Hansard, 2001-09-25

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 (2001)(2001) Mr Tan Soo Khoon17 Aug18 Aug 28 Aug29 Aug 3 Sep8 Sep 19 Sep20 Sep Mr K Shanmugam20 Aug22 Aug 17 Sep5 Oct NameFromTo (2001)(2001) Mr Leong Horn Kee20 Aug27 Aug 20 Sep22 Sep 14 Oct20 Oct BG George Yeo Yong-Boon20 Aug29 Aug 30 Aug3 Sep 10 Sep16 Sep Mr Inderjit Singh20 Aug29 Aug 3 Sep9 Sep Prof S Jayakumar 21 Aug21 Aug 23 Aug25 Aug 31 Aug2 Sep 4 Sep4 Sep 4 Oct10 Oct Mr Lim Swee Say22 Aug25 Aug 2 Sep5 Sep Mr Wong Kan Seng23 Aug25 Aug 2 Sep5 Sep Mr Zainul Abidin Rasheed23 Aug25 Aug 29 Aug7 Sep Assoc Prof Toh See Kiat24 Aug27 Aug 6 Sep9 Sep Mr S Iswaran24 Aug7 Sep Encik Sidek bin Saniff26 Aug29 Aug 12 Oct14 Oct Mr Chew Heng Ching27 Aug28 Aug 4 Sep14 Sep Assoc Prof Yaacob Ibrahim27 Aug29 Aug Mr Yeo Guat Kwang27 Aug29 Aug 11 Sep15 Sep Mr Othman bin Haron Eusofe27 Aug1 Sep Mr Tang Guan Seng28 Aug1 Sep 16 Sep19 Sep Dr John Chen Seow Phun31 Aug2 Sep 28 Sep29 Sep Mr Loh Meng See31 Aug1 Sep Mrs Lim Hwee Hua2 Sep6 Sep Mr Chan Soo Sen2 Sep6 Sep 19 Sep22 Sep Mr Lew Syn Pau2 Sep6 Sep 9 Sep17 Sep 20 Sep24 Sep 28 Sep2 Oct Dr Wang Kai Yuen2 Sep7 Sep Mr Sin Boon Ann2 Sep7 Sep NameFromTo (2001)(2001) Mr R Sinnakaruppan2 Sep7 Sep Mr Charles Chong2 Sep9 Sep Dr Lily Neo2 Sep9 Sep Mr Mah Bow Tan 3 Sep3 Sep 3 Oct5 Oct 14 Oct20 Oct Assoc Prof Koo Tsai Kee3 Sep6 Sep 12 Sep21 Sep Assoc Prof Low Seow Chay3 Sep14 Sep 30 Sep5 Oct Dr S Vasoo3 Sep15 Sep Mr Chng Hee Kok3 Sep23 Sep Dr Tony Tan Keng Yam4 Sep8 Sep Mr Ang Mong Seng5 Sep17 Sep Encik Yatiman Yusof6 Sep8 Sep Dr Hu Tsu Tau Richard6 Sep9 Sep Dr Tan Cheng Bock6 Sep17 Sep Mr Harun A Ghani6 Sep20 Sep Mr Goh Chok Tong7 Sep14 Sep Mr Kenneth Chen Koon Lap7 Sep14 Sep 24 Sep29 Sep Mr David T E Lim8 Sep9 Sep 17 Sep22 Sep 9 Oct10 Oct 1 Dec10 Dec Mr Peh Chin Hua9 Sep15 Sep 24 Sep4 Oct Mr Thomas Thomas9 Sep18 Sep 28 Sep30 Sep 9 Oct13 Oct Mr Bernard Chen10 Sep14 Sep Mr Tay Beng Chuan10 Sep25 Sep Mr Hawazi Daipi11 Sep13 Sep Mr Davinder Singh11 Sep14 Sep 25 Sep26 Sep Dr Wan Soon Bee11 Sep19 Sep Mrs Yu-Foo Yee Shoon12 Sep13 Sep Dr Ong Chit Chung12 Sep19 Sep Dr Lee Boon Yang12 Sep22 Sep 28 Sep1 Oct Dr Ow Chin Hock12 Sep22 Sep NameFromTo (2001)(2001) Mr Mohamad Maidin B P M12 Sep22 Sep RAdm Teo Chee Hean14 Sep15 Sep Mr Ahmad Md Magad14 Sep16 Sep Dr Ker Sin Tze17 Sep21 Sep Mr Ong Kian Min21 Sep22 Sep 24 Sep26 Sep Mr Seng Han Thong21 Sep23 Sep 28 Sep30 Sep Mr Yeo Cheow Tong23 Sep3 Oct Mr Goh Chee Wee24 Sep27 Sep 8 Oct11 Oct Mr Simon Tay S C 25 Sep25 Sep Mr Gerard Ee Hock Kim 25 Sep25 Sep Mr Peter Chen30 Sep4 Oct Mr Lee Kuan Yew 25 Sep25 Sep 7 Oct13 Oct TAN SOO KHOON Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the date stated: 21 August 2001 (i) Patents (Amendment) Bill; (ii) Parliamentary Elections (Amendment No. 2) Bill; (iii)Constitution of the Republic of Singapore (Amendment No. 2) Bill; and (iv)Home Affairs Uniformed Services Superannuation Bill. TAN SOO KHOON Speaker Parliament of Singapore

asked the Minister for Trade and Industry whether there will be an adverse impact from the unfortunate bombing incidents in the United States of America on Singapore's economic prospects and, if so, whether the Government will consider implementing further measures to help Singaporeans and businesses cope with the worsening downturn.

asked the Minister for Trade and Industry, in view of the recent devastating terrorist attacks against the United States of America, whether his Ministry can (i) provide statistics regarding the extent of their negative impact on the Singapore economy; and (ii) introduce further measures to help the Singapore economy should it be badly affected by the events.

Mr Speaker, Sir, with your permission, I would like to take Question Nos. 1 and 2 together.

Yes.

The recent terrorist attacks against the US are bound to impact the global economy. It has already caused significant disruptions to the US economy. The financial, insurance and airline industries are badly hit, although the interest rate cuts by the US Federal Reserve and the European Central Bank have helped to cushion the shock to financial markets. Prior to this event, there were some indications that the US economy might be close to bottoming out, but the September 11 attacks have diminished markedly the prospects of an early recovery. Consumer confidence and spending are expected to decline, increasing the risk of a US and a global recession significantly. The Singapore economy will be adversely affected. In Singapore, the immediate impact of the attacks was felt by our financial markets. The Straits Times Industrial Index fell by 7.3% while the Singapore dollar rose by 1.1% against the US dollar on 12th September as investors sold off the US dollar and stocks affected by the attacks. Air and sea transport was held up temporarily when the US closed its airports following the attack. Our export-oriented sectors like manufacturing, tourism and transport services will slow further as a result of weaker US demand in the short-term. The situation is still fluid and will depend on how events unfold in the coming months. The chain of events set off by the terrorist attacks has not yet fully played out, as the US considers its response, and as terrorist groups undoubtedly plan further moves. But the events last week have already changed the world. There will be greater uncertainties, and all economic forecasts will have to be reviewed. What is clear is that an economic recovery in the short term is unlikely. At this point, we expect our overall economic growth this year to become negative. Singaporeans must therefore be prepared for a more prolonged downturn. Over the last few months, the Government has been working on a second package of additional measures which might be needed to help ease the burden on companies and Singaporeans. The World Trade Centre attacks have increased the urgency of the second package and the scale of measures required. We are still finalising the package. The Finance Minister will address the question on the timing of the package in his reply.

