Hansard, 2000-03-06

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: NameFromTo (2000)(2000) Mr R Sinnakaruppan1 Mar2 Mar 13 Mar18 Mar Mr Lim Hng Kiang1 Mar3 Mar Mr Tan Soo Khoon 3 Mar3 Mar Mr Goh Chok Tong 6 Mar6 Mar Mr J B Jeyaretnam 6 Mar6 Mar Mr K Shanmugam7 Mar8 Mar Mr Leong Horn Kee7 Mar15 Mar NameFromTo (2000)(2000) Mr Chiam See Tong8 Mar9 Mar Mr Hu Tsu Tau, Richard14 Mar19 Mar TAN SOO KHOON Speaker Parliament of Singapore

The following Bill was assented to by the President of the Republic of Singapore on the date stated: 25 February 2000 Developmental Investment Fund Bill. TAN SOO KHOON Speaker Parliament of Singapore

asked the Deputy Prime Minister and Minister for Defence whether the length of national service will be extended from two and a half to three years.

Mr Speaker, Sir, MINDEF has no plans to change the period of national service.

Would the Minister then make a public statement in the press to allay all the rumours that are going around on this matter, please?

Mr Speaker, Sir, by asking the question, Mdm Chiang has given us the opportunity to allay this rumour.

asked the Minister for National Development why the Urban Redevelopment Authority has not seen fit to reply to public suggestions on ways in which the existing National Library can be retained.

Mr Speaker, Sir, I presume by "public suggestions" Mr Simon Tay is referring to the alternative proposal for the Singapore Management University campus that was submitted by Mr Tay Kheng Soon. If that is the case, then perhaps, before I reply to the Question, may I, by way of background, trace the history of the National Library issue. Sir, the possibility of the National Library building being removed was first made public in 1988 when the URA was formulating the Civic District Master Plan. URA held an exhibition on the draft Master Plan for the Civic and Cultural District which was the area around the Bras Basah Park area in April 1988. This was followed by a public dialogue in May 1988 between the then Minister for National Development, Mr S. Dhanabalan, and professional bodies and members of the public. There was general support for the removal of the National Library building to open up the view of Fort Canning Hill from the Bras Basah area. There was another proposal to realign Stamford Road behind National Museum so that the National Museum would be better integrated with Bras Basah Park. This would also entail the demolition of the library building. The public feedback led to further studies by URA and the former PWD on how to better integrate the land parcels in the area to create a more pedestrian friendly environment. Several options were explored, including depressing Stamford Road, providing an alternative at-grade alignment behind the National Museum and a tunnel through the National Library. The only feasible option was the tunnel option, and this was subsequently incorporated into the Master Plan for the Civic District. The finalised Master Plan was completed and exhibited to the public in February 1992. In December 1998, SMU announced that it would build its campus in the Bras Basah area. There was a series of Forum page letters in the newspapers and direct suggestions to URA following the announcement. URA responded to these letters, and explained the plans to them. In March 1999, SMU chaired a public symposium on the physical development of its campus. Issues such as why SMU was located in Bras Basah Park, and the need to remove the National Library building were addressed by the URA representative at the symposium. URA also explained the issues to the press, and the press published these explanations on 20th March. On 15th January this year, SMU chaired a technical workshop to obtain feedback from architectural professionals on three alternative proposals put up by SMU's master planners. At the workshop, Mr Tay objected to the plans which proposed buildings on Bras Basah Park, and the removal of the National Library building. He subsequently called a press conference on 24th January to present his alternative proposal for the SMU campus. URA did not participate in Mr Tay's press conference because it was not invited. Neither could it respond to the proposal then as it had not received a formal proposal from Mr Tay. Mr Tay wrote to the Prime Minister about his proposal on 31st January 2000. The Prime Minister then referred it to my Ministry for evaluation. Subsequently, I met with Mr Tay on two occasions to better understand his plan. On the second occasion, I asked Mr Tay to present it to my Ministry officials with URA and LTA present to give their professional inputs. My Ministry made an assessment of Mr Tay's and URA's plans and I replied to the Prime Minister on 28th February. I am informed that the Prime Minister's Office has replied to Mr Tay. Sir, I have the Prime Minister's permission to release both letters to the public. May I circulate both letters to Members of the House for their information. [Copies of letters distributed to hon. Members.] Sir, may I refer Members of the House to my letter to the Prime Minister dated 28th February? In particular, may I read part of the letter starting from paragraph 3: "Mr Tay's proposal and URA's guidelines differ over two fundamental issues. The first issue is the extent of the open space in the Bras Basah area. The second issue is whether the existing National Library building should be retained. Mr Tay Kheng Soon's Proposal Mr Tay feels that the Bras Basah Park should be kept as a large open space with completely open views from the roads and unblocked by buildings, in order to retain what he perceives to be a crucial element in the mental map which Singaporeans have of the city. He thus proposes to create a sunken park below street level, reflecting pool, and waterfall; and to replace the current foliage with structured rows of palm trees to give this area a sense of monumental scale. However, the sunken park would restrict pedestrian movement between the various buildings at street level as the public would have to walk around the edges of the park to get to buildings on the other side. Since the MRT tunnels under the sunken park would limit the usable area, Mr Tay proposes to meet SMU's floor space requirements via clusters of tall buildings of up to 15 storeys at the foot of Fort Canning. These tall buildings would not be in keeping with the low-rise character of the Civic District with its many historic buildings. It would also block the views to and from the Fort Canning Hill. Mr Tay agrees that the National Library building lacks architectural merit. However, he feels strongly that the Library should be preserved for historical and sentimental reasons. To avoid the Library, he proposes that the new road tunnel run alongside the current Stamford Road for a stretch and then dive down under it. This plan requires a long, deep trench, flanked by one-metre high parapet walls, to be created in front of the National Library up to the entrance of the National Museum. This will severely mar the landscape of the area and restrict pedestrian movement between Bras Basah Park and the National Museum area. URA's Planning Guidelines URA's plan for this area recognises the importance of retaining an open space and the visual connection between the Singapore Arts Museum and the National Museum. By allowing SMU's buildings and some public facilities to be built on the park, the plan seeks to encourage better public usage of the park. Capping the height of buildings around the Fort Canning Hill area to around 4 to 5 storeys will maintain the character of the Civic District and protect the view to and from the hill. The addition of low-rise institutional buildings would further enhance the civic quality of the area. The realignment of the existing Stamford Road and the building of the tunnel through Fort Canning Hill provides the most direct route for traffic moving from Marina Centre and the Central Business District to Orchard Road, and thus siphons traffic away from the Bras Basah area, making it more pleasant for pedestrians. It will provide SMU with more regular land parcels to work with. However, this alignment requires the removal of the National Library building. MND's Assessment Essentially, Mr Tay's and URA's plans seek to achieve different planning intentions, with very different start-points. We need to decide between a plan which provides a large unshaded open space and retention of the National Library building and one which seeks to bring more public activity into the centre of the area. With the former, the trade-off is a poorer road network, a tunnel which cuts the area into two and high rise buildings in an essentially low-rise environment. MND clearly prefers URA's plan as it is more people-friendly, facilitates better pedestrian flow and preserves the ambience and environment of the important Civic District. It also allows SMU greater flexibility to plan the area to meet their requirements. URA's plan brings about better coherence in the cluster of buildings for SMU in that it facilitates pedestrian traffic throughout the cluster without being subdivided by a Stamford Road which will carry heavy and fast vehicular traffic. MND acknowledges that some members of the public are in favour of retaining the National Library building. However, the Preservation of Monuments Board and the National Heritage Board have assessed that there are insufficient merits to preserve the building. Nevertheless, PMB will look into how the social memory of the building of the library can be captured and commemorated. We will also encourage SMU to incorporate in the design of its buildings features that would help Singaporeans evoke memories of the Library." Mr Speaker, Sir, I believe that the issue of the National Library has been extensively discussed and debated, both publicly and privately, not once, not twice, but many times, by way of public dialogues, symposiums, workshops, letters to the press and private consultations since 1988, and now this debate in the House. So my view is that there is no question that URA or any other relevant authority has not seen fit to reply to public suggestions on this issue.

Mr Speaker, Sir, may I begin by thanking the Minister for his full reply and welcoming the steps in meeting the architect, Mr Tay Kheng Soon. May I ask the Minister: will he not consider further public process and attempt for dialogue with the public in general, in the sense that meeting with an individual architect is not the same as meeting other people who might feel that the Library or the Park is worth saving?

Sir, in the chronology of events that I narrated just now, it is quite obvious that there have been a lot of public dialogues and discussions on not only the subject of the National Library, whether it can and should be retained, but also the general discussion on the whole environment of the area. In this particular case, there was a very specific alternative proposal. This specific alternative proposal entailed a technical alternative, ie, to realign the tunnel. There was also a general proposal regarding the ambience of the area as it pertains to retaining the Park. I have met the proponent of the new plan, Mr Tay Kheng Soon, not once, but twice. I wanted to understand what was the rationale for the proposal and why he proposed it this way. I also wanted, at the second meeting, to evaluate the technical feasibility of it. So this is a very specific proposal which has to be dealt with, responded to and evaluated in a very specific manner. There have been, as the Member would agree, a lot of dialogues and discussions on the generalities of the proposal, whether the Library should be retained, the historical merits of retaining the Library as opposed to the perceived lack of architectural merit and so on and so forth. I do not think there is a need now for us to reopen the debate again, especially when there is on the table a very specific alternative proposal. I thought it was proper for us to evaluate and look at the alternative proposal seriously, and we have done this.

Mr Speaker, Sir, I am not really good in architectural details. But what I would like to ask the Minister is: why is the National Library not kept in view of strong public sentiments and there are a lot of debate and views on it? Is a cost issue involved?

Mr Speaker, Sir, the question of keeping or not keeping the National Library was not the starting point of the discussion. As I recounted just now, when the Masterplan for the area was done in 1988, the whole question of upgrading and improving the ambience of the area and turning it into a civic and cultural district was the objective of the exercise. The removal of the National Library, at that time, was felt desirable because it would open up the vista to the Fort Canning Hill. That was the starting point of the process. And at that time, many who participated in the dialogue session, from reading the minutes of the discussions and newspaper reports, did not feel very strongly about the library. In fact, many agreed with the idea of removing the library in order, as I said, to completely open up the whole area to show off Fort Canning Hill. Subsequent to that, there was also the question of how we could improve the transportation network and this involved the building of a tunnel. In fact, this idea of a tunnel, of an alternative road, came from the public dialogue itself. I believe it was a proposal from one of the industry participants in the dialogue. Studies were made and it was felt that that was the best alignment for the tunnel and that also required the removal of the library. If the library had very strong architectural, historical or sentimental value, and if the Preservation of Monuments Board and the National Heritage Board had so classified it, we would have had to look at alternative plans. But in this particular case, these authorities were consulted and it was the general consensus at that time that there was no such strong merit. And indeed, many architects had come out publicly to say that there is also no architectural merit. So there is no question of us setting out to demolish the library but, in the overall scheme of things, the general appearance and ambience of the area can obviously be better enhanced if we are able to remove the library. I do acknowledge that there are many people who feel very strongly about the library and I understand their feelings why they feel this way. I must admit that I too have very fond memories of the library and the area because I studied for six years there. I was in St. Joseph's Institution from 1960 to 1966 and I remember spending many hours in the library and in the park. But I also remember that there were many other old buildings in the area. There was the Catholic Centre, a Bakers' Bakery next door, bookshops in the area and a bus-stop just outside the cathedral. It was actually more than a bus-stop, as SJI boys and RI boys would testify, because that was the meeting place where you went there not to catch a bus, but also to catch the attention of somebody special. That is what many of us who had studied in that area remember. The library is part and parcel of that general sentiment and ambience of the area. But I think our memories are more than just of physical buildings. They are also memories of the environment of the area, the hustle and bustle of that area, the youthful energy and exuberance of the area. Many of those buildings are gone. The Catholic Centre is gone, Bakers' Bakery is gone, the bus-stop is gone. The park, which was the old school field, is now deserted and quiet most of the time. And yet, if you ask me whether those memories are still there, I say, "Yes. They are still there." To me, it is not just a matter of keeping physical buildings. It is also trying to re-capture the spirit of the area, of the past. And when I look at the plans for the area, with SMU coming into the area and the new campus being located in the area, I feel tremendous excitement because I think this is going to bring back the old spirit of the area. It is going to bring back life into that very important part of the city. It is going to make that area once again throb with life and energy. That to me is probably as important, if not, more so than the whole debate of keeping the park open or the need for us to keep the library. And this is how I would like to see people view this new plan, to look at it in this perspective. When I met Mr Tay, I asked him why did he feel so strongly about retaining the library building because in 1988, he actually supported the removal of the National Library building. He told me he was involved with the National Museum at that time and the National Museum wanted to expand and one of the ways to expand it was to remove the National Library. I think he did not feel very strongly about the National Library then. I asked him, "Why have you changed your mind?" He said that he had discovered new historical facts about the library and he referred me to one of the poems which one of the young people sent to him. It was a poem by Edwin Thumboo. He gave me a copy. It is called "The National Library, Singapore" written by Edwin Thumboo, and one of the lines in that poem said, "To preserve the past, ensure the future." To Mr Tay, the library is more than just a library. It is an icon, a symbol. If you knock it down, you would have knocked away the past. If you preserve it, you preserve the past and therefore you ensure the future. After looking at his plans and looking at the whole redevelopment of the area with SMU coming in, I thought to myself that perhaps another interpretation of what Mr Edwin Thumboo wrote - "Preserve the past, ensure the future" - would be to actually redevelop the area along the lines that have been proposed. And what better way to preserve the past and ensure the future than to bring life back into the city, to bring back what was there in the past, the atmosphere, the hustle and bustle, the throbbing energy and vitality, thousands of young men and women going about their work, going to class, hanging around in the public spaces in between classes. I thought that really is something which is in keeping with the sentiments expressed because, by doing so, you are not just preserving the past, but you do so in a way which provides an opportunity, an environment, an institution which will benefit many generations of Singaporeans to come. I would like to say to Members of this House and to the public, please look at the plans when they are produced by SMU and the planners that have been commissioned by SMU to redevelop the area, to bring life back into the area, to bring back the past and give us a wonderful new institution which will cater to future generations of Singaporeans.

Mr Speaker, Sir, I think many of us would share an interest in the Minister's exciting vision of the street life. May I move to the question about the principles of consultation. The Minister has said that there seem to be more public sentiments now for preserving the building and, secondly, he has mentioned Mr Tay Kheng Soon, the architect, wrote directly to the Prime Minister's office. May I ask whether there are some general principles or circumstances that his Ministry would look at when considering possible change of plans? And secondly, may I ask whether there is a formal or regular route for any such suggestions from the public rather than everyone writing to the Prime Minister?

Sir, consultation is not something that we have suddenly discovered, that we have seen the light and now we have public consultation. If we look at the track record of the Government, not just my Ministry but other Ministries, there have been extensive public consultations in many, many areas. In this particular area alone, I went through in quite great detail the degree of consultation that took place more than 10 years ago, when the first plan for the Civic District was mooted. It was not just a plan that was put up. There was an extensive series of dialogue sessions chaired by the Minister himself. And arising from those dialogue sessions, there were a whole series of studies that were done. It was only in 1992 that the final plans were publicised and put into the public domain as a result of four years of consultation and studies. And even then, thereafter, when SMU was given the mandate to locate its campus in that area, I am given to understand that there was also a series of dialogues that were carried out with industry professionals, architects and members of the public. When a specific proposal came to us, we looked at it very seriously because the people who were behind this proposal were serious people. They put up serious proposals, spent a lot of time, money and effort in putting them up and I thought this was worth considering. There are many suggestions that unfortunately are not so serious. In fact, some of them are frivolous. I think those do not deserve the kind of attention that serious proposals deserve. This is the process that we have followed. Indeed, the Concept Plan is going to be reviewed this year and next year. My Ministry intends to hold a series of discussions and consultations with the public on a broad basis and, after that, we will take in the people's views and inputs and finalise the Concept Plan. It does not follow that every single idea or input that comes to us can or will be accepted. I think the Member himself would agree that it is not possible for us to do so. And it is this very nature of consultation which gives rise to this result. Some ideas we may take in and some ideas we may not take in, or we may not take in any ideas at all. But that does not, in any way, suggest that there is no consultation. If you ask me if there is a specific formula or process, the answer is no. There are many channels open. First of all, there is a proactive approach that the Government takes in terms of major plans and policies. Then there is the iterative process of feedback and discussion, back and forth, and there are other channels such as private communications. My Ministry meets with the industry bodies on a regular basis, with the Singapore Institute of Architects, with individual architects, engineers and so on. At each and every meeting, there is opportunity for dialogue and discussion. And this is the whole purpose of having these meetings. So, there are many different channels, including writing directly to the Prime Minister. I think the Prime Minister receives many letters on this and many other issues. What is the right way to go about it? What is consultation all about? I think it is about giving people who are affected by the plans which, in this case, means all Singaporeans, a chance to have a say in the plans before they are finalised. As a result, if we may have missed something, if we do, hopefully this will be taken care of. At the very least, they would have had greater ownership of the plans. And I hope the Member would agree that this is what we have done in this particular case.

asked the Minister for Home Affairs how his Ministry assesses registered groups which have been branded as cults by another government; whether it merely endorses the decision made by that government or carries out a separate assessment to come to an independent decision.

Sir, the Government, being a secular body, is not concerned with issues of religious doctrinal purity or deviance. We do not act against legally registered groups merely because they have been labelled as "cults". We are concerned only if the activities of a group contravene our laws, or are prejudicial to national security or interests, public peace, welfare or good order in Singapore. We would act against any such group, regardless of whether it has been branded a "cult" by other governments.

Sir, I would like to find out from the Minister the status of the Falungong group in Singapore.

Sir, the Falungong group is registered in Singapore as the Falun Buddha Society. As long as they do not, like I said, breach the law or do anything that is against public law and order, their activities can continue in Singapore.

Sir, I understand that an incident happened in Sentosa, where Falungong members distributed some pamphlets and they were arrested. I do not know whether this is true. Would the Minister of State clarify on what happened?

Sir, I am not aware of such an incident. Certainly, the general principle is that if anyone breaches the law, he will be dealt with according to the law.

Sir, what is Government's stand on the practice of Falungong?

Sir, as I have said, Falungong practitioners practise qigong in locations in Singapore. If they do not do anything that is unlawful or against the law, they will be allowed to continue.

asked the Minister for Home Affairs (a) what is his Ministry's stance on brothels; and (b) whether the number of such establishments is on the rise.

Sir, prostitution is not an offence under our laws. However, soliciting is an offence under the Miscellaneous Offences Act. Singapore is not the only country where prostitution is not an offence. Many other developed countries also adopt the same position. Governments around the world through the ages have tried to eradicate prostitution and brothels, but without success. The Ministry of Home Affairs has thus adopted a pragmatic approach to the problem, by confining prostitution to traditional red light areas, and through enforcement against prostitutes who solicit in public, and pimps who force women into prostitution. As a result of Police's enforcement actions, the level of vice activities in Singapore is under control.

asked the Minister for Education (a) if he will consider making the learning of Malay Language mandatory but non-examinable in all schools; and (b) whether he will encourage this at the primary school level.

Sir, the Government has adopted a bilingual language policy in our schools. English is the main medium of instruction. English is our common working language and is also the language of global business, commerce and technology. Each student is also required to learn his mother tongue to provide direct access to our cultural heritage in order to strengthen our values, roots and sense of identity. This bilingual policy is essential for our nation building. We also encourage students who are linguistically inclined and able to cope to study a third language. Malay Language is one of the languages that these students can opt to study as a third language. They do so in their secondary school years when they are more mature and can decide for themselves what their interests are. Learning two languages from Primary One onwards is already a challenge for our students. Such views have often been expressed by Members of this House also. From our experience, going beyond this to learning more than two languages will be academically very challenging and demanding for the large majority of our students. It is not realistic and is too heavy a burden to the majority of the students if the learning of a third language is made mandatory. However, schools, which have the resources and where there is a demand, may consider organising language classes as an optional enrichment programme for their pupils who are able to cope with the additional learning load.

Sir, does the Minister mean that students can have an optional Malay language class at primary school level? He was talking about Malay language in secondary school. I am asking for the introduction of the language at primary level. Can schools be allowed to do that? And can they be allowed to recruit their own teachers?

Sir, I have said that schools, which have the resources and where there is a demand, can consider organising language classes as an optional enrichment programme for their pupils who are able to cope with the additional learning load. I think it will be quite a demand for primary school students, in my view.

asked the Minister for Community Development (a) whether there is a need to assist self-help groups to set benchmarks and to increase their effectiveness in dealing with social issues; (b) how effective they have been in helping to deal with juvenile problems; and (c) what are the statistics of juveniles being admitted to institutions.

Sir, the self-help groups have their own goals which they set for themselves, and these goals serve as benchmarks for improvements. This is because each self-help group will know what is required for their own community, and they know what is realistic. Mendaki, for example, measures the impact of its contribution against the academic performance of Malay students at PSLE and 'O' level examinations. The CDAC has committees involving independent researchers, some of whom are from the universities, and they regularly review each programme to ensure that they serve the needs of the target groups. As for juvenile problems, they are complex and there are various causes. Self-help groups cannot address these problems on their own. Together with various VWOs and Ministries, these self-help groups tackle the problems with programmes which can reach out to both the parents and guardians of these juveniles. Mendaki, for example, has a Youth Development Programme which serves both the students in schools and school leavers. The CDAC has tuition programmes which also aim to involve and interest the family in the student's progress. And by addressing the educational needs of these less advantaged members of the communities and also concentrating on the training of the workers, the self-help groups intervene at the level where intervention can have the earliest and greatest impact, ie, upstream. As for the number of juveniles being admitted to institutions, the Singapore Boys' Home and Toa Payoh Girls' Home have an average of 220 admissions per year, from 1997 to 1999. These numbers have remained fairly constant over the years. The number of admissions of juvenile delinquents and those beyond parental control (BPC cases) to the juvenile institutions run by the voluntary welfare organisations has, in fact, decreased from 170 in 1997 to 97 in 1999. These institutions include Gracehaven, Pertapis Centre for Women and Girls, Muhammadiyah Welfare Home and Pertapis Children's Home.

Sir, the self-help groups were originally set up to assist the youths who were having problems with their studies. What is the scope of expanding the self-help groups into umbrella bodies to reach out further into the communities?

Sir, indeed, they have been doing these programmes incrementally. Mendaki, for example, has gone into the FSC business, as it were, together with some other institutional members. So far, I think they have opened two family service centres. In other words, they do go into these areas too. As I have said, the main concern for Mendaki, the CDAC and for the rest of the self-help groups is the educational performance of the communities. And they hope to improve the respective communities by addressing the problems upstream.

"to provide for making supplementary provision to meet additional expenditure for the financial year 1st April 1999 to 31st March 2000", recommendation of President signified; presented by the Minister for Finance (Dr Richard Hu Tsu Tau); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Resumption of Debate on Question (25th February, 2000) "That Parliament approves the financial policy of the Government for the financial year 1st April, 2000 to 31st March, 2001.". - [Minister for Finance]. Question again proposed. 1.12 pm

