without formal education or training be also considered for the certificate? Secondly, the Bill also requires that only approved materials can be used. Are there any other approved materials, apart from stainless steel, mentioned by the Senior Parliamentary Secretary just now? Thirdly, there are about 60,000 such units with wooden frames. If we spread over a period of 12 months, each month an average of about 5,000 units need to be retrofitted. Can the Ministry assure that owners would not have difficulty meeting the deadline?

(In Mandarin): Sir, I support this Amendment Bill to ensure safe and proper installation of air-conditioners in HDB estates. However, I have a few suggestions for the consideration of the Senior Parliamentary Secretary. The new Amendment Bill provides that air-conditioners be installed only by trained workers. I feel that we should go one step further to stipulate that installation work should be carried out only by registered companies, for better protection to the flat-owners. The HDB should also carry out a proper inspection after the air-conditioners are installed. A sticker can then be affixed to the air-conditioner to certify that it has been properly installed according to the specifications laid down by the HDB. This may help to solve the problems of noise pollution and water drainage due to improper installation. Secondly, we must ensure that the installations are not carried out without prior approval from the authority. I have received complaints during my meet-the-people sessions that contractors employed by the flat-owners to install the air-conditioners did not make a formal application to HDB as required, before they commenced work. Some even proceeded to install the air-conditioners without obtaining the necessary approval. Later on, when the flat owners were to resell their flats, they will encounter problems, as their air-conditioners would be deemed to be unauthorized installation. If there are stickers affixed on the air-conditioners, these problems would not arise. Because of the rising standard of living in Singapore, more and more residents, especially the new flat owners, are having air-conditioners installed. I hope that in designing the new HDB flats, the architects could make provision for air-conditioners to be installed in such a way as to give the flat owners and technicians access to the air-conditioners to facilitate easy checking, servicing and maintenance of the said air-conditioners. As most air-conditioners are now installed outside the windows or on the external walls, flat owners find it very difficult for them to inspect or service the air-conditioners, and it is very dangerous too. They have to bend out of the windows to do it. If they are not careful, it is not the air-conditioners but the persons themselves will be falling over. This is a very important matter of safety to consider. According to the Senior Parliamentary Secretary, at the moment some 65,000 units of air-conditioners are being mounted on wooden frames, and the flat owners are required to replace the wooden frames with stainless steel frames within one year. Will there be enough contractors to carry out the retrofitting work of all these 65,000 air-conditioners within one year? Will this result in a steep rise in the cost? In the case of housing estates which have been selected for the SERS scheme, the residents will have to move out soon. Can the Ministry exercise some flexibility in dealing with these cases? Since they are moving out very soon, there is no need for them to spend extra money to retrofit the installation of air-conditioners. But we must of course ensure that the existing wooden frames are still in good condition. I hope the Senior Parliamentary Secretary will consider my suggestions.

Sir, one of the major causes of air-conditioning units falling off is the deterioration of the air- conditioning unit over time. But we must not forget that these wooden frames were installed by HDB. They were provided for when the owners moved in. HDB, as a developer, provides such wooden frames. I wonder whether the Bill should also require developers (both HDB and private developers) to provide air-conditioning frames from materials which would not deteriorate over time, and thus cause a potential danger in the future. I wonder whether HDB has a moral responsibility to replace the existing wooden frames in HDB estates. Do not forget, Sir, it is not only those who install air-conditioning units on wooden frames that cause the problem, but the frames themselves cause a problem as well for those who do not have an air-conditioning unit. This is because as the wooden frame deteriorates, there is the problem of water leakage which they have to solve. I would urge the Senior Parliamentary Secretary to consider whether HDB would replace the wooden frames as a matter of goodwill, as a one-time basis.

Mr Speaker, may I take the last question first in answer to Mr Low Thia Khiang. HDB did provide some HDB flats with wooden frames to facilitate the owners to put in their window air-conditioning units. These wooden frames were placed on a goodwill basis because there were requests prior to HDB's guesture. In the past when HDB did not provide the frames, owners had to hack a big hole to insert the air-conditioning unit into the hole. Then they have to fix the air-conditioning unit into the hole by inserting wooden frames on the four sides. HDB is unable and will not replace the wooden frames for the flat owners because this was done on a goodwill basis. Any wooden frame that has deteriorated over time should be replaced by the owner. Once the owner takes over the apartment, it is the owner's responsibility for maintaining all the internal fixtures within the flat. Having learnt the lesson, what is HDB doing now? For the new generation flats, HDB is putting them in the service balconies. If you look at the new generation flats, you will find that there is a service balcony where owners can put in their split condensers. At the same time, HDB has also explored areas within the wash areas. We have put in the ledgers with railings to mount the air-conditioners. This is to facilitate replacement. So HDB has progressed ahead and we are now tackling a problem that is actually rooted in the past. We are asking the owners to look at their wooden frames and take the effort to change these wooden frames within one year. Is one year sufficient time to change all the 65,000 air-conditioning units, of which 45,000 are in HDB flats and 20,000 in private estates? We have a pool of 4,000 trained workers certified to install steel brackets on to these existing air-conditioning units. We have an existing problem of 65,000 air-conditioning units. So there should be enough time. We have 4,000 workers and we expect more workers to be trained. What is the qualification of a worker? It is not very high because it is a very simple task actually. We require a person to take a test. If he says he is qualified, he has the skills but he has no certificate, we will require him to take a test. If he says, "I do not know how to do the installation", then he undergoes a course. The course is 17 hours conducted by BCA at the Construction Industry Training Institute at Braddell Road. The course fee is $410 per participant and we conduct the classes in Mandarin or English, or if there is enough critical mass of about 24 students, it can be conducted in any dialect or language. Companies can sponsor their workers for this course. They can pay a one-time fee of $9,840 for one class organised for a company. We have settled the problem whether there is sufficient time. The answer is yes. Are there enough workers? The answer is also yes. What is the best approved material? At this point in time, we think stainless steel is the best material. That will be in the subsidiary legislation. Stainless steel is relatively cheap, readily available and easily installable. Mr Kenneth Chen talked about noise pollution problem. Yes, it is indeed a problem. As the air-conditioning unit ages, the noise level does go up. I will refer the problem to the Ministry of the Environment. They have a Noise Pollution Unit which monitors the noise level of air-conditioning units and other industrial machineries. As regards drainage problem, before HDB allows an air-conditioning unit to be installed, the person who installs the air-conditioning unit must satisfy HDB that the drainage problem is solved before we issue a permit for the air-conditioning unit to be installed. I do not think this is a serious problem. But at the MUP stage where old flats are undergoing MUP, various MUP committees have tackled this problem systematically and some of them actually put a pipe all the way down from the top floor to the bottom floor so that the window air-conditioning units can be connected to such an improvised down pipe. But this is a system solution which can only come about when there is a MUP. But for individual cases, they have to solve it within the unit. Usually, what they do is that they bring the pipe back into the bathroom or into the toilet. On Mr Ang Mong Seng's question, he suggested that we should not license the workers but we should license the companies. It is difficult to license the companies. In any case, it is not a very difficult job to install steel brackets to window air-conditioners. If we license companies alone, I think it will be making a big deal out of a small problem. In any case, there will not be enough companies. We have 4,000 workers. We do not have 4,000 companies. And we have set a time limit of one year because we think that while the problem is not severe enough, there is a possibility that one or two air-conditioners might fall off in the one-year period. So we want to be very safe, we want to make sure the problem is solved in as short a time as possible, and we want to allow a qualified competent person to do the job. I think a trained worker with a certificate from BCA can do the job. In any case, companies come and go, and there is no assurance either. Mr Ang Mong Seng suggested that after the completion of the job, the trained worker or the company should stick a label there to certify that the job has been done satisfactorily. I will pass this back to the BCA and HDB to ask them to consider. But, off my head, I think that the sticker solution may not be a fool-proof solution because you can always tear off a sticker or you can stick on a fixed sticker. But anyway it is one area we can look at and I will ask the authority to look at it. Exemption for flats undergoing MUP and IUP is something that I will talk to HDB and we will see what we can do. The Member was suggesting that flats which have been targeted for SERS should be exempted. A SERS programme takes five years from announcement to completion. So five years is a very long time. If it is for SERS, I would be very reluctant to exempt them because it is a long time. Because when we announced, for example, the en-bloc redevelopment at Hillview this year, it will take some time for the residents to be physically relocated to the new location. So in five years' time anything can happen. But the Member's area is a new area, so probably steel brackets are already in place. But anyway I will ask HDB to look at it. But off my head I think we should think through this again. For MUP, maybe we can look at it. MUP could take two to three years. The time-frame is much shorter. But in any case, if the wooden frame needs to be changed, it has to be changed, and I think we should not compromise on safety. I think I have answered all the questions. If I have not, please remind me.

Mr Speaker, may I clarify with the Senior Parliamentary Secretary. The Senior Parliamentary Secretary in his answer says that the wooden air-conditioning panel and the opening were provided by HDB on a goodwill basis. But I wonder whether all owners would want this goodwill in the first place because I notice a lot of them do not use the air-conditioner opening provided. Either the position is not correct or it is going to cause problems to them because of noise nuisance. But bear in mind that this is initially a goodwill. When the Bill is passed, it becomes a "bad will", because if you do not do anything to it and it drops off, it is your responsibility, and you are going to be punished under the Act. So when the goodwill becomes a problem, would the HDB not be responsible to at least help to facilitate the owners with this goodwill provided by helping them to solve the problem? So can we have another goodwill from the HDB to replace the wooden air-conditioning panel?

Sir, just a point of clarification. Can the Senior Parliamentary Secretary tell us how much does it cost to replace a wooden set into a stainless steel set?

The cost to replace the wooden frame with stainless steel brackets is very small. It is about $200 to $250. That includes labour and parts. It will only take a few hours. Back to Mr Low's problem. He said that many flat owners do not use the wooden window frame. If they do not use the wooden frame, that means there is no air-conditioning unit there and the air-conditioner cannot fall off. So there is no problem. But if they do use the window frame to put an air-conditioning unit there, then they have used up the goodwill, in which case if the wooden frame were to rot, then the owner must replace the wooden frame with steel brackets.

Leakage.

As a flat ages, there will be minor problems. Just like when we age, we will have minor ailments. It is not for the Government to treat us. We must treat ourselves. Similarly, you live in a flat, you cannot expect HDB to go in and fix every small little problem. Over time, rubber seals will drop off, doors will not hang well, things like that. Deterioration of these things is normal over time.

I am not sure whether the amount quoted by the Senior Parliamentary Secretary is a reasonable one because I did check with Prof. Low Seow Chay just now. And he told me it costs only about $100.

Sir, just now I proposed that stickers be provided by HDB and not by a trained worker. Because after installation, I think the HDB should send their staff to make an inspection to make sure that everything is installed according to the standard. The stickers should be provided by HDB and not by the trained worker.

$100 is a good deal. We are talking about good stainless steel. Anyway, the figure I have is about $200 to $250, including labour and parts. After the installation, Mr Ang suggested that HDB should inspect the installation and then certify it. I will ask HDB to look at it. But I think it is really unnecessary. What is the purpose of certifying the worker? We have trained the worker and certified him. It is a relatively simple job, and to ask the HDB Branch officer to go and look at it again is providing 200% redundancy. No building authority in the world legislates the installation of air-conditioning units. So we are almost a first here but partly because we have got too many high-rise apartments. But I think it is a very simple problem. In any case, if an air-conditioner is inserted into a hole, by itself it will not drop because there is a fulcrum and friction effect. In the case where the hole is too big, you put in a wooden frame to make the hole smaller, again there is a fulcrum effect, and the window does not fall off. Now we are saying we put steel brackets to reinforce that installation and fix the steel brackets onto the wall, we are providing already 100% redundancy on top of the wooden frame support. I think with the steel bracket installation, the window unit should not fall off at all. Anyway, I will take the Member's suggestion. I will ask HDB to look at whether it is implementable or not. But I think it is really unnecessary.

Mr Speaker, Sir, how about the casing of the air-conditioner that is corroded? The owner has failed to maintain it and the whole motor can fall out as well. Is that covered under the Bill?

Mr Speaker, Sir, anything the owner puts up, the owner must bring down before it hits somebody's head.