Mr Speaker, Sir, I would like to ask the Minister a supplementary question in terms of commenting conceptually on the extent of pump priming that the Government would consider in the circumstances.

Mr Speaker, Sir, I do not think we are ready yet to announce the details of the package but conceptually there will be a modest amount of pump priming.

Sir, may I ask the Minister whether his Ministry has now revised the GDP forecast for the whole year? I think the last forecast was minus 1.5%.

We expect the flash forecast to be out on 7th October and when that forecast is out, we will also revise our GDP estimate for this year.

Sir, in a worst case scenario, how many jobs does the Minister expect to be lost as companies are directly affected by the downturn?

Mr Speaker, Sir, the situation is still fluid because the dust of the recent disaster has not yet settled. The markets are still volatile. I think it is too early for us to be overly sure of what the ultimate impact would be. The war has not yet started. We do not know how long it will last and what all the consequences will be. We are on the pessimistic side, so we expect unemployment this year and next year to be worse than what we had earlier projected. As to how much worse, it is premature to say.

Sir, as in the US, which has announced a bail-out package for its airline industry, would the Minister consider bailing out SIA should this become necessary, at least to save jobs because SIA has announced plans to retrench some workers?

On the issue of insurance, Government has already taken a quick decision yesterday. On preserving jobs in the airline industry by Government subsidy, I think that would be a very bad principle. I do not see at this point in time any request for a bail-out of SIA.

Sir, I am not asking for a bail-out package but I want to ask the Minister whether he would target specific industries that would be more affected particularly by this impact of the terrorist attacks on the US, for example, airline-related industry, tourism, insurance and others that are more badly affected.

Mr Speaker, Sir, I do not think we should be reacting to what might be transient changes because of the terrorist attacks in New York and Washington. There is naturally an over-reaction and many people have reduced their travels. Many meetings have been cancelled and this has had an immediate impact on airlines, hotel and convention business. The dust will settle and things will assume a certain normality and we will have to analyse the situation then and decide what our appropriate responses should be.

asked the Minister for Finance, in view of the deteriorating economy, when will the Government announce and implement further off-Budget measures to assist Singaporeans and local industries affected by the economic downturn.

Mr Speaker, Sir, when the $2.2 billion off-Budget package was announced in July this year, we said that the Government would do more to assist Singaporeans if the global economic situation worsened in the coming months. In the intervening months, leading indicators suggest that the economy has worsened further and it is likely that the third quarter results will be substantially weaker. The Minister for Trade and Industry has also noted that the events in the United States due to terrorist attacks would depress the global economy further. So the outlook is pretty gloomy. Government has therefore been working on a second, more substantial, off-Budget package, which will be finalised when the third quarter results are known around mid-October. At that time, the full impact of the terrorist attacks on the US and its impact on our economy will be clearer.

Sir, may I ask the Minister whether he has a more definite date as to when the off-Budget measures would be announced and if the flash estimates can be ready earlier, could the off-Budget measures be announced earlier so as to help the industries and Singaporeans?

As I said, the estimates will be available around mid-October. I do not think, at this time, I want to give a specific date when the second package will be announced, but it will be done as soon as practicable.

asked the Prime Minister whether Singapore got a fair deal out of the recent agreement with Malaysia on the outstanding bilateral issues.

asked the Prime Minister if he will give an assessment of the recent in-principle agreement with Malaysia, announced by the Senior Minister and the Malaysian Prime Minister.

asked the Prime Minister when will the price increase to 45 sen per 1,000 gallons for the purchase of raw water from Malaysia take effect and whether it will significantly affect the retail price of water in Singapore.

Mr Speaker, Sir, may I have your permission to take the three questions by Mr Inderjit Singh, Mr Noris Ong Chin Guan and Mr Tay Beng Chuan together as they are related?

Yes.