Mr Speaker, Sir, this year's Government Budget is underpinned by the remarkable recovery of the Singapore economy. We are glad to hear from the Finance Minister that the Asian financial crisis is largely behind us. Everyone could heave a sigh of relief. Because it was not so long ago that during the off-Budget measures announced in June 1998, that we were very concerned about a protracted U-shaped or, as the Deputy Prime Minister said, W-shaped, and a drawn out regional economic crisis that could last 2-4 years. The sufferings, not just to us, but also to the people in our neighbouring countries, would be unthinkable. Anyhow, we are all extremely glad that against all expectations, Singapore achieved a dramatic V-shaped recovery. What is even more remarkable is the fact that the Government FY99 Budget is expected to attain a surplus of $3.2 billion, as against an originally estimated budget deficit of $5.1 billion. This is a gigantic turnaround of $8.3 billion. While on the one hand, we wish to commend the Government, and the Finance Minister in particular, for this very positive turnaround, on the other hand, we wish to better understand two things. One is the reason for this discrepancy for the huge budgetary miscalculation, and hence whether the budget induced belt-tightening measures were unnecessary pains for the people and the local companies. The second point is whether, after achieving such a remarkable positive budget surplus, more could be done to reward the people and companies who have rallied so solidly behind the Government at the time of the economic crisis. Sir, I notice that for this year's Budget, the press had been hard put to pin a label or tag for this Budget. The Straits Times has been kind in calling it a "something for everyone" budget. But have not all past years' budgets been something for everyone? I think the best description for this year's Budget is that it is an e-Budget. It is an e-Budget not just because of its strong biasness towards e-commerce, but it also caters to the elderly, entrepreneurs and ESOP. In addition, I call it an e-Budget because it is an economical Budget, ie, a Budget that is economical in giving away just about enough, without being too extravagant. Sir, the Government has achieved a sterling performance in the management of the economy and the fast turnaround. The fact that we could achieve a budget surplus in FY99 as we were barely emerging from the crisis is extremely commendable, as I said earlier. However, for this year, I am disappointed that with such a good surplus, the Finance Minister has decided to so quickly roll back the set of economic recovery measures, and has not given enough goodies to reward the people for suffering through the belt tightening situation. Essentially, I feel that the Government could have retained the bulk of the economic recovery measures for another year. I recall that during the off-Budget debate in June 1998, we had likened the Finance Minister, our good Doctor Hu, to a medical doctor who was dispensing medication to the sick patient (the Singapore economy) which was suffering from a serious bout of flu. The medications were the budget recovery measures. It seems to me now that just as the patient is beginning to show signs of recovery, the good doctor has decided to roll back the medications. Has he cut back on the salubrious good doses of antibiotics and pills? Is this wise? Are we pulling back too quickly? Mr Speaker, Sir, my concern is that the patient (which is the Singapore economy) is just beginning to enjoy a sharp and good recovery, and then the course of medical treatment is quickly cut back. Would the recovery spatter? Should we be consistent in going through the full course of recovery measures, which are originally meant to be over two years? In fact, why not add more vitamins and beneficial herbs to further strengthen the patient, and be doubly sure that he becomes strong and robust, and can run even faster ahead in the race? Hence, in looking at the package of recovery Budget measures announced, I feel that the Government should not have removed the 10% corporate tax rebate for companies. The 10% savings on corporate tax would be very helpful for companies to further fund their capital expenditures for automation, IT spending, streamlining and restructuring. To reward the individuals in accepting the belt-tightening measures, I would have thought that they should be rewarded by keeping the 10% personal income tax rebate, instead of cutting down to 5%. Sir, it is apt to call this Budget an e-Budget. As we move into the new millennium, there is a need to prepare Singapore to participate more deeply in the New World Economic structure. The world is changing so fast that the recovery, and a sustained growth for that matter, cannot be taken for granted. The point is that with the advent of new technologies, telecommunications and the World Wide Web, or commonly called the Internet, the world is changing and coming together at a very fast pace. The essence is to be e-relevant, and not become irrelevant. If Singapore becomes irrelevant in the new world order, we will surely fall by the wayside and wither. Singaporeans should be made to understand that in the new world order, we are no longer competing amongst ourselves in Singapore, or just against our neighbouring countries. Because of technological and communication advances, we are forced now to compete with the best in the world. If we cannot compete against the best in the world, we will become irrelevant. For example, the DBS Bank is no longer competing with other local banks, but against MayBank, HSBC, BNP and Citigroup and other premium banks in the world. Our NOL and SIA have to compete worldwide. Even our small traders and retailers are not just competing against other local retailers and traders, but have to face up against the retailers and traders in other countries. Ultimately, in fact, they will be competing against the e-commerce virtual companies, like Amazon.com and e-Bay. Nowadays, people choose not only which is the best and cheapest retail store to shop, but also which is the best and cheapest country to shop. As a country, we have to compete against other countries as the best place for our people and foreign professionals to live and raise their children. People also have many choices as to where to park their money. Singapore, because of our inherent domestic constraints, has lost its gloss as the best place to shop. We also cannot lay claim to be the best place to live. But we must continue to be a place where investors are prepared to put their money, and local and foreign professionals find conducive to work in. Against the backdrop of the New World Economy, Singapore and Singaporeans have to stay relevant. The Budget therefore has to address two key imperatives. One is to devote sufficient funds, effort and attention to build Singapore into an advanced knowledge-based economy that can compete with the rest of the world, and the second is how to mould and build up our local people and capabilities which, infused with the right measure of foreign abilities, would be able to measure up against the best in the world. Our Government leaders, including PM, SM, DPM and other Ministers, have spoken recently in their speeches to embrace IT, be enterprising, be risk taking and facing up to the new challenges ahead. On account of the fact that we need to compete globally, I am disappointed that the Budget measures fall short of giving a shot in the arm for our companies and individuals to help them to prepare and propel them into the IT age. Bill Gates, the founder of Microsoft and reputed to be the richest man in the world, in his book called Business@the speed of Thought, said that in the digital technology age, business in the years 2000s will depend on velocity. That is, success depends on how quickly businesses are conducted. Thus, he means business is at the speed of thought, which is at the speed of light. Speed itself is a strategy. A good example is the recent saga of the sale of Cable & Wireless Hong Kong Telecom (HKT). Among the many factors, including political, I feel that Pacific Century CyberWorks has won the deal because of the speed with which they could react to the news that this company is available for sale and that they could make decisions very fast. Hence, speed is important. Anyway, let us leave this saga of the Cable & Wireless Hong Kong Telecom to another avenue for debate. As I was saying earlier, I feel that the Government Budget could have been bolder, speedier and more generous to help propel Singapore into the IT age. At the corporate and individual levels, the Budget could have been bolder in giving encouragement and incentives to those who dare to take risks. If the risk-takers who started ventures failed, they could be encouraged to start again. For those who succeeded, they should be richly rewarded. Moreover, in the process of carrying out their ventures, we should review and ensure that the Government agencies and Government regulators should facilitate rather than put obstacles in their paths. To encourage more companies to embrace IT technologies and invest in new ventures, I would like to suggest that the Finance Minister could look into the following areas: First, group offsetting of operating losses. The Government has been hesitant to allow group offsetting of subsidiary losses because of the concern over abuses and leakages. This is understandable. However, I feel that in the case of a genuine desire to venture into a new business, the company which is taking a huge risk can be allowed to offset their share of the losses in the subsidiary ventures against the profits in the other main businesses. If operating losses of new ventures can be allowed, a company's risk adversity would be reduced. If the Government is concerned about giving a blanket group offsetting approval, then approval can be granted on a selective industry basis. For example, such group offsetting could be considered for approved investments in IT and e-commerce. Second, give pioneer status for start-up ventures. As in the early years of Singapore's economic development, pioneer status was given liberally to new companies so as to stimulate industrial development. I think the same approach can be taken for start-up companies in the new pioneering fields such as IT and e-commerce. They are pioneers indeed in an unknown and fast moving environment of the IT and e-space. They have to move at the speed of thought and compete against the best in the world, such as their counterparts in the Silicon Valley in the USA, or other similar start-ups that are sprouting in other parts of the world, such as Canada, Europe, India and even China. I wish to suggest that these start-up companies in Singapore can be given 5 years pioneer tax-free status. The above two incentives are meant to work hand in hand to encourage a proliferation of start-up companies and build up a sizeable pool of financial backers. Many of these start-ups, perhaps as high as 90%, will not make money or even survive to enjoy their first 5 years of tax-free status. However, for those technopreneurs and their financial backers who succeed, they will be hugely rewarded. And Singapore will benefit, because we have managed, in the process, to become e-relevant, instead of irrelevant. Sir, this widespread, I would call it, "broadband"approach is better than a selective guarded "arrow band" approach, because of the uncertainty of technological changes and velocity of such changes. We do not know for sure which companies, whether a large GLC or a small start-up, will have the ideas, responsiveness, drive or creativity to succeed. Therefore, by encouraging as many as possible start-up companies to be formed, and give them the correct incentives and environment, hopefully, some of them will succeed. Even those who have failed are not lost, since the entire process will help propagate an environment in Singapore of technopreneurship and risk taking, something which both our PM and SM have said is sorely lacking in Singapore. For those who succeed, they will become our hero stories. In Singapore, we are also in dire shortage of home grown success stories. The only often-quoted one is Mr Sim Wong Hoo of Creative Technology. I feel we need more of such success stories, as they are plentiful in the USA, like Stephen Case of AOL, Jeff Bezos of Amazon.com and Lawrence Ellison of Oracles, or Masayoshi Son of Softbank in Japan. The third is tax relief or double taxation allowances for IT expenditures. As a move to encourage companies to adopt IT systems and re-engineering of their businesses, I would like to propose that the Finance Minister consider giving tax reliefs or double taxation allowance for companies which want to spend money to purchase IT equipment that will improve their productivity or efficiency. This incentive will be particularly important to SMEs which are usually not IT oriented, and do not have the in-house technical expertise to help them push into the IT environment. Fourth, personal income tax reliefs for purchase of computers. As I said earlier, I feel strongly that as the Government has achieved a substantial surplus of $3.2 billion, it could have been more generous in rewarding the citizens. Of course, the $250 CPF top-up payment into the individual's CPF account is a very appreciated gesture. In addition, I would like to propose that the Government consider giving a tax relief of, say, perhaps $500 a year to all citizens who purchase a personal computer. The objective is to encourage all citizens, whether young or old, to purchase a personal computer (PC). I am very pleased to read about Government's intention to commit $25 million over three years to provide used PCs to the lower income group, as announced by Mr Yeo Cheow Tong, the Minister for Communications and Information Technology, last week. However, I think that the used PCs scheme may not be enough to reach all the households in the lower income group. Some people may not be interested in using used PCs. They may think that it is too slow or it may not have the advanced features to excite them. My proposal, which is to give an incentive of personal income tax relief to purchase new PCs, will serve as a meaningful gesture and a supplementary scheme to this MCIT scheme. This will be particularly meaningful to the middle and lower income groups to encourage working adults to purchase PCs, whether for use at home or in the office. For those who are not paying personal income tax, an alternative scheme can be devised, whether the local constituency's grassroots organisations, such as the Citizens Consultative Committees (CCCs) can become the channel through which the Government can give out a grant of, say, $200 each to encourage the lower income groups to buy PCs. In addition, I would like to propose that, so as to promote a wider spread of IT and computer education, especially for the adult or older population, the Finance Minister encourage adults to attend self-improvement computer courses. Again, personal income tax relief of, say, $500 each can be given for attendance at computer courses conducted by approved educational companies. Similarly, for those people of the lower income group who do not pay personal income tax, grants can be given to designated grassroots organisations such as the CCCs to conduct computer courses, where the lower income persons can attend at discounted rates. While it is suggested that Government funds be used to foster knowledge technology, e-commerce talent pool and skills, and prepare our economy for the global stage, we must also devote money, effort and attention to build and enhance our local capabilities. Here, Mr Speaker, Sir, I am referring to how to assist our SMEs. While we wish to promote a pool of companies and individuals to compete against the best in the world, we must not forget that there is the main body of the working population and the SMEs which employ them who need help to change and adapt to the new economy. These SMEs need to understand the technological changes in the market place, how they can restructure or adapt, and how their owners, managers and employees can be trained or retrained to remain employable. This is how to remain e-relevant. As the Minister has said, some sectors of the economy are not fully out of the woods yet. These sectors will continue to need assistance. They are the retail, tourism, construction and trade sectors. They may think some of the budgetary measures could mean that their recovery process may slow down or take longer. I would like to appeal to the Minister to look into industry specific measures that can be implemented to continue to assist these sectors that are lagging behind in the recovery. This could be achieved by the Finance as well as the Trade and Industry Ministries calling for separate meetings with representatives of these sectors, so that their problems can be studied in depth, and appropriate assistance given when necessary. Similarly, the local small and medium enterprises (SMEs) may be slow in achieving a quick recovery because they are beset with multifarious problems, such as heavy overheads, labour and managerial insufficiency, low productivity, rising retail and labour costs and structural changes. Therefore, better liaison and consultation between the Government and the SMEs will give rise to effective targeted measures to assist them. Mr Speaker, Sir, I would like to conclude by urging the Minister for Finance to take a more urgent, bolder and generous approach to prepare Singaporeans and the local companies to meet the challenges of the new economy. As the Finance Minister has said in the conclusion of his Budget's speech: "We have to face up to the challenges of a globalised economic system and keep pace with changes . . We need to accelerate the pace of economic restructuring. ." Thus, I would like to urge the good Finance Minister, do not hold back your pen, write in the benefits and incentives now, so that we can be better placed to meet the velocity of changes ahead.

Mr Speaker, Sir, just like Mr Leong before me, I too find the turnaround of a projected budget deficit of close to $5.1 billion in FY99 into an actual budget surplus of $3.1 billion, a swing of $8.3 billion, to be a great surprise. Like a magician, the Minister has managed to pull the proverbial rabbit out of his hat. Mr Speaker, Sir, maintaining budget surplus is a good thing. On the other hand, perhaps we should also revisit the circumstances under which FY99 budget was presented. Time was bad, prospect was gloomy. Economy was in recession. As we all learned in our first course in economics, the economy needed a shot in the arm from the Government's spending. FY99 budget was supposed to do just that. The Government planned to maintain its spending even though it meant incurring a deficit. However, by the close of the financial year, the Government's cup overflowed. I notice that in arriving at this budget surplus, besides higher than expected revenue, the Government actually incurred $3.4 billion less development spending partly because of better prices and partly also because of some lower priority projects being rescheduled. Development expenditure for FY99 stands at 6.9% of GDP, and that is lower than 8.7% in FY98. The question is why should some lower priority projects be rescheduled? Were there good reasons to do so? Is there a change of heart of the Government from trying to extend a helping hand to the economy into a hands-off stance? Basically, in my mind, Sir, if prices were good, should the Government not let out more contracts to gain better value for money? Should we not pump prime the economy a little bit more by keeping those lower priority projects in the pipeline? It seems that some of these lower priority projects might include something like pedestrian bridges, road widening and other civil engineering work that would be needed sooner or later. In my own ward, I was informed by the authority that a pedestrian overhead bridge originally slated for completion in September 1999 would be done. Yet even at this very moment, there is no sign of any activity. Could this particular project be a victim of one of those lower priority projects? If so, are there many more such similar projects? As we all know, the recovery is actually spotty. So would the construction industry not be given a boost if these lower priority projects were actually let as scheduled? Furthermore, we are all aware that the Government has cut back on MUP and IUP in HDB estates because of the projected budget deficit. As the economy turned around towards the middle of the last fiscal year, could the Minister not be more generous by allocating more money back to HDB so that such upgrading programmes could be maintained? I feel that the Minister has been overly conservative in this particular respect. Mr Speaker, Sir, looking at FY2000, it is noteworthy that development expenditure has increased to $12.9 billion, an increase of $2.25 billion. But by doing so, it merely brings us back to the same level of development expenditure as in FY98. Part of this increased expenditure probably includes those lower priority projects I mentioned earlier. It is also pertinent to note that as a percentage of GDP, the new development expenditure stands at 7.8% and while it is higher than 6.9% in FY99 it is actually lower than 8.7% in FY98. Development expenditure is an investment into our future. I would like to see development expenditure being maintained at a higher level compared to what is provided in FY2000. What strikes me as unusual in this Budget is that close to $1 billion has been set aside for new priority projects that may materialise in FY2000. This is a very interesting sentence in the Budget Statement, since most development expenditures would require careful planning, and it is unlike this Government to allocate such a large amount for new priority projects that may come about within a short period of 12 months. So my question is: Does the Minister have something up his sleeves? Is he saving some goodies for Singaporeans? If so, would he be kind enough to drop some hints? I am glad to note this Budget provides a significant increase for Education, historically the second largest allocation after Defence. There is a 15.3% increase in Operating Expenditure and 21.7% increase in Development Expenditure. This reflects the importance this Government attaches to education of our children, in particular for the coming knowledge-based economy. I hope this is not a once-off increase but part of a long-term investment in the future. Mr Speaker, Sir, let me now comment on the various tax changes in this Budget. Before doing so, allow me to report that the Feedback Unit had conducted a series of dialogue sessions in the middle of this January with the business community and the general public as a prelude to the Budget. The Feedback Unit moved the dialogue session ahead of the Budget so that the inputs of the participants could be considered in the preparation of the Budget. I chaired the English language session which was held on 17th January 2000. Participants of the session for the business community were drawn from the various chambers of commerce, small and medium enterprises, as well as selected corporations. The wish list is a long one and it is included in the report of the meeting. The general consensus of the business community was that the recession is by and large over. Nonetheless, the recovery is spotty with some sectors, such as construction, retail, still reeling from the economic downturn. Furthermore, many companies have suffered during the recession and are still in the process of recuperation. The participants generally would like the Government to maintain the various cost-cutting measures implemented by the Government for another year. Doing so will allow most companies to restore their health to deal with the challenges of the future. On tax-deductible savings for retirement, one participant, noting that expatriates are exempted from the CPF scheme, suggested that a tax-deductible individual retirement saving scheme be established. On saving for retirement, it was noted that most taxpayers do not enjoy tax deduction for their insurance premium payments as their CPF payments exceeded the eligibility condition for deduction. Perhaps additional tax allowances could be given to insurance premiums. Apparently, Sir, these appeals found a sympathetic ear with the Minister. He has maintained a number of cost-cutting measures, albeit at a lower level. For instance, property tax rebate is being extended for another year at a lower rate of 25%. Corporate tax rate will be lowered to 25.5% from 26% but only from Year of Assessment 2001. With the withdrawal of 10% corporate tax rebate for this year, Year of Assessment 2000, the corporate tax rate effectively will return to 26% from 23.4%, and then later down to 25.5%. The question is why should we subject the businesses to this variation of corporate tax payable. Furthermore, the Minister is fully aware of "tax haven" provision in many developed countries that would be triggered against a host country when its corporate tax rate drops to 25% or below. As such, the use of lower corporate tax rate to make Singapore more attractive for multi-national companies has its limitations. For instance, in Japan, I believe that the "tax haven" trigger is exactly at 25%. So, after this rate has been lowered to 25.5%, there is really not much leeway left for the Minister to play with. I am sure the Minister has been exploring other fiscal measures to enhance the attractiveness of Singapore to foreign investors. So it would be useful if he could elaborate on some of these measures. Taking the half step in this fiscal year, it is clear that the Government is preparing the ground for a complete withdrawal of all the cost-cutting measures implemented earlier. So I think Singapore business leaders and workers are well-advised to be prepared mentally. On the personal income tax measures, most Singaporean taxpayers express disappointment that the personal income tax rate has not been adjusted this round. Furthermore, the once-off 10% rebate is also withdrawn altogether. As a trade-off, the Minister announces a few measures that while laudable, do not bring about much immediate benefits. I am glad that the Government has accepted the recommendation of the Inter-Ministerial Committee on the Ageing Population to implement a tax-deferred voluntary saving scheme next year. This is a good idea to complement the CPF scheme for those who can afford it. However, for most Singaporeans who are already putting away 30% of their income into CPF, I doubt many would be able to take advantage of this scheme. Furthermore, for those who are likely to participate, they are either high-income earners close to the age of retirement or young unmarried singles without many obligations. Although the details of the scheme are still being worked on, I would like to ask the Minister whether the saving in this SRS could only be withdrawn after the official retirement age, as at today at 55, or otherwise determined by the Government. Would he consider not imposing a retirement age at all in this SRS, so that the individuals who put money in this SRS could decide as and when to withdraw the saving? I think this flexibility is useful and important, and it would encourage the individual to save for rainy days, periods of unemployment, dire needs, or for those who are prepared to go back to study by taking time off from working. Since the Government is agreeable to allow foreigners working in Singapore to participate in this SRS, it would have addressed the concern raised by expatriates during the feedback sessions I mentioned earlier. It will overcome some of their concerns regarding how they would save for retirement. Next, I would like to touch on the extension of the tax relief scheme for CPF cash top-up for grandparents. This step is laudable but, again, I wonder what kind of impact this would have. First of all, most taxpayers with grandparents are likely to be young, below 30 years old, and furthermore their parents are still likely to be very active in their working life; in fact, in the most productive of their working life, and would be able to support their grandparents. These young taxpayers are probably still establishing themselves in the world and not many of them would be able to contribute up to $6,000 a year to fully benefit from this scheme. Perhaps, the Minister can inform the House how many taxpayers could take advantage of this particular scheme and therefore achieve his objective to enhance "inter-generation ties". Would it not be more beneficial if the Minister could review the CPF cash top-up scheme for parents, but not for grandparents? There are many taxpayers today who have made use of this scheme to continue to support their parents and have reached the limit of the tax relief for cash top-up because there is a provision for the Minimum Sum limit. I would urge the Minister to review the limit of this Minimum Sum so that those who have already reached the limit can continue to enjoy tax relief when they continue to support their parents. The Minister is aware that the Minimum Sum has actually been increased from $30,000 to $60,000 over the years. Depending on their age, different senior citizens today would have different top-up limits. The older ones would be entitled to $30,000 and the younger ones would then be entitled to $60,000. As we all know, the older the person the more expenses he would incur. So the Minister would find great support among Singaporeans if he could, in the first instance, revise all the top-up limits to $60,000 so that all those who have reached their existing caps today could continue to obtain tax relief for their filial sons and daughters who contribute to their support. Secondly, I would urge the Minister to increase the annual contribution limit from $6,000 to a higher number. I surmise the total revenue loss if we undertake all these measures would be a small number and doing so would go a longer way towards promoting filial piety and the concept of extended families. Another tax incentive that I would like to see in the Budget but did not get a nod from the Minister is the tax incentives for the third and fourth child. Currently, the incentive is set at $10,000. But this limit was set close to 10 years ago. It is time to review the amount and I would like to urge the Minister to consider increasing this amount to encourage larger families for those who can afford it. Mr Speaker, Sir, Singapore has gone through a recession and came through unscathed. Our coffers are in great shape. I would like to thank the Minister for his outstanding contributions as Minister for Finance during the period of his term of office and for his stewardship of the Ministry during this crisis. Despite his recent health problems, he has continued to serve Singapore selflessly. Indeed, Singaporeans are indebted to him.

(In Mandarin): Mr Speaker, this year we have the good fortune to debate our Budget on a happier note. Our economy has got out of the difficulties brought about by the regional financial crisis. A friend of mine has drawn an analogy of the ups and downs of our economy. He said that each time we entered the Year of the Tiger, our economy would face difficulty. From the financial crisis in 1998, the recession in 1986 and the oil crisis in 1974, it seemed to have formed a pattern or a rule of some sort. Fortunately, after the Tiger Year, we would be able to jump up again like a rabbit, followed by the vitality of the Year of the Dragon and the dance of the golden snake. The prospects seem bright again. Sir, this may well be a great coincidence. In reality, we cannot blindly believe in this kind of rule and our economic development cannot be taken for granted. We are able to go through the difficulties because of the strong tripartism that we practise in Singapore. When the time becomes better, we should spare no efforts in enhancing the strong partnership and nurture our togetherness as a nation - one country, one people, one Singapore. Our tripartite partners have to constantly work closely to strengthen our competitiveness so as to expand our economic pie. In this way, we would be able to safeguard our workers' jobs and also help to improve their quality of life. Mr Speaker, Sir, another main reason that Singapore was able to recover so quickly is Singaporeans' ability and willingness to see the big picture and accept the bitter medicine to help nurse our economy to health. This kind of selflessness helps us to recover quickly. During the economic crisis, many companies closed down and thousands of workers were retrenched. For those who were able to keep their employment, many had to accept wage freeze or wage cut to help the companies tide over the difficult times. We should therefore thank all the workers for their understanding and sacrifices. I am glad that the Government has decided to top-up $250 in each worker's CPF account. It is certainly a good gesture to reward our workers for the sacrifices they had made. This will also help to strengthen the trust in our leaders. I hope the Government will consider the suggestion that such CPF top-ups for workers should continue whenever there is a good budget surplus until the CPF cut is fully restored. Mr Speaker, to the majority of our rank-and-file workers who earn a basic salary of less than $2,000 per month, the sum of $250 is equivalent to about 2% of the employer's CPF contribution. I am also very glad that the ordinary Singaporeans are not left out in this year's Budget. The service and conservancy charges, utilities and rental rebates for HDB residents amount to $154 million. If we take the CPF top-up, the contributions to Medifund and Eldercare Fund, individual income tax relief and so on, the total giveaway is more than $1 billion. This is a glowing testimony that ours is a caring Government. However, our economic recovery is not exactly an even one. Some sectors of our economy are not quite out of the woods. Quite a lot of workers are not free from worries. They will be happier if the once-off personal income tax rebate could remain at 10% and everybody will be happy. I also welcome the additional tax relief for the maintenance of parents. It is a good incentive. But I hope the Government would consider higher tax relief for those who look after their parents by making an effort to stay nearby or in the same HDB estate with their aged parents. Such people should be given higher tax reliefs. Mr Speaker, Sir, we are moving in this fast-paced competitive world, and as the Chinese saying goes: "Know yourself, know your enemy and you will fight a 100 battles and win them all." We must know our weaknesses and our strengths. I also recall reading an article by IDEA of London suggesting a looser monetary policy, keeping our wages at a competitive level and containing our industrial and commercial property prices as the key strategy that we should consider. I agree with these suggestions. As far as our wages are concerned, we have taken steps to make them competitive. It is only proper that we also align our industrial and commercial property prices to make them even more competitive. As a labour movement, our first priority is the well-being of our workers. We must see to it that they have jobs. When we negotiate wage increases, we always take into account two factors: (1) productivity gains; (2) the ability to pay by the company. But wages form only part of the overall business costs, and, in fact, only a small part. It would also be good if the non-wage costs, particularly Government charges, could be held down so that companies can continue to operate profitably in Singapore and our workers will have good jobs. It is only then that we would be able to create a good environment of doing business for the companies and our workers will be able to have better jobs and enjoy higher standard of living.

Mr Speaker, the Budget for the Year 2000 which has been recently presented is a realistic Budget. We are indeed pleased to see that we are getting into the economic growth again and this is encouraging. I commend the Government for taking various measures to deal with the economic crisis we faced earlier and the Finance Minister for his good financial management. Sir, it is not easy to persuade him to do more than what he has set aside for the Budget. I have tried hard every year to try and tug at his heartstrings to get more funds to be released, but each year I have great difficulty. I hope that this year, with the new millennium, he would be able to hear out and accede to some of the requests that I would be putting up. I hope that he will be able to see what he can do more for the community. Sir, I have a few suggestions and observations to make relating to the Budget. With the restructuring of our economy, we expect more labour intensive industries to relocate and this will displace our older workers who are middle aged. I think we know some of their problems. But I feel that we need to monitor and see the impact of this changing economy in terms of their employability and how they are likely to be affected. They will face difficulties in finding the same type of job and salary. They will be less employable because they do not have the skills to fit into the changing job requirements. The employers will take advantage to employ cheaper semi-skilled and skilled foreign workers and this compounds the problem further as they tend to pay these foreign workers less salaries and, to some extent, the Minister for Manpower is trying to ensure that we have a foreign worker levy. But somehow I think they will find a way out to depress the wages further. Sir, there is a danger of structural unemployment amongst older unskilled workers. It will be painful for them as they have teenage children to support, in terms of their education and other needs. Sir, may I draw the attention of the Minister for Finance that funds allocated to skills training are inadequate to train more than one third of our unskilled and semi-skilled workforce. In order to make a good impact, further tax rebates to encourage employers to upgrade their workers should be considered. More worker training funds should be allocated to ITE so that it can work with NTUC and the Ministry of Manpower to implement a more comprehensive plan for older worker training to enhance their employability. This is going to be a critical problem that we will face in the next five to 10 years, especially when the economy is being restructured and we are moving to a knowledge-based economy. This has got a tremendous impact. I feel there is every reason for the Ministry of Finance to allocate more funds to the Ministry of Manpower, trade unions and other sectors which can help to prepare the workers to meet the challenges ahead. And unless and until we do this, there is no point saying that the workers need to be trained and we need to prepare them for the KBE economy. All this remains rhetoric unless we really translate them into real action and there is indeed an urgent need for the Ministry of Finance to allocate the funds because there is a surplus and we can do more for this group of workers. Sir, the other issue that I would like to raise is that Singaporeans are appreciative of the CPF top-up of $250 in their ordinary accounts. This is indeed a bonus for the working class Singaporeans and I must say that many governments cannot afford to do this. This is only possible because we have done well and the Singapore Government, trade unions and employers have worked together to try and revive the economy. This is an important effort that we have all jointly undertaken and I feel that the Minister for Finance could be more generous as mentioned by my colleagues, Dr Wang Kai Yuen and Mr Leong Horn Kee, who have urged the Ministry to see whether it could roll back some of its plans and allocate more funds for those who have contributed. The Minister should be urged to grant a grace period until the end of this financial year, 31st March 2000, for retirees and retrenched workers to make one CPF contribution so that they can get their CPF top-up. This group could not make the CPF contribution because they could not find employment within the cut-off period. It would be a good gesture and a show of good heartware of the Government to extend the benefit to them if they can make the CPF contribution soon. I hope that the Minister for Finance could look into this issue because I know many of them deserve it, and attempts could be made to see how their CPF top-up could be granted. Sir, there is a continued case for us to review the status of low-income pensioners and each year, I have tried to persuade the Minister to see what can be done for this sector of the population and also for the poor segment of the population who need help. We need to examine more closely the impact of the recession on their livelihood. Some of them are retirees, others are older and jobless persons and pensioners with low pensions. They all deserve a little more attention for the simple reason that they have contributed to Singapore's past development. As for the low-income pensioners, I have sounded their plight to the Minister many times. I hope that this time, he would open up his purse string and distribute at least a one-time year-end payment during good times for them. We should not forget them as they have given sterling service. For the low income families and single elderly, it will have greater impact if rental rebates and rebates for SC&CC charges can be increased by 25% per month. This will reduce their burden of increased cost of living, particularly meeting basic necessities, and many of them do not really have any income. They deserve our attention and I feel that we could do more. Sir, the Minister has considered the need to encourage family members to take care of their aged parents. He has increased the tax relief for looking after the aged parents to $5,000. This is reasonable but he has not taken into consideration the financial burden of those who have to look after their aged sick parents. I hope he will be generous, at least, to this group next year. We have to examine more closely the social consequences of corporatisation of our public services and the restructuring of our economy to a knowledge-based economy. We must see that public services remain affordable and the working class is not priced out of the market to purchase goods and services. The Government must intervene, when necessary, to mediate and enable working-class families to have access to services by levying charges which remain within their reach. In short, many of these services would have to be reviewed to ensure that they remain affordable. Otherwise, we would have a large sector which may not get access to the services for which they require. In consequence, if we remain aloof and oblivious to the needs of this group, we can expect the social divide to widen and people who are productive may give up the race because they cannot catch up. Therefore, policymakers who are involved in the promotion of KBE should look closely at the dangers of the wide digital divide and how those who have IT skills and those who do not can be bridged through skills training and education. Here, I must say that we need to prepare a younger generation of Singaporeans, as early as pre-school age, to IT exposure and deploy more funds for the promotion of IT education at grassroots level and within the means of the working-class families. The $25 million which has been allocated by the Ministry of Communication and Information Technology is actually peanuts in the light that there are many people who need to be trained and exposed at the grassroots level. The Ministry of Finance could, in fact, be more supportive of this scheme and allocate more funds to the Ministry so that it is able to promote hardware. Hardware is essential but without trainers and people to provide them the guidance, exposure and education, it remains not effective and does not make an impact. And many of these hardwares will remain as white elephants in many of these centres because there are not sufficient attempts to see how the training is carried out at the grassroots level to those who really need to be exposed. Sir, we should allocate and deploy more funds to the younger children within the community, particularly at the pre-school centres, and if this could be done earlier, many children who belong to the working-class families can get early exposure or an early headstart so that they could catch up and remain in the forefront of the KBE. Otherwise, if we do not do this, our drive to KBE would land us up in KJE, a dead-end road for the less well-off families. Sir, to conclude, I must say that we have done well despite serious social and economic difficulties of the region. We will face more challenges when we restructure our economy and we must pay more attention to the semi-skilled and unskilled generation of workers who will need more support to cope with the changing economy. Sir, on that note, I support the Budget.