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. Koo Tsai Kee]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, this Bill seeks to amend the Bankruptcy Act to put in place measures in support of the Technopreneurship 21 (T21) initiative and to make related amendments to the Business Registration Act and the Companies Act. Members will recall that the Bankruptcy Act had a major and fundamental revision in 1995 aimed at encouraging entrepreneurship. The Bill therefore does not seek a fundamental overhaul of the bankruptcy regime. Instead, amendments are proposed to fine-tune our legislation to encourage technopreneurial activity and to enhance Singapore's entrepreneurial climate. Voluntary Arrangements Sir, in 1995, to promote entrepreneurship, a reorganisation regime called "Voluntary Arrangement" was introduced to provide an avenue for debt settlement without resorting to bankruptcy. This however has not been widely used. As greater use by debtors of Voluntary Arrangements will reduce the incidence of bankruptcy, this process should be encouraged. The measures proposed by the Bill to encourage use of Voluntary Arrangements are as follows: (a) Firstly, the amendments extend the deadline for a bankrupt to make a proposal for voluntary arrangement from 28 days to 42 days. Currently, after the Court orders a moratorium, the debtor has 28 days to make a proposal for the settlement of his debts. The extension of this period to 42 days would allow more time for the debtor to put up a proposal and increase the chances of Voluntary Arrangements succeeding. (b) Secondly, the amendments allow the Minister for Law to make rules prescribing the scale of fees to be charged by nominees assisting debtors in respect of Voluntary Arrangements. The reason for this is that currently, the fees are set by nominees. There is a general perception that fees currently charged are too high. A fixed scale of fees will provide certainty and encourage debtors to make use of Voluntary Arrangements. Measures to allow Bankrupts to be economically productive - Amendments to the Companies Act and the Business Registration Act Sir, the next point is that it is important that a bankrupt remains economically productive even during bankruptcy. This will allow the bankrupt to settle his debts earlier and get out of bankruptcy more speedily. It will also allow the bankrupt to continue contributing economically to society during bankruptcy. Presently, a bankrupt cannot act as a company director or engage in the management of a company or business, except with leave of Court. However, very few bankrupts apply to court for permission to do business, deterred by the costs and trouble of having to apply to Court. The Official Assignee, as administrator of a bankruptcy estate, frequently deals with bankrupts and is more knowledgeable of their affairs. He will therefore be able to consider the merits of each case before he grants permission. Allowing the Official Assignee to grant such permission will also make the process cheaper, simpler and more accessible to the bankrupts. The Official Assignee is also best placed to assist bankrupts and to ensure that a portion of profits made from businesses are paid to creditors. The Bill therefore proposes: (a) to amend the Companies Act to give the Official Receiver power to allow bankrupts to be company directors and be involved in the management of companies; and (b) to amend the Business Registration Act to give the Official Assignee the power to allow bankrupts to be engaged in the management of business. Sir, keeping this as a discretionary measure allows persons who become bankrupts through misfortune to be differentiated from those who have become so through malpractice. It would also encourage bankrupts to co-operate with the Official Assignee to expedite their discharge from bankruptcy. These cannot be achieved by total lifting of restrictions against bankrupts doing business. Measures to speed up the bankruptcy discharge process in deserving cases The Official Assignee takes into account the cause of bankruptcy and the efforts made by the bankrupt to repay his creditors when deciding whether to discharge a bankrupt. This scheme which was introduced in 1995 with a major revamp has the advantage of being an inexpensive way of discharging deserving bankrupts expeditiously, whilst creating an incentive for bankrupts to work towards their discharge. It also serves to promote entrepreneurship without eroding financial discipline and commercial morality. Indeed, Sir, the scheme has worked well and has been rated by the Commonwealth Association of Public Administration and Management in 1998 as "truly innovative and worthy of recognition" with the Insolvency Service being awarded a Certificate of Achievement. In view of the scheme's usefulness in rehabilitating deserving bankrupts, the Bill proposes that the Bankruptcy Act be amended to reduce the period for eligibility for discharge by certificate from the current five years to three years. This will allow the Official Assignee to begin considering a bankrupt for discharge after three years. Sir, let me stress that this is a discretion that the Official Assignee will exercise only in deserving cases. There will be no automatic discharge. This amendment will allow deserving bankrupts to return to society more quickly. The three year period was chosen to provide greater incentive for deserving bankrupts to work towards an early discharge. Measures to streamline procedures and reduce the need to resort to the courts Sir, two amendments to the Act are proposed to streamline procedures and reduce the need to resort to the courts: Firstly, currently under the Act, when a bankrupt makes an offer of composition or proposes a scheme of arrangement, a general meeting of creditors must be convened to consider the offer or scheme. The Bill amends the Act to allow for the offer or scheme to be accepted by the creditors by post without convening a general meeting. Secondly, there are currently two situations where a bankrupt is required to apply to court for a discharge. These are first when a bankrupt has fully repaid all his debts or when the creditors have, by special resolution, accepted an offer of composition or scheme of arrangement from the debtor. Sir, in these two situations, the courts will invariably discharge the bankrupt. The Bill amends the Act to provide for the Official Assignee to issue a certificate to discharge a bankrupt in these two situations. These two amendments, the last two that I have enumerated, would save time and costs and further expedite the process of discharging a bankrupt. Other amendments Sir, in addition to the above amendments, the Bill also amends the Companies Act to increase the debt limit for service of a statutory demand on a company from $2,000 to $10,000. This amendment brings the debt limit for companies in line with the bankruptcy debt limit which has been raised from $2,000 to $10,000 early last month. Sir, in formulating these changes, we have sought to strike a proper balance between the interests of debtors and creditors. We were mindful that over-liberalisation of the bankruptcy regime may erode creditors' rights and make it more costly for businesses to obtain financing. Changes that would work against creditors' interests have therefore been avoided. Instead, the proposed amendments focus on, firstly, facilitating bankrupts to continue being economically active and productive during bankruptcy; secondly, saving costs by streamlining procedures and reducing the need to resort to the courts. These amendments will help to create a climate more conducive to entrepreneurship and responsible risk-taking while preserving commercial morality and financial discipline. They will also help to prepare our people to take advantage of the emerging knowledge-based economy; and, thirdly, these amendments would encourage bankrupts to work towards a speedier discharge from bankruptcy. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I rise in support of the Bill. Any move we make to aid technopreneurship drive is always welcomed, Sir. Bankruptcy and the difficulty of getting a discharge is a major impediment to entrepreneurship. I am delighted that we have progressively lowered the legal hurdle in discharging the bankrupts since 1995. One can only hope that, by lowering the legal hurdle, we can lower the public stigma attached to bankruptcy. Whilst we lower the legal hurdle, I get the distinct impression that we may not be discharging bankrupts fast enough. For example, I am aware of a case in which a bankrupt was in the process of seeking a discharge under the old guidelines. But when the new guidelines were implemented in which the debt was raised to $200,000, he was not given the discharge as he was still governed and considered under the old guidelines. The distinct impression given is that while we have the law, perhaps we are not implementing the law sufficiently fast. Perhaps, the Minister of State would like to comment on how fast we are discharging our bankrupts and the number of cases of discharge that we had done since 1995. Will the new guidelines apply to all cases, even those who are in the process of being discharged under the old policy guidelines? Sir, to improve the rate of discharge, so to speak, I would like the Minister of State to also explain to this House if we have sufficient manpower in the office of the Official Assignee to implement the law. It is one thing to have the law but we do not have the manpower to do that. Lastly, I refer to clause 7 in amending section 125(2) of the Bankruptcy Act. Sir, the time bar of five years which has now been lowered to three years to obtain a certificate is most welcomed. However, I am of the view that the three-year time bar is still an impediment in truly deserving cases since the discharge is not automatic. Perhaps, the Government or the Ministry would like to review a further lowering of this limit, especially in cases whereby the person has started an e-commerce business which is what we are trying to promote. Sir, while we lower the legal hurdle in discharging bankrupts and helping to lower the social stigma, I wish to state that it is still necessary to instill or reinforce the basic fundamental principles that hard work and honesty are integral qualities in commerce. No one should take advantage of the bankruptcy laws to shy away from this obligation to repay his debts and I think the law should not help him in this respect.

Mr Speaker, Sir, I wish to speak in support of this Bankruptcy (Amendment) Bill. As the Minister of State has said earlier, the proposed amendments are in response to measures to be implemented in support of the Technopreneurship 21 initiative. The main objective is to make it easier for businessmen who have failed and are declared bankrupt to have a chance to recover and start afresh in the shortest reasonable time. To enable technopreneurship to thrive in Singapore, we need to create a more conducive business environment and a climate that is more tolerant to business failures. Hence, people who have failed should be given second, third or even more chances to try again. We know of many successful entrepreneurs who have gone through several trials and failures before they finally succeed. While I am generally in support of the Bill, I would like to ask the Minister of State for some clarification on clause 11. Clause 11 empowers the Official Assignee to give permission to an undischarged bankrupt to act as a director of a corporation or to manage a corporation. My query is on the effective implementation of this power given to the Official Assignee. While I agree that it will be expedient for the power to be given to the Official Assignee to allow a person to restart a business, or act as a director, though he is still an undischarged bankrupt, my concern is how would the Official Assignee be able to exercise good judgement on the suitability of a person to continue running a business. Now, the onus of passing the judgement is on the Official Assignee. If the Official Assignee is too lenient and makes a wrong assessment, he may be allowing a crook or a cheat to restart a business and thereafter he can defraud or cheat new and more victims of their money. On the other hand, the clause is welcomed as it gives the Official Assignee the power to allow genuine businessmen who have failed to try again. Perhaps, I would like to suggest to the Minister of State that there should be some means for the Official Assignee to consult, perhaps, a committee or a panel. This panel can comprise experienced businessmen and professionals who can give their independent judgement and views to any bankrupt who applies to be allowed to start a business or become a director. Therefore, this allows our Official Assignee to get some professional advice on this matter. Sir, I support this Bill.

Mr Speaker, Sir, I support the Bill. First of all, I would like to say that I am encouraged that the Minister of State has taken some bold steps in amending this Bill and I am confident that this will be a good signal to Singaporeans and those who plan to become entrepreneurs that we are indeed moving towards an environment where we wish to foster greater tolerance for failure. Sir, many start-ups, especially high-tech ones, are typically risky in nature and not all ideas can develop into successful business opportunities. However, if some of these ideas do become good business ventures, the gains can be tremendous, as evidenced by the many Internet start-ups which have achieved impressive market capitalisation around the world. In cases where a venture fails, the entrepreneur and the investors could suffer substantial losses and our current legislation, especially the bankruptcy law, can be very unforgiving and intolerant to those who dared to take the step towards entrepreneurship and technopreneurship. So I am hopeful that the changes proposed will encourage greater risk-taking among Singaporeans, a trait we lack currently. Sir, in today's context, being a bankrupt is a very big stigma and leaves a permanent scar in their lives. Such people are treated badly by society and not many, especially institutions like banks and Government agencies, will be willing to give them a second chance to try again. While I strongly support the Minister of State's intent to give differential treatment for persons who get into financial problems due to normal business risks versus those who do so as a result of mismanagement and malpractice, the Bill however does not attempt to clearly differentiate the two circumstances and it leaves entirely to the judgement of the Official Assignee. I would like to suggest that the Minister of State consider stating these clearly in the Bill. I believe that business failure need not result in bankruptcy and therefore we should encourage and strengthen the use of informal debt settlement as an alternative and therefore mediation should be made a prerequisite before any bankruptcy proceedings go to the courts. I hope that the requirement of mediation before going to the courts can be formalised in the Bill. This will be a cheaper process and, in my opinion, will give the creditors a better chance to recover their money. I hope the Minister of State will institutionalise pre-bankruptcy mediation in the Bill. This will save many people from the unpleasant experience of becoming bankrupt, a stigma that will last a life time. Sir, sections 95 and 95A attempt to streamline the process of discharge from bankruptcy. By allowing a bankrupt to make an offer of composition or propose a scheme of arrangement without calling a general meeting of creditors will make the whole process less cumbersome. By allowing the Official Assignee to administratively discharge a bankrupt through a certificate after this arrangement is passed by a special resolution means that there is no need to bring the process to the court. Similarly, the new section 123A does not require a person to go back to the courts to be discharged from bankruptcy if he has paid his debts. By empowering the Official Assignee to issue the Certificate of Annulment, or discharge, the process will be much faster, saving both time and cost. Sir, these changes are big steps that show the Government's willingness to help those who have failed to get back to their normal mode of living by removing some major obstacles. However, I would like to ask the Minister of State to clarify whether the Official Assignee will be able to issue such Certificate of Annulment within the minimum three years, as stipulated in the Bill, or will the bankrupt still have to wait for this time period to be up before being eligible for discharge by a Certificate, especially in the case where the bankrupt has already paid up all the debts that he owes to the creditors. This brings me to the next amendment in section 125. I am glad that the minimum period of bankruptcy before a Certificate of Discharge can be issued has been reduced from five years to three years. Can I, however, ask the Minister of State whether he will consider reducing this period to less than three years? At this juncture, in fact, I would like to suggest that we define in our legislation two categories of bankruptcy. One that occurs as a result of failure of business venture especially those of high-tech in nature and, the second, as a result of malpractice and mismanagement. Our current "one size fits all" ruling treats all failures equally and this, in my opinion, will discourage many technopreneurs. Sir, since the Ministry does have the intent to institute a differential treatment for the two categories, I would like to suggest that the Ministry study the proposal of institutionalising a two-tier bankruptcy ruling where those who became bankrupts by virtue of true business failure, without the intent of malice or mismanagement, be allowed an easier option to be discharged. This will achieve two objectives in my opinion. First, it will encourage more people to embark on high-risk technological start-ups and, second, it will allow people who failed to become more productive and to try again at a much faster pace than the current legislation allows. As an example, in the Silicon Valley in the USA, once a person who has become a bankrupt proves that he has no other assets that can be used to distribute to his creditors, automatic discharge is possible. This of course is an ideal approach. This has made Silicon Valley in the USA a vibrant place for many new start-ups because technopreneurs do not have to wait too long before starting up new ventures again. In my opinion, such a change will definitely shift mindsets among Singaporeans towards being more entrepreneurial. By amending section 148 of the Companies Act, we effectively allow bankrupts to be economically productive. This is an excellent move because I feel that this allows many talented people to contribute their knowledge and experience and perhaps even establish successful ventures in the process. It is a waste of our valuable resources by not allowing them to do business or to act as company directors or to manage companies. The new arrangement of empowering the Official Assignee will definitely make it easier for them to become economically active faster. Can I suggest that we take a bolder step by amending this section to read as follows: "Bankrupts should be allowed to act as company directors unless the Official Assignee disagrees." In this approach, such bankrupts would automatically be allowed to do all the things that we have mentioned without getting permission, but if someone wants to object, then the Official Assignee can come in and take action based on that objection. This would give a more positive outlook to our legislation. One last comment I have is on section 254(2)(a) where the debt threshold for filing bankruptcy has been raised from $2,000 to $10,000. While the increase looks big and is welcomed, I feel that many high-tech start-ups can be very much more expensive than the $10,000 and this $10,000 limit may not be helpful if such ventures fail. Here again, having a two-tier bankruptcy rule where perhaps, we set a much higher limit for high-tech start-ups and for ventures that require a lot more capital to be accorded a different limit. In conclusion, I would like to add that the changes proposed in this Bill reflect the desire of the Government to promote a conducive environment for technopreneurs and will give a good signal of the type of changes we need to make for T21 to be successful. I hope that this will not be the end of the changes we are willing to make to this Bill and I hope that the Minister of State will be willing to be more aggressive and consider some of the recommendations I have made in reviewing the Bill again in the near future. Sir, I support the Bill.