Sir, let me first sketch the background to the recent positive developments in our discussions on the bilateral package. Senior Minister visited Kuala Lumpur last year in August, with Prime Minister Goh's agreement, to try and narrow the differences over the outstanding bilateral issues. Following discussions with Dr Mahathir, Senior Minister had written to Tun Daim regarding Singapore's proposals. The next step came, in February this year, when Malaysian Deputy Prime Minister Abdullah Badawi visited Singapore and discussed with Prime Minister Goh the package of outstanding issues. At this meeting, Prime Minister Goh agreed in-principle to Malaysia's request to move their KTM railway station from Tanjong Pagar to Kranji, and to have the KTM trains run in an underground tunnel from Johor to Kranji, as part of the larger package of issues. They both agreed on the need to resolve these outstanding issues on the package as soon as possible. Shortly after Deputy Prime Minister Abdullah Badawi's visit, Senior Minister received a reply from Dr Mahathir in March 2001 regarding Singapore's proposals. Members will recall that I told the House on 13th March that our preliminary study showed that there were variations on some points between Dr Mahathir's reply and Senior Minister's understanding with Dr Mahathir during his visit to Kuala Lumpur last year. I added, however, that at first blush, the difference did not appear that great. Senior Minister's recent visit to KL was a follow-up to Dr Mahathir's reply. After consulting Prime Minister Goh, Senior Minister visited KL again to continue discussions on the package. I now turn to the outcome of the most recent discussions between Senior Minister and Dr Mahathir. As Senior Minister has made clear in his comprehensive press conferences in KL, there is now accord on the basic skeletal or framework agreement, which would form the basis to resolve the outstanding issues. This framework agreement, firstly, spells out the elements of the package; secondly, indicates the areas where there is agreement on both sides; and thirdly, sets out areas where further discussions are needed to close the gaps. To recapitulate, the key elements of the broad agreement are the long-term supply of water to Singapore beyond 2061, implementation of the POA, the proposal for a new bridge to replace the existing Causeway, use of Malaysian airspace by the RSAF and the early withdrawal of CPF funds by West Malaysians. On water, for the period 2011 to 2061, Malaysia has offered to provide Singapore with an additional 100 mgd of treated water to replace the 1961 Water Agreement, which expires in 2011. While Singapore has agreed to the quantity, Singapore has proposed that this continue to be provided in raw form as Singapore has the necessary filtration capacity. From 2061 to 2161, Malaysia has offered to provide 350 mgd of water to Singapore - 100 mgd raw and 250 mgd treated water. Singapore has agreed to 350 mgd of water, but has proposed to draw 150 mgd of raw water and 200 mgd of treated water. As regards the source, Singapore's position is that the source of additional water to be provided from 2011, and from 2061-2161 must be the Johor River. Furthermore, the production of treated water to be supplied to Singapore after 2061 will be done jointly between Singapore and Malaysia. As for the price of water, for the existing supply of 350 mgd of raw water under the 1961 and 1962 Water Agreements, Singapore has agreed to a revision of the price of raw water purchased. Singapore has proposed to revise the price from 3 sen to 45 sen per 1,000 gallons. For the additional raw water to be supplied from 2011-2061, and from 2061-2161, Singapore has agreed to the price of 60 sen per 1,000 gallons, to be reviewed every five years for inflation. Mr Tay Beng Chuan asked when will the price increase to 45 sen commence, and whether it will significantly affect the retail price of water in Singapore. The answer to that is the proposed price increase will commence only after full agreement on the package has been finalised with Malaysia, and only after it is signed by both Prime Ministers. The increase from 3 sen to 45 sen is, of course, significant. However, the retail price of water also includes other components, including manpower costs, treatment and distribution costs, and the Water Conservation Tax. Therefore, any increase in the overall retail price of water, arising from the higher raw water price paid to Johor, should be manageable. On the POA, let me first stress that the new agreement will not supersede the 1990 Points of Agreement, unless they are explicitly varied as part of the wider package negotiations. As I have mentioned earlier, Singapore agreed for the KTM station to be relocated from Tanjong Pagar to Kranji, with the KTM trains running in an underground tunnel from Johor to the Kranji railway station. Malaysia will pay for the cost of building the underground tunnel. The rail Customs, Immigration and Quarantine (CIQ) facilities will move from its current location to Kranji following the completion of the railway tunnel. Pending the shift to Kranji, we have proposed that the KTM railway station will be located temporarily at Woodlands. The plot of land at Tanjong Pagar currently occupied by KTM will be exchanged for a plot at Shenton Way of equivalent value for joint development. In addition, Singapore has agreed to variations of the POA to include 12 lots at Bukit Timah together with the original three land parcels to be jointly developed. On the causeway and the bridge, Singapore has agreed to Malaysia's proposal for a bridge to be built between Singapore and Malaysia. However, Singapore proposed that the demolition of the causeway take place after 2007, when both the bridge and the tunnel have been completed and provided the tolls charged at the bridge do not exceed the present toll rates at the causeway adjusted for inflation. Singapore will reclaim its side to the maximum and build its side of the bridge to meet the Malaysian side at the boundary. Singapore's toll rates at the bridge will match that of Malaysia. As regards airspace, Malaysia will reinstate all the arrangements and understandings for RSAF aircraft to use Malaysia's airspace (including the South China Sea Training Areas) for transit and training. As regards CPF, Singapore will allow the early withdrawal, on an individual basis phased over two years, of the CPF monies of West Malaysians who have left Singapore permanently. Mr Speaker, as Members can see, there has been progress. However, many details still have to be sorted out by the officials of both countries to be put in a form of words into an Agreement which the respective Prime Ministers can agree. Let me stress two important points. Firstly, all the items are to be considered as part of a package. Secondly, the skeletal or framework agreement has to be completed by settling the details that remain to be resolved. The Member for Ang Mo Kio has asked whether Singapore had received a fair deal from the broad agreement reached between Senior Minister and Dr Mahathir. This question has also been raised in the media. Senior Minister had dealt with this issue during his press conference in KL, but I shall also touch on it. Let me first say, Sir, that, in the nature of international negotiations, the broad agreement reached between Singapore and Malaysia was a compromise made by both sides to move the long-standing bilateral issues forward. Having been subjects of contention for so long, the deal marks a psychological breakthrough in our bilateral negotiations. It shows that despite sporadic problems in our relations, both countries recognise the value of cooperation and each country has a stake in the other's stability and growth. I believe this will place relations on a surer footing. Viewed in that context, Singapore has decided to try to reach an agreement with Malaysia. Some of the items are not balanced in our favour like reducing our water request for some 750 mgd to 350 mgd without any reduction of the concessions we are making. The key question Singaporeans should ask ourselves is this: Are we better off concluding a deal, or by allowing such outstanding issues to fester? I think both sides are better off with the outstanding issues resolved. We decided it was best to have a deal with Malaysia. While we have decided to reach a deal with Malaysia, let me assure Members that we will continue with our plans for desalination, as well as water reclamation to produce NEWater, a process which involves micro-filtration followed by Reverse Osmosis based on membrane technology. We can expect advancements in membrane technology to continue to reduce the costs of these two alternative sources of water. Sir, this package will put behind us the outstanding issues and it can have positive effects for both Singapore and Malaysia.

Mr Speaker, Sir, I have three supplementary questions. The first question is on the issue of CPF withdrawal. Is this a total withdrawal by an individual, or is it going to be transferred to the Malaysian EPF? And related to that, would not this create a disadvantage or unfair situation for Singaporeans who cannot withdraw their CPF until retirement? What would be the rules that would not create this disadvantaged position for us? The second question is on the 12 new plots of land that have been released in place of the relocation of the railway. Does the Minister have the current market value of the 12 pieces of land? The third question is, while we have got the broad strokes of agreement, when do we expect the agreement to be finally concluded, as we know the POA was something that we thought would have been implemented, but was not implemented? Will this be another example of something that has been discussed, but not implementable?

I thank Mr Inderjit Singh for his questions. The first question concerns CPF, and the answer to the question is that it is a withdrawal by individuals. Whether it will put Singaporeans at a disadvantage, let me say that, as I mentioned in my main answer, the withdrawal is for Malaysians who were working here and who have returned to Malaysia permanently. So that would be an important consideration. On the question whether I have with me the current market value of the 12 plots at Bukit Timah, I do not have that particular detail with me. The third question was, with regard to a general point, whether we expect any new agreement to be implemented considering our experience with the POA. Let me say that, as with any international negotiation with any country, we must approach the deal in good faith that both sides will keep to the terms of the agreement when we do settle the details and finalise the agreement, and it is signed. The items in the bilateral package would have to form part of a new written agreement which has to be formally concluded between the two countries. And the two countries would be bound under international law to comply with the terms of the agreement. Therefore, I would not want to speculate on a situation where the Malaysians choose not to abide by the terms, and so on. Let me also point out something which both the Prime Minister and I have mentioned on a previous occasion when a similar question was raised and, that is, as these agreements are major agreements between Malaysia and Singapore, both the Prime Minister and I have said that it is the intention that we should come to Parliament and place the agreements before the House after it has been signed.

Sir, may I ask the Minister is there a specific timeframe within which the detailed negotiations are targeted to be concluded for the agreements to be signed? I ask this because experience has shown that our negotiations on these matters have taken unexpected twists and turns leading to long delays.

I wish I could answer Mr Iswaran by giving a clear date when it is expected to be concluded. But I am unable to do so for the reason that there are very many details on important matters to be sorted out. What I can say is that, certainly on our side and also on the Malaysian side, the desire is to resolve this as soon as possible because we really have to put this behind us.

Sir, I have two supplementary questions. The first concerns the price of water. The Minister, in his main answer, has said that any price increase in retail water, arising from the agreement would be manageable. I would like to know from the Minister what does he mean by "manageable". How much would he expect the retail price of water to increase and has the Government studied the impact before agreeing to pay Malaysian 45 sen per 1,000 gallons of raw water? The second question is: under what consideration did the Government agree to the additional 12 plots of land in Bukit Timah for Malaysia?