Sir, may I seek a clarification from Dr Vasoo? Dr Vasoo mentioned in his speech that he is afraid that there might be some services which may be out of reach of the lower income families. Would he elaborate on what these services are?

I think the Member should raise the question with the Minister or the relevant Ministry. But what I am saying is that for the working-class, education, health services and other related services must be within their reach. The prices that are charged should remain affordable so that many of these families, at this juncture, do get access. I hope that it continues to be so and the respective Ministries should see how subsidies and other related aspects could be given to ensure that we do not leave out a group of people who otherwise need support.

Sir, this year's Budget is an inconsequential one. The workers have not been given any significant benefits, neither has the business community. The real beneficiary is the Government, as usual ending up with hefty surpluses. Firstly, let us look at the position of the workers. For two years, our workers were at the forefront in the fight against the recession which has gripped this country and the region since July 1997. The workers were the first to suffer. Their casualties include massive retrenchments, pay-cuts and lowering of the employer's CPF by 10 percentage points. Our workers have suffered. They were the ones who were affected most by the cost-cutting measures, to hold back the recession and not let it get worse. Yet, at this time, when the economy has basically recovered, what do we see? No rewards for the workers, only pittance of small rebates of service and conservancy and other charges for HDB flat dwellers. Those rebates are less than the ones given last year. The two years' recession has left the workers worse off this year. Last year, many of the workers still had some savings to rely on but after two years of recession, all their savings have dried up. And this year, they are in a worse position than last year. They should be given more benefits this year. I think the Minister should have been more generous and reward the workers. The employer's component of the CPF should have been restored at least by a further 2 percentage points, if not more. I do not think that the economy shall be adversely affected if 2 percentage points of the employer's CPF contribution are restored. The economy of America is strong. So too is that of the EU. Japan's economy is said to have bottomed out in 1999 and it is on the road to recovery. The countries in the region have all recovered from the recession and are showing positive growth too. For Singapore, the NUS Economic Studies Unit predicted that its GDP shall be 7.9% this year. It can be seen that the world, the region and Singapore's economic prospects are not that bad. Therefore, there is no reason for the Government for not increasing the employer's CPF rate by another 2 percentage points. At the moment, there is already a restoration of 2 percentage points of the employer's CPF to take effect on 1st April this year. I do not think that that is enough. With the high cost of living, workers in Singapore are generally living from hand to mouth and any cut in the CPF shall certainly cause hardship among them, as happened in 1998. On the other hand, an increment of the CPF rate contribution, even if it is only 2 percentage points more, shall be a great help to the workers as most workers have to pay their HDB monthly loans through their CPF. It is really a sad day for the workers on Budget day not to have any restoration of the said employer's CPF contribution rate. So much for the gratefulness of the Government, for the sacrifices made by the workers. When times were bad, the Government called upon the workers to accept a lowering of the CPF contributions, to tighten their belts, to accept pay cuts. The workers responded positively. There were no strikes, no trouble given to the Government. Yet, when times are good again, the Government appears to have forgotten the sacrifices made by the workers. Other than the two percentage points which the Government has restored to the workers, the other thing that the Government could do is to lower the foreign maid levy, which now stands at $345 per month per maid. I have been told that the foreign maid levy is higher than the salaries received by the maids themselves. My feedback is that, generally, a Filipino maid receives $350 per month, an Indonesian maid receives about $240 a month, and a Sri Lankan maid receives about $200 per month. The Government makes the most money when a foreign maid is employed in a household in Singapore. Yet, the Government has not provided any services to the foreign maids. The Government has not provided training for them to be good housekeepers or child minders. The only thing the Government does is to allow them to work here and impose a heavy levy on them. The foreign maid levy, to me, is nothing more than a tax imposed on the maids. The Government says that the rationale for such a high rate of levy or tax is to prevent Singapore from being flooded with foreign maids. With such a high levy, the great number of foreign maids wanting to work in Singapore has not diminished, but still continues to increase. As we have heard on the sitting of 22nd February 2000 in this House, the Minister for Manpower said that there were about 100,000 foreign maids employed in Singapore. So, the number of foreign maids working in Singapore has not abated, but it is increasing despite the imposition of the high rate of levy. The fact is that there shall always be families wanting to employ foreign maids, as both spouses have to go to work. The cost of living is so high that families generally cannot depend on the income of one breadwinner to support the whole family. As a result, when both spouses are required to seek employment, a foreign maid has to be employed, primarily to look after their children and aged parents, and to cook for them. The employment of a foreign maid is a necessity for many families in Singapore. Therefore, no matter how high the Government raises the levy, the families that need some domestic help to look after their children and aged parents shall somehow find ways and means to employ a foreign maid, either by changing jobs for higher paid ones or to work longer hours to pay for the increased levy. The policy of high levies shall never be a deterrent for Singaporeans who have to employ foreign maids. What is going to happen is that Singaporeans shall seek cheaper maids or employment agents shall force foreign maids to accept lower pay, which shall also not be a good thing because Singaporeans shall then get poorer quality maids. The Government should lower the foreign maid levy by, say, $45, to $300 per maid per month, for a start. This shall be a great relief to many working Singaporean couples. I have spoken on many Budget debates and highlighted the visibly large surpluses accumulated by the Government each year. The people of Singapore are beginning to feel that these accrued budget surpluses are, in fact, not the people's money, but exclusively the money of the Government, although the Government always says that they hold it in trust for the people. Much of these surpluses is collected from the people. The opposition suspects that the policy to accumulate massive amounts of funds by the Government is not exclusively for economic reasons, but for political ones. We have seen that in the 1997 general elections, the Government made it clear that it shall only upgrade HDB flats in precincts that supported Government policies. The words "support Government policies" are an euphemism for the words "vote for the PAP". The residents of HDB flats were made to understand that if they do not vote for the PAP, their flats shall be upgraded last. The upgrading of HDB flats was a major strategy of the PAP to win votes in the 1997 general elections. The budget surpluses of the following year were to be used for the upgrading programme of HDB flats. As it turned out, 1998 was the worst recession year and the Government had to announce a scaling down of the upgrading programme promised by the PAP the previous year. The budget surpluses that were used for the upgrading of HDB flats after the 1997 general elections were clear evidence of the use of surpluses by the Government for a political motive. Sir, in this year's Budget, the surplus is shown as $2.45 billion. This surplus is only the surplus of income over expenditure. The actual receipts or the money which shall be collected by the Government is actually about $3.41 billion. This sum takes into account what the Government receives from its investments and sale of land. When we talk of budget surpluses, we are only referring to part of the money to be made by the Government. The budget surplus this year only shows $2.24 billion but actually the net receipt of the Government is $3.41 billion. The statistics which only show budget surpluses each year of the Government do not show a true picture of the receipts of the Government, which are more than the budget surplus for each year. It is touted that the Government has $150 billion in reserves. I do not see the rationale for accumulating so much money, other than the political benefits from it by the party in power. The Government wants to awe the people that it has so much money. I think the Government should not continue to accumulate so much money. It is time to release some of those monies back to the people for their benefit, in particular, to benefit people in education and training. Money spent on the people's education is not wasted. It is not a consumption but an investment. The Government tells the people of Singapore that we are embarking on a knowledge-based economy, and the majority of Singaporeans agree with the Government that we should build a knowledge-based economy. For a knowledge-based economy to succeed, there is a presumption that the majority of our workers have attained their basic education and they are conversant with the three Rs. The truth is that the majority of our workers are poorly educated and poorly trained. Since I came to Parliament more than 10 years ago, I have been hearing that our workers should be further trained and retrained. But as far as I know, no real success in this respect is in sight. Even today, the Budget Statement says: 'Less than half of our workforce above the age of 40 has secondary and higher education. We need to level up this group of workers numbering some 834,000 or 42% of our workforce through training and retraining to help them cope with the new economy.'

What I suspect is that those 800,000-odd workers may not be able even to read and write English at all, because our school system has automatic promotion. Those who fail in primary one are automatically promoted to primary two. They fail at primary two and they are pushed up to primary three and so on. They finally fail primary six and they are put in 'N' classes in secondary schools. And after one or two years in secondary school 'N' level classes, they just simply drop out of school, and they join the pool of almost illiterate workers. The Government must make up its mind to put a stop to this kind of a school system. Otherwise, the continuing growth in the number of illiterate amongst our workforce can never be stopped. At one time, the Government blamed the large number of uneducated amongst our workforce on the previous government, ie, before the PAP took power. But now we see workers above 40 years old who are not properly educated. All these workers have gone through the PAP system of education, and 42% of them are not properly educated and not fit for the new economy. The only solution is that the Government must have a political will to improve our education system. For this, the Government must release surpluses to spend on building more schools and recruit more teachers. I estimate that the Government should spend an additional $780 million more each year to really give effective teaching in our schools, especially the neighbourhood schools, to make sure, for a start, that all pupils at least learn to read and write the English language by the time they leave school. I recommend an additional sum of $780 million to be spent to reduce the class size by one quarter of its pupils. I believe that with a smaller class size, the teaching can be infinitely more effective. I have been informed that there is a sizable number of students studying in HDB neighbourhood schools who do not manage to read and write the English language at all when they leave school. If this is true, then something drastic must be done to our school system. Another area that I feel the budget surpluses can be beneficially used is to train more of our local workers to become skilled construction workers. It is noted that almost all construction workers at our construction sites are foreigners. This is surely not a healthy situation. Our Government should try to get more of our local workers to be trained as skilled construction workers by giving attractive subsidies for the training. At this time, it is perhaps a good time to do so when the construction industry is in the doldrums. 2.27 pm

Mr Speaker, Sir, the Minister for Finance has delivered the good news to us that he is once again in the happy position of announcing a budget surplus this time of $3.2 billion. He did not dwell long on this accomplishment, but he did pause to observe that Singapore had emerged largely unscathed from the regional crisis and attributed this to strong economic fundamentals underpinned by years of consistent and rational policies. While I am fully in agreement with and appreciative of the good leadership that has made possible these policies, I think we have been guilty of forgetting or of taking for granted the other major underpinning of our economic success, namely, the ordinary Singaporean of whom we expect extraordinary effort, extraordinary commitment and extraordinary resilience. The Minister moved on to deal with the challenges that lie ahead for Singapore in competing in the new millennium. He spoke of the increasing intensity of competition that will be inevitable in the face of globalisation and the onslaught of technological advancement. The times are going to get tougher and the pace even more punishing. He spoke of the competitive edge that we have in hardware in our infrastructure, and he identified as a key component of the software aspect of our competitiveness, the quality of our people. He said, as many of our political leaders have often repeated in recent times, that as a small country, every Singaporean matters. But his focus was on everyone to consciously improve their skills and look for new ways to do the job better. I have a concern for the ordinary Singaporean, and the ordinary Singaporean family. In the face of these new challenges, the demands of the new global, knowledge-based economy, the hectic pace and the pressure that starts from the child in primary school and, in fact, following the recent accounts in the newspaper from preschool, how will our ordinary Singapore family cope? Already, we are beginning to see some fault lines show in the increasing examples we have of young people getting into trouble, not so much in the numbers perhaps, but in the violence of their crimes. I believe all Members of the House have numerous stories from their constituents of the pressures that the latter faced. In the last month alone I have heard of three families who have carted their children off to Australia to escape the pressure. Of these, in two of the families, the mothers accompanied the kids while dad remained in his job in Singapore. What kind of a family life is this? And with regard to the children, will they return to Singapore after their studies are done? What of the far greater number of families who do not have the means of this form of an escape valve? Mr Speaker, Sir, I am not suggesting for a moment that we should, even if we could, stop the world because we want to get off. There is no turning the clock back and wishing for the nice comfortable world that used to be. It is precisely because we cannot turn the clock back, that I believe that it is time for us to review all the policies that we have that impact on the Singapore family, to see if we cannot do better in supporting and strengthening this precious entity. In the House in October last year, the Prime Minister spoke of his concern with regard to two trends: the falling fertility rate, Singaporeans not replacing ourselves, and the increased number of Singaporeans going overseas. He noted that there are many reasons for the declining fertility rate - urbanisation, education, changing lifestyles, singlehood and late marriages. The stresses and pressures of modern life are intimately intertwined with all of these factors. The Prime Minister was absolutely right when he commented that simply the extension of the family benefits to fathers that I had proposed in that same sitting would not be the solution. There is no magic bullet. It would take a wide ranging review of a multitude of issues to come up with a clear vision of what outcomes we want for the Singapore family, a decision to prioritise the needs of the family, and a clear statement in the fact of conflicting demands of the importance of acting on this decision. Follow through and implementation will take plenty of political will and muscle, and the slaughter of not a few sacred cows. But if we are serious about making this vulnerable little island a good home for all of us in the long term, then we must approach the problem in a comprehensive manner, in the same way as we approached our economic well-being in establishing the Committee on Singapore's Competitiveness (CSC) to map out a comprehensive set of long term economic strategies, and not have individual Ministries take small bites at the subject in an ad hoc manner. And as Government adopted the strategies proposed by the CSC as the blueprint for developing Singapore into an advanced and globally competitive knowledge-based economy, so we need in tandem a blueprint for forming and preserving strong happy families, not just to enjoy the fruits of this material success but, in fact, to ensure that we are able to soldier on effectively. We have a slew of policies in place that impact on the family in various ways, many of them enacted and implemented at various points in our history, for various good reasons and priorities at that time, that altogether now send sometimes conflicting messages to Singaporean women and men as they make their way through life taking decisions on marriage, starting a family, bringing up children and possibly finding time and space for themselves. Just let me walk you very quickly through the factors that come into play at these various points. For a start, even before worrying about helping the family to cope with the pace and pressures of life in the new millennium, persuading young Singaporeans that they want in fact to form a family in the first place. For the young Singaporean deciding to get married - yes, no, or wait? We have brought up a generation of youngsters on the lap of economic well-being, who have very high expectations, and who place economics - work and career - before family and home. And understandably so, when so much more tangible and immediate rewards come with having a successful career than for being a good spouse or a good parent. Expressed appreciation from the boss, promotions, a good salary, and the attendant lifestyle that this affords. Is there some way to moderate these values? What could we be covering in a life skills curriculum in school that might place some emphasis on the importance, joys and responsibilities of family life? How do we engage parents in the process? In a survey commissioned by the SDU in 1998, 62% of young couples felt that it was important to have financial stability before embarking on marriage, and 33% would delay marriage until a matrimonial home is ready, even if they were otherwise ready for marriage. There are limited options for housing for the young couple just getting started in life, apart from getting into the queue for a HDB flat. There are various HDB grants and schemes to assist young couples, and also promote and facilitate extended families living together or in close proximity. These are good. And then there is the Fiance/Fiancee Scheme which requires a $5,000 registration deposit on application, and the production of a marriage certificate three months after taking possession of the flat. Does this push them into marriage too quickly, without enough consideration, resulting in increasing number of divorces in this younger age group subsequently? A review of the impact and implications of the assorted policies may be timely. Then we come to the decision to have children, the first baby. Again, attitudes and values, weighing work and family come into play. Wait for one's career to be better established, to better afford the financial responsibility that comes with bringing up a child? The decision to have baby number three carries with it weighing the tax benefits against the maternity benefits, or rather, the lack thereof. Dr Wang has made the point about increasing tax incentives for the third and fourth child. I myself rather think that one should be looking at the loss of maternity benefits and maternity leave for the third child and above. In fact, I think the group that benefits from the increased tax incentives is much smaller and at this point in time we are ready to look at encouraging a wider portion of the population to consider having the third child and not just the very top cream of the economic crop. Looking after baby. How many young couples are fortunate enough these days to have the family infrastructure available and willing grandparents on hand to help with child minding? If not, a decision has to be made between engaging a maid, fostering the baby to a child minder, or finding a good child care centre. With the child care centre - the quality of care, the availability of a place in a conveniently located centre, and cost and subsidy, are all issues. This is the one solitary item I found highlighted in the Budget estimates that was specifically for the family - the 49 additional childcare centres and 25 student centres provided for under MCD. Should we be doing more over and above this? The viability of each of the options varies from one young family to another. What is important, therefore, must be the availability of the range of options. With one child, a childcare centre, especially with the available Government subsidy, may be a good option. With two children, it is probably cheaper to get a maid, who then also helps with the housework. If the maid levy was less, or could be put aside towards a gratuity to be paid to the worker at the end of the contract period, would parents be able to afford to attract and hire a better calibre employee, who can then act more as a governess in helping to bring the children up, relieving some of the pressures that are felt in terms of providing a good environment for the child at home? Once the first baby arrives, the parents have then to address how to balance work and home responsibilities with the burden falling very much at the moment on mum. To stop work, work part-time, or continue to work full time. At a median Singaporean household income of just around $3,000, for many of the 56% of dual income families in Singapore, continuing to hold down a full-time job is a necessity for both parents. How to cope with the demands of the current working environment, the pressures of increasing productivity, constantly learning new skills, and yet manage to do a decent job of bringing up a child and maintaining the household? We need to look at how to convince companies of the benefits of implementing family friendly practices to help employees with this balance. How can Government support and facilitate the process? By sourcing and providing information of best practices in other countries, by commissioning local studies to demonstrate applicability to our own environment, by providing tax and other financial incentives where applicable, and by setting the example as a major employer in Singapore. These family friendly practices should include measures to facilitate re-entry to work, when the kids are older and more independent, for the parents who had earlier stopped work to attend to family responsibilities full-time. Then, when the kids get to school, life becomes a pressure cooker seething with anxieties and angst. The study done by Stella Quah on the Singapore Family, published in May last year, identified children's education as the single greatest worry for parents. Over and above the simpler issues of the availability of before-and-after-school-care, important to working parents, are the pressures that come from the curriculum load, streaming and examinations that are characteristic of our education system. The Ministry of Education has in recent years announced many admirable initiatives which, if and when fully implemented, should go some way to dealing with the problems and challenges. But there seems right now still a huge gap to bridge between the existing and the desired situations. Mr Chiam has asked for more funds for the Education Ministry to decrease class size and improve the situation. I noted in fact that in this Budget 2,400 positions had been provided for. Not only that, when I look at previous years, I believe there is a huge vacancy rate in the Education Service. My concern is not so much that there is no willingness to put money aside to provide for this, but how on earth are we going to find the bodies, the brains and the hearts and souls to fill up these positions that will help ease the position? That, in fact, is key to the situation. With the ageing population, the care of frail elderly family members will start becoming a factor that needs consideration. Fortunately, in this instance, Government has anticipated the problem and action has already been initiated in this area in the work of the Inter-Ministerial Committee on the Ageing Population. Finally, changing the traditional views and practice in the sharing of home responsibilities. More flexibility in the assumption and sharing of different roles and duties will allow couples to better manage the calls on their time and attention, to achieve better outcomes for the family. Two people willing to pitch in according to their strengths and aptitudes without preconceived ideas about rigid divisions of labour are going to be that much more effective and efficient in sharing the responsibilities of bringing up a happy family. Fortunately, we are seeing more younger men helping out in more ways with home responsibilities these days. Just recently, a group of three young men have got together to establish a Centre for Fathering. How can we support and facilitate this trend? Training in parenting for both our young men and women is much needed. Mr Speaker, Sir, as you can see, many Ministries need to be involved if we are to address the subject of strengthening the Singaporean family in a holistic and coordinated manner. Not just the MCD, the obvious Ministry, through its Family Development Division. MCD, by the way, soon to be the MCDS, Ministry of Community Development and Sports, and alas, not even MCDF, Ministry of Community Development and the Family. But also the Ministry of Education, Ministry of Manpower, the Productivity and Standards Board under MTI, Ministry of Finance. Practically, every Ministry has policies and can do things that will impact and that can help support the Singapore family, as we push for all the training and the entrepreneurial talent. In the meantime, the Singaporean and his or her family, that is the mainstay, and that is ultimately what produces all the energies and the engine that drives what we are trying to achieve, I think we sometimes stand in danger of taking that very much for granted, as we are so caught up in undoubtedly all of the other very important things that we need to pay attention to. I think the Singapore family needs and deserves our attention. I will pick up in the debate on the estimates that follow specific issues with the Ministries. But I should like to call upon perhaps a more coordinated approach. When Government feels that something is important, it places priority on it and straightaway the resources move, and you can see this. The best recent example is, having identified the issue of ageing, we formed the Inter-Ministerial Committee on Ageing Population. And we now have $200 million in the Eldercare Endowment Fund. The Minister for Finance has introduced various tax incentives in the Budget for looking after our older population. If only we would pay the same amount of attention to putting something together for the Singapore family. 2.46 pm

Mr Speaker, Sir, thank you for allowing me to join in the debate. Sir, many of us were anxiously waiting for this year's Budget which we anticipated as a growth budget and one that was going to give a strong signal that Singapore is indeed serious about participating in a global knowledge-based economy which is now at our doorsteps. We are now in a completely different era where competition is not in Singapore, nor is it in the region, but it is now throughout the world. Whether we like it or not, we have to participate and fight to win if we want to ensure our survival. The good news is that we have a level playing field and have as good an opportunity as any other world-best countries and economies to be successful. The bad news is that the competition is going to come to our doorsteps and it will be here whether we like it or not and our old ways of doing business is not going to work in this future. All of us will have to make major mindset changes, including how we formulate the country's budget. Sir, today I will be touching a bit on the strategies that we should consider in planning our economy and I will give my detailed suggestions during the Committee of Supply's discussions. First of all, I would like to talk about Singapore's role in this global world and the lessons that we must learn from others. Singapore is fortunate to have a strategic geographical position and through this we have developed ourselves as a hub for various activities like trade, logistics and travel and as a language hub linking Asia to the rest of the world, which were all very important in the `old economy'. In the new economy, information technology will create tremendous efficiencies in the way goods and services are produced and distributed. IT has also increased the productivity of workers, and it is going to reduce uncertainties, create visibility and transparencies and break any barriers that governments may try to erect to protect their economies. So the question is: are our infrastructure and hardware going to make the same difference in this new economy as they did in the past? My contention is that it will not and we will have to create new competencies and use of IT will continue to play the role we played in the old economy, but we know that the physical and geographical advantages are not going to be the differentiating factors anymore. Neither will we have the luxury of just importing and transplanting proven technologies and competencies from other more advanced countries into Singapore as we did in the past. Every one of our competitors will be able to do the same or even better than us. Our role therefore has to be one of an innovator and leader, capable of being in the leading edge of things, and be a choice place where business will be done efficiently. Sir, the recent Cable and Wireless HKT and SingTel episode should be a lesson that we should learn. It basically says that we are not yet ready to participate in a very fast moving new economy. The paper wealth and the speed at which Pacific Century Cyberworks group moves are good examples of how things are going to be done in the future. The worry I have is that this is just a signal and an indication of things to come if we do not change fast. The fact is that Singapore started talking about and planning for a knowledge-based economy about two years ago and many other Asian countries, including Hong Kong, started this journey later than us. Hong Kong, for example, has leap-frogged Singapore despite their later start and the danger is that Singapore may lose out in its battle to be the Asian Hub for this new economy and the Silicon Valley of the east. If we do not change, we may just get the number two or number three position. And we as a nation, I believe, cannot risk being in this position. Sir, in my speech today, I would like to touch on three areas which we should focus on in order to be a more potent source in this new economy and these are: (1) Changing the way Singapore is governed; (2) Promoting entrepreneurship; and (3) How to build world class local companies. Changing the Way Singapore is Governed Sir, many observers have advised us that the Government should rethink the traditional strong guiding role in developing the country and the economy. My suggestions are as follows: First, we need an entrepreneurial civil service that is willing to take risks in policy making. In some cases, when we are unsure, it may be necessary to implement a policy first, based on the best of everyone's judgement and, if necessary, fine-tune it as we learn our lessons. If we wait for a perfect policy to be formulated, the battle may be lost. Sir, our Government and civil service need to transform its administrative role to one of being entrepreneurial. Second, in the new economy, as we compete with the best in the world, public policy making and decisions need to be made at very fast speed, which I call Internet speed. And I believe from certain research that I have done, one Internet year is equivalent to seven physical years in terms of how fast things change. This means that we must be able to move seven times faster than how we had moved in the old economy. In my opinion, the loss of the Cable and Wireless HKT deal was a result of how fast our Government and GLCs are able to make decisions. Richard Li's Pacific Century Cyberworks is an example of how Internet speed works in this new economy. In certain cases, decisions based on gut feel and on the fly may be necessary. Sir, I have an experience that I would like to share with the House about the speed at which things get done in this new economy. I have started an e-commerce shopping portal about six months ago. I managed to build quite a good concept in the last six months. About two weeks ago, I had a call from a CEO from the Norwegian company that was also doing a similar portal. And we started talking just about two weeks ago. The true negotiations really started last Friday night at about 10.30 pm in my house. We negotiated through the night until 4.00 am on Saturday morning, and we shook hands that we had a deal. We then passed on the work to our lawyers who worked the whole of Saturday. I got the draft legal document on Saturday evening. We met on Saturday at 2 o'clock in my place, thrashed out the whole legal document, and by 4.30 pm the document was ready. At 5.15 pm, I left my home, rushed to a hotel to sign the agreement, witnessed by the Norwegian Ambassador. By 6.00 pm, the deal was done. And this took us just 48 hours. This is an example of how Internet speed works if you want to be successful in this economy. Thirdly, we should seriously consider my suggestion that I made in the past, that of outsourcing the governance of Singapore to the people and the private sector as much as possible, wherever possible. While certain sectors cannot be outsourced, for example, defence and a number of other Ministries, there are others that can be. And through a partnership, we will have a better chance of succeeding. In this way, with a shared responsibility, we will be able to make better decisions and move faster than before. Our Government agencies will do well if they act only as facilitators and not as drivers in this new economy, because too much of Government involvement will only slow things down. So agencies like the NSTB and PSB should either be privatised or they should modify their roles to become more effective. Fourthly, I feel that the civil service needs to be rewarded differently so that they will be motivated to transform Singapore to a knowledge-based economy. If we do not do anything about this, there will be a feeling of being left out and a reluctance to change policies for the sake of promoting entrepreneurship and enriching the private sector. I feel that we need to seriously consider revamping the compensation system. Fifthly, I believe that we have failed in attracting many good people with private sector experience into the civil service because of the bureaucratic and promotion practices that exist today. People do not feel that they will get what they deserve and be able to advance their careers should they move from the private sector to the public sector. I hope that the Government can relook at its practices to change things to attract more people of varying backgrounds into the Government service. I feel that we should not worry about perfecting and devising perfect policies before we make changes. As I mentioned earlier, a little uncertainty and a little chaos may be necessary and may not necessarily be a bad thing for the country. In fact, this type of uncertainty and chaos is what that threw up the truly entrepreneurial group of Ministers and civil servants during the era of our first generation leadership of Singapore. Too much of structure will create complacency in society and weak leadership. Promoting Entrepreneurship Sir, without doubt, the promotion of entrepreneurship is the most important activity all of us should focus on in the next 10 to 15 years of economic development, because the nation needs this new breed of wealth creators who will then generate jobs and create a better standard of living for Singaporeans. In my opinion, it was a disappointment that nothing new was done and no new initiatives were introduced in this year's budget regarding promotion of entrepreneurship. Any spending in entrepreneurship development should be seen as an investment and not as a handout. I would have hoped that the budget surplus that we surprisingly got could have been better spent in this area. I would like to suggest a few things on what we can do about promoting entrepreneurship. Firstly, our tax system needs to change with time. I feel that we are too caught up in devising a single tax system for all our economic activities. I suggest that the Minister consider a mass customisation approach, as the Minister for Education had considered for the education system, to our tax regime as it needs to be proactive in supporting certain types of activities like technology and info-communication start-ups. We should treat entrepreneurs and start-up companies differently, be it in how we tax them or in the incentives, grants and Government charges levied on them. We should also facilitate their growth and help remove bureaucratic obstacles. For example, I feel that the employee stock options and share grants in start-up companies could be treated differently from those given by companies already established or companies that have already been listed. Similarly, technology savvy investors could also be given preferential treatment on how they are taxed or how they can minimise the burden of investing in companies that eventually collapse. Secondly, capital raising should continue to be liberalised. We should make it easier to raise funds for start-up companies either through angel investors who are well incentivised to do so and also by making it easier to list new companies on a stock exchange and by allowing international access of funds to Singaporeans. Thirdly, the Government should allow the private sector companies or individuals manage its funds. If the Government can identify a pool of well established local businessmen and entrepreneurs, we can develop a cluster of small funds that can act as catalysts for many more new start-ups in Singapore. Currently, the Government funds are being invested in only a few large and well established venture capitalists who can serve a different purpose from the smaller cluster of funds. Fourthly, in the new economy, we will be seeing an acceleration in innovation, never seen before in history. The way businesses and companies are run will be re-invented all the time. To participate in this economy, all Singaporeans need to become knowledge workers who must be prepared to accept constant change as a way of life and to survive, everyone needs to continue to learn new skills. While once upon a time a single career path and hence a once-in-a-lifetime learning and training was sufficient, in the future environment, this will lead to an early end of our earning ability. I therefore feel that it is about time that we revamped our education system and the values we believe in, including the practice of meritocracy so that our workers can become effective knowledge workers of the future. Developing Local Companies into World Class Companies The third area I want to talk about is the development of local companies into world class companies. Sir, the promotion and growth of many more successful local companies who can compete head on with any other of the world-best companies is a very important task in the next few years. In this respect, I feel that we should have taken the opportunity to give more incentives to companies to regionalise and globalise in the current year's budget. We now have a unique opportunity to acquire or merge with or invest in good companies around the world, given our financial strength and strategy. In our quest to create world class companies, we have been focusing too much on our GLCs. Once again, the SingTel and Cable & Wireless HKT deal has shown us that despite being highly successful locally in Singapore, many of our GLCs will not be able to compete effectively outside Singapore. We have also recently seen a number of other failed deals by some other GLCs and my worry is that while we can compete effectively in our small Singapore market, we do not have the ability to compete globally. I do not have the full answer as to where the problem really lies, but my feel is that there is too much of comfort with a large Government ownership in such companies. We should fully privatise all GLCs and let them be driven by market forces. In fact, it will do the GLCs a lot of good if they are run purely on a private enterprise basis. Thirdly, since we are just coming out of the economic crisis, I feel that this is an excellent time to incentivise local companies to restructure and consolidate. They should focus more and more on the value creation proposition and be less dependent on just cost factors in the future. Many European countries have been able to breed world class companies despite their high costs and this is because of their focus on technology and value creation. Nokia and Ericcson are just two examples of such companies coming from these countries. Fourthly, we should watch against rolling back too quickly all the cost containment measures implemented last year. Delaying any cost measures by another one year will allow companies to regain their full strength and they will not have to worry about cost at this stage. During this time, they can focus on their restructuring plans. If we roll back the cost measures too fast, we may risk a reversal of the recovery seen by some companies. We should wait a little longer before changing things. Fifthly, in my opinion, after so many years, we have failed to find a good solution or formula in helping our local small and medium enterprises (SMEs). I believe a major restructuring is needed in how we support and nurture SMEs. If we do not do things differently, the recently announced SME 21 plan will have little chance of success and I will give my suggestions on how we can do this during the Committee of Supply discussions. But the gist of my suggestion is to let the private sector handle this, including the administration of grants and incentive schemes. The various industry organisations and Chambers of Commerce can do a good job in this area. Sir, e-commerce is the future for Singapore and our traditional traders risk collapse if they do not embrace the Internet economy. However, in the meantime, our traders still need some help, especially in the area of financing their trade and in modernising the whole order fulfilment process, to compete in the new economy. I feel that the Government is not doing enough and is too quick to decide that the trading sector does not need any more help. Similarly, I believe that the legislation and tax regime are not fully ready to participate in the e-commerce world and there is an urgent need to address this issue. Sir, the new economy is already here. We have no lack of capable people with many ideas. What we need is a conducive environment and a sea of entrepreneurs in the private, people and public sectors to come up tops. We have the ability and the will power to make it happen. We must be prepared that we may have to adjust and re-adjust our policies and strategies as we move ahead and learn. We must be prepared to give up certain efficiencies for the sake of success. Now is the time to act, so I hope the Government will urgently address the issues that Members will raise during the next 10 days of debate regarding the promotion of enterpreneurship. Mr Speaker, Sir, I support the motion.