Mr Speaker, Sir, before commenting on the Bill, I would like to declare my interest as a lawyer in private practice where from time to time, I advise clients on bankruptcy and insolvency matters. The amendments to the Bankruptcy Act, the Companies Act and the Business Registration Act proposed under the Bill seek to put in place important measures in support of the Technopreneurship 21 initiative which we are promoting in Singapore. The proposed amendments are welcomed as concrete and practical measures to relax the rules and procedures affecting bankrupts in Singapore. It is hoped that these changes will help encourage greater risk-taking amongst entrepreneurs and would-be entrepreneurs and will reduce the unnecessary restrictions and burdens on those who may have failed in previous business ventures but have the resolve to try again. In line with the measures to encourage the bankrupt to work towards a speedier discharge of his bankruptcy, perhaps the Minister of State could also consider relaxing the conditions for bankrupts to travel and work outside Singapore. I have come across a number of cases where the bankrupts have failed in their business ventures in Singapore, or had been structurally retrenched from their jobs, but who are willing to travel abroad to take up employment opportunities in other countries in order to earn a living to provide for their families, to repay their debts and to secure a discharge of their bankruptcy. We have discussed on many occasions in this House the problems of structured unemployment . Where a person is retrenched because of the particular industry he has been engaged in is going through a period of consolidation and structural changes, it would not be easy for him to find another job in Singapore. And it would be a double whammy for that person if, because of the financial difficulties arising from unemployment, he is made a bankrupt as well. Under the existing rules, a bankrupt has to seek the permission of the Official Assignee (OA) to do so. However, such permission from the OA may be declined or delayed for a whole host of reasons. One of the key concerns is in ensuring that the bankrupt would fulfil his obligations towards his creditors and the OA when he is free to leave the country. Yet, the job abroad may offer just the most crucial opportunity for the bankrupt to turn his life around. Therefore, I believe that we should find ways of fine-tuning the present conditions to allow the bankrupt to work overseas while at the same time securing his return to repay his debts. Although changes to existing legislation are necessary for the changing needs of our society, we must of course bear in mind the need to balance the interest of the individual bankrupt and those of his creditors. It is also important that the new rules are not open to abuse. In this connection, I would like to make the following comments on some of the specific provisions proposed under the Bill. First, the proposed amendment to section 95 of the Bankruptcy Act is intended to simplify the existing procedures for a bankrupt to propose the composition and scheme of arrangement of his debts to his creditors and to obtain their approval. The composition or scheme of arrangement may under the re-enacted section 95 be voted on at a physical general meeting of creditors, or the votes may be put in writing through the post by the creditors. This makes it easier for compositions and schemes of arrangement to be settled conveniently and with less hassle. However, the new section 95 provides that anyone who fails to attend a meeting of creditors or who fails to signify his assent or dissent in writing is taken to have voted in favour of the resolution. This is different from the present position whereby such a creditor's debt will merely be disregarded in calculating the percentages of rates for or against the resolution. The new provision appears to detract from the fundamental principle of law that silence is not assent. The objection to this is not merely academic, as the effect of a successful composition under the new section 95 is that the rights of the creditors may be affected, ie, that they may have to accept less than 100% of their debt or compromise their priority status in the ranking of creditors. While the new procedures are in general welcomed, I wonder if it would be going too far to put undue pressure on creditors with these technicalities. A creditor may fail to attend a meeting for good reasons, for instance, the notice for the meeting may have gone astray. Further, could the Minister clarify what is the result where nobody attends the meeting or replies to the OA's invitation to vote? As there is no longer a requirement for a quorum, it appears that composition will go through with 100% voting in favour. My second point relates to clause 8 of the Bill. The proposed section 157 deals with service of "any summons, notice or document" and is thus wide enough to cover service of statutory demands and creditors' petitions. The old section 157 made it clear that it did not apply to the service of any document for which a special mode of service had been prescribed. Thus, the old section 157 operated without prejudice to the rule relating to personal service of statutory demands and the rule relating to personal service of petition. The new section 157 is not restricted in this manner and by reference to the rules, it appears to be intended to override the rules and thus will conflict with these rules. The new section 157 should therefore make it clear whether it is to operate without prejudice to the rules or notwithstanding the rules. My preference is that it should operate notwithstanding these rules, which should then be repealed. This will make it easier for creditors to serve such documents on debtors who frequently evade service. However, this may go against the spirit of the amendments which is to be more protective of debtors' interests. Sir, at this juncture I would also like to raise an ancillary point on the present section 123(1)(b) of the principal Act where there appears to be a typographical mistake. The word "paid" in the second line of subsection (b) should read as "proved". This may be a good opportunity to rectify this error. My last point relates to the powers of the court. The new amendments to the Bankruptcy Act, Companies Act and the Business Registration Act will widen the powers of the Official Assignee. Some of these powers were only exercisable by the Court in the past, but now they will be exercisable by the Official Assignee. Indeed, it appears that no procedure has been provided to allow the Court to oversee the exercise of the OA's discretionary powers. There is no objection in principle in giving these wide powers to the OA. However, the law should provide some form of mechanism for a dissatisfied creditor to apply to the Court to review, and if found fit, to have the exercise of the power set aside. Although it is recognised that the OA's office is in a better position than the Courts in many cases to deal with the particular matters which the new powers relate to, there may be special circumstances in which the Courts' intervention may be necessary to bring about a fairer balance between the interest of the bankrupt and those of the creditors. In line with the spirit of the new amendments, such a mechanism for review could take the form of a quick and simple application under the Act rather than by cumbersome procedures for judicial review. Sir, I support the Bill.

Mr Speaker, Sir, I thank you for giving me this opportunity. Sir, I support the Bill. May I suggest to the Minister to consider changing the title of the Act from "Bankruptcy Act" to "Insolvency Act". "Bankruptcy" is a much disliked word these days. We have transformed our bankruptcy law in the last few years and this is very progressive, and I would like to thank the Minister for taking the initiative and bringing in the amendments at such a short notice. I also have some suggestions. Could the office of the Official Assignee and Public Trustee be corporatised to be more service-oriented in the long term? I am not suggesting that it should be done today. But we should look into this on a long-term plan. I have at the 1998 Budget debate praised the good work of the Official Assignee and Public Trustee. In fact, my feedback is this. I have had some dealings with the Official Assignee and Public Trustee and the department has improved by leaps and bounds. I have seen how effectively a bankrupt's case is being managed now and dividends paid at a shorter period than it was previously. What used to take a few years now takes a few months. The backlog has been cleared not only in the judicial system but also by the Official Assignee, and I think this House should be grateful for the work done by this department. It is very important that businessmen who have failed should be given a second chance. This would encourage entrepreneurship. I am glad that under clause 4, creditors can accept composition of this scheme by special resolution. This clause lays down the procedure for doing it. I do not have to repeat it. It is gratifying to note that under section 35A of the Act, the Official Assignee has the power of annulment before going to Court. Previously, applications had to be made to Court and it was expensive and time-consuming. Now, this power is vested in the OA and it is a very laudable clause. I am a little concerned about subsection 2 of this section. It says that "notice of annulment shall be advertised in the Government Gazette in any local newspaper". I think, in fairness, Sir, the advertisement should be in one English newspaper and one in a vernacular language newspaper. The decision should be left to the Official Assignee as to which newspaper he wishes to choose. But perhaps one consideration should be the debtors. If the debtor is an Indian, he may want to publish in Tamil Murasu. Similarly, if he is a Malay, he may want to publish in Berita Harian. I think we should bear this in mind. Another suggestion is that the Official Assignee should farm out some of its work to accountants and lawyers. This would give an opportunity for young lawyers and young accountants to practise some insolvency laws as well. Similarly, I welcome section 123A. It allows for annulment of bankruptcy orders for debts that are being fully paid up. I am also glad that section 157 has brought about fundamental changes. Previously, we had what is called "personal service". New section 157(1) says that service could be effected by: '(a) delivering it to him; (b) by delivering it to any adult person residing at his usual or last known place of residence .; (c) by leaving it at his usual or last known place of residence or business; or (d) by forwarding it by registered post in a cover addressed to him at his usual or last known place of residence or business or at any address furnished by him.' The other thing I am glad, Sir, is the composition that the Minister has mentioned earlier. I am glad that it has been done. Sir, I have the benefit of going through Mr Inderjit Singh's speech earlier, and I support his call for a two-tier category. I think it is something that is worthy of consideration. Although it may not be practical now, I think we should give it serious thought. Sir, this is a very judicious Bill. The interests of the creditors and the debtors have all been taken into account. Finally, I owe it to the Attorney-General's Chambers. I wish to congratulate them for this Bill which is in simple language. Plain English is taking place now and I am glad. Perhaps the Minister could write a note to the Attorney-General's Chambers on this.

You write.

Thank you, Mr Jeyaretnam. I will do it.

First, let me thank all the speakers who have spoken. Sir, indeed, as the speeches have underscored, it is important to keep a proper balance between the interests of the creditors and the debtors. There were some speeches in this House which have reflected some concerns of debtors, and other speeches in this House asking for more, reflecting concerns of creditors. I think this is something which we always keep in mind. I am glad that Members can see that in other exercises concerning bankruptcy laws which we had, first, the revamp in 1995, and then we continued to fine-tune the law over the last 2-3 years, we have kept this balance in place. Indeed, as one or two Members have asked whether or not there can be further refinements, the answer will be yes, because no laws are cast in stone, particularly laws like bankruptcy and as has been shown from our track record. I think, where appropriate, to maintain this balance in the light of changing circumstances, as have happened, with the drive towards technopreneurship. These amendments have been partly driven by this drive towards technopreneurship. Let me take the points of Members now. On Mr Chng Hee Kok's main point, he says that there are some people who still see bankruptcy discharge proceedings as being rather slow. I think a lot must depend on the bankrupt. Because in terms of refinements, firstly, to the procedures and, secondly, to the insolvency service of the Insolvency and Public Trustee Office (IPTO), the Official Assignee and his staff have made many improvements to the procedures and process of bankruptcy. Many units, for example, have been formed. One unit, for example, is the Bankruptcy Unit for Discharges, a special unit formed to speedily process all bankruptcy discharges. And it also maintains a hot line to inform bankrupts of the status of their cases. Indeed, some of its innovations, like I have said, have been recognised by other world-wide agencies. One example, besides the one I mentioned in my speech, where the Commonwealth Association of Public Administration and Management recognised its discharge by certificate process, is the fact that the IPTO last year became the first legal institution in Singapore and the first insolvency service in the world to be awarded the ISO 9002. And I am glad Mr Rai, through his practical experience, also testifies to the fact that the processes have improved. I think that is the first thing to note. If there is any delay in the discharge of any particular bankrupt, it is not because of the processes. The OA tells me that he has in fact hired temporary staff when the need arose to cater to the demand. He also tells me that from his experience, there will always be about 20-25% of bankrupts who do not cooperate with his office. They do not file statements. They do not turn up for meetings. So it is a matter of getting people to understand that it is to their full benefit to cooperate with the OAPT, particularly in view of the discharge by certificate process. It has worked for many cases, because this process, in fact, encourages deserving bankrupts to cooperate. And if they do and they fit within the requirements, then the OAPT can consider selecting such deserving bankrupts to be discharged. The other group of people who may hold up discharges are the creditors. So besides the bankrupts, there are also creditors who hold up the discharge process, in respect of offers of composition by bankrupts. They do not respond to the OA's letters, despite many reminders. This can be quite taxing. This is in fact one of the problems being addressed by the Bill, that debtors who come forward, cooperate and who are able to put together an offer of composition or scheme of arrangement should not be held back by creditors who do not respond to the many letters calling for meetings. Mr Chng Hee Kok also asked whether the new guidelines will apply to bankrupts whose process of discharge has begun. Of course, the new guidelines will apply to all outstanding cases. So they will benefit should they satisfy the requirements. Mr Inderjit Singh is another strong proponent for creditors. He applauds the Government for making these innovations to the Bill and, indeed, I want to thank him because I think he captures the spirit behind the Bill, which is to encourage entrepreneurship. On the other hand, like I have said, we have to keep in mind the central point that we want to maintain a balance between the interest of creditors and debtors. So we cannot go overboard. We must keep this in mind, because otherwise if bankrupts are able to get out of bankruptcy too easily without showing effort on their part, that may also increase business costs. That may also increase the reluctance of bankers to lend money. I think that is the central point. His points are well made, but, at the same time, we have to keep this balance in mind. On his suggestion for a faster discharge process for high-tech businesses, as I have said, we have moved it down from five years to three years. The three years will enable the OAPT sufficient time to study the circumstances of the bankruptcy, and will also give the bankrupt an opportunity to show that he is prepared to work with the OAPT. All these factors are indeed taken into consideration. If he does meet the criterion, when three years are up, he will be considered for discharge by certificate. I think we should keep it at that, and not lower the 3-year criterion. Let us see how the process works, and if circumstances warrant it, of course, we can consider it down the road. The idea is not to put this 3-year limit as an absolute bar. If a bankrupt is able to make an offer of composition, which is accepted by the creditors or indeed has paid up fully, then he will be discharged immediately, once the creditors agree. So the 3-year bar is not an impediment in those circumstances. Indeed, the OAPT tells me that there have been bankrupts who have been able to get out of bankruptcy within a week. So a lot depends on how quickly they cooperate. His observations on the importance of pre-bankruptcy mediation are very valid ones. Indeed, Mr Singh will be happy to know that the Ministry of Law is now working with the Official Assignee and the Singapore Mediation Centre on a pre-bankruptcy mediation programme. Once the details are ready, they will be announced. In the meantime, the OAPT is already exploiting mediation, not at the pre-bankruptcy stage, but at the post-bankruptcy stage. A Bankruptcy Mediation Unit was formed earlier this year to provide mediation services to bankrupts and creditors to encourage them to work towards a settlement. I have been told that to-date, 104 cases have been successfully mediated. So lessons which are learned by this Unit can, of course, be applied to pre-bankruptcy processes which are also important, because then it will keep the person away from the bankruptcy regime. Mr Leong Horn Kee and Mr Inderjit Singh also asked about the criteria and the process by which the OA will decide whether or not to allow bankrupts to manage businesses or be directors of companies. Both in New Zealand and Malaysia, it is the OA who grants such permission. The OA is looking into the criteria that are used in these countries before finalising the factors that he would consider. What is important is that in processing such applications, the OA will consider the interests of the public, the creditors and the bankrupt. He will take into account a number of factors which will include, first, the cause of bankruptcy; secondly, previous involvement in a failed business or company; thirdly, liability of the proposed business; and, fourthly, whether creditors will benefit from the proposed business. These are the factors which will guide his deliberations. I have said just now that the OA is well placed to make this consideration because he and his staff deal with the bankrupt on a continual basis. So he will be able to assess not just their ability to pay but their character and whether or not they will fulfil these criteria. Certainly, when he makes his decision, he is not going to act alone. There will be a committee that will assist him in the OA's office. The committee will include other professionals like accountants who can also help him make a professional judgment. Let me assure this House that the OA will make his decisions very judiciously, taking into consideration the factors that I have mentioned. Mr Ong Kian Min asked about this perennial question of travelling for bankrupts, particularly bankrupts who want to work overseas. He says in the past, it was so difficult. The bankrupt works overseas to help him pay off his debts, get him off the bankruptcy, helps everybody, but the bankrupt has difficulty travelling. I think he will be very pleased to know that this is a problem of the past, because the OAPT tells me that in so far as working overseas is concerned, he is now more relaxed. This is set out in a brochure, The Bankruptcy Information Sheet No. 5. There are many such pamphlets and brochures on various matters which have been produced and which are easily available, helping bankrupts along. This one deals with travelling overseas, which says that a bankrupt will be allowed to travel overseas or remain abroad if he is required to do so in the course of his employment. All that the bankrupt needs to do is to produce the employer's letter indicating the need to travel. Indeed between August 1998 and July 1999, there were 1,509 applications for bankrupts to travel for purposes of employment. And of these, only 6 or 0.4% were rejected. So this will be good news for bankrupts. Mr Ong Kian Min makes a few points about the Bill itself. One concern that he expresses is the amendment to section 95, as to the creditors' silence on a composition offer, whether that is unfair to the creditors. On the other hand, other Members who have spoken appreciate the thrust behind this amendment. Because here is a situation where you have creditors who, in the past, might have received letters informing them of the meeting but they did not attend. This holds up the process. Really, the important point is that the notice of the meeting or the notice that they can object in writing must be sent to the creditors. And this will be done because registered post will be used. Since a large percentage of creditors are institutions, companies, businesses - more than 80% - the likelihood of wrong address or the letter not reaching the place is very minimum. Indeed, the OAPT tells me that for many of these situations, creditors who are institutions have written off these debts and are not too concerned. In fact, they may agree to the composition but in the past they have never replied. So this new amendment will help expedite the process. Indeed, this is not a new situation because we have other provisions in our law where silence constitutes consent. Those lawyers who do criminal law will know that. An accused person who is served a notice of warning containing charges made against him, if he keeps silent, adverse inference can be drawn against him. Even in the Act itself, section 126 provides for a similar provision for discharge by certificate of the OA, which says that if the creditor does not object to a notice of the OA's intention to discharge a bankrupt, he is deemed to have no objection to the discharge. So this, in fact, has already been used in the current discharge scheme which has worked very well. It is really just applying it in other situations where it can be seen that from practical experience the OA is very clear that it will help expedite the process. The other point is section 157. Mr Rai also brings up this point. Of course, the amendment makes it easier for various notices and summons to be served. However, in so far as the document relates to the creditor's petitions and statutory demands, the current position of the need for personal service still applies. It must be so because these amendments are to help the bankrupt. It is not to dispense with personal service where the creditors want to petition him for bankruptcy. This is done because there are express provisions in the Bankruptcy Act (sections 52 and 62) which specifically mention that these documents are to be served in a manner which is prescribed, and the rules in fact prescribe personal service. These sections clear up this point. The other point that Mr Ong mentioned is recourse to courts. I do not know whether he knows that section 30 in the Bankruptcy Act states very clearly that the OA is subject to the control of the court, and section 31 specifically empowers the court to review the OA's act on application of a dissatisfied bankrupt, creditor or any other person. This is a very simple process. All it entails is an application to court which would be heard in chambers, like any other summons. Even though the Act does give more powers to the OA, firstly, the assurance to the House is that the OA, as the record shows, will exercise these powers judiciously. Secondly, these amendments are procedural rather than substantive. Thirdly, sections 30 and 31 will enable recourse to the courts by any dissatisfied bankrupt, creditor or any other person who may want to seek redress from an OA's action. Mr Rai makes two suggestions, one complimenting the Attorney-General and the other about improving service in the IPTO. I think he will know that the IPTO was made an autonomous agency some years ago and that has improved its services. Of course, if the need arises, and if it is useful for it to be corporatised, that can be considered.