Sir, I do not have with me the details. My Ministry does not deal with the details of water price by PUB. All I am able to say, at this stage, for the reasons I have given, is that whatever price increase may take place, it will be manageable. The details will be given to this House at a later stage. When we agreed to various increases, and when we put forward certain proposals, have we made our calculations? I think the House must expect that, yes, we do not put forward proposals lightly. We have to take into account what advances our interests, what we can manage, and we will not put forward a proposal - particularly on the price of water - that we are unable to justify to ourselves. So, our national interests are always at the back of our mind in such international negotiations. As to the KTM lands, let me say that this is really not a new issue. If Members cast their minds back to 1997, Prime Minister spoke to this House on the difficulties about the POA and his approach to solving the problems with Malaysia within the context of a framework of wider cooperation. He already mentioned that if there is a framework of wider cooperation and there can be a resolution of a package of items, he is prepared "notwithstanding the terms of the POA, to agree to the joint development of the KTM land in Bukit Timah, in addition to the agreed three parcels of land referred to in the POA." In other words, as part of the overall package deal - we are not under an obligation to include the additional land in Bukit Timah - but if we want to advance the process and to solve the package, he is prepared to consider this as part of the package deal. And that is the approach we have taken.

Sir, I would like to put on record that the Opposition is very happy that an agreement has been reached between Singapore and Malaysia on the outstanding issues. This is a great progress in the relationship between Singapore and Malaysia. I hope that before we finally sign the agreement, that there is an assurance from Malaysia that Malaysia shall continue to supply raw water to Singapore. I am not asking a question. I am putting on record what the Opposition is going to say.

Mr Speaker, Sir, the Minister spoke about concessions Singapore has made. But it appears like surprises to me. My question is: on the issue of land, bridge, etc, did the Malaysian government inform us earlier that these are to be part of the deal or did these matters surface just during the discussions with the Senior Minister? The other question is, if that is the case, are there enough consensus and provisions in the discussions to prevent further surprises from cropping up?

Sir, Foreign Ministers have some abilities, but one of the abilities is not to be able to predict future events! This is where we have reached after many years of discussions. The whole package has evolved. At one time, it was electric train (fast train) - POA-water. It evolved to water-and-loan. Then it evolved to POA-water-bridge-tunnel. I think we have taken it as far as we can to this point. It is in our interest to try to wrap it up as early as possible. The Senior Minister explained in his press conference why that is so. Both countries face various challenges and problems. The region also faces problems. So, as we tackle these problems, let us not be bedevilled by these outstanding problems. And when the Senior Minister said that, that was before 11th September. You have heard Minister George Yeo and Minister for Finance talking about how the global economy and the region may be affected by the recent terrorist attacks. So both countries and the region face enormous challenges and therefore it is good for both countries to try to put these behind us. Will there be more surprises and twists and turns? I cannot guarantee that but, certainly, I hope that, and am sure, all Members of the House share my hope that will not happen.

Sir, my question is about the effective date of the new water price. What I hear from the Minister is that the effective date will be from the point when the two Prime Ministers sign the new agreement. But would it not be possible to actually ask that the old agreement, which has the old price of about 3 sen, be allowed to run its full term, before the new price is implemented at a later date?

If I understand Mr Leong Horn Kee, what he is saying is that the new price should only apply to the extension of agreements after 2011 and after 2061, and that the existing price be untouched. We did assessments and in the negotiations, it was considered that this proposal to adjust the existing price - which is not a legal obligation on our side - was a factor to advance the negotiations. So we may not be able to make any advance if that package did not have that element.

Mr Speaker, Sir, I would like to ask the Minister about the issue of the CIQ. I remember a few years ago we debated on this and many Singaporeans were quite emotional about locating the CIQ within Singapore, being a sovereign issue for us. Is there a plan in the agreement to finally locate the CIQ back to Malaysian soil rather than keeping it in Singapore?

If we look back at the CIQ issue - what was the key issue in the CIQ? The key issue was that wherever the CIQ is located, where sovereign functions are being performed - such as immigration and customs - it must be with the consent of Singapore. That was the key issue on the controversy. As events developed and there was an exchange of letters, it was not controverted by Malaysians. If the CIQ was located here, it is with the consent of Singapore. If that basic issue is not challenged, then we can discuss where else the CIQ can be located. But that is the key principle.

Sir, there is speculation outside this House as to why the Senior Minister was tasked to negotiate this agreement with Malaysia instead of the Prime Minister. Would the Minister like to explain that?

I thought that the Senior Minister had answered this question quite comprehensively in the press conference. He had explained that this matter had been discussed for some time. There had been some difficulties. He had discussed this with the Prime Minister whether, given his past experience of having discussed with Dr Mahathir, he should take a crack at it. Senior Minister got the agreement and approval of the Prime Minister to proceed. He explained this fully in the press conference. There ought not to be any speculation. One more point - the Senior Minister, in all the negotiations, made it clear that the agreements and discussions that had taken place will, of course, be subject to the agreement of the Prime Minister.

asked the Deputy Prime Minister, in the light of the recent disquiet over the suspension of trading of certain shares, what steps will be taken to reassure the investing public that the Singapore Exchange will adequately explain (i) the circumstances for any suspension of the trading of shares; (ii) the justification for the period of suspension, if resumption is not readily contemplated; and (iii) how it attempts to treat all affected shareholders fairly.

asked the Deputy Prime Minister if the Singapore Exchange rules need to be reviewed to make it more equitable in the light of the Links Island case.

Mr Speaker, Sir, with your permission, I will take Question Nos. 7 and 8 together.

Yes.

Trading in the shares of a company listed on the Singapore Exchange (SGX) may be suspended at the request of the company or of the exchange. A company may request that trading in its shares be temporarily suspended before announcing material information, to give time for the information to be disseminated to the investing public. SGX may suspend trading in the shares of a particular company where it is likely that trading of the company's shares will not be conducted in a fair or orderly manner. This may occur, for instance, where a company fails to disclose or ensure proper dissemination of material information to the investing public. Alternatively, the company's shares could be the subject of market manipulation. SGX's power to suspend trading is necessary to protect the integrity of the marketplace and safeguard investors' interests. All major international exchanges operate under similar rules. SGX suspended trading in Links shares on 16th August 2000, after the exchange's preliminary review showed that trading in these shares had been irregular during the period leading up to 16th August 2000. On the same day, SGX issued a public announcement, stating that it was conducting inquiries into whether a corner situation had arisen in the counter. SGX also stated that the exchange considered it appropriate to impose a trading suspension in view of the irregular market in Links shares and pending the outcome of the inquiries. Once imposed, any trading suspension should be as short as possible in order not to deprive market participants of liquidity. But whether trading should be allowed to resume depends on whether the concerns that led to the suspension being imposed in the first instance have been addressed, thereby allowing an informed and orderly market to prevail. In the case of Links, it was only after a thorough investigation lasting nearly one year that SGX was able to conclude, on 26th July 2001, that a corner situation had arisen in Links shares in the period leading up to the trading suspension. As mentioned in SGX's press statement of 26th July 2001, the investigation was complicated by the need to examine the trades of more than 50 parties, the significance of the commercial and personal relationships among them, and the cash flows and trading patterns of the individuals and institutions that traded in Links shares. If SGX had allowed trading to resume before establishing whether Links shares were cornered, it could have further exposed investors to an irregular market in those shares. In retrospect, given the duration of the inquiries, the exchange could have updated the investing public periodically that the investigation was still ongoing. Having established that a corner situation had arisen in Links shares, SGX decided that all outstanding market trades in Links shares transacted during 14th to 16th August 2000 be settled by way of cash instead of delivery, at the fair settlement price of $1.