Mr Speaker, Sir, over the years, it has become a somewhat popular Shenton Way tradition to attach terms to describe the Budget. This millennium Budget is no exception. Some have called it "The Good Old Budget" in respect of the SRS and tax reliefs for dependent parents and aged grandparents. Others have called it "The Cyber Budget" in recognition of the tax initiatives for an increasingly borderless virtual world. But it is a bothersome Budget for taxpayers who were disappointed by the full or partial withdrawal of a number of rebates. In this regard, some have even called it "The Withdrawal Budget". Some of these are quite unfair terms that have been coined out of parochial interests. It is unfair because people conveniently chose to overlook a possible GST hike that did not materialise. It is unfair because people chose to forget the conditions attached to one-off rebates. Personally, I prefer the term "measured Budget" for the Minister's measured fiscal response to the millennium challenges. It is a measured response because the withdrawal of each rebate appears to be followed by a concomitant new tax initiative. It is a measured response because while we see great challenges ahead, we must not lose sight of the lessons that we have learned from the recession, that we need to remain competitive, that a continued bright outlook is sometimes contingent upon forces and factors entirely beyond our control. And so, Sir, there are merits in adopting a measured fiscal approach. For this reason, I support the Budget. But I would like the Minister to consider a scenario that assumes the challenges to be somewhat more compelling and that requires a slightly more rigorous fiscal approach. What happens when the twin forces of IT and globalisation require stronger response from the Government? What are some positive tax initiatives to accelerate the path to become the Asian Silicon Valley and to maintain our position as the regional business hub? What tax measures can be considered to encourage our local companies to think bigger, enter into new markets and invest more boldly? How can we give a tax boost to companies that are still struggling from the lingering effects of the economic downturn? We ought to visit these issues and attempt to answer these questions. Firstly, companies that are still facing economic difficulties. The V-shape rebound is understandably met by a U-turn in recession year tax rebates. The conditions for these rebates were laid out beforehand by the Minister. Once the economy improves, the rationale for the rebate collapses and reason compels that the rebates be removed. If specific business sectors require a post-recovery boost, new tax measures should be designed to deal with a specific issue at hand. This seems to be the measured approach adopted for this Budget. But, Sir, have companies and businesses recovered entirely from this recession? Statistics suggest that our growth is not broad-based across all sectors. In the course of my day-to-day business dealings, I have also come across many people who feel that we are not fully out of the woods. Many SMEs are still struggling. Many SMEs bore the brunt of the recession, much harder than larger businesses. The withdrawal of rebates will again hurt them harder in relative terms as compared to larger businesses. Sir, if we are genuinely concerned about growing our local SMEs into world class companies, we will need to create a conducive environment for them to grow. A conducive physical environment should be part of the blueprint for local SME growth. Instead of a flat corporate income tax rate for all companies, we might consider implementing a lower rate of income tax for local SMEs. SMEs that are wholly owned by Singaporeans could be subject to a lower rate of tax, say, 16% on the first million of income which is ploughed back into the business and not distributed as dividends. Low rates will allow the SMEs to build up their reserve to better weather economic downturn that will occur in the future as part of the normal business cycle. For the purpose of helping SMEs still suffering from the lingering effects of the recession, consideration should be given to allowing SMEs to use losses incurred during the recession years of 1998 and 1999 against income earned in previous years. This ability to so-called "carry back" losses would greatly benefit SMEs that are facing cashflow problems and financial difficulties now. The current tax rules allowing for the carry forward of losses is only of benefit if a company actually survives the recessionary years. While on the topic of providing relief for tax losses, I would also like to raise the issue of corporate group relief for losses. Businesses under the common control of a shareholder, or group of shareholders, may be organised in separate companies for a variety of reasons. This corporate separation, while real in the legal sense, is artificial in the business sense from the perspective of the owners. We hear the Government's message that the more entrepreneurial approach of style is needed to sustain us beyond the millennium in the face of the tough regional competition. But the willingness to take structured risks may manifest itself in operational structures, giving rise to quarantine losses. Our tax rules do not permit losses in one company to be offset against profits in another company even if one person owns both. If the two businesses were run out of the same company, the losses would implicitly reduce the profits resulting in less tax. In effect, by not allowing inter-corporate losses, and I use the term loosely, the effective tax rate is actually higher than 25.5% for the above companies taken together. In line with certain other countries, I suggest we seriously look into the concept of group loss relief. The structured separation of businesses and risks into separate companies should not lead to the very real problem of taxing a corporate group at a tax rate that is effectively higher than the statutory rate. I would now like to focus on the other possible tax measures to boost our regionalisation efforts in an increasingly globalised world. Risks are involved for companies going regional. Investment and external financing are required. Interest costs, in some cases quite substantial, are incurred. In initial years, the company invested may be expected to operate with little, if any, profits. It will take time for them to build up their reserves in order for such companies to repatriate profits back to Singapore. We can try to minimise the time needed by local companies going regional to build up their reserves. We can try to help our local companies to be competitive in a global environment. Current tax rules do not allow funding costs to be deducted if the investment does not produce income. This serves as a disincentive for local companies to seek regional expansion opportunities. We can assist such companies by allowing them to accumulate expenses in periods when no income is earned and allowing them to deduct such expenses when the investment starts to produce income. Such rules could be targeted specifically to costs incurred in regional expansion activities, such as funding and legal costs, and would help companies that are starting to plan for regional expansion. The tax authorities already administratively allow expenses to be accumulated and deducted in future years where foreign income is earned, but not brought into Singapore in a given year. It is not such a great extension to allow expenses to be accumulated on certain expansionary activities to be treated similarly. On top of helping companies to get started in regional expansion, we should also think forwardly and consider how best to allow successful companies to reinvest their overseas profits. Currently, foreign taxes paid by a second or third tier of foreign company may not be recognised in Singapore when the Singapore parent company receives dividends from its overseas subsidiaries through an offshore intermediate holding company. Since credit is not given for such foreign taxes suffered at the second and third tier level, the overseas income that is brought back to Singapore is effectively taxed twice, once by the foreign country, and once by Singapore. This may act as a disincentive to a Singapore company that has been successful abroad from reinvesting in Singapore even if the best opportunities are available at home. We should remove this potential road-block and, as a general rule, allow companies to look through intermediate holding companies in foreign countries and receive credit for foreign taxes paid. I now turn to issues affecting individuals. The Minister, in his Budget speech, stated that only employees will be eligible for the Supplementary Retirement Scheme. It does not appear that any provision has been made to allow entrepreneurial business owners, such as the self-employed like sole proprietors and partnerships, to take advantage of this scheme. It appears strange that the scheme does not apply to SME entrepreneurs who are willing to take risks in the prime of their life. There is no guarantee that their ventures will succeed. There is no certainty that having risked it all, they would have enough for their old age. As it is, the CPF contribution rate for the self-employed is already capped at $14,400 per year. Is this enough for them in the long-term? What if their businesses do not prove to be successful in the next recession? Should we try to help them build up their reserves as well? Depriving entrepreneurs of the old age safety net may not be the way to forge a more risk-taking mentality among Singaporeans. We need to support them by putting in place provisions to facilitate their personal financial planning for old age. We need to ensure that any Government initiative does not indirectly prejudice their ability to achieve long-term personal financial goals. For these reasons, we should make the scheme open to self-employed entrepreneurs in addition to employees. In line with the Government's desire to create a more innovative business environment and consistent with remuneration trends in the world of technopreneurship, the Government has introduced provisions governing the taxation of employee stock option schemes. The business community, as a whole, is encouraged by the Government's plan to improve the tax treatment of such schemes and has much focused in this area. In light of this scrutiny, we need to carefully consider how best to motivate companies to make more widespread use of such schemes when warranted and we need to determine how best to motivate key employees in an organisation to take long-term stakes in the company they work for. We have seen in the past how speculation, be it in the share counters or properties, destabilises and undercuts the society's economic and social progress. We need policies that encourage people to take a longer term view of things. I, like the rest of the business community, will wait with interest for the details in respect of the stock option scheme. However, I would encourage the Ministry to improve the taxation of such schemes to encourage the long-term development of the stock option schemes. Besides proposing tax initiatives to face the challenges in the economy, I would also like to very briefly comment on a few other issues. The first is the need to review the threshold parameters for estate duty. For example, in relation to estate duty, the use of $600,000 as a threshold for non-property exemption seems to be inadequate. After all, the $600,000 is inclusive of CPF which nowadays, as a result of higher income and better investment opportunities, is easily achieved. The current exemption scheme appears to favour the very wealthy, or at least those with significant property ownership and their investment portfolio. Consideration should be given to revising upwards the non-property exemption to allow or, more radically, abolishing estate duty on all non-property assets and allowing for estate duty to be levied only on real properties passing in excess of, say, $9 million. This would encourage Singaporeans to adopt a wider investment strategy rather than to be overly tied down and exposed to the property market. My second concern deals with the personal reliefs generally. Such reliefs do not appear to have kept up with the times. We have introduced business tax measures to keep up with the move towards technopreneurship in the economy. We should consider measures to keep up with changes in society. For instance, the personal income threshold of $2,000 for the wife relief does not appear realistic given the financial pattern of today's families. I suggest that we look closely at the current programme of personal reliefs to determine where improvements can be made. One area which seems to be of concern to a growing number of Singaporeans is the cost of medical treatment for their ageing parents. Perhaps, the personal tax system can be used to help alleviate some of their concerns. Thirdly, I would like to propose the topping up of students' Edusave accounts to encourage PC ownership. We want to encourage our students to be more IT savvy. Not every student can afford a personal computer. While there are personal computers in schools, the IT exposure of the students without personal computers at home is very much restricted. Sir, IT has increasingly become an integral part of how we educate our next generation, both during and outside school hours. In this regard, we should level the learning field for our students by giving each and every student the opportunity to widen their learning experience through the use of a personal computer. We should make personal computers an essential part of the home, as much as telephones and television sets are. For this purpose, I suggest that the Government consider granting topping up of students' Edusave accounts to subsidise or pay for the purchase of personal computers. The top-up can be reviewed five years later to keep up with the changes in computer technology. This amount in the Edusave account will be for the sole purpose of allowing students to own a personal computer at home such that a programme can be put in place by the school to effect learning at home. On a final note, I cannot help, just like my other colleagues here, but notice the glaring disparity between what was budgeted last year and the eventual out-turn. I understand that the V-shaped recovery is remarkable. I understand that revenue collection has not fallen last year and that development expenditure intended to stimulate the economy is no longer required. What all this adds to, of course, is that we have over-budgeted last year under exceptional circumstances. But when I cast my eyes back to the previous Budget estimates, I wonder if the Government has developed a trend of over-budgeting, albeit in smaller amounts. I wonder if the buffer built into previous Budget estimates could have arisen out of a mentality of conservatism and safety nets. A conservative mentality that was, and probably still is commonly associated as being symptomatic of the bureaucraticism in the civil service. I hope not. But it is a side message emanating from over-budgeting. I hope not because in order to adequately meet the millennium challenges head on, we need both the private and the public sectors to be more rigorous and less risk-averse. The Government should lead this change to promote this renewal and stance for Singaporean entrepreneurs to factor-risk into their business strategy and the Government should send the correct messages through this budgeting process.

Order. I suspend the Sitting and will take the Chair again at 3.45 pm. Sitting accordingly suspended at 3.24 pm until 3.45 pm.

Sitting resumed at 3.45 pm

Resolved, That the debate on the Budget Statement be proceeded with beyond 4.30 pm and the proceedings thereon be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng].

Debate resumed.

(In Mandarin): Mr Speaker, Sir, I support the motion standing in the name of the Finance Minister. In his Budget Statement, the Minister for Finance, Dr Richard Hu, said that about 65% of individuals no longer pay income tax and would not benefit from income tax rebates. To assist people in this group, the Government will continue to grant rebates on HDB service and conservancy charges, and rents. At the same time, they will also enjoy the utilities rebates. I personally feel that this kind gesture of the Government will enable the people of Singapore to realise that the Government is very caring and is full of humanity. I commend the Government for continuing to help this group of Singaporeans as our economy recovers. The Finance Minister also announced that taxpayers who stay with their parents and grandparents will enjoy higher tax relief, and the tax relief will be increased by $500, to $5,000. And also from the Year of Assessment 2001, taxpayers who top up in cash to his grandparents' and parents' retirement accounts will be allowed a tax relief. So, irrespective of the amount granted, the Government has clearly indicated that it wants to maintain the tradition of family core values to deal with our problem of an aging population. This rebate will help to promote family cohesion and family harmony and to encourage maintenance of parents and grandparents. The message of the Government is very clear and precise. The Finance Minister also announced another scheme, ie, our people are allowed to contribute voluntarily over and above their CPF savings to the Supplementary Retirement Scheme with tax being payable only when the savings are withdrawn, and participants will have considerable flexibility investing their savings. I think this is attractive to the higher income Singaporeans. However, I urge the Government to also consider giving more favourable terms to Singaporeans who are in the lower and middle income groups, such as giving them a higher interest rate, higher than the bank's interest rate so that those Singaporeans who are in the lower and middle income group who do not pay income tax would also benefit from this scheme. This will make sure that the people in the lower and middle income group will have higher CPF savings in their old age and this will also help to solve and deal with our problem of an aging population. Because of our economic recovery, the Government has decided not to grant the 10% income tax rebate as was given last year, but to give only 5% rebate this year. Many Singaporeans are disappointed. They said that with the recovery of the economy, our CPF cut has not been restored and yet our income tax rebate was reduced by half. Therefore, they had a misunderstanding against the Government. I can understand their feelings and their sentiments. Mr Speaker, Sir, since our independence, we have gone through four economic crises and economic recessions. We have, fortunately, been able to weather through this recent Asian financial crisis. And under the Government's prudent management, instead of a $5 billion deficit in our 1999 budget, we had actually a $3.2 billion surplus. This was because our people and the Government have worked together in one heart to battle this financial crisis. However, I feel that the top up of $250 to our CPF account is good, but not enough. We should commend our people and give them more positive incentive rewards. I think the best way is to immediately consider restoring their CPF contributions even in a gradual manner. I feel that at this moment we are actually going into a period of high economic growth. We have emerged from the bicycle era in the 1960s to the F16 era now. Now that our foreign reserves are steady and increasing, I think so long as the people and the Government can work hand in hand, we would be able to grab hold of this opportunity, and the 21st century will be a high economic century for Singapore. I personally feel that we should also gradually restore the CPF to our people so that people and the foreign investors will have more confidence in us and then our F16s will be able to perform better and more successful. In 1997, the Government reduced the corporate tax to 26% and from FY 2001, it will be further reduced by 0.5%, so that our corporate tax will be reduced to 25.5%. This is a very wise decision. This will enhance our competitiveness in this region. With the competition in the region getting more and more intense, many developing countries, in order to attract foreign investments, are reducing the corporate tax and giving tax waiver for a certain number of years. Therefore, in order to maintain our competitiveness, I think we should further perfect our GST system, ie, to pay more when you consume more, so when you use less, you pay less. When GST becomes our main source of revenue, we should consider further reducing the corporate tax and individual personal tax, so that we may attract more foreign companies and foreign talents to Singapore, and to contribute to our economic development so that we would be able to compete actively in the international arena. I also welcome the Finance Minister's proposal to further improve the stock option scheme. Many developed countries have realised that the stock option scheme is an important factor to retain talents in a company. And now with competition getting more and more intense in this region, I think it is very important that we be able to retain our team of talents. Because the talented people, whether they are the CEOs, scientists, engineers, researchers, technicians, MBAs or even an ordinary staff in the office, they would rather take the company's shares than to ask for high salaries, because they feel that to have shares in the company will be something that creates a sense of belonging to them. If the company makes money, they should get more benefit from it. Of course, I feel that we should fix a ceiling as to how much shares they can sell off, maybe 10% or 20% per year at the most. And when they were given the stock option and at a discount, then of course they would have to pay tax when they sell off the shares. I feel that this is very important in our effort to build up Singapore as an international securities and financial centre. Only then many foreign high-tech companies will come to Singapore for listing. At the same time, it would also encourage our people to have shares in the company. Another thing I like to mention about is how to establish a more healthy era of creativity. Apart from the development expenditure which will be increased by 21% and our tax system amended to encourage people to go into creative work and to start business, this is something that is truly commendable. I personally feel that when we encourage the people to go into business, we should not create misunderstanding. We should not let the people go into business impulsively or blindly. They should understand what is their ultimate purpose of going into business. We should not encourage them to go into business like a swarm of bees with the thinking that everyone can make money and everyone can be a Sim Wong Hoo. Then this will be ridiculous. However, if they can make good money and have great wealth because of the success in their enterprises, then, of course, it is well and good. However, I can only see young people going into business with the objective of making more money and wealth. This is wrong. In the next five to 10 years, if we have successfully created a new society, then it will be a very materialistic society where everyone just goes for money and greed. This is not something that we want to see. Therefore, because of this, I feel that when we are encouraging the people to be enterprising, we should also lead the young people in the right direction. First of all, they must have an understanding of themselves before they create business. They must have this human factor. They must have the talent and the wisdom to go into the business. Of course, nowadays, we have many young talents. They have this first condition. I think this is something that is beyond doubt. Apart from this human factor, we must find out whether the surrounding environment is conducive to their starting a business. In this respect, the Singapore Government has encouraged people to venture into business and to go regional or global. The Finance Minister has amended our tax system to encourage our people to undertake creative work and to have the entrepreneurial spirit. This is something that is clear for everyone of us. Whether or not they will be able to raise enough capital to start their own business, this is again something that the Government should help. Of course, there are lots of venture fund schemes to help them solve this problem of shortage in capital to start their business. With the human factor and a conducive environment, the next thing is to look for opportunities, ie, the right timing. I think timing is very important. It is like when to produce and what type of products to satisfy the demands of the consumers. As for products, whether designing or manufacturing, do they really understand the market for it and what will be the competition? These are things that the young people will have to carefully consider before they go into business. So, when we see these people going into business like a swarm of bees, I feel that they are going into business with the belief that by just setting a few dot.com companies, they will become Sim Wong Hoo in a few months' time. This is very unrealistic and very naive. Money does not come so easily. They do not fall from the sky. So, when the young people go into business, even if they have the aforesaid conditions, they are only the pre-requisites. It is still a long way before they can taste success. Mr Speaker, Sir, what I want to say is that if they are enterprising just at a moment's impulse, then it will not be sustained and it will wither away very easily. The Silicon Valley was not established in this way. Even if you have the pre-requisites, it does not mean you will be successful. Therefore, we have to consider all the complicated problems that you may encounter after you have started your business, whether you have the will power to fight on, whether you will give up half-way, whether you would get up again after you have failed. You must also understand that success is the accumulation of many failures. Your dreams are nothing but just a fantasy in your mind, you will never succeed. Furthermore, you will have to know whether you have this business acumen, whether you are sensitive about the market, when to get in and when to get out, how to analyse your business operations, how is your inter-personal relationship. These are all very important factors to consider. Our young people must understand what is the highest objective that you should pursue. A successful entrepreneur will pursue a sense of satisfaction, the achievement in their business and a sense of mission and not just money. Of course, if you are successful in your business, if you have money, so long as you do not womanise, gamble or not greedy, you will have enough money to live through life. But a successful entrepreneur goes for a sense of satisfaction in the achievement of their business and a sense of mission to the society. This is the intangible wealth that is inexhaustible. Of course, an entrepreneur will have the imagination, the courage and the vision. Young people going into business would of course want to make money. But we do not want just to make a lot of money and pay a lot of taxes. We have also to return some of our moneys to society to help those who are less fortunate than us. Of course, the pursuit of wealth is not a sin, but we must understand benevolence and wealth. There is no conflict between them. Only the very rich can exercise great benevolence. Our forefathers in the business world like Tan Kah Kee and Lee Kong Chian are great entrepreneurs but they have contributed a lot in helping our society. But at the moment I can only smell young people going like a swarm of bees, just to make money. This is indeed a profound regret. Finally, I must say that in order for Singapore to flourish, we must have a very good culture in our civil service. First of all, I must declare my interest. Recently, I invested with a friend on a type of electronic product. It is something invested by a young Singaporean. It is what we call "creative cracker". It is not the real cracker, no gun powder and no danger. Once we announced the invention of these creative crackers, the police told us that we cannot sell them. We submitted our application. The Government's response was very fast. The Police was helpful. But when it went to the Ministry of the Environment, noise pollution was not a problem. It can be accepted. But they say this creative cracker will let out a lot of paper fragments and they will litter the public areas. So it becomes littering. They pushed the buck and finally it went back to the police. I feel that if it is just a question of littering, you can make rules and say you must clean up the paper fragments. Why must you push away such a creative invention? Finally, it just died a natural death. This is not an environment in which the Government is encouraging creative enterprise. Many of our civil servants are inflexible. When the rules say you cannot do this, then of course you cannot do it. When there are no rules to say you cannot do, yet you are not allowed to do it. I hope that our civil servants would not just say, if there is no U-turn, you cannot turn. Only if there is a U-turn sign, then you can make a U-turn. But if there is no U-turn sign, think about it. Do not do a U-turn but turn into a side road, make a 3-point turn and go on. This is creative! The Government recently announced the setting up of Enterprise Challenge Trophy started by Dr Tan Chin Nam. They want to introduce this sort of creative spirit of the Silicon Valley into our public service departments. We encourage our public servants to keep on coming out with new ideas and to cultivate our civil service with this concept of creativity. Only then can we establish a very creative entrepreneurial society.