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

Resolved, That the proceedings on the remaining items 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 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

Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with Section 4 of the Foreshores Act (Cap 113) approves the reclamation by the Government of the foreshore and seabed at Jurong Basin containing an area of about 7.44 ha as shown coloured pink on the plan marked 'LAND OFFICE RECLAMATION PLAN NO 6/99', which is deposited in the Land Office, Singapore. Sir, the Ministry of Trade and Industry proposes to reclaim approximately 7.44 ha of foreshore and seabed at Jurong Basin. This is shown coloured pink on the plan marked "Land Office Reclamation Plan No 6/99", a copy of which is displayed in the Library of this House for the reference of hon. Members. Upon completion of the reclamation, the land will be used for general industrial use. The works will commence immediately upon approval for reclamation and will be completed by the first quarter of 2001. Jurong Town Corporation will oversee the reclamation as agent of the Government. Sir, I beg to move.

Question put, and agreed to. Resolved, That this Parliament, in accordance with Section 4 of the Foreshores Act (Cap 113) approves the reclamation by the Government of the foreshore and seabed at Jurong Basin containing an area of about 7.44 ha as shown coloured pink on the plan marked 'LAND OFFICE RECLAMATION PLAN NO 6/99', which is deposited in the Land Office, Singapore.

This motion is subject to signification of support by at least one Member. Does the motion have the support of any other hon. Member? Dr Lee Tsao Yuan raised her hand.

Yes, Dr Lee. Mr Rai.

Mr Speaker, Sir, I am grateful to you for giving me this opportunity and allowing this motion to stand on the Order Paper. Sir, I beg to move, That this House endorses the Principles for Determining and Safeguarding the Accumulated Reserves of the Government and the Fifth Schedule Statutory Boards and Government Companies as set out in the White Paper (Paper Cmd. 5 of 1999) [presented to Parliament on 2nd July 1999]. Mr Speaker, Sir, after listening to the Prime Minister, the Senior Minister and the Minister for Finance yesterday, I was in two minds about whether I should proceed with the motion. Some Backbenchers felt that I should not proceed. I have considered the position and I am going to proceed with this motion. Sir, the Principles laid down in the White Paper were arrived at after consultation with the President and the Government. It is reassuring to note that if any issues arise and are not addressed in the Principles, the parties will resolve in accordance with the spirit and intent of the Constitution. I repeat the words "spirit and intent of the Constitution". This is in keeping with the spirit of conciliation and consensus we are trying to build in this young republic. It is a part of our Shared Values as well. On the importance of the Principles, I can do no better than to quote the President's letter. I quote: "will make for greater certainty and clarity in approaching matters affecting the reserves". Here again the key words are certainty and clarity. The White Paper will serve as a public record of the convention, and convention forms an important branch of constitutional law. Sir, the White Paper will become an important reference point in future. May I have your permission to quote from the document itself: "The constitutional practice embodied in these Principles is open to future evolution and refinement by future Presidents and Governments. This is necessary as over time the Government will make new transactions and policies, and the Principles will need to be extended or adapted to deal with these presently unforeseen situations." By endorsing this motion, we would be giving the Principles sanctity of a resolution which I think this White Paper rightly deserves. It will gain public confidence and it will have the approval of the highest forum of the land, that is, this Parliament. Mr Speaker, Sir, our Elected Presidency is a new institution. It will take some time to shape. We must give the institution a chance to develop. We must not get ourselves unduly concerned if there are minor differences as to the methods of achieving the Principles enshrined in this White Paper as well as in the Constitution. As a practising lawyer and a student of constitutional law, let me share with this House my belief in the Constitution. In our Constitution, the President is still the titular head of state. He is elected by the people but he has no executive power. He acts on the advice of the Cabinet but he is given extra powers to protect the reserves as well as the integrity of the civil service. He has veto power dealing with religious harmony and ISA. If there is a hung parliament, as it happens in India, he plays an important constitutional role in appointing the Prime Minister. Let us pray and hope that we do not have a hung parliament in Singapore. The President does not have the power to initiate policies. This still remains in the domain of the government of the day which derives its legitimacy from the mandate it obtains from the electorate at General Election where political parties offer their policies to the electorate. The President does no such thing. The Presidential candidate does not go before the country with any political platform. Mr S. R. Nathan has not gone to the country with any political platform. He asks the country to give him the mandate to discharge his constitutional responsibilities. And I repeat the words "constitutional responsibilities" which I have defined earlier. This distinction must be appreciated. The Prime Minister and his Cabinet are accountable to this Parliament. The President does not have to do so. I want to make this clear because some people think that the power base has changed. It has not. Having said that, Mr Speaker, Sir, we cannot run away that the President is the Head of State. He symbolises our nationhood. We owe our loyalty to him. He bestows honour to our citizens. He is patron to many charities and art groups. In short, he is a symbol of power. It is therefore of utmost importance that the powers bestowed on him should be respected. His standing must never be undermined. He is not the ruling Party's President or Opposition's President. He is our President, the entire country, and we must bear this in mind at all times. Sir, the idea of Elected Presidency came from the mind of the then Prime Minister, Mr Lee Kuan Yew. He has given his thinking during the Straits Times interview recently. Members have read it. I do not have to repeat it. His younger colleagues accepted the principle of Elected Presidency and worked for it. It became an electoral issue in 1988 and the PAP won the battle against the Opposition's call to curtail the power. We have had a lengthy debate on the Elected Presidency. Two White Papers were published. Public hearings took place in the Select Committee where there was an exchange of ideas. And I think some of the ideas from the representors were in fact incorporated in the Bill. Because of the nature of the office, in my submission before the Select Committee, I had pleaded that the Presidency should be above party politics and I am glad all political parties have done so. While the Cabinet and other MPs are entitled to support the Presidential candidates, political parties must never get involved in the campaign for the Presidential Election. Otherwise the President will be beholden. Sir, I have a terrible dislike of the word "beholden". Mr Speaker, Sir, the President's address to the press has given rise to public concern about the constitutional mechanism to safeguard our reserves. We must address and answer this question. The Constitution is not a writ in stone. It is a living document that requires changes, interpretation and even amendments from time to time to meet the requirements of the country. If the Constitution has to be amended, so be it. We should debate it in public and see if it could be accepted. The Elected President and the Government have both worked in a very harmonious manner. It must be so. I remember vividly the Prime Minister, who was then the First Deputy Prime Minister, said that the Government was prepared to have its wings clipped. There was no clamour to change the system. The Prime Minister did on his own initiative for the good of the country. The Prime Minister said, and I quote: "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." The Prime Minister has rightly pointed out his position. However, the power base did not change, and in fairness to the Prime Minister he did tell the House, and I quote again: "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." Mr Speaker, Sir, the Government, Ministers and civil servants must at all times try to help the President by giving him the necessary information. If the President and his Council of Advisers are not given the necessary information, then the President is hampered from making his decision. This will do no good to the country. The President must have the right to call for papers and summon officers when the need arises. To assist the President, I am proposing to the Government that a high ranking officer be appointed by the President to assist him. This high ranking officer should have his own officials to assist him. We can call him Secretary to the President. I leave it to the draftsman to think of a name. Mr Speaker, Sir, I am pleased to know that the President has no problem in safeguarding the integrity of the civil service. This is very comforting. I take pride in this because without an honest and dedicated civil service we will never succeed in building a peaceful and prosperous Singapore. Mr Speaker, Sir, another concern in the President's address was the need for a good and honest government. Many of us, especially those who are young, take it for granted that there will always be honest government. We have maintained a high standard of integrity and honesty. It is to the credit of the founding fathers who paid a premium on a clean government. Some younger Members may not remember the clown and corrupt Ministers we used to have in this House. They do not even know who Chew Swee Kee is. It is important that whichever party forms the government, we must maintain this high standard. It is no use having the constitutional protection in the Presidency if we do not have an honest and open government. It is in this spirit that we must institutionalise the process and I urge all political parties in Singapore to make it as a part of their political platform and culture. Corruption here is indeed almost non-existent. Whenever corruption charges are before the courts, the courts take a serious view. Mr Speaker, Sir, hon. Members travel from time to time to other countries. We can see how the customs and immigration officials conduct their work. In some countries, they ask for baksheesh as if it was their birth right. Corruption is indeed almost non-existent here. It is part of a political culture. Sir, I want hon. Members to consider this aspect rather than the earlier aspect more closely. We are a country without natural resources except our people and our system of government. We must institutionalise this virtue of honest Government in every sphere of our life. Sir, like good health, we take good government for granted. Sir, I end my speech with this remark. We are a young nation. Our institutions are still evolving. We must try to evolve a system of government that suits, and I repeat, our social, economic and political needs. We cannot just borrow from other countries' constitution. We must custom-make our Constitution. Sir, in two weeks' time, the President will leave the office. I want hon. Members to join me in thanking him for having discharged his responsibility with dignity and honour. He has won the hearts of the people. The House will join me in wishing him the best in the days to come. Mr President, you have made us proud. I ask hon. Members to support the motion which I have moved and which has the support of my colleague, Dr Lee Tsao Yuan. Question proposed.

Mr Speaker, Sir, I have an amendment to the motion, but before I speak on the amendment, I have a few words to say on the motion itself.

Mr Speaker, Sir, I am objecting to the amendment.

On what grounds, Mr Rai?

Could I have the floor, Mr Jeyaretnam?

You can object to the amendment later, unless you are saying it is a question of principle.

Point of order and clarification as well, Mr Jeyaretnam.

What is your objection, Mr Rai?

May I have the floor, Sir?

Yes.

Sir, Mr Jeyaretnam has totally taken away my motion. It is not an amendment to the motion. He had been the Registrar of the Supreme Court. He knows the procedure very well. He must have my amendment in some form or other. What he has done is that he has completely taken out my motion and put in his amendment, which is wrong. I want a ruling from you, Mr Speaker, Sir.

Mr Jeyaretnam's amendment is before the House. Under Standing Order No. 35, an amendment may be proposed to the motion if it is relevant thereto. The question now is whether the amendment is relevant to your motion or not, Mr Rai. Erskine May is very clear on this matter. It states that the object of an amendment may be either to modify a question in such a way as to increase its acceptability or to present to the House a different proposition as an alternative to the original question. This latter purpose may be effected by moving to omit all or most of the words of the question after the first word "That" and to substitute an alternative proposition which must however be relevant to the subject of the question. Looking at Mr Jeyaretnam's amendment, I find that the words in his amendment are relevant to the subject under discussion and that, being the case, I rule that Mr Jeyaretnam's amendment is in order. You may proceed, Mr Jeyaretnam.

Thank you for your ruling, Sir.

Thank you, Mr Speaker, Sir. I hope you will give me another five minutes stolen by Mr Rai.

I am sorry. You still have 30 minutes from the time you started.

From now?

From the time you started.

Thank you, Mr Speaker, Sir. As I said, I have a few words to say on the motion and that is, first of all, I must express the amazement I felt when I received the notice from the Clerk that Mr Shriniwas Rai was moving this motion. If any motion is to be moved, I would have thought it would have come from one of the Ministers of the Government. They are the party to this agreement, not Mr Shriniwas Rai, and he is not a Minister of the Government, unless he thinks he is a member of the Government already.

Mr Speaker, Sir, I think it is a very uncalled-for remark. I am not part of the Government and I do not aspire to be part of the Government.