21. The fair settlement price is intended to settle all outstanding market trades in Links shares done during the 3-day period in a manner that would, on balance, be most equitable to all parties to those transactions. This is not an easy task. To be fair to all persons who traded in Links shares during those three days, the settlement procedure had to treat all contracts alike, regardless of whether they were done by investors with long or short positions. After considering the particular circumstances of this case, the Settlement Committee determined that the weighted average price of Links shares on 14th, 15th and 16th August 2000 would be the most appropriate fair settlement price. Various alternatives for dealing with the outstanding transactions in Links shares have been suggested. SGX has considered these proposals, and found them no better or more equitable than SGX's decision. MAS concurs with SGX. For instance, one suggestion was to allow those sellers who hold Links shares to settle by delivery instead of cash, and apply the fair settlement procedure only to short sellers. However, under this alternative, CDP would not be able to treat all buyers equally. The CDP acts as the central counterparty to both sellers and buyers in all market trades. If a seller elects to deliver Links shares under this proposal, CDP would have to deliver those shares to the buyers who contracted to buy those same shares. On the other hand, if a buyer has contracted to buy Links shares from a short seller, the buyer would have to contend with cash settlement at the fair settlement price, even if he may have preferred receiving Links shares in settlement. Another proposal was to lift the trading suspension on Links temporarily so that investors could unwind any outstanding positions they may hold in Links shares. Proponents of this alternative point to SGX's reinstatement of trading in Malaysian stocks on CLOB International for two weeks after the initial trading suspension, which allowed investors to square their positions before trading on CLOB International was ceased. The current situation is different. In the CLOB International case, the trading of Malaysian stocks continued on the KLSE and there was no suspicion of a false market in those stocks. But in the Links case, the company's shares had been cornered, and there could have been no assurance of a fair and orderly market in those shares if trading had been resumed. The Commercial Affairs Department is currently investigating whether criminal offences had been committed in relation to trading in Links shares. If any of the persons under investigation is convicted, he will be liable to pay compensation to those aggrieved investors in Links who traded with him. The affected investors can seek such legal recourse any time within six years of an offence. This criminal prosecution regime will be complemented by a civil penalty and civil claim regime when the proposed Securities and Futures Act (SFA) comes into force. MAS can already institute an action for civil penalties in relation to insider trading. This will be extended under the new Act to other forms of market misconduct such as market rigging, the employment of fraud or deceit in trading, and failure to make continuous disclosure of material information. Further, the offender will be liable for civil damages to investors who suffer losses as a result of the market abuse. Instead of having to institute their own legal action, aggrieved investors can file within six years of the offence, claims for compensation with the Court on the strength of criminal convictions or civil penalties imposed by MAS. Under the new regime, MAS will also have enhanced enforcement powers in investigating suspected offences. Investors should analyse information and understand the fundamentals before they invest. Investors who intend to trade heavily in a counter which has doubled or tripled in price within a short period of time for no apparent reason, should recognise the risks involved and consider whether it is within their means and risk appetite to do so. Market intermediaries who extended credit to such investors must be prepared for the consequences if the counter is suspended and later declared cornered.

Sir, I would like to ask the DPM whether the new Securities and Futures Act will be made retroactive in the Links case. In other words, will the civil penalties be made retroactive in the Links case?

Mr Speaker, Sir, the answer is somewhere in the new Bill [indicating]. He will get a copy later after the First Reading. I think it depends on the date on which the original criminal penalties are imposed and on the date on which the conviction takes place, if there is a conviction. And if that is after the Act is enacted, then the civil penalty can follow from there. But I am just speaking from first principles.

asked the Prime Minister whether the Government has any target for an optimum amount of reserves and, if so, has it achieved the optimum.

Mr Speaker, Sir, this question has been asked several times in the past, but let me explain again the Government's policy on reserves. It is generally accepted internationally that countries should have foreign hard currency reserves of between three to six months of imports. Depending on a country's degree of economic self-sufficiency, reserves at these levels should be sufficient to support a temporary dislocation in the country's economy. In the case of Singapore, with its high dependency on imports, our level of reserves should clearly be in the upper bound of the three to six months' range and more, if possible. Our current official foreign reserves of around US$75 billion is equivalent to about seven months of imports. However, as a country without natural resources, our aim should be to accumulate, over time, as much reserves as we can afford to do so without over-taxing our people and without denying ourselves the expenditures necessary for economic growth. Over the years, Mr Chiam will have noted, Government has lowered personal, corporate and property taxes substantially in order to stimulate growth. At the same time, the Government has spent many billions of dollars to build up world class infrastructures in health, education, housing and transportation. I should also point out that our reserves cannot be allowed to remain static. It must increase in line with our GDP growth. As our population grows and our standard of living increases with economic growth, so will our imports grow.

Sir, can the Minister tell us whether, other than the three to six months of imports, there are any other reasons for having such high surpluses?

Other reasons have already been said in the past. The Senior Minister had said, when asked questions about the assets managed by GIC, that Singapore needs large reserves to defend our currency against speculative attacks.

Sir, are there other reasons than defending our currency against speculative attacks?

I do not know specifically what he is asking. I think it is good to have large reserves anyway.

Sir, we have heard that the reserves have been used for upgrading of HDB flats and because of the downturn, there were not enough reserves, the upgrading of HDB flats was held back. Are these some of the reasons?

I am afraid Mr Chiam is mistaken. The upgrading programme was funded from surpluses. And when the surplus moves up and down, the programme will be adjusted accordingly.

Are reserves not actually from the surpluses that we have?

Part of it, yes, of course, those which we have not spent. When we have surpluses beyond what we need, during times of good economic growth, this will be added to our reserves for a rainy day.

Therefore, the surpluses and reserves are tied. They are the same, are they not? If you have got less surpluses, that means you have got less to put into the reserves?

Budget surpluses only account for part of it. Our land sales are also transferred to reserves. That is the other large component.

Would the Minister for Finance clarify the Government's position on the reserves? Is the Government saying that no matter under what circumstances, it will never touch the reserves, or would it, under certain circumstances, dig into the reserves? If so, what would be the circumstances?

The circumstances would probably be what we are facing now. The reserves would be available for use if there should be a major economic dislocation in the world affecting us. The size of that is not something we can pre-determine but it is a bulwark which we can fall back on. I can assure the Member that it is not the intention to lock up our reserves permanently but it should be used with discretion and care.