Mr Speaker, Sir, the Budget Statement by the Minister for Finance, Dr Richard Hu, seems notable to me for at least three reasons. First, it officially marks the turn around that our economy has made in this past year. It is a marker in the change of mood from the doom and gloom of last year, and the fresh hopes of a new year and millennium. Second, the statement recognises how much our continued recovery depends on the region and the wider world. Singapore's open economy can be buoyed or brought down by events in the USA, Japan, Indonesia and other parts of the world. Third, the statement is a budget that seeks to deal with the effects of globalisation. The phenomena of globalisation increase competition between companies and nations. It creates great opportunities for some, with the right skills at the right price. For others, without such skills, it can mean the end of existing jobs and the start of persisting pockets of unemployment or of persistently low wages. Many economic indicators and some stock markets have shown marked improvement since the third quarter of 1999. Some believe the crisis is over. I think that this is not the right way to look at things. I believe instead that we are going to enter a period in which crisis may recur. These may be similar to what we experienced in 1997, or from a wholly new nature and source. There is little guarantee that the long decades of rapid and largely uninterrupted growth that we and much of the East Asian region knew until the crisis will again return, whether for us or for our neighbours. It is likely that we will instead experience a much more patchy pattern. Some years will be better than others. Some countries will surge forward while others in the region will struggle. Some sectors of our economy and society will prosper and others may experience a slow down or even extinction. As such, the Budget of 2000 is not simply a budget for the new financial year. It may in fact be seen as a Budget for a new era. This is a post-crisis era in which new stresses from worldwide competition and globalisation must be addressed. This is an era in which the recovery would be real for some, uncertain for others, and a missed boat of opportunity for yet others. Much depends on the policies that we adopt. The important policies, moreover, are not just on macro-economic and financial matters. They relate to technology, education, citizenship and foreign talent, rules and social norms that allow and reward risk-taking as well as to community, family and good relations with others in the region. In this, there are special needs for financial and other policies that allow and encourage the new knowledge-based economy to flourish here in Singapore. Yet, there is also a need for measures that reaffirm many important and enduring foundations of our society. In this setting, there are many points we must consider. I can only touch on some of these. Some relate to the general context the Minister has set out. Others relate more specifically to strategies that can be suggested to deal with the challenges of this new era. I shall deal first with the regional setting, and then with policies for Singapore. Singapore, ASEAN and the World Economy When we look at ASEAN and the world economy, we must see that we have generally enjoyed a special place in the world economy, as have others in the region. They have attracted, together with China, the lion's share of foreign direct investment that goes to the developing countries. Asia's trade, up to the crisis, had been the fastest rate of growth in the world. In contrast, many countries in Latin America and Africa have known years, decades, of slow or no growth. ASEAN countries, with some exceptions, have been relatively open to the world economy. Singapore is the most fully integrated and open of all. Openness has, to date, been part of our formula for success. Minister Hu is right, therefore, in pointing to both the developments in the world that favour our continued recovery, and other events that may de-rail that recovery. With openness comes both opportunity and vulnerability. If others do well, we are most likely to prosper. If others fail and flounder, we may well be affected. This is the nature of the open and inter-dependent world economy. Minister Hu has pointed out some of the major trends, both the upswings and possible downsides. May I ask him to additionally consider three factors? These factors are (1) the need to renew our regionalism; (2) the prospect of increasing economic cooperation and integration in ASEAN and East Asia; and (3) the rising price of oil. Sir, in his Budget Statement, Dr Hu recognised the rising competition with China. He also recognised that China's rise is not all negative for us all. There are also opportunities if we find ways to complement investments and growth there. The Minister also spoke of problems in neighbouring countries and the relative strength of our economy. In this context, may I draw him out on how the Budget might set the context for a renewed wave of regional undertakings in China and elsewhere? I ask this question particularly in the light of our experience in the Suzhou Industrial Park, and of the financial and political fluctuations in other countries during this crisis. What new ways, if any, does the Government propose to complement investments and growth overseas so that Singapore might benefit? I would ask the Minister if it is time that we provided better schemes for our businessmen to consolidate and write off losses from their overseas ventures. Or even to enjoy lower tax on profits they may remit from overseas ventures, when they return these profits back to Singapore's economy. After all that has happened in the crisis generally and in Suzhou particularly, we must recognise that going into China and other countries is subject to risk. Yet, we also recognise that these risks must be taken, if our economy is to go regional, global and help sustain growth in Singapore. It may therefore be a strategic step forward for the Budget to provide greater financial incentive for such risks and reward. Sir, some who heeded the Government's call to regionalise have been badly hit by the crisis. We should assist them to renew their commitment to going regional and global. New incentives would set the right signal. Let me turn to my second point on economic cooperation and integration in ASEAN and East Asia. Sir, the Minister's Budget Statement recognises the importance of China and Japan. Additionally, we can and should make more ties with our fellow ASEAN economies, to increase economic cooperation and integration. Despite the crisis, positive steps have been taken. A system of financial surveillance over ASEAN and East Asian economies has begun. There may be a temptation to slacken now the worst of the crisis seems over. Yet, such a system must be continued, the vital alarm bell to signal that danger of any recurrence. Other positive steps forward taken despite the crisis have been in the ASEAN Free Trade Area (AFTA) and ASEAN investment Area (AIA). While these steps have been promised, there seem to be some negative trends. Countries that are newer to ASEAN and the world economy and free market system, such as Vietnam, Cambodia, Laos and Myanmar, may well have doubts about opening up their economies. These concerns are often not confined to economic matters. They also relate to social, cultural and political factors. In this context, I would ask the Finance Minister and his colleagues in Government to do more to assist our neighbours in making the necessary but sometimes daunting transitions for these countries. Singapore is both an open economy and one of the most developed ones in the region. We can and should do more. This should not be as a bandage or charity, but to help build the expertise, capacity, infrastructure, and for us to be true partners with our neighbours. This is as much for our good in the longer term, as for theirs. It would encourage and enable neighbouring countries to undertake the right policy reforms and allow the AFTA and AIA to proceed more smoothly and quickly. I will speak more on this matter when we come to the estimates of the Ministry of Foreign Affairs. One related and further question, which is directly under the Minister for Finance's purview, is whether the Minister will consider more generous tax exemptions for foundations and institutions in Singapore who undertake or fund development and training projects abroad, in other ASEAN and Asian countries. Our private sector and civil society can play a significant role in helping our neighbouring countries. This can be in small but significant projects such as the provision of medical care in Bintan, or assisting environmental groups in Indonesia. Tax exemptions for such worthwhile overseas projects would encourage such good works and better recognise the growing interdependence between our society and those of our neighbours. I would also ask the Finance Minister to play his part in continuing and strengthening the new ASEAN system for financial surveillance. Indeed, we might ask the Minister to look forward to a greater system of cooperation and coordination for financial and economic matters in ASEAN and East Asia. We might also hope that the Government will proceed with more bilateral agreements on free trade, investment, taxation and associated matters. Singapore is presently studying a number of these, including those with New Zealand and Japan. With our ASEAN partners, we are also considering an agreement between ASEAN, Australia and New Zealand. We should do all we can to proceed with these with due dispatch. This is especially given that talks in the World Trade Organisation have stalled. Perhaps other regional agreements too might be usefully explored, such as one with China. Let me turn to my third point on the overall context. This is on rising oil prices. Sir, it is observable that there has been a sharp rise in oil prices. This may mark a reversal in the low prices that the world has known in these past years. We will remember how oil prices hiked up by the OPEC cartel in the 1970s caused many economies to slow and stall. This particularly affected economies such as ours which are highly dependent on energy, and yet have little or (in our case) no energy resources. May I ask the Minister how he thinks this trend may affect our recovery, and what we might do to meet this possibility, as best we can? I myself believe that much more can and should be done to encourage greater energy efficiency in Singapore. I will return to this point when I outline my thoughts on the national economy. But at this juncture, I do wish to emphasise that my call for energy efficiency is not, in this sense, premised solely on environmental and ethical concerns, that I often raised in this House. Energy efficiency, like other forms of efficiency, is primarily a concern about our competitiveness. It is a way to enhance our economic security against sudden shocks and rising energy prices that seem to be on the way. The Singapore Economy Sir, thus far, I have spoken about the place of Singapore and our region in the world economy. Now, allow me to turn to the place of all Singaporeans in our national setting. In doing so, I will touch on three points. The first is whether we can keep the compact of 1999; second, whether we can provide opportunities for all in the new economy; and, third, of increasing the efficiency of government. Sir, on the first point, the crisis saw the ouster of leaders in some countries and, in others, the betrayal of trust that people gave to their governments. The role of Singapore's Government in this context is very difficult. We weathered the crisis and the Government led our recovery, and people should acknowledge the role of the Government with gratitude. Singaporeans have a strong and resilient spirit, but good governance and leadership have been greatly important for our recovery. In this context, while the Government has done well, I believe some further explanation of the Budget Statement is important. Some may otherwise wonder if the compact between the Government and people in facing the crisis of 1999 has been met. This relates to two facts. First, that the Government was supposed to go into deficit, but did not. Second, that the CPF cut is not yet fully reinstated, yet senior civil servants and Government leaders will have their full pay put back. In asking for further explanations, we should acknowledge that citizens were asked to make a sacrifice in their pay, and did, and this was real. In contrast, the Minister announced a surplus, instead of a deficit. This reversed a projected $5.1 billion deficit into a surplus of $3.2 billion. This is a variance of some $8.3 billion in total. In his statement, the Minister explained that, in part, this happy state of affairs was due to lower development project spending, and the rescheduling of some projects. This may seem prudent to some. However, the state of the economy depends on a mix of both public and private consumption. A fall in Government spending may therefore create a surplus, but at the cost of lessening overall demand. In particular, I note that the Minister acknowledged that the construction sector remained in recession, and remains so today. In 1999, this sector contracted a severe 12%, according to the Minister's statement. May I ask him whether, if the Government has not held back its projects, part of this contraction might have been avoided and the construction sector helped? What were the main or main types of projects that were held back by Government? Equally important, how will the unexpected surplus be used? The Minister announced various schemes that add up to some $685 million, but this is well short of the full surplus of $3.2 billion. Allow me, therefore, to propose a way of spending some of the Minister's money. Globalisation, as I have mentioned briefly, will increase the divisions between sectors in our societies. Some sectors will prosper and others may experience a slowdown. Those with little formal training and education have less chance to participate and benefit from the new knowledge-based economy. This may strain our social cohesion and the Singaporean ideal that all must have a chance to prosper. We should do all we can to increase the capacity of everyone to participate. If not, we are in danger of breeding resentment and our own tribe of Luddites. The Luddites, if you recall, was a movement in the early 19th century that protested against new technology by rioting and breaking the new machines. The use of violence must, of course, be condemned. But what we have to understand today is that the Luddites did not wreck machines for no purpose or because they were against progress. In most cases, it was because they were displaced by machines and given no chance to join in the benefits of the progress. We must, therefore, be inclusive in promoting progress. Thus, while some sectors, such as younger graduates and professionals or even foreign talents, may have advantages in the KBE, we must act so that no sector is completely excluded. Worker retraining, which the Government initiated, is part of that. But I believe we would benefit from greater attempts to bring IT and other new skills to the mass of people. We should in this recognise that Government cannot provide for everyone. I therefore ask the Government to consider giving all Singaporeans a new fund for their own self-improvement. This would be open to a wide range of courses in different skills. This could range from Masters courses at the university to language instruction or to computer skills or basic education. Such educational schemes should be recognised as creating assets, just as much (if not more) than buying a house with your CPF money or upgrading flats. This would be a fitting use for the surpluses that the Government has unexpectedly generated in 1999. Perhaps this new fund might be called "EdVenture", as it is like a venture capital for education. Allow me to close, Mr Speaker, by looking at the forward projections for the coming year. One item that stands out to me is the operating revenue of Government. This will go up by some 8.6%. In particular, I note that manpower estimates will increase by some 10.8%. That is to say, Government is costing us more, and civil servants are costing us more. Of course, good governments do not come cheap. But expensive things are not always better. Most Singaporeans like their stuff cheap but good. The increases in operating revenues and in manpower costs are notable in that they outstrip economic growth for 1999, which was 5.4%. They are also larger than the Government's forecasts for 2000, which is between 4.5 and 6.5%. Should these types of expenses grow faster than our economy? Or should they be pegged and made sustainable? It is not my point that we must reduce Government costs at all costs. What I am suggesting is that we should set ourselves the challenge of doing more with less - having a good government, making good government better, but for less. And I am asking the Government to try to do more with less money, people and resources of land, water, and energy. To do so, Government should aim to be competitive, transparent and efficient. This is for all resources, but especially those which Singapore has in short supply, such as energy and land. Let me at this juncture return to my concern about energy efficiency as an illustration of this broader point. As I said earlier, oil prices have risen and may well remain high, or go higher. Government and businesses can always do nothing more than just pass on these new and higher costs to their consumers and taxpayers. Or, and this is the alternative, they can seek to be more efficient in their use. This can be done by incentives in our Budget for the private sector. Energy efficiency can also be mandated by new regulations with higher standards. Such measures need not be at the forefront of technology and risk undermining our competitiveness. But they can be usefully benchmarked against what other countries with good records achieve. Additionally, and perhaps most importantly, Government itself can set the tone for energy and other efficiencies in its own practices and principles. In this regard, I would hope that the Government will see fit to release all or part of its own internal interagency report on energy efficiency. At the last sitting of Parliament, the Senior Parliamentary Secretary in the Ministry of National Development, Assoc. Prof. Koo Tsai Kee, said they might do so, under certain conditions and subject to certain caveats that he did not or could not specify. I would ask the Government to consider the need for greater transparency and leadership in this important arena of efficiency and competitiveness. This is a critical aspect of good governance. Not just as it relates to the specific example of energy efficiency, but in all aspects of Government policy making. Sir, I will take up and develop some of the points in my cuts on the estimates for the various Ministries. I hope the Minister will consider and respond to the points that I have made here. Mr Speaker, I support the motion.

Mr Speaker, Sir, thank you for allowing me to join in the debate. I am much obliged. Sir, the Nominated MP, Mr Noris Ong, said that it has become common practice to use a single word to describe the budgets in recent years. He used Millennium Budget, Cyber Budget, Withdrawal Budget, and many other words. If I were to follow that, I would call this year's budget an "e-Budget". Delivering the millennium's first budget, Dr Hu signalled the entry of Singapore in the world's burgeoning knowledge economy. I use the alphabet "e" not to just describe the new Internet economy, but rather I use "e" as the first alphabet of some of the key points that Dr Hu has raised in his Budget Statement and the tax changes that he announced. First, e-Budget for economic recovery. This Budget signals our region's economic recovery. That was the reason why many found that the Santa Claus, Dr Richard Hu's gift-sack was much lighter relative to last year. This has even led to some people to dismiss the Budget, very unfairly in my opinion, as a non-event. Dr Hu, in his statement, emphasised that, given the favourable external environment, and I quote: "Unless we are among the world's best, we will be relegated to playing a peripheral role in the global economy". And this could be achieved through an educated and highly skilled workforce augmented by external ("e" for external) or foreign talent, promoting technoprise or technopreneurs, and by throwing open our financial services, communications, and power sectors. Budget 2000 commentators, like Price Waterhouse Coopers, feel that there is not much tax incentive for skilling our workforce and the job has been left very much to the Ministry of Manpower. They and others who feel that way must recognise that Manpower 21 was just launched late last year and that MOM's development expenditure has increased by a whooping 684% from $7 million last year to $52 million this year. But I agree that the skilling needs much more financing beyond the $52 million and much more attention from all quarters of Government. Sir, let me move on to the many more "e"s of this Budget 2000. E-budget for Government expenditure. Sir, the Budget book says that this expenditure will increase by 12.5% to nearly $29 billion this year. Whereas the Nominated MP Noris Ong, and I think Mr Simon Tay as well, pointed out that when the year is out, this 12.5% increase would really be spent and not seen as surpluses in the following year. I hope that the Government will make up for the less expenditure last year by meeting this target of 12.5% increase. Entrepreneurship has been given more boost through various incentives, particularly for non-manufacturing sectors and for foreigners who carry out their work in Singapore. For example, the employee stock options scheme (ESOP). Changes have been announced and I welcome the Government's move in this much awaited direction to reduce taxes for employees when they exercise their options. This would help both budding high-tech start-ups and established companies attract and retain both local and foreign talent. Along with this, employer's CPF restoration of another 2% is a welcome gesture though there was greater public expectation for restoration of a higher percentage, despite DPM Lee's earlier announcement about the Government's schedule of CPF restoration. E-budget for estate duty - the exemption for residential properties will certainly facilitate many budding entrepreneurs to work from their home, as many do in the garages of their homes in the United States and Europe. Sir, some MPs who have spoken earlier had said that Government has not announced too many incentives for entrepreneurs. Against the background of $1 billion that has been set aside for promoting technopreneurship, many have expectation of the Government doing more for the entrepreneurship. Sir, an entrepreneurship is an entrepreneur if he finds his way given the facilities that the Government can provide and the environment that the Government can provide is for the entrepreneur to see a way through to make his money to succeed in his business. Sir, the best definition of entrepreneur is perhaps given by one American magazine that I read many years ago, and they talked about the logo of an entrepreneur association in America where it had a stone sculpture where a male's body up to his waist was already sculptured and he was leaning forward with a hammer and a chisel, trying to carve his own legs and putting himself into shape. That is how perhaps an entrepreneur should be evolved. He does not know what is ahead but he is constantly evolving and trying to make use of the environment before him. And the Government's job is to provide that environment, not to do everything for the entrepreneur. Sir, in this regard, I am happy to see the changes that the Government has made so far and it must continue to open up the facilities so that more entrepreneurs can surface in Singapore. Sir, I would like to move on to a few other "e"s that relate to society and education. Education of the young has indeed received a significant boost. The operational and developmental expenditure for the Ministry of Education is significantly higher at 15% and 22% respectively, signalling our commitment to prepare our school-going children for a knowledge economy. "E" for elders or senior citizens. Senior citizens will benefit through this CPF top-up and through the new Supplementary Retirement Scheme which appears good in concept to prepare Singapore for a rapidly aging population. But as Nominated MP Noris Ong pointed out, there are a number of issues there and we would have to wait and see how this will be implemented and its full tax implications. "E" for extended families. Extended families will benefit from increased income tax concessions for their dependants who are their aged parents. Let us hope that this will be one of the additional factors in increasing the number of extended families in Singapore. Sir, finally, almost everyone has something to gain from this year's Budget. My congratulations to Dr Hu for delivering not an exceptional or excellent Budget this year, but an efficient Budget. Sir, now I would like to move on to talk briefly about the advent of the new global knowledge economy and its impact globally and locally, and the role of our Government in this regard. The Internet economy is rapidly changing the way of life for people the world over. New developments are not only happening every day but every morning and afternoon. Sir, the Internet economy, through the equity, money and debt markets, has been the catalyst in the redistribution of wealth of legendary proportions. Let me relate a folklore that is familiar to all of us here: Robin Hood and his band of merry men stole from the rich to feed the poor. Over the centuries of retelling, the Robin Hood legend grew: peerless archer, noble fighter against injustice and tyranny, champion of the little guy. A hero. Thanks to the Internet revolution, we cosmopolitans live in a Robin Hood economy, where redistribution of wealth in significant proportions is taking place. It is not so much robbing the rich to pay the poor, but it is not far off. And, irony of ironies, it is the money men, the venture capitalists who play Robin Hood. Sir, I want to say that I am an advisor to one of these venture capital firms and declare my interest, if any. And the twist is that in the Robin Hood economy, everybody who is involved wins, at least thus far. Globally, North America, Europe, Asia, Australia and South America are the key continents that are very quickly adapting themselves to the new Internet world. But let us ask ourselves where Africa features in this new era. Already, Africa is far behind the rest of the world in the industrial age. Will Africa become a victim of the digital divide and become a digital outcast? Or will there be resources and the political will amongst the African leaders, to change this sad state of affairs? One distinct advantage if the above problems can be resolved, is that the absence of legacy systems would help Africa leapfrog into the Internet technologies faster. But at this moment, I am very sceptical. This is something that the world leaders have to address. Zooming back to Singapore, very many of our cosmopolitans and our young are the immediate and future beneficiaries of this wonderful new money world, and the new technology infrastructure. And many of us in Singapore, unfortunately, just link the many dot.com companies to the equity market and we say that this Internet economy is going to burst. I like to just use this example that BG George Yeo had used, some years ago, when he talked about pornography on the Internet. He said that we should keep the main pornographic sites out of the main streets and if someone does go through the alleys and the lorongs and get there, well, we cannot help it the way technology is. Let me follow on his analogy and just make this point on how this Internet economy is going to move. Suppose we were in the age when Raffles founded Singapore in 1819, or thereabout, when Singapore was just a fishing village, and suppose there was no PWD, no state agency to build roads, and if everyone who had his little kampong hut, had to decide to put a road in front of his house, and some of us did more extensively and succeeded in attracting more users to the road in front of us, and we did it together with others, then we will have some roads that would become Orchard Road, others would become Shenton Way, and some others who might not have been more successful might become the small lorongs, others might do it wrongly, or in their minds, might do it for different reasons, might become the Desker Road. But whatever the case, as more and more people use a particular road, it is going to become more important and the infrastructure around it is going to develop. And that is what the technology infrastructure is all about. As more and more companies go into this, the infrastructure is going to be there. But when we link it to the equity markets, it is a different phenomenon. It is something that nobody can foretell. But the Internet technology infrastructure is here to stay. Sir, many of the MPs from the private sector, who spoke earlier, spoke at length about what Singapore should do to move towards this direction. Personally, I think we are one of the few countries in the world where the Government has proactively done so many things to move us to, what we call, the KBE. And one of the MPs who spoke earlier said that, although Hong Kong had started later than us, we are behind because of this SingTel-C&W HKT deal. I think the deal did not come true for different reasons, and it has nothing to do with whether they were faster or working at Internet speed. I think it is much more complicated than that. To be accurate, some of us who went on a Parliamentary visit to Hong Kong last year found that Hong Kong had started almost the same time as we did. And Hong Kong is a different environment. They have entrepreneurs for more than 20-30 years and an entrepreneur culture which we are just starting. But coming back, many MPs here, with the exception of a few like Mr Simon Tay, had said that we should not just focus on the business world. Yes, we have to succeed economically. But I think we have to be inclusive of the society at large. When I sat here on 25th February to listen attentively to Dr Richard Hu's pronouncements on the economic challenges and opportunities that we face in this Internet world, I was somewhat saddened that the important aspect of the social dimension of the digital divide was not being addressed in his fiscal policy statement. Perhaps, I thought it may not need some fiscal treatment at this point of time. I told myself that perhaps it would be the key point that I would raise in this debate. I was however pleasantly surprised when MCIT announced a few days ago that IDA will get $20 million to address the digital divide issue in Singapore. Sir, I think it is a very good start, but much more needs to be done, and not just in terms of money. Let me elaborate. Sir, presently, the SBA has under its wings the National Internet Advisory Committee (NIAC) (in both I sit as a member of the board and committee). The SBA and NIAC promote, among other areas, the use of Internet for housewives, senior citizens and non-working people, young, school-going children as well. It has set up Project I-Senior and the Family Access Network led by Mrs Carmee Lim, retired RGS Principal, and this has gone on for about two years. This pioneer work, I would say, is excellent, very commendable and has tremendous challenges ahead. Sir, in Singapore, I estimate that the bottom 20% of the population can be regarded as relatively poor. My fear is that the digital age may increase and accentuate this percentage and the number as our population grows. This is compounded by two factors: a rapidly ageing population and a higher computer illiteracy amongst those who are above the age of 45 years. Sir, the point I want to make is this. Singapore is known internationally as the first country in the world to be broadband networked completely. There are sufficient political, social and economic reasons why we need to prevent a digital divide in Singapore. Can we also become the first country in the world whose population is entirely Internet ready? To underscore the importance of computer education for adults and senior citizens, I wish to ask the Government to consider setting up a Ministerial Committee with a social focus that can coordinate a national drive in this direction. Providing money or computers is but only a first step. The human psyche, the apprehension, the fear for computers amongst the older Singaporeans need much more attention. To support this effort, a new multi-agency can be set up under the Prime Minister's Office to achieve the same. Sir, I will speak more on this when we consider the estimates under PMO. In conclusion, Dr Hu's E-Budget 2000 signals a new age. As we move forward, let us remind ourselves of some of the axioms that we often hear and speak of. We must create a thinking people and a learning nation. We must try and maximise the potential of not just every student or undergraduate in our universities or schools, but also every citizen, young or old, skilled or unskilled, who is in the workforce, and the housewives. We must develop and maximise their potential. Let us not allow the tentacles of the digital age divide us. Let us remain one nation, one people and one Singapore for many more years to come.

Mr Speaker, Sir, thank you for allowing me to participate in the Budget debate. Sir, the Budget tabled by the Minister for Finance is a carefully crafted Budget, with emphasis placed on the welfare of the ageing citizens and the low-income families, the need to encourage innovation, creativity and enterprise and the continued liberalisation of the financial sector. The business sector welcomes the corporate income tax rate reduction from 26% to 25.5% and the retention of employers' CPF contribution rate at 10% until 1st April this year. The Minister has obviously shared the concern of businessmen that, as the economic recovery has just begun and not evenly spread, it is still important to keep business costs at a competitive level. Workers, recognising that it is crucial to help keep business costs low, continue to accept the lower employers' CPF contribution. They are somewhat compensated by rebates on HDB service and conservancy charges and rental rebates. It is therefore a Budget of balanced consideration in the sense that it tries to take care of the welfare and benefits of the low-income earners, businessmen, as well as enterprising young entrepreneurs. In terms of revenue and expenditure, it is projected to produce a surplus of $2.45 billion. As both operating and development expenditures are greater than those of the last Budget, it is relatively expansionary, which is necessary to support the recovery of the economy.

4.48 pm One emphasis of the Budget is to encourage innovation, creativity and enterprise. Under this heading, the Minister has proposed removing the restrictions that residential properties must not be used for any form of business activities, which is a qualifying condition for estate duty exemption up to $9 million. The purpose is to encourage entrepreneurs who may want to work from home and to support the Technopreneur Home Office Scheme. I have, however, doubts on the effectiveness of the proposed removal of these restrictions. Technopreneurs are mostly young risk-takers who have new ideas but limited financial means. They want to work from home in order to reduce the initial start-up costs. The notion of disqualifying them for estate duty exemption as a result of using their residence as home office is probably least of their concern. The reason is that they are young and paying estate duty upon death is something very remote to them. As such, the removal of the qualifying condition is equally least of their concern and will likely fail to excite them. I therefore do not see how the proposed relaxation would support the would-be technopreneurs. As a matter of fact, estate duty itself has long been regarded as a disincentive for greater wealth creation by individuals in today's world. The purpose of the original estate duty, which was known as death and gift taxes, was to reduce inequalities in the distribution of wealth and to prevent large estates passing from one generation to the next generation. The rationale behind is therefore social and not for revenue generation. However, the social reason to retain estate duty may no longer be valid in our present context. We do not subscribe to the philosophy that income and wealth distribution should be completely equal for individuals. In fact, we support greater rewards to individuals who work harder and contribute more to economic growth. Furthermore, in Singapore, there are not too many large estates which warrant their being broken into smaller estates. In the few cases which we may have had, the natural process of inheriting estates by a number of children will break large estates into smaller ones. This, to some extent, fulfills the aim of the estate duty legislation without the agony of a complicated administrative process. On the revenue side, the collection amount is small and relatively insignificant. In Singapore, the revenue collected from estate duty was $45 million, out of the total revenue of $15,628 million in 1998, which was only 0.28% and was the smallest tax item. In addition, estate planning will further minimise the collectable amount of estate duty. This includes the setting up of trusts and holding companies which are effective in avoiding tax payments. But the setting up of trusts and holding companies itself is a tedious process and it involves large amounts of legal costs. Perhaps, it is timely to review the estate duty ordinance to see whether the Act should be revised further, or whether estate duty should be exempted for residential properties, irrespective of their values. The Minister may argue that most people are not liable to pay estate duty as the exemption amount of $9 million for a residence is high. But the agony of assets being frozen for investigation and valuation is an unnecessary burden to bear. In his reply in the old Parliament Chamber on 26th November 1998, the Minister promised to consider introducing legislation to exempt small estates, and to give an answer to requests for abolishing estate duty in the present Budget. However, I have found no reference on this topic by the Minister in the Budget Statement. I would therefore be very much obliged if the Minister could share with us his thoughts on these issues. Sir, I support the motion.