So I was surprised to see that it comes from a Nominated Member of Parliament. Be that as it may, it is my proposition here that this agreement has lost all its validity now. Mr Ong assumed the post of President in 1993 and just three months before he leaves his office, an agreement is presented, setting out what should be the pattern of behaviour between the Government and the President. One would have thought that as soon as the President has been appointed the first thing to have done would be to come to an understanding on how the institution was going to be worked, but, no. What is more surprising is that it comes after the Government would appear to have made known to Mr Ong that it would not support his re-election. We were told by the Prime Minister yesterday that it was in February of this year that Mr Ong mentioned to him that he might seek re-election. And then, apparently, the Cabinet immediately got into a huddle about it, called for the medical reports and then informed him that the Cabinet could not support his re-election as President. What is the purpose of having this agreement when there was going to be another new President? Should you not wait until the new President takes office and then have the agreement? So I do not see that there is any purpose in debating this agreement at the moment. Thirdly, there is the Constitution which sets out clearly, I should have thought, the powers of the President and that, according to the President, was not being strictly observed. So what guarantee is there that this agreement will be strictly abided by? I think it is a waste of time at the moment debating this agreement. But I have something more serious. The question that I am going to raise before this House is whether the PAP, when it instituted this office of an Elected President to have executive powers over the Government, was serious or whether it was all a show. I am going to explain why I ask this question. The question that has to be answered is: was all this just a show, a pretence, a game of make-believe or did the Government seriously intend to do what it said it was proposing to do? What was the promise that was made in July 1988 to the people of Singapore in the White Paper? There was great publicity given to it, although there was not enough public debate, and the analogy of the second key was used that the President would have the second key; the Government cannot open the safe unless the President himself joins in and opens the safe for them. It was said that if the Government wanted to spend any past reserves, it must obtain the concurrence of the Elected President. This was to be a precondition, according to the PAP. And what is more? The White Paper went on to say, in grand words, "The legitimacy and moral authority of the President can only be derived from the will of the people as expressed in an election." He must have the moral authority and that moral authority must come from the will of the people as expressed in an election. And then the White Paper continues, "The President will have the discretion to withhold concurrence to decisions of the Prime Minister and Cabinet on the spending of reserves and assets. For a Cabinet decision to be valid, the second key must be used." And what is important is that the White Paper sets out, "The President shall be entitled at his request to any information on matters requiring his assent. All public officers [mark these words] will be placed under a legal duty to inform the President whenever assets or reserves are to be used or pledged." So this is what the PAP Government was telling the people, "We are an honest, good Government. We are now providing you with a second safeguard. He is going to safeguard your reserves." When the Bill was presented in Parliament, the mover of the Bill, our present Prime Minister, then the First Deputy Prime Minister, said again that "The President will have the right to veto budgets if they draw down past reserves." Bear in mind that these words have been quoted by Dr Lee yesterday. Bear in mind that in introducing this Bill, the present Government was saying it was, in fact, "clipping its own wings". "Clipping its own wings" means that it is depriving the Government from doing something which it previously had the power to do. There is something else to it where he says, "This Government will have some of its powers checked." And he says in the Third Reading, "I am putting my money where my mouth is. I am subjecting my Government to these new checks and balances." In other words, he said he would accept the authority of the President over these matters and he would be subject to his decisions. That was the promise and the people were told "we are honest men, we are men of integrity". The Government would not wait for any loss to occur and was taking all sufficient safeguards because Parliament was not competent at the moment. And why was Parliament not competent? It was simply because Parliament was deprived of an effective opposition. It is very heartening when, at last, the Senior Minister has come to the realisation about the role of an opposition in Parliament. He has said what we have been saying all along, that if you want a check on Government, then vote in the opposition. And we hope the electorate will remember that. Have the opposition in. So that was the promise of the PAP when they introduced the office. But what is the reality? We now hear from the President in his press conference that it was not exactly what the PAP had promised. The President was, one could see, very restrained when he spoke to the press. He pulled his punches. But despite all that, it was quite clear to anyone reading between the lines that the President was disillusioned with what was promised and the reality. He spoke of a long list of problems. I am not going to go into all what he said because I do not have the time. Yesterday, we heard from the Minister, and no less than the architect of this office, and the Prime Minister replying to the President. I am not here to make a judgment on who is right and who is wrong. The President was accused of not setting out facts accurately. They did not exactly call him a liar but they said he was not setting out the facts accurately. May I tell the Government that if you think this matter should be cleared once and for all, then it should not just be brought before the House in a debate. You should have a committee to look into it and to report on the situation that existed between the President and the Government. And I am commending to the Government that if they are really serious, they appoint a Parliamentary committee consisting of the three opposition MPs and three backbenchers from the Government to consider the difficulties that the President said that he had experienced. Now that the President is leaving his office, he can be summoned by that committee to answer questions and to explain everything. And so can the Government Ministers be summoned by the committee. If you are serious, that is the only step open to you. But we do not have to accept everything that the President has said. The Senior Minister - I am sorry he has left the House as soon as I started to speak, I wish he had stayed on - attempts to explain and I see he has, in his explanations revealed the intention of the PAP, knowingly or unknowingly. He has revealed the truth. He says, "There are a lot of misconceptions." I do not know there were a lot of misconceptions. But if there were misconceptions, who is responsible for those misconceptions? If you say something and the listener or the reader understands it in a different meaning, then it is obvious that you have not made yourself clear. But I thought that the Government had made it clear. But he says, "There are misconceptions." Then who is responsible, if not the PAP Government? He says, "No executive power was granted to the President." Are we playing with words, Mr Speaker, Sir? Here was the Prime Minister saying in this House, with this office we are "clipping our wings". We are subjecting ourselves to the President's powers." I asked the Senior Minister yesterday that when the President chooses to exercise his veto, is he not using his executive power? The Senior Minister evaded that question and said, "I am not here to argue as to whether it is executive or not." So are we playing with words? Then he said, "It was never intended that the President's office should be an independent office to check on the Government." Has he not read or heard what Mr Goh Chok Tong said when he was moving the Bill? He said, "We are providing an independent body to check. You have this second key held by an independent person." What was Mr Lee doing when Mr Goh said these things in Parliament? Was he not in Parliament then when Mr Goh said that the Government would be "clipping its wings"? He says, "I would never had used those words. It was not intended that the Government's wings should be clipped." Then why did he not correct it then? He was the architect. If he was the architect and he sees the workman putting a brick which should not be put, he should have said, "No, no, that brick is out of place. I did not want that brick there." But nothing was said and the people were allowed to think that the Government was really giving the President the executive power. As I said, we do not just have the President's outburst. We have Mr Lee revealing what he thought were the powers that were being given to the President which was what the PAP intended. But that was not what the PAP said they were giving to the President. So, the question is: was all this a show, a show in front of the public not meant to be carried out, but just a showcase, a pretext? Singapore, Mr Speaker, Sir, is a lot of pretence. We pretend that we have a national press when we do not have any national press. We have a PAP press. I do not want to go on but there are so many other things which are a pretence in Singapore. This episode has attracted attention not only in Singapore but outside Singapore. It has drawn into question the honesty and integrity of this Government. What did it mean to do when it brought this office into being? Did they intend to carry out or was it simply a wayang and the Government continued as it had done previously? Was there any directive to the civil service after the office was instituted that they should provide the President with all information he needed because the White Paper said that that would be the duty of the Ministers and the civil servants. I do not have much more time, Mr Speaker, Sir. I am going to suggest to the Government that it can still redeem itself. It can recover some of the credibility that it has lost and it can only do that if it now goes before the people again and explain to them why this has arisen. I say that, in all decency, this Government should resign and I mean it. It has been shown up to have instituted something which it had no intention to allow to work. It is a confidence trick, nothing short of it. If the Government feels that it is not necessary for the whole Government to resign, then I am sorry the Prime Minister should resign. It was he who promised the people in Parliament what the office would be. He should resign and go to the people. Let us not forget, as I keep saying in this House again and again that it is the people that matter. So we have got to satisfy the people. At the moment, there is a lot of mumbling going on outside this House. There is a perception that the PAP did not want Mr Ong Teng Cheong to continue because they found it difficult to get along with him. So there is a perception which has been lodged with me several times that Mr Nathan is just the Cabinet's man. Of course, we know it. It was revealed to us. It was the Cabinet who chose him. What about the words that Mr Goh used when he asked the House to pass the amendment? May I repeat again: "The President must have, and be seen to have, the legitimacy and moral authority derived from the will of the people [not from the will of the Cabinet, but from the will of people]." Does Mr Nathan have the will of the people?

He was elected by the people!

Does Mr Nathan have the will of the people? We posed this question in a press release but, of course, the Straits Times, true to its tradition of being a servile follower of the Government, does not publish the press release. So I say, Mr Speaker, as we said in this press release, let us stop all this pretence. Let us be honest. Let us go back to the people and explain to them why this has happened. Let the people make the judgment. And I say quite seriously that the installation of Mr Nathan should be postponed and that an Acting President should be appointed until the people are told everything and the matter is resolved to their satisfaction, so that Singaporeans may say honestly and proudly that we have a President that we elected into office, not that we have a President who has been foisted on us by the Cabinet. We have no choice and yet the PAP said, "(its President) must be elected by the people." But after saying it, they went out of their way to see that people will not vote anyone of their choice. So let us stop all this humbug, all this pretence. Let us, as I said, be honest now with ourselves and with the people. The couplet in Shakespeare comes to my mind: 'To thine ownself be true Then it must follow as day follows night Thou canst not be false to anyone' And I tell the PAP Government, be true to yourself. What did you intend when you presented the Bill to change the whole structure of the Government? There is a fundamental change. We, may I say, Mr President, the Workers' Party oppose ---

Mr Speaker, not Mr President!

Order. Mr Jeyaretnam, who are you addressing?

The Speaker. Mr Speaker, Sir, we opposed the Bill. We said that the President should not have executive power. It should rest with Parliament to control the Government. And now, as I said, we seem to have found support from a quarter which we never expected and that is the Senior Minister. Now he says it is Parliament with an Opposition. So, let us reform ourselves. Let us scrap this office of executive President. Let us take steps to see that there is growth of an effective Opposition, so that the Opposition can play its role. If you are honest with yourselves, and you are honest in your determination to do your duty for this country, you will do it. Sir, I beg to move my amendment: To delete all words following "That this House" and there to insert - "regrets that the Government blocked the President's efforts to exercise the powers granted to him under the constitution to safeguard the Accumulated Reserves of the people and deplores the conduct of the Ministers of Government and the civil servants who failed to give the President any co-operation to enable him to discharge his functions."

The Question before this House is the amendment moved by Mr Jeyaretnam. The Question is, "That the words proposed to be left out, be left out." I shall now call on Members who wish to speak on the amendment.

Mr Speaker, Sir, I rise to speak against the amendment proposed by the Non-Constituency Member, Mr J B Jeyaretnam. Sir, many tributes have been paid to President Ong and his devotion to duty, especially in the midst of grief. Many who watched the National Day Parade have remarked on the courage etched on the face of the President, his serenity and composure showing a fine President and a true Singaporean. All Singaporeans owe an enormous debt to our first elected President. That is why I am particularly dismayed and saddened that at the end of his term in office, we in this House have to consider an amendment in the name of the Non-Constituency Member that seeks to bring out all the disapproving and unhelpful elements in an otherwise impeccable Presidential term. The Non-Constituency Member has had many opportunities yesterday to clarify his doubts, and he took advantage of them. He asked questions of the Prime Minister and Senior Minister, and they were answered, though perhaps not in the way he had hoped or expected. Yet, at this time, when we should be considering the positive aspects of the first elected Presidency, we are asked to make deprecatory remarks about the relationship between the President and the Government. Sir, I believe we should reject this amendment and proceed with the original motion standing in the name of the Nominated Member, Mr Rai. The Non-Constituency Member repeated matters that were comprehensively dealt with in the Ministerial Statements. Whilst not wishing to prolong discussion on them, may I just draw on the main points of the two Ministerial Statements yesterday to rebut the Non-Constituency Member's observations that there needs to be a committee of inquiry. First of all, there was no attempt to block the President's efforts to exercise his custodial powers. And that in the one incident referred to regarding the CPF Board, the issue was one of accounting standards and of correctly interpreting the Budget figures, and this is also the case with the meaning of the net investment income vis-a-vis the past reserves. Second, and more broadly, both the Prime Minister and Minister for Finance have reiterated that the Government, ie, the Ministers and the civil service, treated the President with great respect and answered all his queries. There is no failure to give the President the cooperation to enable him to perform his functions. There is nothing to regret or deplore in the relationship between the President and the Government. I believe that Members have all heard the accounts given by the Prime Minister and the Minister for Finance yesterday, and that we are satisfied with the explanations given. There is no need for a committee of inquiry. It is demeaning to the process of government. There is no case for it. The matter has been adequately resolved. Mr Speaker, Sir, we should reject this amendment and consider the very positive effects that have emerged from the first Presidency. The White Paper that has the status of a constitutional convention is a significant document. It shows a close working relationship between the President and the Government, for it is a convention that is reached by consultation and consensus. This does not suggest, as the Non-Constituency Member suggests, a confrontational relationship between the two institutions. Sir, we, in Singapore, have adopted a unique form of government, of two elected institutions - the President and Parliament. We have also laid down in our Constitution that the President generally shall act in accordance with the advice of the Cabinet. The executive powers reside with the Cabinet, which in turn comprises Ministers who are all Members of this House and answerable to it. The principle of parliamentary government remains paramount. This is so whether the President is elected or not, and we are not playing with words. The President is very much like a passenger in a car with his hand hovering over the handbrake in case the driver does something rash. When the car is travelling well, there is no need for the passenger to worry about the driver. It is only when the driver becomes rash or reckless that the passenger would need to have his hand over the handbrake in case there is any unintended danger. The President, as a custodian, has veto powers on the use of past reserves and the appointment of senior public officials conferred on him. The relationship between the President and the Government is regulated both by the written Constitution and by constitutional conventions. That is clearly correct. The use of constitutional conventions allows the President and the Government to evolve and keep in touch with the growth of ideas. Indeed, it keeps the Constitution up to date. Such a convention makes the Constitution a living constitution. For this reason, Sir, I ask that the amendment moved by the Non-Constituency Member be speedily and decisively rejected. 5.15 pm

(In Mandarin): Mr Speaker, Sir, I support the amended motion moved by the Secretary-General of the Workers' Party. In 1990, the PAP Government amended the Constitution to institute the office of Elected President in what was supposed to be a move to "clip the wings" of the Government. Yet, in 1994, the PAP Government again amended the Constitution, and this time, it was to clip the wings of the President. Under the amended Constitution, the President's consent is not required for defence expenditure. Even if he knows it, he has no power to veto it and to make it public. The Monetary Authority of Singapore (MAS) no longer comes under the supervision of the President. There were also some other amendments. As a result, the original intention of having the President to safeguard the national reserves is thus diminished. Although it was said that the Elected President was holding a "second key", the PAP Government changed the lock! It has become apparent to us that it is not the President but the Council of Presidential Advisers who is having the veto power. More than half of the members of the Council of Presidential Advisers were appointed by the Government, and in the event of a tie in the votes, the Chairman of the Council has the last say. Even if the President vetoes the advice of the Council, Parliament can also overturn the President's decision by a two-thirds majority. Under the current circumstances of a PAP dominated Parliament, the Elected President is actually a nominal post. Can he effectively safeguard our national reserves and our security? No. From our experience of the way the first Elected President operated, we can see that this system is not functioning effectively at all. There is no transparency in the workings between the Government and the President. It is only after the first Elected President is about to step down that we see problems exist between the President and the Government. It has already become a thing of the past, and only then do the people know about it. Secondly, the Elected President is actually nominated by the Government. The word "elected" is a misnomer. Even if people were to vote, they can only vote for those whom the Government had certified to be eligible. The public's participation in the whole process is subject to what the Government has provided for them. This system of pre-qualification is ineffective. It has resulted in people who are eligible refusing to offer themselves for nomination, while those who are willing and ready to stand for election fail to qualify under the rules set by the Government. As a result, the candidate endorsed and nominated by the Government just walks in and is returned unopposed. The so-called "election" and "participation of the people" have become just a means to legitimatize the institution. Therefore, the Workers' Party feels that if we want to effectively safeguard the people's assets and the security of the country, we should have more opposition Members in Parliament so that the Government will be checked when it does anything against the interest of the people, they have to face the challenge of opposition and the prospect of losing parliamentary seats in elections. Sir, on 12th August 1988, when the then First Deputy Prime Minister was speaking on the amendment, he said, and I quote: "A weak and/or opportunistic Government together with a weak opportunistic President, and both belonging to the same party. Under that scenario, I think it is hopeless." Those were the words of the Prime Minister. In fact, what the people have to worry about is not a scenario in which there is an opposition party taking over the Government. What we really need to worry is that you have a dominant PAP Government and a PAP approved Elected President but have no effective opposition having the ability to serve as a mechanism to exercise checks and balances on the Government. Under the circumstances, there may come a day when the PAP Government squanders away all the reserves of the nation and then Singapore really is "hopeless", as the PM had said.