Sir, if I am not mistaken, our reserve is in S$139 billion now. Is this not in excess of six months' imports?

I do not know where you get such a figure.

It was published in the papers.

Who publishes it? Singapore dollars probably. Mr Chiam See Tong: Yes, Singapore dollars.

I was talking about US$75 billion. This is probably equivalent to your figure in Singapore dollars.

Mr Chiam, would you like to ask your next Question?

Can I ask one more question?

All right.

Sir, assuming that we exceed seven months' imports, do we still continue to collect money to increase the reserves?

I thought I had answered that question. I said that we should accumulate as much as we can afford above the seven months, because of our great dependency on imports. We have no natural resources whatsoever. If there should be a prolonged downturn, then I think every cent we put aside would become very useful. There is no limit. We are talking about putting aside as much as we can without affecting our ability to finance our needs and without taxing the people unnecessarily.

Can I clarify with the Minister that, in fact, seven months' imports is only a guideline, and there is no limit to collections for our reserves?

I have said that several times. I do not know why he needs elaboration.

asked the Prime Minister for the period from 1997 to the present date, (a) how many foreign consultants have the Government and/or statutory boards consulted; and (b) what were the fees paid to them.

Mr Speaker, Sir, the Government is constantly grappling with new, complex issues in a rapidly changing environment. Ministries and statutory boards engage external consultants when they lack internal expertise and experience in these new issues, or when an external view will be helpful. External consultants can bring knowledge of best practices from all over the world. In some cases, such as the liberalisation of the telecommunications and power industries, external consultants have acquired considerable proprietary expert knowledge, gained from having worked on similar projects in other countries. They can therefore provide valuable inputs to Government agencies formulating policies to meet our needs and conditions. However, the Government does not track how many external consultants Ministries or statutory boards engage, or how many of these consultants are foreign. Government agencies make no distinction between local or foreign consultants. Consultancy contracts are awarded to the vendor who is best qualified to do the job and offers the best value for money, usually through an open tender. Consulting firms typically work in teams which include both foreigners and Singaporeans, based on their individual competencies and what is needed to deliver the job.

Sir, the key part of my Question has not been answered.

Mr Speaker, Sir, since we do not track all of the individual contracts for consultants, I do not have a total tally.

Does the Government have the same problem as the recent problem in Thailand where the Ministers over there objected to the high fees to be paid to a foreign consultant there?

Mr Speaker, Sir, I am not sure whether in Thailand the Minister or the MP complained. In Singapore, when we engage consultants or when we spend any Government money, it is a very careful decision. There are tender procedures which have to be followed. We must satisfy ourselves that this is money spent on a good purpose which is worthwhile doing and furthermore, that the price is reasonable. There are procedures for approving all these Government expenditures. If it is going to be very large or likely to be contentious, the Cabinet is aware of it, and there have not been cases where the Cabinet has argued over whether it is worth spending the money.

Can the Minister tell us whether or not they have paid consultants up to $1.5 million at a time?

I do not have an off-hand answer, but I would not be surprised if we have had consultancy projects which are worth more than that. For example, when we first designed the MRT system, we engaged several sets of consultants and I imagine we must have paid them several million dollars. Column 2072;

asked the Deputy Prime Minister, in view of recent changes to the Banking Act and of consolidation within the banking sector, whether there are any restrictions on the use of banks' names and corporate signages on buildings for advertisement purposes.

Mr Speaker, Sir, up to now, MAS has not allowed banks to exercise naming rights to buildings, or display their corporate signages on buildings, unless they own at least 50% of the building. This is to minimise the risk of depositors misunderstanding that these buildings are assets of the bank, and will be available to meet claims should the bank encounter problems. MAS has reviewed this policy and decided that it is no longer necessary. The public should not associate the ownership of a building with a bank's financial strength. A bank's strength lies in the size and quality of its overall operations. Buildings are likely to constitute only a small percentage of a bank's total assets, especially in the case of foreign banks. Bank supervisors in most other countries also do not impose any such restriction. Banks are henceforth free to negotiate with owners of buildings for naming rights, and to seek approval from URA for displaying signages on buildings, just like any other business. They no longer need to consult MAS in either case.

asked the Minister for Health whether research on stem cells from human embryos has proceeded in Singapore and, if so, whether there has been due consideration of the moral and religious dimensions.

Mr Speaker, in Singapore, the practice of human embryology and in-vitro fertilization (IVF) is regulated under the "Guidelines on Human Embryology and the Practice of Reproductive Technologies in Singapore" issued by the Ministry of Health. All current embryonic stem cell research has been done in accordance with these guidelines and with internationally accepted guidelines. Ethical approval is required from the respective institutional ethics committees operating within the broad Ethical Policies and Guidelines set out by the Ministry of Health with the advice of the National Medical Ethics Committee. Researchers at the National University of Singapore, in collaboration with researchers in Australia and Israel, were able to develop 6 stem-cell lines which were derived from excess frozen embryos donated to medical research by couples who underwent IVF treatment. These excess embryos were donated voluntarily with the patients' signed informed consent. We are in the process of reviewing our embryonic stem cell research regulations. In November last year, the Bioethics Advisory Committee (BAC) was appointed by the Government to address the ethical, legal and social issues arising from research on human biology and behaviour and its applications. The BAC has been actively addressing and deliberating on the issue of human embryonic stem cell research. Among other things, it has received a report from an Inter-Ministry Committee set up to explore the ethical issues involved in cloning and stem cell research. The BAC also regularly consults with an International Panel of Experts. The BAC will finalise its views after consultations with the community, including the general public and interest groups, through dialogue sessions and forums as well as further international consultation. The BAC will submit its recommendations to the Life Sciences Ministerial Committee by the end of the year. Column 2074;

asked the Minister for Home Affairs if he will (i) give an assessment of the extent of the threat, if any, posed by religious or other extremist groups to our national security; and (ii) highlight the approach adopted by his Ministry to monitor the activities and influences of such groups.

Mr Speaker, the recent tragic events in America underscore the threat posed by terrorism. Singapore is an open society and must remain mindful of our vulnerabilities to ethnic, ideological and religious tensions and conflicts in our multi-racial and multi-religious society. Our national security and continued peaceful and harmonious way of life are exposed to threats from domestic as well as external forces. Members will recall that Singapore was the stage for terrorist actions by foreign elements in the Laju incident of 1974 and, more recently, the hijack of SQ 117 in 1991. While we have not found any domestic group to be involved in politically motivated violence, we are conscious of the possibility for local groups, even if only a minority, to be influenced or misled into participating in an agenda of violence purveyed by external extremist groups. The Internal Security Department and the Singapore Police Force monitor racial and religious extremism and other security threats closely. Appropriate action will be taken against any group that threatens national security or law and order. In an increasingly inter-connected world, the scourge of terrorism affects all civilised countries. Hence, the Internal Security Department and the Police Force have established channels of cooperation for exchange of information with various countries on security issues and intelligence.

asked the Minister for Home Affairs why is there a need for organisers of public rallies held in a public stadium to employ CISCO guards to be present at such rallies where there is no imminent danger of a breach of the peace.