(In Mandarin): Mr Speaker, Sir, this year's Budget is a cautious one. It is generally acceptable by the people in Singapore. Realising that in 1997 and 1998, we faced an economic crisis, and in 1999 we were beginning to recover, my constituency leaders are quite happy with the rebates and tax exemption and income tax of 5% granted in this year's Budget. The residents will also get rebates on service and conservancy charges and rentals for their flats. On top of that, everyone above 21 years old will get a CPF top-up of $250. These tax incentives, though cannot be described as a big "hongbao", are nevertheless a good gift. For the business community, the corporate tax has been further reduced from 26% to 25.5%. It is also a breakthrough. However, on property tax, the rebate has been reduced from 50% to 25%. I would like to express my views on this item. At present, this tax rebate was geared towards high-tax enterprises but they neglect those hawkers and some small merchants and traders. In 1994, the Government announced a scheme to sell the hawker stalls to the existing stallholders. Altogether there were 1,627 cooked food hawker/market stalls. Out of these, 299 cooked food and 189 market stalls were sold. After they have purchased their stalls, the hawkers who took the loans from the commercial banks, the repayment period is 10 years and up to a maximum of 15 years. Some stallholders purchased their stalls in 1994 on a 20-year lease. After operating for six years, they decided to quit and wanted to sell the stalls. They could not find anyone to take over because the banks were not prepared to provide the loan as the lease had only 14 years remaining. Therefore, the stallholders have no choice but to carry on with their business at the stalls. These stalls are scattered in housing estates and their customers are mainly HDB flat dwellers. The hawkers have to raise prices to cope with the high overheads and this has affected the residents there. Many stallholders told me that they had to pay $2,500 to $3,500 in property tax and the monthly payment is from $250 to $300 which is more than the rental which they were paying prior to the purchase of the stalls. They were paying rentals at $160 per month only. This is a big headache for them. This is in addition to the loan payment they have to make to the bank. The market stallholders particularly are finding it difficult to make ends meet. Their operating hours are very short, that is, from 7 am to 10 am. So I hope that the Government can give more rebates on property tax to them. If they could get 50% rebate, it would be better, or else they should revalue their stalls and then give them more tax rebate on property tax. If the stallholders find that their burden is too heavy, this will defeat the original aim of selling the stalls to them. On the other hand, residents of HDB estates will have to pay higher prices, thereby adding to their burden. Therefore, I would urge the Minister for Finance to consider giving them special treatment on property tax. The second point is that the clan associations have to pay quite high property tax. Singapore is a multi-racial and multi-religious society. In order to forge racial harmony, to live together and to build a harmonious society, clan associations have made tremendous contributions in this regard. Before we set up grassroots organisations and RCs, the clan associations have already done a lot to foster racial harmony between the different races in Singapore. Even today, in the midst of prosperity in Singapore, our clan associations still play a very important role. There are many clan associations in Singapore like the Lee Association, Wu Association, Tan Association and so on and so forth. All these clan associations have done a lot for their members and they have carried out various activities for their members to strengthen the cohesiveness of their members. This is beneficial to our national solidarity. Recently, a clan association conducted a seminar to discuss their common problem of having to pay very high property tax on their premises. Property tax is levied, based on the commercial rates of the buildings. Therefore, we hope the Government will give them special treatment. Of course, if these associations make use of certain areas of the premises for other purposes, then they should be taxed according to commercial rate. But if these premises are used for their own purposes and for conducting social activities, a lower property tax should be levied on them or no tax at all. These associations' revenue depends on the management committees and members' subscriptions or from voluntary donations. However, they have to pay income tax on these donations. Therefore, the council members of these associations hope that the Government can accord them special treatment, because the activities they carry out are charitable in nature. It is not profit-making. Therefore, these revenues should not be taxed at all by the Government. I hope the Government will consider the two points that I have raised. Sir, I would like to make use of this opportunity to congratulate our Minister for Finance and the Government for turning a projected deficit of $5.1 billion into a surplus of $3.2 billion. I would like to applaud them for this special feat. This is also a testimony to their sound management of our economy and our finances. I would like to congratulate the Minister for Finance and I hope that we will accrue more surpluses in the next financial year.

(In Malay): Sir, I support the Budget tabled by the Minister for Finance. I wish to congratulate the Minister for Finance, Dr Richard Hu, on the announcement of this year's Budget Statement in which he announced several measures which I think could foster family spirit among our younger generation. I am referring to the incentives given not only to parents but also to grandparents, and at the same time foster a three tier family unit that includes children, parents and grandparents. If we look carefully at the financial incentives given to children for maintaining their parents and grandparents, it may sound odd. It seems that these measures encourage a materialistic culture among our young generation. In fact, if our children could look after the welfare of their parents and grandparents without the financial incentives, we should be thankful, because it is something ideal that we dream of. However, in reality, it would only remain as a dream because without such financial incentives, I think it is not easy for us to encourage our young generation to shoulder the responsibilities of looking after their parents and grandparents. This, however, should be an embedded value in our young generation. I am also glad that attention was also given to the low-income earners who could not afford or are helpless in looking after the welfare of their parents through the ElderCare Fund. This is because the low-income earners often face hardship in their life. To maintain themselves is already a problem; what more if they have to look after the welfare of their aged parents who require medical attention. In this respect, I would like to propose that more Malay/Muslim homes for the aged be set up in one or two years' time to meet the future needs of the Malay/Muslim community. It is not my intention to encourage the young generation to place their aged parents in these homes. In fact, I feel that the addition of these homes is necessary to meet the needs in the next five or six years. Hopefully, by encouraging more Singapore citizens to upgrade their skills and secure better jobs with higher income would lower the number of low-income earners among the Malay/Muslim community. Once this is achieved, there is no need to increase the number of homes for the aged. In addition, the proposed Supplementary Retirement Scheme (SRS) would hopefully be able to meet the needs of the retirees. However, this objective may not be achieved in 10 years' time and, as such, I feel that while waiting for a better situation in the next 10 years, the addition of one or two more homes for the aged is necessary. Sir, according to the Monthly Digest of Statistics, it is estimated that about 15,000 Singapore citizens die annually. Their deaths are due to various diseases - old age, accidents, homicides and so on. What I wish to highlight here is the deaths caused by road accidents involving vehicles and innocent people as a result of drunken driving and deaths by accidents. We found that 200 people have died, 396 with serious injuries and over 8,500 suffered minor injuries. From the 200 people who died, we were not able to identify how many were due to drunken driving; and the fights that took place at coffeeshops, hawker centres and at homes which were all due to excessive alcohol consumption. Drug addicts who could not get drugs would indulge themselves in alcohol consumption and when they become drunk, they cause social problems by committing theft, housebreaking and outraging modesty. As such, I wonder why there is no increase in the tax on alcohol. I hope the Ministry of Finance would consider my proposal so that alcohol consumption could be reduced and our youths will find it a pinch when buying and consuming alcohol. On the other hand, this will increase the revenue of the Government from $343.1 million to possibly $500 million a year. Otherwise, alcoholism will be a way of life for our youths to show that they are "cool" and somebody. And what will happen to our youths in future when they indulge in drinking alcohol? 5.15 pm

Mr Deputy Speaker, Sir, in 1998, we experienced the full impact of the regional crisis and economic growth had slowed sharply to 1.5%. In 1999, the Minister in his Budget Statement cautioned another difficult year ahead. In the end, we registered a remarkable turnaround and achieved that overall growth of 5.4%. I would like to register my gratitude to the Minister and the Government for having so ably steered Singapore out of the Asian economic crisis. Sir, the general response to the Budget 2000 is "Nothing dramatic". The dominant sentiment is this: if the business measures adopted in the 1999 Budget had yielded such a remarkable V-shaped recovery, what are the reasons for not continuing with the measures for another 12 months to allow those sectors already rebounded to reap an even higher level of growth while giving more time for weaker sectors, like the construction, financial services and businesses to get out of their recession? The decision to stop these incentives and rebates which are particularly significant to these weak sectors seems difficult to understand when we weigh it against an unexpected budget surplus of $3.2 billion in FY99, a forecast of economic growth between 4.6% and 6.5% and a budget surplus of $2.5 billion in FY2000. We need some very good explanations. While many would agree with the Government that we need to live within our means and accumulating surpluses in order to deal with sudden downturns again, many would query how the Government balances the gains by taking back the goodies and the possible losses to the private sector which needs continuing fiscal support for just another 12 months. If these firms cannot make it for FY2000, what are the implications for employment and family well-being? Is the Government prepared to pick up these companies when they fail, or is the Government going to let them vanish, sticking by the cardinal law of the survival of the fittest and ablest? Sir, many companies do not belong to this category. Hence, we need the Government to play a stronger, supportive role. I would like to turn to the social and community sector. While observing that the overall expenditure priorities for the social and community services account for 39.6% of the total expenditure, or an allocation of $11.5 billion, it is education, public housing, health and environment which receive a larger chunk of the allocation. These are well-deserved investment, Sir. MCD, on the other hand, receives only 5% of the sector allocation followed by MITA receiving 3%. Although the allocation of $610 million to MCD registered a substantial increase of 38% over the last year, and within the MCD, the Elderly Development Programme benefitting an increased allocation by 55% to $12.3 million, the feeling in the community is that the Government could do more. Within the perspective of the family and community services being seen as central heartware institutions to create the level of cohesiveness for Singapore to function as a competitive economy, $610 million spent on operations, People's Association Programme and delivering social services and sports facilities to a population of 3.8 million which averages a per capita annual expenditure of $160 per head, totalling a monthly $13 per head, are clearly not over generous. I would like to know how we fare compared with other countries, if the Minister could provide the figures. Furthermore, our ageing population will need specialised care services and personnel which are expensive to develop and sustain. Without the many helping hands from the community and the private sector, this budget allocation to MCD cannot cater to the needs of the disadvantaged families, the young, the old, the vulnerable like the disabled and the intellectually challenged. We have many loving and willing hearts, Sir, but the community donors and volunteers are stretched. The same fund-raisers are chasing the few generous donors and the needs are forever expanding, with more and newer services required to attend to the emerging needs of a complex society. Can the Government please look into its funding principles for social and community services in particular, and respond generously to future recommendations put forward by various community agencies, not only those working on the ageing population. There is indeed a feeling that not enough is done for restoring family wellness, not enough is committed to youth activities and interests, even less is provided for the disadvantaged and dysfunctional families with multiple social problems. As to developing research competence to help us identify new concepts and methods in organising the community, our resources and effort leave much to be desired. The Minister will ask how much is enough and caution me that giving more to one Ministry will mean less for another equally worthy programme, that I must always assess what counts and what matters in the overall scheme of development. But I urge the Government to look at people's needs, not at cost allocation alone. I believe that investment on social fundamentals in matters related to the family and the community is a process of enhancement intrinsically important in themselves, while serving as a significant supplement to a market mechanism which leaves many struggling behind in the development race. After all, Sir, economic growth at 5.4% a year only means progress if we use more of the money to allow families to lead the kind of lives which they have reason to value. I agree with the Minister that MCD, like any other Ministry, must get the most out of their allotted resources by managing them well in order to achieve the desired outcome. However, community programmes that deal with dysfunctional families and youths, including eldercare programmes and counselling programmes for the abused, rape victims and violent perpetrators do not yield easily tangible and immediate outcome, and they are not easily audited and measured. This is not to say that the Ministry must not attempt to do so, but the exercise requires a tremendous amount of human and research resources. Our habitual pragmatic scrutiny of outputs and tangible outcome very often make us fail to respond with open mindedness and accept a level of "untidiness" in the community sector. Because of this nature of complexity, all the more we need to commit energy, resources, skills and time to level up services and involve community participation in developing an audit blue-print to set best practices and performance indicators. The easy part in project planning is spelling out the social objectives. It is less certain that we are able to agree on clear indicators that are understood and shared by different Ministries and the people sector. Sir, this has to be an evolving process and we need more resources to set the right directions. Last year, I noted the decrease in budgeted development for MCD by 15.4%. This year, I am pleased to note that the development expenditure of MCD registers a 98.6% increase over FY 1999 and many community projects are in the planning. I hope the Minister for Community Development and his team will continue to heed the appeals from the community and Members of this House during the debate on the estimates and champion our causes before the Minister for Finance.

Thank you, Mr Deputy Speaker, for allowing me to join in this debate. The budget is indeed a conservative and a prudent budget. The economy has recovered. How else could the Government finances show a turn around of $8.3 billion last year - from a projected deficit of $5.1 billion to an unexpected surplus of $3.2 billion? Yet, in spite of this unexpected sterling performance of the economy, the Minister has seen it fit to remove or reduce almost all the measures given in prior years to reduce the tax burden of taxpayers, individuals as well as corporations. The result, as we can see, is a projected Government surplus of $2.5 billion for the coming fiscal year. Given the Finance Ministry's well-known bias of underestimating revenue and overestimating expenditure, this figure could well be much higher. Sir, I would like to bring the attention of this House to just one item, that of corporate taxes, as an example to illustrate this. In the Budget book on page 21, the revised collection in 1999 from corporate taxes is estimated to be $6.2 billion. The projected figure for FY 2000 is estimated to be $6.75 billion, an increase of $550 million. Let us then look at the Minister's Budget statement on Corporate Income Tax section. In it he said that the revenue loss arising from the reduction in corporate tax rate from 26% to 25.5% would amount to $140 million. In other words, a 0.5% reduction amounts to a loss of $140 million. There is nothing wrong with this, except that we must not forget that 1999's revised collection was estimated after a rebate of 10% from a tax rate of 26%, or effectively a 2.6% rebate. This rebate has been removed from this year's budget while the loss of $140 million will only take effect from next year, as this drop of 0.5% will only take effect in the year of assessment 2001. In other words, there is a claw back of tax collections in this section to IRAS for this year resulting from the removal of the 2.6% rebate. What would this sum be? Based on simple arithmetic and the same corporate profit base, it would amount to $728 million. This is based on 0.5% is equivalent to $140 million, and therefore 2.6% would be equivalent to $728 million. Moreover, 1999's collection was based on the actual corporate results in 1998, a year in which most corporate profits were ravaged. On the other hand, this year's tax collection would be based on last year's corporate results. We all know, Sir, that most corporations had been reporting much improved corporate figures for last year. Thus, I would expect the taxable base for this year, which is based on last year's corporate result, to be much higher than that of Year of Assessment 1999. Based on this, Sir, I expect the increase in the collection of corporate tax could be much higher than $728 million, yet the Budget book shows only an increase of $550 million. I am not against the Government taking a bigger bite of the expected bigger economic pie. But I question the timing of this policy. We have just recovered from a recession. Private sector wealth of individuals and corporations has been badly mauled. In the light of economic globalisation and competition, the Government has been urging the private sector to take greater risks. Sir, a most appropriate and correct call, but how can the private sector do this when, at the first sign of recovery, the Government implements measures to nip the rebuilding of such private sector wealth so necessary to provide the basis for taking greater risks? Nevertheless, budgetary measures such as those in this year's Budget are matters of judgment and timing. Whether or not the Minister's judgment to remove or reduce the tax relief measures now is correct, we will never know. The removal of these measures is not that major in that economic growth will be visibly affected. All it means is that we will have lost some time in the global competition of being there first. Unfortunately, in today's fast-paced global market place, especially in the new technological engines of economic growth, speed and being there first is of the utmost importance. Sir, I would have expected that after the recession the Government would use the Budget to signal a more forward-looking policy for Singapore. Unfortunately, in this year's Budget, there are few such signals. I would thus like to touch on three areas where such signals should be set. These are: (1) Tax deduction for contributions to S21 programmes; (2) Tax deduction for venture capital; and (3) Closing the digital divide. Sir, in S21, we have come up with a first class vision of what we, as Singaporeans, want Singapore to be. We agree that we should take a more participative role as Singaporeans; active citizenship, civil society, helping our less fortunate and less able fellow citizens, and so on and so forth. All these call for greater resources from the average Singaporeans, in terms of willingness, time, effort and money. While the Government cannot, in the short term, do much to promote greater participation in the first three areas, that is, willingness, time and effort, there is much it can do to encourage more monetary contributions from Singaporeans. I think the Government can afford to be more generous with the treatment of tax deductions to designated institutions and projects. For example, some institutions and projects could be designated as S21 institutions and projects. Contributions to such institutions and projects could then qualify for double tax deductions. Or if this is too generous, maybe 1.5 times tax deduction. A strong signal will then be sent to all and sundry, that is, this is the direction we want to go, and the Government will do all it can to encourage all Singaporeans towards that direction. Double tax deduction as a means to promote desired objectives is not new. It had been done before; with success, I must add. Surely, it will not be misplaced in this instance. More importantly, Sir, those supporting such specific institutions and projects, though initially encouraged by the greater financial benefit of higher tax deductions, may begin to identify with such institutions and projects. With time, ownership and subsequent involvement then becomes that much easier. Mr Deputy Speaker, Sir, for suggesting financial methods to encourage the attainment of the high ideals and goals embodied in S21, I know that I take on the danger of being branded as crass or gross. How can I bring in the idea of sullying S21 with Mammon? If so, I make no apologies for it. First, let us not forget that however crass the idea may be, money is a strong motivating factor. Second, we need not be so altruistic that we forgo one of the strongest motivating factors to reach our objectives. Remember that the goal is to get greater involvement and participation. Once that goal is reached, very often the reasons why one started to participate and be involved in the first place are often forgotten. As an example, we are always fond of quoting the participation of Americans in their civil society and their financial contributions to charitable and educational causes, and how we should emulate them. But how many of us realise that one reason for their generosity is the regime of high tax rates in the United States and the tax shelters that such generosity creates for them. Does it matter what the original reasons are, when in the final analysis, the nation benefits from a more involved citizenry? Sir, these days, we are bombarded with calls to be more entrepreneurial and to take greater risks by our leaders, in particular the Prime Minister and the Senior Minister. The Government has also done much to develop an environment which allows technopreneurial companies to start up and thrive. As a matter of interest, only in last Friday's Straits Times Forum page, the National Science and Technology Board came up with a long list of initiatives implemented by the Government. Sir, the first point of concern addressed in this letter was that of adequate financing being crucial to the development of technopreneurship. How true! And I applaud the truism of that statement. But what I would like to add is that what the Government had done is still inadequate. Very often, many a bright idea has died an untimely death from the lack of seed money. While there may be venture capitalists, these people would not normally finance start-up ideas. Often, they want to see more concrete evidences of potential successes than a dreamer with an idea, a burning ambition and a willingness to work 25 hours a day. Luckily for technopreneurs-to-be, before venture capitalists, there are the business angels, normally individuals who are more willing to finance dreamers with their own money. In Singapore, we do not have enough individuals who are prepared to be angels. I would certainly like to see more business angels. With more angels, we will be able to support more idealistic budding technopreneurs. We will be able to build a critical mass of individuals having some form of financial support. This is important as creativity will come from such individuals, not from corporations. It is here that I have a bit of disagreement with my colleague, Mr Inderjit Singh. Sir, his call for more privatisation includes clusters of funds to be managed by the private sector. If this be the case, nothing much will be changed. The rules for managing other people's money, whether by the private sector or the public sector, will be the same. One still has to be very prudent, very careful and very circumspect in decision making, because you are managing other people's money. And that is why I am suggesting the incentives for individuals. It is only when individuals are making investment decisions with their own money that they can afford to be more generous and can afford to take more risks. So I would like to suggest that the tax treatment in this area be changed to encourage the emergence of more business angels. Under the current Venture Capital Tax Incentive Scheme, the investor must invest in approved companies and can only claim relief as and when the losses from the sale of shares of the venture company are incurred. Sir, this is certainly not enough to encourage the growth of business angels. Instead, the Government should allow relief for such investments at the point of making the investment. Also, the need for the venture company to be approved should be scrapped. The approving process implies that EDB can spot winners and losers. I doubt very much that EDB would dare to claim that it can do so. Instead, general guidelines could be used to ensure that abuse of the scheme is minimised. Sir, if such a scheme were to be adopted, it would bring up two other issues. The first is that of the possible loss of too much tax revenue. After all, the scheme as proposed creates a very big tax shelter for high taxpayers. To prevent this, there could be a limit on the relief given. For example, the relief could be limited to, say, 50% of the taxable income of a taxpayer. It could also be a graduated scheme, higher percentages for those with lower taxable income to lower percentages for those with higher taxable income. The second is that of capital gains. Our current system is based on "no deductions for investments and thus no capital gains tax on gains from investments". Allowing tax deductions for venture companies would mean that the investor stands to gain from both ends; tax relief at the point of making an investment and no capital gains tax at the end when they are successful. My answer to this issue is: why not? After all, we are encouraging a speedier fusion into a new world and a new economy. If this scheme promotes that objective, what is the loss of some tax dollars as compared to the benefits to the economy and community of the future. However, if the Government still cannot accept such thinking out of the box and feels an instinctive need for order and symmetry, then I suggest a choice be given to the business angel at the point of investment. And this is, "Take the tax relief option now and pay capital gains tax when your venture succeeds later. Or forgo the tax relief now and you do not have to pay capital gains tax when your venture succeeds". Since at the point of making investment it is not possible for the investor to know whether his investment is going to succeed or not, I think it will be a fair choice to make. On digital divide, I do not have to stress the importance of this issue. Enough of our leaders had brought up this issue for all Singaporeans to know that, if not resolved, it will lay the foundation for economic, social and perhaps, even communal divisions, in the future. Even the world's superpower and the powerhouse of IT and the Internet, the United States, is concerned about the digital divide, as evidenced by President Clinton's recent State of the Union address on the subject and his budget proposals for a multibillion-dollar plan to help poor Americans and minorities get access to the Internet and make it as universal as the telephone. Hence, I was very pleased when the Minister for Communications and Information Technology recently unveiled a $25 million plan to bridge the digital divide and help every Singaporean go online. At least that is the objective. I just hope that it would be the thin end of the wedge to seriously address this important issue. If so, I hope that the wedge will thicken very quickly for there is so much to be done. Perhaps, if the House could bear with me, I would like to relate a story while I was with the Monetary Authority of Singapore. It was in the late 70s and personal computers were just coming into prominence. In those days IT was not known as IT, not even known as IS (Information Systems). But in those days it was known more as EDP (Electronic Data Processing), because computers were then mainly mainframes and used in the backrooms for processing voluminous data. One day, we were told that every department was to get an Apple computer for its use. The Government also implemented a scheme whereby public sector employees could obtain cheap loans to purchase personal computers. We were surprised as few of us, other than those in the Electronic Data Processing department, knew much of computers. Later, I heard it whispered at the corridors of City Hall and Fullerton Building that the late Mr Hon Sui Sen, the Finance Minister, had personally lobbied for this programme. I heard that he was told that the staff would only play games with the computer, as few then knew how to use the personal computer. So why should the Government spend this money to put computers in the department when they would be used to play games? His retort was reportedly this: "Let them play games, as it would teach them how to be familiar with the computer. However, someone somewhere will know something and he will use the computer for improving his work. And if that happens, we will progress." Sir, that was exactly what happened. The computer in my department was first used mainly to play games, I must say. Subsequently, somebody came out with a VisiCalc program and also other programs and we were able to use such programs to improve our work. And the rest, as I said, Sir, is history. Sir, I am aware that today in this House there are some who knew exactly what happened then. I have no idea whether the version that I have just related is true or not. If not, Sir, I stand corrected. I hope however that I am correct, not because I am afraid of being corrected but because such stories are the stuff of legends. We must remember that the late Mr Hon was known as an extremely prudent and careful man with money, especially those belonging to the nation. Yet, for such a man to come out with such an IT plan, even if the computers were used to play games in Government offices, is, indeed, visionary. I think all of us in Singapore owe him much. I know I do, as I would have never purchased my first computer, an Apple IIe, without the encouragement of the loan. And I thank him for his part in making me a bit less computer illiterate today than what I otherwise would be. Sir, this story is related not so much as to add to the legend of Mr Hon (though I hope that it does), but more to illustrate that visionary thinking and speedy action are needed in this area. We should be bolder, much bolder in our plans to reduce the digital divide as soon as possible. We should aim for a 100% PC ownership in every home, similar to the goal of 100% home ownership. We should ensure cheap and fast access to the Internet for without such cheap and fast access, the computer is just a machine and not the gateway to information and the future. We should harness the assistance of the private sector through a system of tax incentives. These are but some of the ideas that I can come up with for the moment. But I am sure that the civil servants could come up with more, if given the go-ahead. Sir, more importantly, the mindset must change. We should not make investments in this area on the basis of economic returns alone. Instead, we should look at such investments from a communitarian perspective. If the digital divide persists into the future when the use of IT becomes that much more pervasive, can our community survive the divide? In this respect, I would like the Government to reconsider its policy on the ownership of broadband electronic highways, such as those provided by cable. Cable modem access to the Internet certainly is fast. But it is not cheap. Singapore CableVision recently announced the slashing of prices for its broadband Internet access service via the cable modem. The reduced prices would be $76 per month for those who subscribe only to the broadband service. To many Singaporeans, let alone the poorer ones, this is certainly not cheap. Sir, I am concerned that, to date, SCV has only about 8,000 subscribers to this service, including the 5,000 who were on the trial service. This means that since they opened up in December last year to all and sundry, they have only increased it by about 3,000 subscribers. However, so long as SCV continues with its high rates, there will be many who would prefer to use the much slower dial-up service, especially when some are provided free. If it were just a matter of time spent on the computer, I would not be so concerned. But we know that there would be more and more Internet services needing broadband access. If because of the high charges, many Singaporeans continue not to use the SCV broadband access, then there could be more and more Internet services denied to them. I urge the Government to take over the ownership of such electronic highways. They are like our expressways and should be publicly owned. Internet service providers can then rent them from the Government and provide the competition so necessary to improve quality and efficiency while reducing cost to the consumer. The events in the arena of the dial-up services have shown that this can be done and would be done, if only there were competition. Moreover, with public ownership, the Government can then charge a policy-dictated price that may not necessarily be an economic price. The losses could then be subsidised from the Government's general revenues. Mr Deputy Speaker, Sir, the IT revolution has become too important for the Government to ignore and to be treated as simply another area of development. Instead, it should be treated as an essential public service, similar to health, education, housing and security. Anything less will be to the peril of our future.