Thank you, Sir, for allowing me to join in the debate. I think it is unfair of Prof. Chin Tet Yung to say that Mr Jeyaretnam has been making deprecatory remarks about the President. The Opposition has got nothing against Mr Ong personally. If you look at the amendment made by Mr Jeyaretnam, he regrets that the Government blocks the President's effort to --- Assoc. Prof. Chin Tet Yung rose ---

On what point are you rising?

I am objecting to his saying that I have been asking the House to make deprecatory remarks about the President. That is not what I said. What I said was that we are asked to make deprecatory remarks about the relationship between the President and the Government.

What I am going to say is that the Opposition has got nothing against Mr Ong personally. Prof. Chin tries to draw a scenario where the Opposition is objecting to Mr Ong personally. We have got nothing to that effect. Assoc. Prof. Chin Tet Yung rose ---

Order. Prof. Chin wants to make a clarification.

There is no such implication in anything that I have said. If Mr Chiam had listened clearly, he would have heard the sentence that we are asked to make deprecatory remarks about the relationship between the President and the Government. I said nothing about the Opposition, if he can recall.

I think Mr Jeyaretnam in his reply later on will surely have something to say about the remarks made by Prof. Chin.

Mr Jeyaretnam has no right of reply. Mr Chiam, you may continue.

The Opposition in the 1988 general election opposed the introduction of the Elected President. It had good reasons to do so. It persisted that the institution of the Elected President was installed so that it could be used against the Opposition should the Opposition be elected into power. I can see that some of the younger Members are smiling in this House. They think that the Opposition cannot get into power, but the Senior Minister and the older PAP Members think otherwise. In 1981, Anson was lost. Then in the 1984 general elections, not only two seats fell to the Opposition but, more importantly, there was a 12.3% swing of the votes to the Opposition. That massive swing of the pendulum towards the Opposition shocked and angered the Senior Minister, who was then the Prime Minister. Those Members who watched television at 3.00 on the morning after the polling was over in 1984 would remember the grim face of the Senior Minister. That election result shocked him. He knew that if the pendulum swing continued at that rate, the PAP shall be out of office in another two or three general elections. He took the 12.3% swing of the votes to the Opposition seriously. He knew that if nothing was done, the Opposition shall come into power in 10 or 15 years' time. I believe it was the shock of the big swing of the votes to the Opposition in 1984 that got the Senior Minister to moot the idea of the GRCs and the Elected President, purportedly to preserve national wealth. Members know what happened after that. The election laws were drastically changed to prevent further PAP loss at the polls. The Constitution was amended to bring in the institution of the Elected President to protect and preserve the national wealth. Now that the institution of the Elected President is in place, the Opposition has to make efforts to make sure that the Government abides by the Constitution, and not to ride roughshod over the Presidency. This can easily happen since the Elected President is very much alone. Whereas on the other side, we have an all-powerful, overwhelming Government which could be quite intimidating to the lone elected President. Mr Ong Teng Cheong, the current President, dared to speak up. Many have asked: how come he dares to do so? For the answer, we must look at the man himself. He was a die-hard politician. He has been toughened at the hustings. He was also a trade union man, and not an armchair one at that. I have read that he had led an industrial action once. So he was no pushover. He had guts. He had courage. I believe that it was this nature of Mr Ong which compelled him to speak up to voice his dissatisfaction of the way the Government treated the office of the Elected President. We in the Opposition support Mr Ong's press conference of 16th July. We are happy that he dared to speak out, criticise the Government, and voice his dissatisfaction with the way the Government treated the office of the Presidency. The Elected President has two important custodial powers. One is to oversee new appointments, and the other is to protect the reserves that have been accumulated by previous governments. We in the Opposition shall assist the Elected President to carry out his duties. We shall speak up in Parliament if there is any hint that the Government attempts to block the President's effort to exercise those powers. I support the amended motion.

Mr Speaker, do I have the right to reply to the Member now or do I wait till I conclude?

You have to reply at the end of the motion. Do you want to speak on the amendment?

Yes, I am opposing the amendment. I am prepared to speak at the end of the motion, if I am allowed to.

Yes, you have a right of reply at the end of the motion. But I am asking whether you are speaking on the amendment.

Yes, I am speaking on the amendment. Sir, I ask the House to reject the amendment. Do not laugh, Mr Jeyaretnam, I am coming to it. I think Mr Jeyaretnam forgets that any Member of Parliament can raise any issue in this Parliament. The fact that he has moved an amendment to my motion signifies that I have the right to speak.

Does that mean you do not have the right?

It is for the House to decide whether I have the right or not.

The House has already decided that you have the right.

Thank you. Mr Jeyaretnam has cast aspersion on the office of the Presidency. The President has discharged his constitutional responsibility --- Mr Jeyaretnam rose ---

Order. What is your point. Are you seeking a clarification?

Yes, a clarification.

Are you giving way?

I am not giving way.

He is not giving way.

The previous speaker has said that I never cast aspersions and now Mr Rai comes on and says that I cast aspersions.

All right, you have made your point. You will continue, Mr Rai.

Mr Speaker, Sir, I was at pains explaining to the House earlier the nature of the office of the Presidency. The President is never an Executive President. Leave the Constitution alone. Do not go to the Hansard because the Hansard is not the Constitution. But I will go to the Hansard since Mr Jeyaretnam has quoted from the Hansard and I will give him his piece. Speaking on the Second Reading of the Constitution of the Republic of Singapore (Amendment No. 3) Bill on 4th October 1990, the Prime Minister said, and I quote: "Objective of the Bill: The Bill provides for an Elected President to safeguard the reserve and integrity of the public services. Specifically, the President will have: (a) the right to veto the annual budgets of the Government, statutory boards and key Government companies, if they draw down reserves accumulated during the terms of previous governments; (b) the right to veto key public service appointments; and (c) safeguard roles with respect to the Internal Security Act, the proposed Maintenance of Religious Harmony Bill, and CPIB." I will go further. What the Prime Minister said is worth listening to. He said: "We are singularly lucky that able and honest men were in charge of Singapore for the last 31 years. They have not abused their powers. They have worked the parliamentary system very well. And because they have worked the system very well, this has caused some people to conclude that there is nothing wrong with the present system and that we should therefore leave things alone - do not make any modifications to the Constitution or to the system. But in my view, the marvellous working of our parliamentary system is due less to the merits of the system than to the integrity and quality of the people working it. And while honest men are still in charge, it is prudent for us to institute a system of checks and balances in our political system, instead of banking on good fortune to throw up good governments for the next 30 years."

There are "checks and balances". That is what he said.

Yes, the checks and balances are there. But he was saying something more. Sir, the other thing I am saddened is this: Mr Jeyaretnam is a lawyer and he knows that. Mr S.R. Nathan has been constitutionally elected by the people.

By the people.

Yes.

How?

Because he has offered himself for election and nobody comes forward to challenge him. Are you saying that he is not elected by the people themselves?

No.

Take a writ in the High Court and I will argue against it, and I will not charge him any cost, if I win. Mr Jeyaretnam, let us be ---

Order. Can I urge the two Members not to indulge in a personal discussion, and make their remarks to the Chair.

I am sorry, Sir.

He got carried away.

Mr Speaker, Sir, Mr S.R. Nathan's choice is not just the Cabinet's choice. He is qualified for the job because he was a former Permanent Secretary. And may I declare my interest, Sir. Mr S.R. Nathan is a member of SINDA. I have worked with him in SINDA. I was at the Nomination Centre this morning to endorse him. I spoke about him in May this year when the motion on Singapore 21was being debated and I paid tribute to the man who, because of his ability, has transformed one community organisation. And let me quote from Prof. Tommy Koh who had issued a statement to the public at large. He says: "Ambassador Nathan has the intellectual ability and moral courage to discharge his constitutional duties as President. Of his intellectual powers there can be no doubt." I was hoping that Mr Jeyaretnam will never bring up the office of the Presidency again, but since he has decided, he wants us to postpone the installation. Let us not shut out the Constitution. Let us accept this fact. He has been elected, and I use the word "elected" by the people. As I said, he should assume office. Mr Speaker, Sir, I agree with Prof. Chin that the office of Presidency should go by convention. And that is why I brought up this White Paper today to have the approval of this House to give it the sanctity of a resolution of this House. Sir, I do not want to prolong the agony of this House. Let us reject this amendment. It does not deserve the consideration of this House. Mr Chiam has said some good words about the system, but still I do not agree with him and my good friend, Mr Low, here. I would urge my NMP colleagues and the entire Members of the ruling Party to reject this, and I will reply to other Members at a later stage, Sir.

The Question before the House is the amendment moved by Mr J. B. Jeyaretnam. Question proposed, "That the words proposed to be left out, be left out."

Mr Speaker, Sir, I call for a division.

The Member has called for a division. Does it have the support of five Members in the House? Mr Low Thia Khiang and Mr Chiam See Tong rose.

There being less than five Members, a division is not permitted. Question proposed, "That the words proposed to be left out, be left out." Amendment accordingly negatived. Original Question again proposed.

Mr Speaker, Sir, I would like to preface my speech by stating my view that President Ong is a good President. In spite of his illness which he and his late wife suffered, he discharged his duties well. I would also like to put on record my wholehearted endorsement of Mr S. R. Nathan's candidature for the Elected Presidency. In my capacity as Director of the Institute of Policy Studies, I have come to know and to work closely with Mr Nathan in his capacity as Director of the Institute of Defence and Strategic Studies. I have the highest regard for his integrity and sound judgement, and have not the slightest doubt that, if necessary, Mr Nathan as President will exercise his custodial powers responsibly and will by no means be a yes-man of the Government.

5.35 pm Let me now come to the motion which I fully support. The White Paper carefully lays out for the first time the definition of what constitutes past reserves, how budget surpluses are treated, what should be done in a transition year and the frequency and type of information to be given to the President. It is a meticulously written document. I applaud the effort that went into producing the paper. I also fully endorse the objective of the White Paper which is to enable the President and Government to have a harmonious working relationship. The clarity and transparency achieved by the White Paper go a long way towards removing some ambiguities where reserves are concerned. My only reservation is that the White Paper should have gone further in its clarification. It is a good first step but it is not enough. I am rather puzzled as to why there is such an easy escape clause. So long as the President and the Government agree that the Principles apply, they apply. But in the event that one party notifies the other that it does not wish to abide by the Principles, they no longer apply. Allow me to give a concrete example as an illustration. Suppose that in future the government of the day decides to sell a piece of state land. The White Paper states that the value of the state land is its fair market value, in other words, the highest acceptable bid by tender, and that all of this amount is considered to be past reserves. Suppose it is boom time and property prices have doubled. The fair market value at the time of transaction is $20 million but the Government returns only $10 million to past reserves, retaining $10 million as current reserves, giving the reason that the fair market value is not the value at the time of transaction but at the time they assumed office, which was $10 million. And hence only $10 million is considered to be past reserves. In other words, the government of the day decides not to abide by the White Paper and that it then unilaterally informs the President of the day that this is the case and proceeds to return only $10 million and not $20 million to past reserves. What recourse does the President have to prevent the Government from doing so? Since the Principles are only in operation when both sides agree, it would appear that apart from publicising the disagreement and applying public pressure, there is very little else that the President can do. After all, it is not a dispute regarding the use of past reserves. It is a dispute regarding the definition of past reserves. This simple example illustrates the point that the disagreement over what constitutes past reserves can have serious consequences for the size of past reserves, particularly where the treatment of state land is concerned. In my view, therefore, steps should be taken to prevent the occurrence of such a scenario in future where the government of the day can merely by formally notifying the President not abide by the Principles in the White Paper. This is too easy. It should be made more difficult for either party if they wish to do so. I therefore believe that these Principles should eventually be part of the Constitution sometime in the future. It should not be done so now, because to cast them in stone now would introduce too much rigidity, while an element of flexibility is needed at this early stage of the office of the Elected Presidency. The Principles should first be tested out and refined, and then at some later stage, be incorporated in the Constitution. But I do believe that we should not stop at the Constitutional convention that we have now, but, at some later stage that these Principles should be enshrined in law. The Prime Minister and Dr Richard Hu clarified many of the other queries which I had. Dr Hu has stated that by accounting convention, net investment income is regarded as current reserves and hence it is not described in the White Paper. I was initially going to argue that the President's staff should be increased. But the Prime Minister has clarified yesterday that the President's Office should function much like the Prime Minister's Office, which only has a few staff, and therefore the President and his staff have the right to query public servants in the course of his carrying out his constitutional responsibilities, regardless of whether it is safeguarding reserves, safeguarding key public appointments, in conjunction with Internal Security Act or corruption investigations. If this is indeed the case, then I think that it is not necessary to increase the President's staff so long as they can function much like that of the Prime Minister's Office. I therefore hope that future Presidents and their staff will not experience any more unpleasant encounters. In conclusion, I agree that a harmonious working relationship between the President and the Government is in the best interest of the country. It is therefore in support of this objective that the White Paper was published and hence I believe that it is a commendable move. I fully support the motion.