Sir, Mr Chiam is probably referring to the condition for CISCO guards employed for the public rally the Singapore Democratic Party (SDP) held on 23rd September 2001. Sir, this condition is not new. Other organisers of mass public events have complied with it. Any event involving large crowds of people has the potential to lead to law and order problems. The safety of those attending is of paramount importance. Hence, it is a standard condition that Police imposes on the organiser of any event involving a large crowd of people to employ the necessary resources to maintain the orderly conduct of the event. This condition is imposed not only on events organised by all political parties but applies also to other mass events such as football matches and rock concerts. Sir, in approving the application by SDP, the Police had specified a minimum number of CISCO officers to be present. These officers have the necessary police powers to deal with any potential law and order problem. The number of officers required was determined after a ground recce Police conducted with the organisers. Sir, this is a professional matter which the Police is well equipped to handle.

Sir, can the Minister of State cite one example of a rally where there was law and order problem?

Sir, the purpose of having CISCO guards is to prevent law and order problems. The presence of CISCO guards, for example, will deter trouble-makers from coming to the stadium and, indeed if they are there, from creating trouble. I am sure Mr Chiam must know that political rallies do elicit emotional responses. You get all kinds of people who are attending. You get speakers making speeches which are probably critical and attacking policies and so forth. I think we should be on the safe side. Mr Chiam is a veteran of many political campaigns and of many general elections. I am sure he has seen political rallies where there have been such high emotions. Indeed in past elections, there have been rallies, particularly of Opposition parties, that attracted thousands of people, and some people have been unruly. So I think we should be on the safe side.

Sir, I attended many rallies but I think there should be a distinction between election rallies where the fever runs very high and non-election rallies. These days, it is difficult even to get interest in such rallies. So how can there be law and order problems?

Mr Chiam should not complain that it is difficult in getting people to be interested. I think it all depends on the party that is holding the rally. If they have interesting speakers and they are able to hold the participants' interest, there could be a high interest. It is the intrinsic nature of political rallies. Like I have said, it is the nature of the speeches being made and the fact that the audience can be a mixed audience - some are supporting you, some are not. So I think it is better to be safe than sorry.

Sir, would the Police impose the same condition of requiring CISCO guards during elections? Secondly, why is the Police or the Government treating political parties the same as any other organisation? Basically, political parties hold rallies to disseminate certain information and to institute public debate. By imposing the condition of requiring the hiring of CISCO guards, does the Minister of State not think that it will restrict the ability of political parties to organise rallies, given the fact that it costs a lot of money to employ CISCO guards? Is this one way to restrict and curtail the ability of the Opposition in having activities like rallies and dissemination of information?

Sir, first of all, the general election (GE) is a national event. So political rallies during GE do not require the hiring of CISCO guards. The Police takes charge of that. The other point is that Police takes a professional attitude towards all these events, whether it is organised by any political party or by any other organisers where there is potential law and order problem. It is a professional judgment that must be made because, ultimately, law and order must be maintained. Like I have said, in particular, for political rallies, given the nature of the topics being raised and the mixed crowd involved, Police professional judgment is that there is potential for law and order problem and hence the need for CISCO guards. Like I have said, this is not just for political rallies but also for other events as well. For the Singapore International Marathon and the recent football international match between Singapore and Liverpool, Police made the same judgment. This is not to say that we are trying to prevent the Opposition from reaching out to their supporters and Singaporeans, because there are many other ways of doing it. And indeed Opposition parties are doing it through various means - Internet, publications and so forth. To require political parties, in this context, the SDP, to pay about $3,400 for 13 CISCO guards, which works out to about $65 per hour per officer is, I think, not asking too much. I am sure any organiser will want to avert any problems, because that will also reflect on the organisation.

asked the Minister for Communications and Information Technology (a) why is the Bukit Panjang Light Rail Transit still encountering frequent service disruptions and accidents despite 20 months of rectification works since its opening; and (b) what are the measures taken to ensure the safety and convenience of LRT commuters.

Mr Speaker, Sir, since the launch of the Bukit Panjang LRT system on 6th November 1999, improvements have been made to the hardware and software of the system to improve service availability. The operator, SLRT, has also continued to improve its operations and maintenance procedures and processes over this period. The number of service disruptions lasting more than 20 minutes reduced sharply from 35 in the first eight months of operation to 7 in the following six months. This year, up to now, 6 such service disruptions have occurred; unfortunately, the last 2 occurred within seven days of each other, on 29th August and 6th September. The second disruption was consequential to the first. The system has, on the whole, stabilised, and the service availability target of 99.7%, which translates to service disruption of not more than 4 minutes over a 20-hour daily operation, has been achieved on most days over the past 12 months. LTA has completed its investigations into the cause of the service disruption on 29th August and 6th September. The disruption on 29th August was due to a minor technical problem. A permanent solution to prevent a recurrence has been installed. However, LTA is of the opinion that the disruption on 6th September was a result of shortcomings in the repair work carried out by the operator to rectify damage sustained during the 29th August incident. LTA intends to impose a penalty on SLRT for the 6th September service disruption. . The frequency of the recent service disruptions is not acceptable. The LRT operator is required to meet the standards for service quality, safety, maintenance and operation prescribed by LTA in its Licence and Operating Agreement. Penalties are imposed when the operator fails to meet a standard. I have asked LTA to review and tighten the penalty framework in order to spur the operator to devise the necessary preventive and corrective maintenance regimes to avoid severe delays. I understand that SLRT is now working with the system supplier to see how its operation and maintenance regimes can be further improved.

Sir, may I ask the Minister of State what are the world-class performance standards which the Ministry has set for the LRT? Also, since the Ministry is not happy with the LRT's performance, what kind of deadline has been given to the SLRT to improve the system? Will the Ministry also consider setting up a committee to conduct a safety audit of the system? What is the redress available to LRT commuters who have suffered much inconvenience and financial loss? Many residents in Bukit Panjang have to take taxis to work as a result of the disruptions.

Sir, as I have explained earlier, the requirement for the service availability to attain 99.7% is a very high standard. So this is of world-class standards. The safety and reliability aspects are all benchmarked against world standards. As for the time-frame, LRT has been improving since it begins operation. It is not unusual for train operations to experience problems initially, even for MRT. When it first started, there were problems. And these problems will get less and less frequent. Even today, MRT also encounters problems from time to time. As for the audit, as a first step, we have SLRT to work with the system supplier and, if need be, we will bring in a consultant to do an audit. I do not know whether Mr Chiam will be happy about that. But, if necessary, we will do it. As for redress, SLRT has provided free bus services during the disruptions. So if there is any claim from residents, who were affected by the service disruptions, they can claim back from the operator.

Sir, may I ask the Minister of State whether the Ministry will also consider asking SLRT to install railings on the track. Because when the train stops, the commuters will have to walk along the track to the respective stations, and it is quite dangerous to walk along the track. So presently it is without railings on both sides.

I will ask the operator to consider that.