Mr Deputy Speaker, Sir, I rise in support of the motion standing in the name of the Finance Minister. The world of business and government is dominated by buzz words like "e-commerce", "dot com", "portals", "eyeball" and "Internet economy". But what is Internet economy or sometimes loosely termed as the new economy or digital economy? The truth is there is no universally accepted definition for "Internet economy". Economists have trouble defining what is the new economy, let alone understand it. Some used the term to describe the combination of the business of multi-billion dollar Internet companies like Yahoo and American On-Line as well as the effects that the Internet has had and continues to have on businesses. Since the driving force on the Internet is the US, some have gone so far as to suggest that the Internet economy is also the US economy. What you know for certain is that Internet technologies and applications have grown more rapidly in the last few years than any other singular event in human history and the cumulative effect of technology and business transactions alone done through the Internet is the backbone of the new economy and this has a profound effect not only on our lives but governments all over the world. This new economy has continued to surpass all expectations and confounded experts and no lesser a person than even Alan Greenspan, Chairman of the Federal Reserve of the US. Sir, the Internet economy indicators, an on-going study of the Internet at the University of Texas funded by CISCO System, seek to quantify the Internet economy. It reported that the industry generated US$300 billion annually, grew 68% from the first quarter of 1998 to the first quarter of 1999, accounted for 2.3 million jobs and is expected to reach US$507 billion by the end of last year. Another report from the Commerce Department in the US measured the "digital economy" which they defined as the value of the hardware and software produced by the computer and telecommunications industries. It was reported that the digital economy accounted for 8% of America's GDP, a very remarkable figure considering how new this economy is. Sir, these are mind-boggling numbers. There will be about 250-300 million global users of the Internet by the end of this year and still growing with some 65,000 new users every day. Some 2,000 new secure web sites (secure web sites are those set up by businesses) are added each month, reflecting the creation of new companies and shifting of existing businesses to the Internet. All these impressive growth numbers must mean that it is imperative that we understand the truly incredible impact the Internet will have on the global economy and Singapore's role in this new paradigm. The Internet economy is an economic phenomenon never seen before in human history. The value of the Internet economy, or transactions done through the Internet, is experiencing exponential growth. Research company, International Data Corporation (IDC), reported that commerce on the Internet is expected to top US$1 trillion by the year 2003 on the World Wide Web. It is small wonder that businesses are moving their capital spending into technology, not just among technology companies, but also those in other mature industries. In Asia, a GS Asia Web report recently released by Goldman Sachs concluded that Internet users in Asia will grow by a compound annual growth rate of 40% bringing the total number of Net users to 64 million by the year 2003. This is about twice the growth rate of the US. Extrapolating the e-commerce market in Asia is set to be worth US$32 billion by 2003. Here, in Singapore, the Gartner Group Incorporated reported that Singapore spent US$484 million in business-to-business (B to B) transactions and US$101 million in business-to-consumer (B to C) transactions last year. They forecasted that by the year 2003, B to B and B to C will total US$11 billion. Sir, with these huge numbers, Government's e-commerce plans and promotion of venture capital activities, many more companies are expected to jump on the e-commerce bandwagon. If these statistics are anything to go by, I think the Internet economy has arrived. Leaving aside the social issues, the profound changes brought about by the Internet economy raises two key issues for the Government. Sir, the first relates to how this new economy affects Government planning and growth forecasting and how this will affect areas, such as manpower, economic modelling, accounting for productivity improvements and the effect of wealth creation through high-tech start-ups and stock market listings. The second issue posed by this new economy is the potential loss in Government revenue due to losses in GST and direct taxation. Underlining this of course is the question of how are we prepared for the new economy. The explosion of the technology era will have implication on the manpower planning of countries hot on the heels of this new economy. The US, for instance, has experienced changes in its employment and wage growth patterns as a result of the rapid pace of adoption of new technology. Workers on the job suffer from a lingering sense of insecurity. Technology has led to higher productivity, allowing firms to meet rising demand with the same number of workers. The remarkable growth of the US economy, coupled with low inflation in the last decade, is attributed to the high productivity contributed by technology and the Internet. The rapid increase in B to B and B to C e-commerce has also made redundant a whole host of middlemen from car salesmen to ticketing agents and stock brokers to insurance agents. The result is also a mismatch of skills and labour shortage. There is a shortage of workers in the new economy which cannot be filled by workers who are made redundant as their skills are not what is required. This must be a frightening prospect not only for workers who are not well versed with technology, but for Government planners as well. In almost every industry it touches, the Internet changes the role of the middlemen. In a world in which the Internet can connect everyone, it is possible for businesses to have direct relationships with their clientele and not rely on distributors. For example, dramatic changes have also occurred in the brokerage business. Although middlemen remain in the on-line investing world, they charge more and provide fewer services than their off-line rivals. Moreover, the web gives individuals the ability to buy stocks without using a broker at all. Why transact on-line? In most cases, it is a matter of convenience besides lower cost. It is also easier to trade stocks on-line than it is to trade over the phone. Sir, the not too distant future, the distinction between on-line and off-line financial services will fade away. Banks without Internet web sites will be as rare as banks without ATMs. Lenders without a web presence will find themselves losing market share. Insurers incapable of providing services over the Internet will shrivel. Eventually, not giving customers the ability to check balances, originate loans, buy insurance, or otherwise manage their financial lives over the Internet will cost institutions business. In no time, employers and employees will have little alternative but to seek training and retraining opportunities. This will have great impact on the Government's role and response in training and retraining and the role must increase in importance in the areas of skills development and manpower planning. Sir, Macroeconomic Advisers, a St Louis-based economic consultancy, in September last year, reported evidence of technology's impact on productivity. A new analysis shows that about half of the growth in non-farm businesses in US can be explained by the benefits of computer-related advances and investments. The study found that productivity growth has recently been more than double the average since 1973 and will remain over 2% for the next decade if current technology-investment trends continue. In the study by University of Texas, Internet firms are impressively productive. The average revenue per Internet economy worker is US$250,000, or 65%, higher than employees in the industrial economy. The automotive industry, for example, in the US earns US$160,000 in revenue per employee versus US$250,000 for an Internet employee. The US Department of Commerce forecasted last year that almost half of the American workforce will be employed by information technology-related companies by the year 2006. It also reported that from 1990 to 1997, digital economy companies achieved a "robust" 10.4% average growth rate in value added each year per worker. And these IT workers earned more than non-IT workers. Finally, just last month, the US Labour Department said worker productivity rose at a 5% annual rate during the fourth quarter of 1999, pushing the average growth in productivity for all of 1999 to 2.9%, the best the US has seen since 1992. Internet and technology play a vital role in wealth creation and productivity in the US, as confirmed by these figures. This must have a significant impact on Singapore as well. I think the Government should take this into account in our economic modelling, especially in the area of forecasting. Are we working on too conservative a basis if the United States example is anything to go by and whether our budgeting process needs some form of an overhaul? The second important issue is the impact of the new economy on Government revenues. This new economy where the transactions in the provision of goods and services are carried out between faceless individuals and faceless corporations domiciled in any corner of the world will pose the biggest challenge in the collection of Government revenue. In the area of direct taxation, it makes perfect good sense for a corporation to locate the source of the supply of goods in a tax haven just to get themselves out of the reach of the tax man. This is one potential large drain on Government coffers. The other relates to indirect taxation. How does the Government intend to tax every little parcel or packet that goes into a consumer home? What about non-physical goods? Another one of the key e-commerce tax policy issues is the increasing conversion of tangible goods into intangible goods. At issue are products like computer software, music, movies, videos and even books that can be turned into digital code and downloaded by customers anywhere in the world. For example, currently if a British-based firm downloads a book into a customer's computer, this will be considered a service and will be taxed at the United Kingdom's rate of 17.5%. But if this same company is based in the British Channel Islands or outside the EU, it will avoid this 17.5% tax completely. In Europe, tax officials have proposed that products sold in digital form will be taxed on the rate in the customer's country. For example, companies operating in the United States would have to collect taxes on all sales to European customers. In other words, there has to be a reciprocal agreement between nations for the collection and remittance of tax on out-of-state basis. Sir, my question to the Minister is: where does Singapore, a relatively small country and small economy, fit into this global scheme? Traditional retailers have gone on-line in droves. "Click and mortar", denoting a combination of on-line sales and traditional retailing, went from an unknown phrase in the beginning of 1999 to a New Yorker headline - making event by the end of last year. There is barely a traditional retailer left that does not now accept the Internet as a critical weapon in its retail arsenal. A recent report in the United States estimated that current tax revenue losses are less than 1% of total tax revenue collected. However, losses in the immediate future could grow to 2% to 4%. State and local governments also fear growth in Internet commerce will drain sales in shopping malls and traditional retailers, causing a drop in sales tax. In Singapore, the impact is no less profound. The Gartner Group has projected that by the year 2003, as I mentioned earlier, transactions through the Internet will total some US$11 billion. Translated at 3% is a total loss in GST collection of no less than US$330 million. The United States government has a headstart in this area but has yet to arrive at Internet rules that will curb tax losses as a result of sales transactions over the Internet. It is important for other nations to speed up the process of setting Internet rules especially when e-commerce is still small enough and tax distortions are modest. On the home front in Singapore, it is pertinent to ask the Government or the Minister on how it intends to address this critical issue. The new economy will pose tremendous challenges for Government as its working is not well-understood and, yet at the same time, has immediate impact. We have to grapple with lots of unknowns which are affecting our lives in a profound manner. My question is: can the Government face up to the challenge?

Mr Deputy Speaker, Sir, thank you for permitting me to join in the debate. Sir, since many Members before me have spoken on the details of the Budget, allow me to touch on two topics which I feel passionately about as they concern the future well-being of Singapore and then comment on some specific areas of taxation which I would like the Finance Minister to give attention to. The first is on foreign talent. I recall how I listened in awe last year when Senior Minister, Mr Lee Kuan Yew, spoke during the Singapore 21 debate about the criticality of bringing in top talent into Singapore because we are now on a global stage, whether we like it or not. It really drove home to me that as a pre-requisite for us to play in the global arena, we must have talents, whether local or foreign, who are of global standard. I am convinced more than ever now as I too, in my experience in working for a multi-national corporation, am compelled to look for talent beyond the shores of Singapore to carry out higher value-added activities where locals do not have the expertise. The proverb "time and tide waits for no man" is more relevant now than ever. Technology has enabled many things never thought possible in the past and is changing at lightning speed with each passing day. It is therefore highly essential that we intensify the inflow of talent which could help us narrow the gap and catch up with those at the leading edge of technology. The analogy used by Senior Minister of how ATMs had dramatically affected traditional banking services in the recent past and how this is about to change again with the advent of the smartcard, is a clear demonstration of how technology is driving and forcing change in the banking industry, and how it will make many of the services offered by banks currently irrelevant in the not-too-distant future. It is this "change or risk becoming irrelevant" phenomenon that has forced the restructuring of our banks and banking system and the pursuit of top talents like John Olds and Alex Au. Sir, I am encouraged to note that the Trade and Industry Minister, BG George Yeo gave a convincing perspective of what foreign talent had done for Singapore in the Sunday Times yesterday and why we need them. I think it is important that this subject be raised periodically. Although by and large, Singaporeans generally accept foreign talent, many still feel that foreign talents deprive them of some of the good jobs which should have been theirs. But to accelerate our KBE positioning and ensure Singapore's successful transition to a full-fledged knowledge-based economy, we must be able to bring in the top high-end talent. Evidently, the competition for such talent is also intense as we are meeting head-on with Silicon Valley and the other top places in the world - the Himalayan peaks, as Minister George Yeo puts it. Sir, in addition to offering tip-top infrastructure and an increasingly intellectual environment, I believe incentives matter a lot to this group of people. I know of many cases where attractive stock options made the difference between losing or winning a top candidate. If pioneer status or tax holiday has been a successful tool to lure MNCs to invest in Singapore, we must look at such top individuals as intellectual capital, especially in the context of KBE positioning. It is therefore imperative that we find ways and means to incentivise higher level intellectual capital to attract them to Singapore and stay here for a period of time. Apart from the corporations doing their part to retain talent, the Government should consider making the tax environment for such people more attractive. As an example, we could consider a progressive tax rebate system, say, a 30% rebate on their tax paid in the first year is given in their fourth year of residence in Singapore, 40% in the fifth year and so on, subject to a maximum cap. If necessary, such incentives could be confined to high-level talents who truly contribute and make a difference for Singapore, just as pioneer status is not extended to every MNC putting in their money here. The criteria for qualification must be stringent. Sir, for talent attraction in general, I know much has already been done to position Singapore as a hub for international talent. The setting up of the Kowloon Club for Hongkongers, for example, provides a sense of comfort and relief for new arrivals from Hong Kong to turn to and help them quickly integrate into Singapore society. The same should also quickly be done for others, such as Chinese nationals and Indian foreign talents, if this is not already in place. One of the frequent complaints I often hear from foreigners living here is the lack of space and recreational facilities. Hence, the NTUC's recent initiative in building a $22 million theme park in Pasir Ris and the repositioning of Sentosa as a day and night tourist and recreational destination are encouraging. I know for a fact that Caucasians enjoy weekend getaways. Hence, it would also help to freely disseminate information about weekend packages such as escapades to the Riau Islands or Tioman, these places being just a couple of hours away. I applaud the exemption of the 90% granted to royalties for innovations and inventions in a bid to attract and encourage foreign talent to create new products in Singapore. The new tax deductible Special Retirement Scheme for foreigners is an initiative in the right direction to enable them to reduce their tax burdens. Sir, I feel there is no better way though to attract top talent here than to create an abundance of success stories as evidenced by Silicon Valley and the Hshinchu's Science-based park in Taiwan. We all must be familiar with the saying, "success breeds success." Doing all this and more will help to accelerate the creation of success stories which will in turn help bring in the talent we need. The second topic is my concern about our youth's world readiness. I can still vividly recall the headline of a Straits Times report less than two weeks ago which states "A wake-up call for Singapore youths." In spite of the financial crisis afflicting Singapore recently, it is apparent that our youths are shielded by their parents and, as the report noted, are stuck in a comfort zone where they saw no necessity to keep themselves abreast of the impact of globalisation and the borderless economy. Our young people saw not much of a need to seize opportunities in an open economy where information, products and people move freely across national borders. They seem to be obsessed with the feeling that just because Singapore is tops in many areas, there was little scope for them to learn from others. I see this, Sir, as a dangerous trend which needs to be given urgent attention. Such negative attitude and narrow-mindedness among our youths can only spell disaster for Singapore's future, if not quickly corrected and given the right perspective to them. Although the idea of a Ministry of Youth has been suggested as unnecessary by Deputy Prime Minister, BG Lee Hsien Loong, it is imperative that the Government focuses attention to this looming problem by setting up a body within an appropriate Ministry to tackle the issue. Perhaps, the Singapore International Foundation could also be charged with the responsibility to design overseas attachment and internship programmes for a wider cross-section of our youths to make them understand that there is much more to just material success and help equip them with a more balanced perspective of how they see the world. I come now to the specific tax areas. I would like to first draw attention to the Finance Minister's segment of his speech on the new economy where he cited the important need to "adopt a global mindset, innovate and advance with global trends, or risk being rendered redundant". He went on to say that "unless we are among the world's best, we will be relegated to playing a peripheral role in the global economy." While I am glad that some enhancements were announced to support the technopreneurship drive, such as the estate duty exemption on residential properties used for business activities, it is my hope to see the Employee Stock Option Scheme (ESOP) creatively enhanced when it is announced in May this year, which, hopefully, will trigger many more high-tech start-ups. Apart from motivating local investors to be more adventurous to put in their money in start-up ventures, it will also help to bring us closer to a Silicon Valley atmosphere where talent from every nook and corner of the world flock, hoping to strike it rich through stock options. Technopreneurial ventures involve high risks. As such, it would augur well for the Government to send a strong signal that it is prepared to participate through incentives which would promote and motivate such ventures. Next, I would like to take issue on group taxation, which has been raised by several Members today and in the past. This is where I feel we continue to fall short in comparison to the advanced economies in the world. Mr Heng Chiang Meng, the Member for Cheng San GRC, and Dr Wang Kai Yuen, the Member for Bukit Timah, have argued convincingly in last year's budget statement debate of the important need for us to seriously consider this move in the context of our rapid shift to a modern and knowledge-based economy. This, coupled with the effect of globalisation and more liberalised measures initiated by the international community aimed at converting the world into one monstrous marketplace, and with many of our companies now plugged to this marketplace, is making our territorial principle of taxation more and more irrelevant, and the absence of group taxation felt stronger than ever. I sincerely hope that the Minister for Finance will review this in the interest of keeping pace with global trends and maintaining our relevance in the business world. While it is heartening to note a half percentage point reduction on corporate tax, the gap for taxes on individuals is widening to 21/2%. To prevent a trend of more individuals corporatising themselves to reap the benefit of lower corporate tax rate, I would urge the Finance Minister to also look into this. Another area which I think is in need of review is tax relief for children. With our declining total fertility rate, which currently stands at less than 1.5, we have to find ways to increase birth rates and incentivise couples to have more children and bigger nuclear families. In spite of the special tax rebates of $20,000 extended for two to four-child families to set off against income tax, this has proven to be an insufficient motivator for married couples to bear more children. Singaporean couples want to give the best for every child they bear and because of this high expectation they have set for themselves, it pushes up the cost of bringing up children. In the interest of increasing the number of Singaporeans and arresting our declining fertility rate, I would urge the Minister to consider increasing the tax relief for children as a motivator for Singaporeans to have more children. In conclusion, our challenge is for Singapore to continually differentiate ourselves from the rest of the world by finding ways and means to creatively harness and add value to both our hard and soft infrastructures that we have painstakingly built. The secret of Singapore's success has not been that we were just responsive to the ever changing economic and political landscapes but always anticipating the changes ahead. We need to always keep it this way. With that, Sir, I support the motion.

(In Mandarin): Mr Deputy Speaker, Sir, I rise to speak in support of the latest Government Budget. I am particularly pleased with the $250 top-up of workers' CPF ordinary accounts and the rebates for rentals and HDB conservancy and service charges. These benefit workers and their families directly and will be especially useful for those in the low income group. Other Singaporeans and those in the low income group have also accepted the 10% cut from the employer's CPF contribution and wage cuts last year to pull Singapore out of the recession. It is painful for those earning low salaries to accept the cuts, but their sacrifices have not been in vain. It helped companies to cut cost and saved many jobs. Last year, the number of retrenched workers fell to 14,600, about half the figure of the previous year. But we must not forget that less than half of Singaporeans above the age of 40 have secondary and higher education. They were born before 1960. At that time, we were living under the colonial rule. We grew up in poverty. There was no opportunity for us to learn English or to go to the secondary school. Therefore, this group of people did not receive good education. If this group of more than 800,000 people, or 42% of our total workforce, could not upgrade their skills because of linguistic problems, they are likely to lose their jobs. Many do not have computers at home or at work and are practically IT-illiterate. They can easily be replaced by younger and more computer-savvy employees who are cheaper to hire and are more trainable. If these older folks lose their jobs, they will have no income to support themselves and their families. They will also lose medical and other benefits provided by their previous employers. The $250 CPF top-up in the new Budget is a good way for the Government to tell these Singaporean workers that this is good news for them. It is a good way for the Government to tell them that it cares for them and appreciate their sacrifices during the recent recession. It is also a good idea for the Government to make these top-ups whenever there is a surplus in the annual Budget. Because of their low income, many workers do not pay income tax and therefore do not enjoy tax reliefs. With all these kind gestures on the part of the Government, it will be easier for the Government to convince them to accept wage cuts if there is another recession in future. Sir, there are other ways to reach out to the hearts and minds of the rank and file workers. Many of them would want to know when they can get back the full 10% cut in CPF contributions by employers. The first restoration of 2% will be made on 1st April this year. Will the next instalment be made next year if the economy grows by 4.5%-6.5% this year, as expected by the Government? If the growth is sustained in this way, how long will it take for the Government to restore the full 10% that was cut? The Government can also provide more funds to step up skills upgrading for those with low education and skills. Perhaps in the years to come, when there is a budget surplus, the Government could explore the idea of having a similar $250 CPF top-up but in a skills upgrading account instead, to encourage our workers to use this fund to upgrade their skills. The Government can also consider giving more funds to Community Development Councils and town councils to help retrenched workers and their families. Sir, I would also urge the Government to revise certain labour laws to allow trade unions to represent casual, contract or part-time workers who are paid by the companies on a project-by-project basis. Tougher economic competition will force companies to downsize their workers to cut cost. This trend will grow in future and those without the skills needed in the labour market may be forced to become casual or part-time workers. They will move from one project to another without getting CPF contributions paid by the employers. When they retire, they will have no CPF or medical savings to take care of their old age requirements. Singapore is marching into the 21st century. It will be a different Singapore from that in the past century. With technology advances and the Internet revolution, many existing jobs and skills will become redundant. But, at the same time, new jobs requiring new knowledge and skills will be created. As such, it will be unavoidable that the wage gap between the IT literates and those with lower education and skills will widen. Besides urging workers to change their mindsets to one of life-long learning in order to surf on the wave of changes, I wonder whether there are any other plans to help those lower skilled workers adapt to these changes. I think it is timely for the Government to study these implications and to make extra effort to help these lower income earners keep pace with the change. In short, this is to help them increase their incomes so that they can enjoy a better standard of living. Simply put, the Government should think of ways to help the low income workers so that they will also be able to ride on the trend and to enjoy a higher standard of living. 6.30 pm

Mr Deputy Speaker, Sir, I rise in support of the motion as proposed by the Finance Minister. The Budget for Financial Year 2000 is indeed prudent and cautious. Despite the difficult year in 1999, the Singapore economy has made a quick recovery to achieve a 5.4% growth and have a budget surplus of about $3.2 billion. As highlighted by the Finance Minister, the financial crisis is largely behind us. The $3.2 billion budget surplus has raised expectations. As a result, both the individuals and business community are disappointed when not much rebates and tax incentives are proposed in the Year 2000 Budget. Many had expected the Finance Minister to continue last year's rebates and tax incentives for one more year. This would have helped more firms to recover and more individuals to ride out of the crisis faster. Sir, to address the concerns of individuals and the business community, I would like to make the following suggestions for the Finance Minister to consider. Special CPF Top-up grant As highlighted by the Finance Minister, the 10-percentage point cut in employer's CPF contribution and wage restraint in 1999 have made a significant difference in increasing our cost competitiveness. Thus, the sacrifices made by workers have indeed helped firms to turn around and contributed to the growth of our economy. In view of this, I feel that more rebates should be accorded to our workers to recognise their efforts in helping to revive the economy. The proposed special CPF top-up grant of $250 in the Ordinary Account is a token sum as compared to the total amount of CPF contribution loss suffered by the workers. Let me illustrate the computation of this CPF loss. Based on the Department of Statistics' household survey conducted in 1995, the median monthly household income is $3,135. A 10% employer's CPF cut will result in the loss of CPF contribution of $3,762. Thus, the $250 special CPF top-up grant only accounts for 6.6% of this loss. As we have a budget surplus of $3.2 billion, I would urge the Finance Minister to be more generous and grant a higher CPF top-up grant of $1,000 for individuals. To further ensure that this top-up grant will benefit individuals more effectively, we should allow CPF holders to decide which account they would like to top up in the CPF such as Ordinary, Special, Medisave or the Supplementary Retirement Scheme account. Individual tax rebate Sir, the Finance Minister has highlighted that not all industries are out of the woods yet. In particular, the construction business and financial sectors are still under performing. Similarly, not all Singaporeans are out of the woods from the financial crisis. There are some who still face difficulty in finding jobs, servicing their mortgages and paying for their living expenses. Although the Government has implemented various measures to assist these Singaporeans, there are some who still need financial assistance to overcome the financial crisis. Those who have lost jobs experienced a drastic drop in their household income and may need time to retrain and find other suitable jobs. During this transition period, their families undergo a difficult period of financial hardship. In many cases, their children's studies and welfare are badly affected. I would propose that more incentives or subsidies be given to those who make efforts to retrain and upgrade their skills. Besides training grant, incentives such as CPF top-up, or service and conservancy or utilities rebates can be used to alleviate the financial burden of these workers and facilitate their upgrading efforts. Without strong support from the Government, these workers will find it difficult to prioritise between family survival and skills upgrading. In addition, more grants should be given to the CDCs or the CCCs to provide a safety net for these affected individuals. Development expenditure The construction sector is an industry that is closely related to many other industries due to its range of products and services. Its downturn has affected many industries and the jobs of many Singaporeans. I welcome the increase in development expenditure by 21.1% to $12.9 billion. This will provide a boost to the construction industry. But, a significant proportion of this expenditure is on physical infrastructure development such as Jurong island development, reclamation of Changi East, 5-year sewerage programme, MRT and LRT system. Many of these projects are complex and large in contract value. The scope and nature of these projects is also limited to very few building trades such as excavation, concrete and steel works. As such, these projects may not provide much impetus to boost the construction industry. Local contractors and suppliers may not benefit from such development expenditure. Therefore, I would urge the Finance Minister to consider increasing the budget for more building projects such as MUP, IUP, upgrading of existing schools, construction of new schools and upgrading of sports complexes. As stated in the Budget, only $188 million and $80 million are allocated for MUP and IUP respectively this year. 6,420 flats are projected to undergo MUP while 13,026 flats will start IUP. Since the implementation of MUP and IUP, many HDB residents have enjoyed the benefits of having a better living environment. As these programmes are funded when there is a budget surplus, we should expedite these programmes so that more residents living in older estates can have their living environment improved earlier. Similarly, the Selective En-Bloc Redevelopment Scheme should be expedited so as to maximise land use and rejuvenate older housing estates. We should also consider upgrading the public infrastructure and amenities in private estates. The proposed Ministry of Community Development and Sports has plans to make Singapore a sporting nation. To achieve this goal, we should also invest in the sports infrastructure in our living environment. Many old sports complexes and swimming pools must be rejuvenated to provide a wider range of facilities. New sports facilities must be developed to encourage Singaporeans to take up sports and maintain healthy lifestyles. Therefore, it is necessary for the Government to develop an upgrading programme for sports complexes and swimming pools. IT infrastructure upgrading grant The impact of IT on businesses has surfaced new concerns on the suitability of building design of existing buildings. Many commercial and industrial buildings are not designed to incorporate IT technologies. As a result, companies may incur high cost or loss in efficiency when they implement IT in their existing business premises. Productive time of workers may be wasted due to the incompatibility of building design and IT infrastructure of the company. As reported in the Straits Times today, some buildings can have as much as two tonnes of unclaimed copper in the buildings due to the change of tenants and frequent rewiring of communication lines. This will not only increase the cost of maintenance but also the efficiency of the communications system in the buildings. Therefore, in order to maximise the potential of IT, companies must be encouraged to upgrade their business premises to house IT technologies appropriately. Proper facilities planning must be incorporated to ensure that building design can facilitate business processes or workflows in an IT working environment. This will not only improve the morale of the workers but also increase the productivity of our workforce. Thus, I would urge the Finance Minister to consider providing an IT infrastructure upgrading grant for building owners or companies that invest in IT infrastructure to increase their productivity and competitiveness. CPF housing grant I welcome the tax changes to encourage Singaporeans to plan prudently for their retirement needs and encourage greater family cohesiveness. To further encourage families to stay together or close to each other, I propose that we extend our present CPF housing grant for HDB first-timers to include all Singaporeans who choose to purchase flats near their parents in the resale market. Our housing policy can also be revised to allow HDB owners within the requisite 5 years' occupation period to move near their parents. But measures must be taken to ensure that such relocation is bona fide and fair. Sir, the Home Ownership Policy in Singapore has resulted in the rapid nuclearisation of families over the years. The progressive development of New Towns and our Flat Allocation Policy has also caused many members of families to be located in different parts of Singapore. To address the rapid widespread of family nuclearisation, it is necessary for the Government to relook into its housing policy. More flexibility must be adopted in our housing policy to encourage families to live close to one another within a community. This will provide much impetus in encouraging Singaporeans to age in-situ within the community. To cope with our fast ageing population, it is also necessary to provide elderly friendly infrastructure within the community. Many existing housing estates are not seamless and not entirely elderly friendly. For example, some external staircases are steep and have no railings, ramps are not provided or are inconveniently located in some areas, not many vehicle drop-off points are available near housing blocks, and there is a general lack of communal spaces and facilities for the elderly. Although the Town Councils and Citizens' Consultative Committees have been improving the housing estates, limited funding is available to spearhead these initiatives to make the towns more elderly friendly. Thus, I hope the Finance Minister can increase the allocated budget of $51 million for Community Improvement Projects. In this way, the CCCs and the Town Councils can work together to undertake more improvement projects for the benefit of our senior citizens. World class companies IT and globalisation have indeed put immense pressure for companies in Singapore to increase their capabilities and competitiveness. To face these challenges, the Committee on Singapore's Competitiveness has recommended that we need to build up a stable of our own world class companies with core competencies, which can compete effectively in the global economy. Unfortunately, this year's budget does not provide any specific boost to nurture our own potential world class companies. Although there are various existing schemes in EDB and PSB to help local companies, more support is needed to expand these schemes so that more local firms can be nurtured to achieve world class standards. Therefore, it is timely for the Government to re-examine these schemes and set appropriate benchmarks to measure the success of these schemes. The various approving authorities must be given more mandate to take more risks to assist local companies' ventures. In addition, we should provide more flexibility and easier access for such companies to obtain grant or financing to strengthen their core capabilities. Companies that produce global products should be given special tax incentives to venture into the global market. The Government can also provide more support to help these potential world class companies market and brand their products or services globally. To further assist these firms to attract and retain talented staff, companies must be given more tax incentives to package their remuneration system. For example, we should allow personal tax exemption for staff benefits such as car, housing, club, etc. To be able to attract world class talent, we must offer world class remuneration packages. I believe the Government can play a significant role to facilitate the recruitment of world class talent in Singapore. This will increase the chances of success in producing world class companies in Singapore. 6.43 pm

Thank you, Mr Deputy Speaker, Sir, for allowing me to speak. I would like to speak in support of the motion in the name of the Minister for Finance. After a long day where my parliamentary colleagues have given so much of the bird's eye and fish eye view of things in this budget, I would just like to focus on one particular topic, ie, the Supplementary Retirement Scheme (SRS). The Minister intends to initiate some tax changes in order to encourage Singaporeans to save more prudently for their needs after retirement, and to encourage greater family cohesiveness, particularly in view of the Inter-Ministerial Committee on Ageing Population Report. This "complementary private sector system" is to encourage individuals to contribute to a private fund such as under the "Supplementary Retirement Scheme". It is proposed that the SRS will be accorded tax deductions at the time of contribution, but the tax being payable only when the savings are withdrawn. The Minister said that the percentage cap based on the salary will be determined. In view of this prospective ageing population, and the higher dependency ratio that we are going to face in the next 10 years, I urge the Minister to consider immediately giving some leeway to taxpayers who would also like to save under the SRS for their aged parents who may be either working or retired. Many Singaporeans retired on very small retirement savings because our country was quite poor in its initial stages of our economic development, and the country went through a very dramatic growth era, from ground zero within one generation. Just now, my parliamentary colleague Mr Ong Ah Heng from the NTUC has just given an example of how we have a huge group, 40% of our labour force, of 800,000 workers without Secondary Four education. This group of people at that time did not have this opportunity, because we were under a colonial administration, as he had aptly put it. And because of this, their earning capacity and income stream all through their life were quite low. So even if we had a CPF scheme during the period when they were working for the last 20 to 30 years, the amount saved is quite small for these workers. A SRS Scheme for aged parents, with an appropriate tax offset, ought to be incorporated. The Minister may reply that there is already in existence an allowance for aged parents supported by a taxpaying son or daughter. But this tax relief is only limited to one taxpaying son or daughter. He may also say that there is now already a Minimum Sum top-up to the CPF. First, I support my colleague, Dr Wang Kai Yuen's suggestion to raise this Minimum Sum top-up to $60,000 for all. But I am more concerned also with extending this SRS scheme to aged parents as well. I believe this is quite an urgent task. The sooner we do this the better because it takes time for some reasonable accumulation of savings to be effectively useful. It makes possible a kind of inter-generational transfer of income with some tax incentive by the Government. I hope we do not have to wait for another five or 10 years to discover that the Minimum Sum top-up is not enough. I hope the Minister will seriously look into the widening of the SRS scheme now to allow taxpayers with income to transfer some savings to their aged parents through such a scheme. They should get full tax offset on this, up to some generous cap, and I mean generous, bearing in mind the longer lifespan of people in the next 10 to 20 years. We need to do this now as soon as possible. Although we have our CPF scheme for many years, the truth is that many Singaporeans will not be fully prepared for their retirement. The tax relief the Minister offers now will pay off in lessening the burden of a large number of such aged who are inadequately funded for retirement. A positive step now will add to building a cohesive bond between the Government and the family. Mr Deputy Speaker, Sir, I support the motion.