Mr Deputy Speaker, Sir, thank you for allowing me to speak. I rise in support of the motion in the name of Mr Shriniwas Rai. Although most of the issues have been clarified yesterday, I wish to emphasise a number of points and implications in the White Paper. First, I think the clarification yesterday has given a lot of Singaporeans a sense of clarity and a sense of comfort over some of the issues that have disturbed some Singaporeans prior to this. And the other thing that is more important, despite the very uncomfortable issues that were presented to Singaporeans, we did handle the issues without really hurting the Presidency, the Government or the personalities involved. I think that is a good thing that has happened out of it. I wish to raise a number of points. One is that I would like to see the White Paper as one of the more notable contributions of the Elected Presidency. Through his experience and clarifying some of his problems, I think we are now better able to clarify many of the technical issues related to the Principles for determining and safeguarding our accumulated reserves. And therefore there is a good outcome out of all these. The differences on this matter have brought about a positive and concrete outcome in terms of the White Paper. The provision therefore provides for a more effective channel of communication to deal with the matter. While the clarification had been necessary, it was no doubt uncomfortable and I think the White Paper today can serve as a better platform for future Elected Presidents and the Government to deal with many of the problems that can be expected to evolve over time as we continue to strengthen the institution of both the Government and the Presidency. Next, as we now move towards instituting a new President, the White Paper can also serve to facilitate the smooth transition of office for the next Elected Presidency. Every Elected President by sheer qualification will be a man of strong character and can be expected to exercise his own judgement on the power that is bestowed on him. However, being an elected process, despite the stringent qualification, there is no guarantee that the new President will abide and keep to the conventions agreed between the Government and the previous President. We have seen how, in my view, completely unsuitable Singaporeans made comical attempts to contest for the Elected Presidency. Perhaps I would like to suggest that we find a way to get the new President to, amongst other things, as his first duty, confirm his desire to abide by the terms of the convention; or perhaps at some future date, consider translating the White Paper into a stronger legislative process. On the whole, I think we have had a very good outcome of all these discussions. And I hope one day we can look back and say that one of the more solid contributions of the first Elected Presidency has been the White Paper which I am quite sure will in the long run strengthen not only the institution of Elected Presidency but the Government.

(In Mandarin): Mr Deputy Speaker, Sir, at the swearing-in ceremony on 1st September 1993, President Ong Teng Cheong gave the assurance that he would do his best to unite the people of Singapore to jointly build up a prosperous, gracious and compassionate society to make Singapore a wonderful country. He also vowed to carry out his duties fearlessly, selflessly and without bias or prejudice, to protect the interest of the people of Singapore, to reach out to fellow citizens from all walks of life, to understand their aspirations, and at the same time maintain a good working relationship with the Prime Minister, the Government, so as to create a rational system of checks and balances on the political system of Singapore, thereby enhancing the political stability of Singapore and ensuring that Singapore has a government of high standing that will continue to work for the well-being of the people. During the past six years, President Ong encountered many difficulties. However, he lived up to the expectation of the people, and earnestly practised what he advocated to undertake the heavy responsibilities and accomplish the very high target that he had set for himself. This has enabled Singaporeans from all stations of life to stay united amidst the recent Asian financial crisis to tide over the crisis and emerge even stronger to march into the next century. Based on the working experience and knowledge accumulated during his term of office, President Ong also collaborated with the Government in formulating the principles to safeguard our national reserves in the form of a White Paper which is the subject matter of our debate today. As the Prime Minister has said yesterday, President Ong has proved that this "second key" system of safeguarding our national reserves and key appointments in the civil service is indeed feasible. It is even more commendable that President Ong has impartially and selflessly revealed some of the problems encountered by him in the execution of his duties, just before he steps down, to enable the people to openly discuss the issues and have a better understanding of the real object and working of our Elected President system. As Senior Minister Lee said yesterday, this debate is useful as part of the education for our people. More importantly, this will enable the Government to take stock of the views and reactions of the people on this system after it has been in operation for six years. President Ong has announced his decision not to seek re-election. This is indeed a great pity. However, we should respect his decision. We must record our affirmation and appreciation for the great contributions he has made to the country and the people. Therefore, I am very glad to learn that the Government will be giving a farewell party to President Ong on 30th August to pay tribute to the great contributions he has made to the country and the people. Mr Deputy Speaker, Sir, President Ong once said, "Having a good government is far better than having a good President to check on the bad government." These sincere words and earnest wishes truly bring out President Ong's love for the country and the people, and his noble sentiments. As a matter of fact, the people of Singapore can be said to be extremely lucky to have not only a good Government, but also a good President. I believe it is the common prayer of all the people of Singapore that we continue to have a good Government and a good President. However, from the long-term point of view, this is not something to be taken for granted. Apart from the wise choice of the voters, we must also endeavour to fine-tune the Elected President system through extensive practice and exploration, so that this system will give full play to its fullest effect when necessary. Mr Deputy Speaker, Sir, on behalf of the business community in Singapore, let me take this opportunity to offer our heartfelt congratulations to Mr Nathan who was returned as the second Elected President of the Republic of Singapore this afternoon. I firmly believe that he will be a well-respected and popular President, like President Ong. When the Government instituted this office of an Elected President, its intention must surely be that the Elected President would no longer be having just a ceremonial function. The President has also the custodial power to safeguard our national reserves and maintain the integrity of our civil service. In view of this, the responsibility of the Elected President is indeed very heavy and important. Such a heavy responsibility will be put to test only when our nation faces a very serious internal or external crisis, or a severe economic crisis which requires the Government to draw on the reserves, or when an important decision has to be made on some key appointments in the civil service. As such, we have to be prepared for the worse, and fine-tune our Elected President system based on the most fundamental interest of our country so that we would be able to deal with any sudden crisis. Mr Deputy Speaker, Sir, from the views expressed by the media and the public, it is apparent that our people are very concerned with our present Elected President system. Some people would like to know how the Government views the difficulties encountered by President Ong in the execution of his duties, and whether the Government is determined to seek a long-tem solution to the problems, or to give the President more resources to exercise the powers vested in him by the Constitution. Is the Government happy with the way the election for the first and the second Elected Presidents was conducted? What is the people's reaction to the nomination of the second Elected President? If, in future, candidates for the presidential elections have to be proposed and endorsed continuously by the Government before they can be considered eligible to stand or worthy of support, then will this not run contrary to the original intention of the Elected President system? Mr Deputy Speaker, Sir, based on the working experience over the past six years, President Ong and the Government have entered into a convention and formulated a set of principles to safeguard the national reserves and this is published in the form of a White Paper for the people of Singapore to read. This is very encouraging. However, because the Government originally had no intention to move a motion in Parliament for the contents of the White Paper to be debated, it has caused some Singaporeans to be skeptical over the feasibility and sustainability of these principles. The people of Singapore want to know in the event of an Elected President having to face a strong but free-spending and persistent government in the future, under the present mechanism, can this set of principles be solely relied upon to stop the government from squandering away our reserves? Yesterday, the Prime Minister, the Senior Minister and the Finance Minister, Dr Richard Hu, had already given a very detailed explanation on the problems encountered by the Government and President Ong during the past six years. However, from the long-term point of view, it is apparent to us that there are still a lot of worrying and complicated issues which need to be resolved. In view of this, I support the motion standing in the name of Nominated MP Mr Rai to give this House the opportunity to further discuss the issues, and give a clear explanation to the people of Singapore. Mr Deputy Speaker, Sir, I sincerely hope that through this round of frank and sincere discussion, and with the joint efforts and mutual cooperation between the next Elected President and the Government, our unique Elected President system will make further progress, thereby laying a solid and effective foundation for our political development, and for the long-term benefit of our people. Mr Deputy Speaker, Sir, everything in this world is continuously changing and developing. Our unique Elected President system is no exception. It is, after all, just a six year-old little boy. It needs to be carefully looked after and nurtured by his parents. He also needs regular medical examinations, takes the medicine and receives medical treatment whenever he is sick. Only then, can he grow up to be strong and healthy. Therefore, I suggest that the Government should reach out to the people and collect feedback from the people on how to perfect this Elected President system, and make this a "World Class Political Project". In other words, if there is a need to amend the Constitution again to perfect this system, the Government should go ahead and do it without any hesitation.

Mr Deputy Speaker, the debate on this motion takes place amidst the context of considerable controversy and the incoming President. There are factual differences between what President Ong said in his press conference and the Ministerial Statements given yesterday by the Finance Minister, Dr Richard Hu, and the Prime Minister. The Opposition have been quite opportunistic in seizing the comments by President Ong to their own advantage. I myself find I cannot comment on these factual differences. They are not in my knowledge. I wish, in this sense, to avoid the question of personalities. At most, I think all of us would join in thanking President Ong for the service he has given to the country and to welcome the incoming President, Mr S R Nathan. And I would like to place my thanks to President Ong alongside the thanks of many, many Singaporeans and my well wishes to President-designate Mr S R Nathan among the well-wishers of many people. Beyond this, I wish to focus on the Presidency as an institution because Presidents come and go, but for the present and future, for our children, the principles set out in the White Paper before us and of the Constitution are what would endure. There has been great debate in various media about whether this Presidency we now have is executive, or custodial. And many other terms have been bandied about by me as well as other people. We know for a fact that the President is now elected. But these other terms are not in the Constitution. The Constitution does not call it "executive", "custodial", or "largely ceremonial". None of these is there in the Constitution. These are words, analogies that different people have used differently to try to simplify for the public the very complex issues and laws in the Constitution. Let me go through some of these quite briefly in this House. In classic constitutional theory, there is a separation between only three arms of the state - the Executive, the Legislature and the Judiciary. In these three-fold divisions, the President is clearly part of the Executive. He acts in this classic model. The President, while being the Head of State and part of the Executive, does not hold powers or discretionary initiative. The running of the Government is indeed with the Prime Minister and his Cabinet once they have been appointed to the office. The President or the monarch - in the case of England, it is the Queen - reigns but does not rule. It is almost all ceremonial. This is what Singapore used to have before the creation of the present presidential system. What do we now have? As I said, in our Constitution, if you look at it carefully, there is no use of the word "custodial", "ceremonial", or "executive". On the other hand, there is no term like "executive President". The definition of the words "Elected President" is not even there. It is just simply the definition of the word "President", which is the person elected to that office. The main provisions of the President are found in Part V of the Constitution and this is the same Part, under the title of the "Government", where we find the provisions of the Prime Minister and the Cabinet. None of these is to say therefore that the President is the Head of Government or the CEO. I tend to agree with the Prime Minister in this sense. All things done by Government are done in the name of the President, eg, in giving the Presidential Address. But it is clearly the agenda set by the Prime Minister and his Cabinet. In Article 21(1) of the Constitution, it is clear that the President acts on the advice of the Cabinet. But, here, the word "advice" is not simply a nice suggestion you give to a friend. The word "advice" here is a polite way of saying "instruction of the Cabinet". How then is the present system of the President different from the old form? The President today differs from what we had before in that he can exercise his discretion and make up his own mind on a limited set of matters. These matters are set out in Article 21(2). There are various shorthand ways of saying what these powers are. Some people say that this is the second key, custodial. Generally, people say the Elected President acts as a check on the use of reserves and on key appointments. These short forms are not sufficient to a full understanding of what the President can or cannot rightfully do. The NMP, Mr Shriniwas Rai, earlier mentioned - correct me if I am wrong - that the President can veto on the Internal Security Act or the Maintenance of Religious Harmony orders. Well, he has a role in it. But look carefully, and I quote Article 22(I) that the President can only act on orders on religious harmony if first, the Presidential Council for Religious Harmony disagrees with the Government. If the Presidential Council agrees with the Government, the President cannot veto. This is what I mean that we are dealing with very complex issues which in the end we must try to simplify to be understood by the people who elect the President. These short forms are not exact. They never would be. But we can, through various exercises such as this, try to educate our people and ourselves in trying to understand these concepts. Similarly, when we say the President guards the reserves, it is clearly not all the reserves. Those not accumulated by the present Government are protected. Those accumulated by the present Government can be used at their discretion and are not subject to the Elected President's veto. More importantly, it must be seen that the President does not exercise this function absolutely or alone. There is a role for the Council of Presidential Advisers as well as other balancing institutions or pillars such as I have mentioned, the Presidential Council for Religious Harmony. In exercising discretionary powers, the President is not an absolute ruler. He is independent but he is neither wilful nor singular. The President can disagree with the Prime Minister but there is no guarantee that the President will always prevail in case of such a disagreement. The role of the Council of Presidential Advisers is critical. It is said so in Article 21(3) of the Constitution that the President shall consult the Council of Presidential Advisers, and he may do so in other circumstances set out in Article 21(4). If the Council of Presidential Advisers agrees with him, the President can carry the issue. If the Council does not agree with the Elected President, then the Prime Minister can override if two-thirds of Parliament supports the Prime Minister. This is clearly seen in Article 22(2) as regards certain appointments. In today's Parliament, I would dare say that if the Prime Minister wants the two-thirds majority, he would get it. That is the standing of the Prime Minister in today's Parliament. But this is not always vouchsafe for the future. It is possible that the future Prime Minister would have a majority but not a two-thirds majority. And so we must see that the President's powers in the Council of Presidential Advisers and Parliament sit in a very intricate balance that may well change over time according to certain numbers. The President, in that sense, can win in some circumstances but the point today is that the President can act, even without the concurrence of the Council of Presidential Advisers. He may act but, ultimately, be defeated. But in acting, he would raise issues, an alarm bell would have been raised and a controversy would have begun. It is therefore a question of judgement and discretion on the part of the President whether to act alone and risk defeat or whether to only act when the Council of Presidential Advisers is with him. This is a new and unique institution. The Prime Minister and Elected President Ong had, in their own ways, pointed to teething problems. We have to accept this as part of the price for embarking on a bold constitutional adventure to create a new system of Government. The White Paper is therefore very important in this context. It seeks to record the present President's agreement on ways to smooth over these problems. The Member of Parliament, Dr Tan Cheng Bock in 1988 in a debate in this House on 12th August 1988 [Hansard, Vol. 53, Cols. 578 to 579] put it correctly on the issues that the White Paper now touches on. Let me quote: "I shall now touch on financial assets and reserves. The definition of "assets" is indeed very wide and may in practice mean every cent and every square centimetre of Government land in Singapore. Singaporeans want to know if this means that every parcel of land sale must be approved by the President. Must the sale of HDB properties have his assent? Will the sale of every HDB unit or every block or every defined estate have his assent? What about resale?." We have therefore to thank President Ong for trying with the Prime Minister to make some of these matters clearer. I dare say if we had somehow managed to do the White Paper before President Ong came to office, half the controversies that President Ong alluded in this press conference would have been avoided. Of course, this could not have been done. But now, having the White Paper, I think it helps the next President. We are trying to clarify and we will come to a position of clarity. I think the White Paper also does a very good service in setting out some ideas about the Net Investment Income (NII). Commonsense tells us that capital, the reserves and return on capital are different. Many businessmen will agree that NII can be used by the present Government. The Finance Minister, Dr Richard Hu, says that this might be defined to protect some part of the NII in the next year. Of course, this can be done, perhaps to take care of inflation or rise in replacement costs of certain assets. But the essential principle is that the NII is part of income, return on investment and not past reserves. Similarly, I think that there is a point to say that the valuation of assets should be at the point of transaction of sale or alienation rather than to try to sit down at any one point in time and take stock of everything in Singapore. This is not easy to do and actually it is not much sense in doing it because the value of property changes according to use and the rules you allow a property to be used for. It is sensible and workable therefore in what the White Paper recommends. But while the White Paper is a step forward, it is not the only thing we need to do. We need to make the system work in practice. Yesterday in this House, the Prime Minister told us that there is no need for parallel government under the President's office. I agree. People want less government and less red tape, not more. They do not want another bureau, another bureaucracy. But people do want transparency and accountability and they do see the President as an important additional element in ensuring transparency and accountability, in addition to the direct accountability of the Prime Minister and his Cabinet. The Constitutional duty of the civil service set out in Article 22F is to reply to the request of information by the President. This should be reinforced in the mindset of our civil servants in case it is ever forgotten. It is not just a nice thing you should do because the President is a nice guy. It is part of the burden of their office and the obligation to defend the Constitution. I would venture to say that while the civil service must observe their constitutional duties and while there is no need for a parallel government, there may be some need for additional staff and resources for the Elected President. Perhaps, this question should be left to the next President to decide within a reasonable mandate. Let me next turn to the nature of this White Paper. This White Paper is not binding on either this House or the next President. This is despite the suggestion in paragraph 10 of the White Paper itself that it should be so unless the next President disagrees. Senior Minister Lee Kuan Yew's point in Parliament yesterday bears repeating. What we say in this White Paper or in Parliament are not of the same effect as the words in the actual Constitution. Therefore, the White Paper is of limited use. We must understand this. It can be open to questions by the next President or indeed it can be subject to judicial interpretation under Article 100 of the Constitution if matters should be brought to the tribunal. To make the system work, another point must be that the President should be entrenched sometime in the next term. By this, I mean that, as it stands presently, this House, under the leadership of the Prime Minister or another leader, could amend the Constitution and limit the powers of the President without the President's approval. Only if it is entrenched can the President be assured that his powers will not be nibbled away. I think this matter is not a light matter because once we are doing that, we are locking ourselves into such a position. But I think it must be seriously looked at and considered over the next term of the President and I am glad the Prime Minister indicated yesterday that he would look seriously at this question. Only then can we have an assurance that the President is an institution that is strongly established and accepted by all. This White Paper and the other measures I have suggested are necessary to make it work. But perhaps they themselves are not sufficient. Institutions are necessary but never enough. We do need a President with moral courage. I can do no better on this part than to quote from then Deputy Prime Minister's Goh Chok Tong's speech in this House on 5th October 1990 [Hansard, Vol. 53, Col. 560]. He said, "We are actually looking for people with competence. They must be competent people before they can stand for election. Secondly, they must be trustworthy. Thirdly, they must have sound judgement. They must have the moral courage because the President may come from the same party as the Prime Minister. But if he disagrees with the Prime Minister on the use of reserves for wasteful welfare programmes, then the Elected President must have the moral courage to tell the Prime Minister that he is not going to spend the reserves." We do need men of such moral courage to fill that office. We also need a Prime Minister who is committed to making this very new and unique system work, as Prime Minister Goh has said that he is committed to doing so. The Elected President is supposed to check if we ever had, God forbid, a so-called bad government or rogue government. Of course, it need not be a rogue government. There can be reasonable disagreements between reasonable people. But while we are planning for a scenario of a rogue government or disagreement, it is ironic that to make the presidency work in the first place, it must be put into operation by a good government and by a good President. Only when both these two important officers are concerned with the future of Singapore and the future of institutions will this new and unique system be strongly embedded in the hearts and minds of Singaporeans and the way our system works. With these comments, I will support the motion.