(In Mandarin): Mr Deputy Speaker, Sir, many people told me that the Budget this year is not exciting at all. It is not surprising because this Budget was pronounced after the series of supplementary measures announced last year. It is now the time to adjust to new conditions. Some measures which were necessary last year would not be necessary this year. So there should be a period of adjustment. The measures abolished were not many. The 10% corporate tax rebate has been replaced by 0.5% reduction in corporate tax. The exemption of property tax for properties under development was withdrawn. These two big measures show that the Government is quite optimistic about the recovery of our economy. The Minister also mentioned that the construction industry is still in the doldrums. However, I feel that the reduction of the tax rebate on developments from 55% to 25% happened too soon. The construction industry has a share of 10% in our GDP. The long term negative growth of this industry would affect quite a lot of people. Many people in this industry are facing bankruptcy and becoming insolvent. If the Government does not do anything to help the construction industry, this industry will take a much longer time to revive. To withdraw the property tax exemption for the property under development will have negative impact on the construction industry. We should make use of these measures to stimulate the property sector so that they can be restored to their former prosperity. The reduction of corporate tax from 26% to 25.5% would imply that there will be some adjustments in personal income tax in future. Right now the 5% rebate in income tax is more preferred. However, I feel that there should be an adjustment in the personal income tax rate so that there should not be too big a difference between corporate tax rate and personal income tax rate. There are many things which merit our support. In the allocation of funds for MCD, there is an increase of 38% which shows that the Government is concerned about the building up of social cohesiveness as proposed in the President's Address. The proposed Supplementary Retirement Scheme is a good suggestion. The increase in the tax reduction for the aged parents and the top-up for the parents' CPF show that the Government has taken note of the problems of an ageing population in our society. I think families are the best places to look after the aged parents. And the big increase in other social and community funding also shows that the Government pays attention to the personal relationship between the people and the harmonious relationship between the different communities. This will also strengthen other social amenities like homes for the aged, childcare centres and other measures. This will alleviate the problems of working mothers and the problems of aged parents who need people to look after them. Therefore, the increased funding for MCD will help to raise the quality of life and the cohesiveness of the society. The Budget encourages young people and foster the spirit of entrepreneurship. The measures such as the reduction in estate duties and tax exemption for royalty for intellectual properties are positive measures for encouraging entrepreneurship. However, on the other hand, there is this scheme called the employee stock option scheme. The tax levied on this scheme, I think, is not very appropriate. We should understand that the capital gain from the acquisition of shares is not taxable. Generally, a stock option scheme is aimed at retaining employees so that they have a stake in the company in order to motivate them to work better and longer hours for the company. After they have opted for the shares, there is an appreciation in the share values. Why should they be taxed on the gains of the shares which they are allocated? These shares allocated to the employees will have certain conditions attached. For example, the value of the shares will be based on the market value at the time of announcement. And there is a limit in the period before they can take out the shares. If the gains from these shares are taxable, they will have to sell their shares to pay for their income tax. This will defeat the purpose of the employee stock option scheme, and the employees will suffer certain losses because it may not be the right time to sell their shares. Many young entrepreneurs have many ways to make money but they are short of funds. Therefore, through this stock option scheme, the young entrepreneurs could acquire a substantial portion of the share in the company where his idea is implemented. The benefits accrued are the same as those shareholders who founded the company. To levy taxes on the shares under the stock option scheme will be contradictory to the aim of the scheme in promoting entrepreneurship. I hope the authorities will take note of this. I personally do not agree to the levying of tax on the stocks under this scheme. Like the Budget last year, the Budget benefits many Singaporeans, especially those who are in the lower income group. In this tax package, those who are above 21 years old will be given $250 CPF top-up. This is a very good measure to make them feel that the people of Singapore have a stake in our economic prosperity. Through various tax rebates, for example, in the case of 4-roomers, they will get a minimum of $683 as rebates and top-up. For those earning higher income they would be getting as much as $1,138 in the form of rebates and top up. Many Singaporeans benefit from this Budget. I support the motion.

Mr Deputy Speaker, Sir, I stand to urge the Ministry of Finance help chart the future work of the Ministry of Health in a new direction and for the better of healthcare in Singapore. It is a known fact that the right allocation of funds will determine the advancement of certain desired outcome. Sir, the new direction I would like the Ministry of Health to go in this new millennium calls for a greater integration of the public and private medical sectors in Singapore. This is far removed from the type of integration that we have been stressing on - the vertical integration between primary through to tertiary services and facilities all within the public sector only. What we need to look into is the lateral integration, say, between the polyclinics and the private general practices, between specialists in restructured hospitals and those in private practice and between restructured and private hospitals, etc. I do contend that there is already a little integration in our health system at the moment. The Health Ministry allows private doctors to come back as visiting consultants to teach and to impart experiences to the younger doctors. A set of scheme under the Ministry of Health has specialists providing services in hospital departments that are short in such expertise. The Health Ministry taps expertise from private sectors with the setting up of specialist centres. Among doctors, collaboration for complicated procedures, such as open heart surgery or liver transplant, is common and fairly routine. There is, however, a distinct and disturbing divide between the private and public medical sectors in Singapore. And, Sir, this divide is and will always be a dilemma for healthcare here. BG George Yeo, when he was Minister for Health, supported the notion for greater integration of the public and private sectors. Integrate these two sectors and we may even achieve global recognition as being one of the best. Staying on with BG George Yeo, he mentioned that he had visited the Mayo Clinic at Rochester in Minnesota. He noted that Rochester was a small town of less than 100,000 inhabitants, in the middle of nowhere and has beastly cold winter four to five months a year. But it has the most wonderful medical facilities in the whole world. And because it serves the rich and famous from around the world, the people and Rochester enjoy a quality of healthcare not possible for any other prairie town of 100,000 in America or in the world. He said that in the same way, if we were able to establish Singapore as a "Mayo Clinic in South East Asia", then all of us who happen to live in Singapore will enjoy a quality of medical care far surpassing what a population of three million would otherwise deserve. Singapore will be a "Mayo Clinic in South East Asia", Mr Deputy Speaker, Sir, and the way towards achieving this is through the integration of our public and private medical sectors. There must be a change of direction towards integration rather than maintaining division. Singapore is a small country with a small population; we must derive our strength through unity. We must remove the unnecessary waste of energy on competing and bickering amongst ourselves. Our energy should be used to put all our resources to maximal use. In the past, the Government's policy has been to rely on competition and market forces to keep health cost down. Sir, we need a mindset change now; these are different times. We must look at things globally and we are doing in so many aspects of our forward planning. Our healthcare plans should be included in this overture and I am suggesting that we quickly do away with the divide between the public and private sectors of our healthcare system. Mr Deputy Speaker, Sir, I would like to give ten reasons to emphasise the importance of integrating the public and private medical sectors in Singapore. I am sorry I have to hold you back, my colleagues. (1) Singapore is a small country; an integrated system will lead to maximisation of potential in the medical arena. (2) The public and private sectors should work together to plan facilities more efficiently. Integration will reduce duplication of facilities, in terms of expensive equipment such as the gamma knife, etc, in the two sectors. Sir, there is certainly no necessity for duplication of facilities in certain highly specialised fields of medicine where the patient pool in the country is limited. (3) It is more sensible to maximise the use of our healthcare personnel. For instance, the experts in the very specialised fields like liver transplants should be allowed to operate in both sectors because there is really not a sufficient pool of patients from our population of three million to support these areas in the divide of the two sectors. Another example is to make the private practitioners look after a portion of the "subsidy patients" and ease the load in the polyclinics and specialist outpatient clinics. (4) Patients will stand to benefit from integration of the two sectors because there will be more equitable availability of quality care. The costs will be better contained and the wait times will be less lengthy. (5) Both private and public sectors could work together to develop Singapore into a Regional Medical Hub. Mr Deputy Speaker, Sir, the two sectors should not be in conflict but should be in synergism, or Singapore will lose the leading edge over the neighbouring countries. As it is, many overseas patients are now finding Penang to be a very good alternative place to seek medical treatment in lieu of Singapore. (6) Integration will restrain the exodus of specialists from the public to the private sectors, especially during good economic times. This will prevent uneven spread of talent. This will also bring earnings of doctors in both sectors more comparable with one another and stem one of the major reasons for the outflow of doctors to the private sector. (7) Training of young doctors will get a boost from the active participation of private doctors, both general practitioners and specialists. Sir, there are many private practitioners who love teaching and are, indeed, very good at it. Training young doctors should therefore be seen as a national concern, involving doctors from both sectors, as it is a "very specialised, time-consuming and expensive" exercise. (8) Doctors can learn from each other when more collaborative work becomes possible through integration. They will learn when they work together and get to see and treat more complicated cases that they may not otherwise meet individually. This will further fine-tune the skills of our doctors, and thus get closer towards our aim of being a regional medical hub. (9) With the healthcare system integrated, both doctors and patients will benefit. Specialists from both sectors can be called in to treat local and foreign patients, especially in areas of super-specialisation. Super-specialists will then get more patients to hone and improve their skills. Patients, whether local or foreign, will benefit because they will get to be treated by the best in each field and from a wider base of doctors and specialists. (10) Our talent pool is unnecessarily segregated and restricted in their respective positions in the two sectors. Many doctors will have the chance for research work and teaching as well as to have a private practice if their more dispensable roles can be shared out amongst more colleagues. The private practitioners, in the present system, can lighten the workload of Government doctors if allowed to work in the public sector as visiting consultants, treat subsidised patients and impart their skills to the younger doctors. Mr Deputy Speaker, Sir, we should look at some of the basic steps that must be adopted to bring about integration as follows: (1) Unless the Government is serious about integration of the public and private sectors and actively promote it, all efforts in this ideology will not come about. The Government, therefore, must be even handed in all aspects of its handling of the private and the public sectors. It should be concerned about the well-being of the private sector also. (2) Government must be seen to be committed towards bringing about this change. The appropriate funding and incentives provided by the Finance Ministry will be a good start. The correct directives must also come down from the Ministry of Health to all public medical sector and private medical sector. (3) There must be a paradigm shift of mindset of all doctors in Singapore to work as one in synergism and not in competition, to aim to become a regional medical hub for the good of the country and the people. Without this basic shift in mindset, even all the favourable areas in our present healthcare system will sadly go to waste. (4) Many schemes must be structured properly by the Ministry of Health. For example, the visiting consultant scheme must be structured by an objective panel so as to optimise the benefits. Prime Minister Goh did suggest previously that this scheme should be enhanced and called on more private specialists to contribute their services to Government hospitals as visiting consultants. At the moment, this scheme cannot be enhanced because it lacks the directive from the Ministry of Health. Private doctors have to depend on friendship and courtesy of their colleagues in public hospitals to be invited as visiting consultants. Some feel redundant and unwelcome even after being offered visiting consultant posts. To succeed, this scheme must be structured, with the appointments made by a panel from the Ministry, and a clear programme drawn up to optimise the visiting consultants' time in public hospitals. (5) Fuller cooperation by the private sector must be forthcoming, for example, to accredit Government specialists as consultants to private hospitals. Government doctors could be allowed to work in primary healthcare set-ups such as general practice clinics. In other words, let us evolve a system where the cross-borders between public and private sectors are less distinct. Mr Deputy Speaker, Sir, this new directive, if adopted, will bring medical healthcare in Singapore to even greater heights. This opportunity to maximise our present medical healthcare system should be harnessed quickly and fully. I therefore beseech our Government to proceed immediately for greater integration of the public and private medical sectors in Singapore. 7.15 pm

Sir, like many other citizens, I am very pleased with Singapore's V-shaped economic recovery and proud of the way in which Singaporeans have banded together, accepted cuts in CPF and faced global competition by adjusting to increasing liberalisation of key sectors of our economy. We have taken the Asian economic crisis by its horns and rode the tidal waves in the last three years, coming up stronger, as the sterling economic results presented before us by the Minister have exemplified. I would like first to thank and commend the Minister and the Government for the skilful steering of our economy as we emerge from the wood of the crisis. Sir, as we enter into the new millennium, the Minister has rightly pointed out that the terms of reference for global economic competition have altered significantly. Globalisation and the onslaught of technological advancement have altered the way markets operate and the nature of doing business altogether. We do indeed need to innovate and advance with global trends or risk being rendered redundant. Traditional brick and mortar enterprises are being replaced daily by virtual dot.com businesses. Indeed, the first two months of the new millennium saw the Dow Jones falling 17% from its peak in a rather short period of time, while the technology heavy NASDAQ doubling since September 1999 and seems to rise irrespective of whether there is any intervention in the money markets via interest rates by the FED. What this boils down to in essence is that there is a clear diversion of capital to the new technologies, the new methods of doing business or the new era of competition that lies before us. In this regard, I would like to express my concerns whether the Budget caters enough to enable Singapore to embark on the genesis of this knowledge-based economy of the future. My concern transcends beyond the simple allocation of a budget for IT across the Ministries. It is essentially whether we have provided enough across the entire budgetary system and framework, to incentivise, to motivate and to support a strategy of the new knowledge economy. The Government has indeed tried to position Singapore for these new challenges. I note that there have been concerted efforts to roll out IT education programmes in our schools and to "wire" Singapore up. The NSTB is also in receipt of development expenditure for financing and administering R&D projects in addition to the various schemes already in place to co-support IT start-ups. Its recent launch of the portal for technopreneurs in Singapore to facilitate and support budding dot.com companies is also a step in the right direction. Fiscal incentives in the budget for innovation, as well as the estate duty exemption extended to support the Technopreneur Home Office Scheme, are all encouraging signs that the Government is positioning Singapore for the new age. However, this begs the question of whether more can be done in the shortest possible time as we quickly reposition ourselves to face the KBE. First, at the macro level, through belt tightening and the cost of restructuring, which was felt by many at the individual job loss level, Singapore has been able to run budget surpluses in the last two financial years, to the tune of $4.2 billion and the Government has rightly decided to pass a portion back to Singaporeans via a $250 CPF top-up. I wonder whether part of this surplus could be passed on to Singaporeans to get them to prepare for the knowledge-based economy. Sir, it may sound radical at this juncture but we may need to be courageous as we enter the brave new world ahead. The Communications and IT Ministry has recently announced a $25 million scheme to finance IT courses. This would, as a start, underline the commitment and the fundamental strategic direction that the Government has for Singapore to compete in the new environment. This programme would be a basic enabler to ensure that the vast majority of our workforce or every single family is IT equipped and can then start to embrace and take full advantage of the KBE. It is indeed a laudable move. However, I believe the $25 million, averaged over a workforce of 1.5 million Singaporeans works out to $16 per person, may not be enough. As a start, I would like to propose that perhaps a matching amount for the CPF top-up of $250 per person be channelled through the CDC to co-fund IT courses or even basic hardware purchases like PCs by families as part of the life-long learning initiatives. Furthermore, I would propose that the Minister consider a scheme whereby we devote some 10-15% of our annual budget surpluses to be ploughed back into the economy through the CDC to upgrade and to prepare our population for the KBE. This is more substantial than the mere $25 million earmarked by the Ministry of Communications and IT. This programme would help ensure that the vast majority of our workforce or even every single household is IT equipped and can then start to embrace and take full advantage of the global KBE. This method of involving the CDCs and the community groups is also consistent with our aim of encouraging ownership and self-reliance, in keeping with the objectives of Singapore 21, and would go a significant step to reach out to our families and communities to influence their mindset and culture. This is especially applicable to the middle-aged and older generations, a vast number of whom still have an innate fear of technology and have felt left behind by the fast changing world. The second area of concern is the comparatively few firm initiatives to support the entrepreneurial or technopreneurial society that we envisage for the future. The Minister has emphasised that the review for the ESOP scheme would be completed in May this year. We recognise the importance of how stock options are essential to start-ups and mature corporations in this new environment to recruit, motivate and retain top talent. Indeed, equity ownership is the key to the development of a vibrant technopreneurial environment in Silicon Valley and other high-tech nodes elsewhere in the world. Sir, time is of the essence in respect of creating a technopreneurial society. Hence, I would urge the Minister to consider hastening the process as this tax review on the ESOP scheme has been on-going in Singapore for a number of years now, whilst other countries such as the United Kingdom and Japan have gone ahead and revised their policies. In addition, to improve on our modest first step which was to enhance the tax treatment of ESOP by deferring the tax payable by up to five years announced last year, I would like to suggest a bolder extension. To really make the tax treatment for ESOP scheme more favourable than cash payments, perhaps an easy to administer scheme would be to charge all income derived from share options exercised and sold at a flat rate of 3%. This could be a spur to allow companies to incentivise their employees and partners in enterprise, and is also in line with our attempt to encourage basic wage flexibility as well as a more risk-taking culture. Similarly on fiscal policies, we note that many younger generation IT savvy potential entrepreneurs are lacking in funds to support their good ideas. While there are various schemes in place at the NSTB, we still have a large number of successful Singapore technopreneurs obtaining funding from angel investors in Singapore. May I further suggest that the Minister consider tax incentives for these angel investors, such as the ability to offset venture investment losses in such hi-tech start-ups against their personal income tax, as a catalyst to encourage more risk-taking by our people and to spur the private sector growth for angel investments. Sir, as part of the knowledge-based economy of the future, there are employment trends in the United States showing an increasing growth of part-time and contract jobs. These are created as a result of the outsourcing of many aspects of a traditional firm, from project work, supply chain management, IT to human resource management. Firms are becoming more lean and mean and efficient to compete effectively. This trend is not isolated and the model is applicable to the KBE of the future. Indeed, there are already signs in Singapore that our companies are adopting such methods to stay nimble and competitive. The upshot to this trend is that permanent work or full-time employment is on the decline and that self-employment and part-time work are on the increase. This increased incidence of flexi-work is consistent with a KBE and should be supported especially in the light of increasing deregulation of our services sector. However, there are implications that we have to cater for. We have to encourage individuals to be more self-reliant and responsible for their own well-being since the era of life-long employment is on the decline. I am glad that the Minister has announced the introduction of a Supplementary Retirement Scheme (SRS) which would allow Singaporeans to contribute voluntarily over and above their CPF savings which would be accorded tax deductions at the time of contribution. However, I would urge the Minister to consider extending the SRS in two areas. Firstly, the percentage cap for tax deductibility for employees' CPF contributions could be set at a higher level so that employees have greater flexibility to maximise their long-term interest via the CPF. Secondly, to encourage the greater use of CPF accounts and ancillary benefits, I suggest an equivalent scheme be extended to the self-employed and those who are employed on non-CPF schemes, particularly those part-timers and contract workers, to also contribute to the CPF in such like manner. In the KBE that Singapore is transforming itself into, there would be a greater number of self-employed, contract staff as well as home-based entrepreneurs and technopreneurs who would benefit from this measure. This would enable the Government to encourage more personal responsibilities and less reliance on the state as we move forward. In addition, with the trends in new forms of work and employment, I would suggest that the Government encourage Singaporeans to take up private insurance. The tax deduction for life insurance premiums is currently limited for most individuals who have regular CPF contributions. To encourage greater self-dependency and personal responsibilities, the Government should consider lifting this cap and allow Singaporeans to use their CPF to buy health, education and other forms of life insurance. Finally, Sir, a critical aspect to the success of Singapore in the new globally competitive IT intensive future is to influence the culture and mindset of Singaporeans. We have to change our traditional expectations of what working life or what a job is like. We have to become less risk-averse, more entrepreneurial and more IT enabled. Some of these aspects are already enshrined in Singapore 21 goals, where we should leverage on the strengths of family and the community and not merely let loose unbridled individualism. I am glad that the Minister has continued to extend fiscal incentives that are supportive of the family. However, in conclusion, I urge the Minister to consider my suggestions to encourage greater contributions to CPF, and to use the channel of the CDCs and other community organisations to distribute some of our budget surpluses to enable Singaporeans and the community at large to benefit and to contribute to the successful KBE of Singapore. Sir, I support the motion.

Resolved, "That the debate be now adjourned. " - [Mr Wong Kan Seng].

Resumption of debate on what day, Dr Hu?

Tomorrow, Sir.

So be it.

Resolved, "That Parliament do now adjourn." - [Mr Wong Kan Seng]. Adjourned accordingly at Half- past Seven o'clock pm.

asked the Prime Minister, in view of the growing number of senior citizens as voters, whether there are good reasons to think of balancing this trend by lowering the voting age from 21 to 18 years in order to increase and capture more voters in the young and economically active category.

The great majority of the 18 to 21 year old Singaporeans are still studying or doing national service. They are not economically active. Hence, lowering the voting age from 21 to 18 years will not significantly increase the number of economically active voters to balance the growing number of voters in the over 60 age group.

asked the Minister for Home Affairs, in view of the increasing mobility of the young and talented globally, whether Singaporeans will have dual citizenship.

Singapore is a young nation. We have not reached the stage of nationhood where a Singaporean with a second citizenship would still retain his identity and loyalty to Singapore as his homeland wherever he goes, his second citizenship being only of secondary importance. Hence, the Government does not allow Singaporeans to have dual citizenship.

Foreigners are granted Singapore Citizenship only if they are committed to making Singapore their home, and see their long-term future with Singapore, in which case they should readily be prepared to give up their foreign nationality.

asked the Minister for Health (a) if there is a hearing impairment detection programme for the newly borns in all hospitals; and (b) whether a policy will be formalised in relation to early detection and intervention programmes in order to arrest hearing impairment of the very young.

The routine medical examination of newborns in public hospitals includes a test for hearing loss. Babies who are suspected to have hearing loss or who are at higher risk (eg, premature babies or those with family history of deafness) are referred to audiologists for further tests using more sophisticated equipment and techniques. Those with confirmed hearing loss will be referred for treatment and rehabilitation. My Ministry recognises the value of early detection and treatment of hearing loss to minimise speech and learning disabilities in children. It has therefore appointed a Committee in October 1999 to Study the Early Detection and Treatment of Hearing Loss in Children in Singapore. This Committee comprises ENT surgeons, paediatricians, audiologists and family physicians from both the public and private sectors. The Committee will be reviewing the current system of hearing loss detection in children to see how our present screening methods and coverage of newborns can be further improved. It will also make recommendations to strengthen the intervention programme for hearing impaired children to support the expanded screening efforts.

asked the Minister for Community Development (a) how many calls were registered by the Community Development Council (CDC) National Helpline between 1997 and 1999; (b) what are the main problems faced by the callers; and (c) what measures are adopted by People's Association to help to enhance the community skills of young CDC General Managers in problem-solving neighbourhood challenges.

The Community Development Councils' (CDCs) National Helpline, set up on 3rd January 1998, provides a one-stop referral service for members of the public. From its inception to the end of 1999, the Helpline has received about 19,400 calls. In 1998, besides enquiries about the National Education Exhibition and miscellaneous calls to air personal views about life, the Helpline also received requests for job matching as the CDCs are linked to the Ministry of Manpower (MOM)'s Labournet and job banks set up by some CDCs. Other callers raised family concerns, financial needs and training sponsorship. The summary is given in Table A below. In 1999, the largest number of callers were interested in skills training and upgrading. This could be attributed to the CDCs' sponsorship of approved courses under the Skills Development Fund (SDF) and Skills Redevelopment Programme (SRP). Job matching continued to be high on the callers' list for 1999. The requests for financial assistance decreased from 769 in 1998 to 666 in 1999. The breakdown is at Table B. The PA provides the necessary training for all the staff at the CDCs so that they are able to carry out their tasks effectively and efficiently. Such training is either at the National Community Leadership Institute or by professional organisations and trainers. Table A Breakdown by the type of calls received by the National Helpline for 1998 No. Type of Calls No. of Calls 1 Job matching 1,773 2 Family matters including child and 1,080 youth concerns 3 Financial assistance including help 769 with school fees 4 Enquiries about the CDC Training 364 Sponsorship Scheme 5 HDB related (eg rents and mortgage 298 instalments) and environment matters (eg mosquitoes breeding) 6 Legal aid and disputes 293 7 Health and mental health concerns 264 8 Elderly concerns 181 9 Immigration/citizenship and CPF 93 matters 10 Concerns of the disabled and 33 handicapped 11 Miscellaneous calls to give feedback 4,142 and personal views about life 12 Enquiries about National Education 3,064 Exhibition Total 12,354 Table B Breakdown by the type of calls received by the CDCs National Helpline for 1999 No. Type of Calls No. of Calls 1 Enquiries about the CDC Training 2,067 Sponsorship Scheme 2 Job matching 1,349 3 Financial assistance including help 666 with school fees 4 Family matters including child and 471 youth concerns 5 Elderly concerns 140 6 HDB related (eg rents and mortgage 128 instalments) and environment matters (eg mosquitoes breeding) 7 Health and mental health concerns 121 8 Legal aid and disputes 104 9 Immigration/citizenship and CPF 61 matters 10 Concerns of the disabled and 22 handicapped 11 Miscellaneous calls to give feedback 1,855 and personal views about life Total 6,984

asked the Minister for Education if his Ministry will give the statistics of students failing in the second language in the Primary School Leaving Examination (PSLE) and "O" level examination.

In the PSLE, the grades awarded are the following: A*, A, B, C, D, E, and Ungraded which is considered the Failed grade. The percentages of pupils failing Mother-Tongue Languages in PSLE are very small. In the 1999 PSLE, the numbers and percentages of pupils who failed, that is, did not achieve a Grade E or better, in Chinese and Malay Language were 20 (0.07%) and 2 (0.03%) respectively. There was no failure in Tamil Language. In the GCE 'O' level examination, the grades awarded are A1, A2, B3, B4, C5, C6, D7, E8 and F9. In the 1998 GCE `O' level examination, the percentages of school candidates who failed, that is, getting F9, were 2.1% for CL, 2.2% for ML and 2.1% for TL. These represent 532 of CL students, 118 of ML students and 24 TL students.

asked the Minister for Education whether there is a need to issue detailed guidelines on disciplinary actions to ensure consistency of application and to provide some comfort to those schools which face the need to take such actions on students.

Guidelines on Disciplinary Actions Schools are given broad guidelines on the approaches and actions they could adopt in managing pupil discipline. These guidelines include the development of a comprehensive system of discipline involving all teachers, the setting up of referral systems as well as the use of a variety of measures, ranging from the preventive to the corrective. The guidelines drawn up were based on the principles that punishment is only a means to an end; that it must be commensurate with the seriousness of the offence committed, and appropriate to the nature of the offence committed. Schools include counselling as an integral part of the corrective process to ensure that the punishment is meted out with care and concern and that the pupil understands the reason for his punishment. Parental involvement would be sought when deemed necessary. In extreme situations where corporal punishment needs to be meted out, as a measure of last resort, principals are empowered to do so within the guidelines set by the Ministry.

Consistency of Application of Disciplinary Actions While the broad guidelines ensure a general consistency of approach and actions across schools, schools are, and must be, given the flexibility to develop their own discipline policy with regard to specific disciplinary problems. This degree of school autonomy is essential as school situations differ. Detailed guidelines on what schools can and cannot do would curtail the ability of the schools to manage its discipline situation effectively.