Mr Deputy Speaker, Sir, first let me thank Mr Rai for moving the motion for the House to endorse the principles for determining and safeguarding the accumulated reserves of the Government and the Fifth Schedule Statutory Boards and Government Companies as set out in the White Paper and also to the other Members for speaking in support of the principles. I think this motion has taken the debate in several directions. I have no wish to clarify or explain all the issues that have been raised. Many of the issues have been addressed yesterday. I just want to make a few key points after listening to the debate so far. First, because of the perceptions and the confusion through the use of the terms like "executive President", etc, the Government decided to clarify the role of the Elected President and his specific roles in the two areas - protection of past reserves and key civil service appointments. This clarification, in my mind, is not intended to diminish the role of the Elected President. It is because of this confusion that we thought it necessary to re-establish or to re-visit the objectives in setting up the elected President. I think Mr Simon Tay has gone through at great length the role of the President. So I have no wish to go through the same ground. But just to highlight to Members that by introducing the elected President, we have made a very major change in the way future governments will run Singapore, whether future governments come from the PAP or come from the Opposition parties. And this change is that all future governments will find that they have to run the government on a balanced budget, because at every stage of their term of office, they can only make use of current reserves. Without the elected President mechanism, the government could use past reserves without it being clearly made known to the public. But with this mechanism now in place, future PAP governments or future Opposition party government, if there is one, will find it incumbent to run the government on a balanced budget. Any time any government wants to use the old reserves, they have to seek the President's agreement to unlock the past reserves. So this is a fairly significant change to the way future governments should be run. Secondly, there is a lot of talk about the need for good and honest government. I endorse that entirely. But Members may not realise that, in fact, the elected President mechanism is also important even if there is good and honest government. You do not need a bad and dishonest government to dig into old reserves. This elected President mechanism is not about corruption. It is about using past reserves. So it is to protect ourselves against a government that is honest, not corrupt at all, but wants to spend old reserves for well-meaning and even well-supported policies. With the elected President mechanism in place, if such a government wants to spend on programmes, however well-meaning, honest or well-supported, a red flag will be flashed. The President will have to come into play. The President has to agree that such a programme is in the interest of Singapore. And as the Senior Minister has explained, this is a hurdle so that Singaporeans are alerted. Because we are a small country with limited resources, we have decided to set aside past reserves. And if we are now going to spend on programmes using the past reserves, let that be a transparent fact. The objective of the elected President is not just to guard against dishonest government. In fact, it is equally effective against a good, well-meaning but profligate government. So we do not need to have a rogue or a bad government for the elected President to be effective. I think the main benefit of these two days' discussion is the ability for us to clarify the role of the elected President and to better understand how this new mechanism that we have put in place would change the nature of future Budgets and future governments. Why did the Government put the principles in a White Paper? As explained in the White Paper, the objective of the elected President is clear. How to operationalise it is a lot more complicated, because it is a complex issue. We have to define many terms. We need to come to a common understanding, a common agreement on what these terms are and how to interpret them. Therefore, the White Paper is important to set out these definitions and to spell out the working arrangements between the President and the Government, so that both parties can fulfil their respective roles effectively and smoothly. Mr J B Jeyaretnam asked why not put out this White Paper at the beginning of Mr Ong's term and not at the end of his term. As explained in the White Paper, many of these principles require time for them to be operationalised, to be documented, formalised and then institutionalised into the White Paper. We would have liked to do it earlier, but it is in the nature of such complex issues that we can only complete it towards the end of the term. And for this, I think we have to thank President Ong for setting the pace and wanting to make sure that the White Paper is completed before the end of his term. The White Paper is a statement of how we would proceed with the administrative actions to implement the objective of the elected President. So it is not an agreement between President Ong and the Government, as Mr J B Jeyaretnam tried to argue. A few Members asked about the role of the civil servants. I can only reiterate what the Prime Minister said yesterday. The civil servants have a constitutional role to support and advise the President in his role in the two areas that we are concerned about. Mr Low, Mr Chiam and Mr J B Jeyaretnam talked about clipping the wings of the Government. In the context which I explained just now, the institution of the elected President would mean that all future governments, whether PAP government or an Opposition party government, would have to operate a balanced budget. If they operate anything other than a balanced budget, they have to go to the President to unlock the past reserves. And if that is not clipping the wings, I do not know what is. It is a very major restraint on the way we run future Budgets and the way we run future governments. Several Members asked about giving the President more resources. Again, the Prime Minister has explained, that the President can call upon the entire resources of the civil service in executing and implementing his role. He is assisted by his Principal Private Secretary (PPS) who is a civil servant in the Administrative Service of Deputy Secretary Grade. So he is a very senior Administrative Officer and can call upon the entire resources of the civil service. It is the same way the Prime Minister operates through his PPS, the same way the Senior Minister operates through his PPS as well as the Deputy Prime Ministers operate through their PPSs. So we do not see the need for additional staff for the President for him to implement his role effectively. Let me now turn to how the White Paper would bind future Presidents and future governments. As indicated in the White Paper, these are principles which both the President, his staff and the Government had worked together to establish, and we find it effective and we intend to make this binding on future Presidents and future Governments. At the same time, we know that these principles cannot be cast in stone and therefore there must be a mechanism by which either party can be allowed not to follow the principles if they think these are not applicable. But there is tremendous moral pressure in the example that Dr Lee Tsao Yuan raised. If indeed a government does not want to return the money from a sale of land, using the argument that it will return the money at market value at the start of the term and not at the time of the sale, I think that is clearly in violation of the preservation of the past reserves. And the President will be well within his power to veto that transaction, because that would mean a draw down on past reserves. So I think both the principles as well as the intent and spirit of the Constitution are quite clear. That would be deemed as a draw down on past reserves, and the President would indeed either veto the transaction or gazette and make it known that the Government has drawn down past reserves, in which case the Government would be forced to replenish the past reserves from its current reserves. So there is no ambiguity in that. Let me just conclude by saying that we have worked hard to establish the principles between the President's Office and the Government. We believe that the principles set out very effectively the common understanding of how we will proceed to implement the safeguarding of the past reserves. It is a complex issue and we are glad that we are able to complete this White Paper on time. The White Paper can indeed be said to be a legacy of President Ong and this White Paper will help future Presidents in performing their constitutional functions.

Sir, can I have a clarification?

What is your clarification?

The Minister said that the principles in the White Paper are binding and that if a future government so decides to define fair market value as not at the point of transaction but at the time it took over office, then that is clearly in violation of the definition of past reserves. But as far as I remember in the White Paper, there is a provision to say that so long as either party does not wish to agree to the principles of the White Paper, they can notify the other party in writing and therefore the principles of the White Paper are not binding on that particular government. Could I please ask for clarification of this point?

Sir, the principles will be binding for future Presidents and future governments. And there is, as the Member has described it, an escape clause, that if either the President or future government does not want to follow the principles, they are allowed to say that it is no longer binding. But that does not deviate from the requirement and the spirit of the Constitution, which is protection of our financial assets and protection of our land and buildings, which are deemed as past reserves. State land is deemed as past reserves, and if you sell State land at anything less than market value, you are running down on past reserves, and the elected President will veto that transaction.

Another clarification, please. As far as I understand from the White Paper, and I could be obtuse, supposing you have a future government that informs the President of the day that it disagrees with the definition of the value of State land, in other words, the value of State land at fair market value at the point of transaction, then those principles no longer apply. So it is not a question of using past reserves. Here, it is a question of the definition of the value of State land, which is very clearly stated in the White Paper. Therefore, unless those principles are indeed made binding, then future governments can have the leeway to say that they do not agree with the valuation of State land at fair market value. This is my understanding of the White Paper. I could be wrong. If I am wrong, please clarify.

Sir, the Member's understanding of the binding agreement is correct. But whatever principles you may not agree with in the White Paper, the fact remains that the Constitution says that the President protects past reserves. And what constitutes past reserves? They are net financial assets and State land and buildings. And if the Government says, "No, that past reserve is defined as the value at the time of the change over of government," and the President says, "No, it must be at the point of transaction.", the President will say, "This is my view supported by the Council of Presidential Advisers. I will veto it." The Government will have to either challenge it, if it can. It will be under scrutiny by the public. In that very simple example, the public will quite clearly be on the side of the President to say, "You sell a piece of state land, it must be at the market value at at the point of sale." I do not think there is any confusion to the public who is right in that scenario that she painted.

Mr Rai, can you reply?

I have got two clarifications for the Minister.

Why not you put them all in your reply?

All right. I know Members are eager to end this debate soon and I will do so. I would not take much time. Sir, I am grateful to the many Members who spoke, ie, those who have supported the motion and even those who have opposed the motion, because they have added to this debate. There is no doubt, as my good friend, Mr Tay Beng Chuan said, that President Ong has endeared and has done the Constitution and the country proud by the way he has discharged his duties. The Elected President is still in its infancy. It will take some time to shape. The Minister has been very assuring and I have no doubt that the Government intends to abide by the principles laid down in the Constitution and the White Paper. I have two clarifications for the Minister. (1) Should the in-coming President ask for a staff, I hope the Government will consider it favourably. (2) Should there be a dispute between the President and the Government, would it go to the Constitutional Court for a decision? Sir, the new President has won the admiration of my colleagues, Dr Lee, Mr Tay Beng Chuan and others, and I think Members will join me in wishing him well. He has a heavy responsibility in discharging his duties, but I have no doubt that his vast experience and the mandate he has received from the public will enable him to discharge his duties. Though he is an intellectual, he is a man of the ground. He has friends from all walks of life. I was surprised when his fruit seller came to the People's Association this afternoon to wish him. He was delighted and talked to him. I will give another example of the humility of the man. After he was returned unopposed at the Nomination Centre, he went around thanking people. An NTUC official came and told me that he has moved away without meeting one sector, ie, the Indian activity group from the PA. When I whispered this to him, he said, "Yes, I am sorry, let us go." That is the quality of the man. He has finished his tour but he felt that he has left out one group and he must meet them. Sir, I would ask Members to endorse the motion wholeheartedly. I would also ask the Opposition Members to endorse the motion, even though they have filed an amendment to the motion and spoke in favour of it. This is not a political issue. It concerns the future of the country. It concerns how we are going to rule. The Government has introduced a very unique constitutional mechanism which has no parallel anywhere in the world. I think we owe it to ourselves to evolve the system by assisting. When the Prime Minister, Senior Minister and Minister for Finance spoke yesterday, I was relieved by the picture that they have painted because there were some doubts in the minds of some members of the public. This morning I had a chance to speak to some people and they were relieved that they have now been presented with the facts of the issue. Whenever there is any difference between the Government and the President, it is only fair that the public should know it. In this way, we can talk and debate on it. Sir, I would urge Members to vote for the motion. Resolved, That this House endorses the Principles for Determining and Safeguarding the Accumulated Reserves of the Government and the Fifth Schedule Statutory Boards and Government Companies as set out in the White Paper (Paper Cmd. 5 of 1999).

Resolved, "That Parliament do now adjourn to a date to be fixed. " - [Mr Lim Hng Kiang]. Adjourned accordingly at Twenty four minutes to Seven o'clock pm to a date to be fixed.