Can I ask the Minister of State, when he claims that the LRT is of world-class standards, but the Member for Sembawang is complaining that there are so many frequent breakdowns, what world-class standard are we talking about? Secondly, can I find out from the Minister of State, besides the penalty that he is imposing, whether it would be better if we allow some competition by other operators to the system, like allowing supplementary bus services, Scheme B buses, to run to meet with such contingency?

Sir, obviously, the Member has not listened to the answer that I have given earlier. I told him that the results of the last 20 months' operation have shown quick improvement. We have attained the target of 99.7% service reliability. If this is not world-class standard, what is it? Sir, as far as competition is concerned, this issue has been raised in the House and the Minister has said that we are reviewing it and we will make an announcement in due course.

Mr Speaker, Sir, I would like to confirm what I have heard. Did the Minister of State mention that commuters who were affected by the disruptions are free to go to SLRT for monetary claims right now? Can I confirm that?

Sir, I am talking about the fares that they have incurred. Yes, if they have paid, for instance, a dollar or 60 cents, they could approach SLRT.

Sir, I believe the question asked was whether they could claim the difference, the taxi fare that they have incurred. So I think it is better that it be clarified because it may be assumed that they can claim the additional fare that they incurred on taxi.

The fares I am talking about are the fares they have paid to take the SLRT.

asked the Minister for Communications and Information Technology if his Ministry will work towards the merger of all public bus and MRT/LRT companies to gain economies of scale and provide commuters with a more integrated and cost efficient public transport system.

Mr Speaker, Sir, as our public transport operators are publicly listed companies, they make their own commercial decisions when it comes to issues of merger. However, while the merger of all public transport operators (PTOs) may provide greater economies of scale, it is in the interest of the general public for sufficient competition to exist in the industry. Competition ensures that the PTOs will strive to improve their service and provide better value for money to commuters. The proposed merger of SMRT and TIBS will result in a multi-modal transport operator, while SBS will be the second multi-modal operator next year when it commissions and operates the North East Line. These two multi-modal operators will be well positioned to provide integrated and seamless travel to commuters.

Can I ask the Minister whether he can consider it a competition when commuters do not have a choice, whether they are being served by SBS or TIBS? They have to live with whichever public transport company runs the route along where they live or want to use?

In our case, by competition, we mean to provide a benchmark for comparison. So if you have only one operator, like what the Member is proposing, then really we do not have comparisons as to the efficiency and service levels, whether they have put in the best, and so on. But if we have two, then we can clearly compare, and I think that is a good thing to have.

Mr Speaker, can I ask the Minister of State, when he is talking about world-class transport, are we comparing internally or are we comparing with the rest of the world to be the best in the world?

When we say "world class", of course, we compare ourselves with the best in the world. But how do you achieve that? If we have comparison between two operators in Singapore, that also gives us assurance that they are doing the right thing.

Would the Minister consider that Singapore being very small and if there is one company sharing resources, just like the banks are being encouraged to merge and share resources and skills, we will have an even better public transport system? After all, many of the big cities of the world do not have too many bus companies or transport companies operating in those cities.

Sir, I agree with the Member that there is economy of scale if you have got a big operation. But there are also the disadvantages of the operator being the only operator, ie, being complacent and so on. So I think our approach of managed competition is a correct one. I would not support a situation where you have numerous operators and that would also not be good.

The Minister of State said that we need some competition in order to set benchmark, and he mentioned two. I wonder why two competitors will be considered as a benchmark. Why not three or four? And he mentioned about managed competition. Would he explain to us what does he mean by "managed competition"?

To have this comparison, you must have at least two. Whether three or four, depending on the size of the market again, if you have too many, you may have the problem that Mr Thomas mentioned about, ie, lack of economy of scale. As I have said, we are reviewing it and we will make a decision in due course. As to why it is called managed competition as opposed to free competition, it is because we do not allow players to just freely come in. So that is the meaning of "managed competition".

One last question. Mr Thomas.

Mr Speaker, Sir, I just want the Minister to clarify, because I do not understand. If it is managed competition with two, why can it not be managed competition with one? Since we always say that we are short of players, we have a concentration of players to give even better services.

Sir, may I ask the Member: how do you compete with only one player?

asked the Minister for Health (a) whether the use of handphones will pose any health risks to phone users; (b) how are handphones tested to ensure they are safe for use in Singapore; and (c) will boosting handphone stations and antennae pose health risks to residents staying near such facilities.

Mr Speaker, Sir, the Health Sciences Authority (HSA) had issued comprehensive Health and Safety Guidelines on Electromagnetic Fields (EMF) on 16th August 2001. These guidelines are based on the latest status of the World Health Organisation (WHO) EMF Project which is the international benchmark for research in this area. While noting that research is in progress, international scientific committees that have evaluated the current body of evidence, have reached the same conclusion: that there are no established health effects from EMF exposures below these internationally set guideline limits. In answer to question (b), the Infocomm Development Authority of Singapore (IDA) gives type approval of mobile phones. Part of this type approval includes radiation safety standards and the requirement for manufacturers to provide their Specific Absorption Rate (SAR) value for mobile phones. So these radiation safety standards are based on international safety standards. In answer to question (c), mobile cellular base stations are commonly installed in both indoor and outdoor locations. They function to provide mobile cellular subscribers with the required mobile service coverage. When the mobile operators install more base stations to improve mobile cellular services coverage for their subscribers, this actually reduces the transmitting power by which the mobile phones and base stations operate at. So the bottomline is the more base stations we have, the lower the power, and therefore the safer it is.

May I ask the Minister: why is the HSA so sure that handphone radiation will not cause cancer when WHO is actually still studying the issue?

The position is not different from WHO. We are saying that based on current studies, we follow WHO's standards. And WHO's standards say that while they are still studying the long-term effects, it is safe to use the handphone.

May I ask the Minister on his view on one recent report in the UK. It was reported on 21st September 2001 by Dr Alan Preece, Head of Biophysics at Bristol Oncology Centre, that mobile phones may cause damage to health by speeding up the brain's response times. What is his view on that?

I will get the report and ask my officers to study it.

asked the Minister for Manpower if he will, in line with the national objective of promoting lifelong learning, allow Central Provident Fund account holders to use their balances to pay for degree courses at the Singapore Open University and for distance learning courses from reputable overseas universities.

Sir, several Members of Parliament have in the past raised the issue of allowing CPF for part-time courses, including those offered by the Singapore Open University and distance learning degree courses. I understand the desire of individuals who wish to have the flexibility to use their CPF savings for part-time courses. Since the special exception was made in 1989 to allow CPF for local full-time tertiary education, we have received many requests to liberalise the CPF Education Scheme to cover overseas education, part-time courses, distance learning, and so on. The CPF is meant for a member's retirement, housing and medical needs. We have allowed CPF to be used for local full-time tertiary education as a concession to help low income families support their children through local full-time tertiary education. 2.00 pm

Order. End of Question time. [Pursuant to Standing Order No. 21(3), Written Answers to Question Nos. 18-19 and 21-23 on the Order Paper are reproduced in the section, "Oral Answers To Questions Not Reached" (Cols. 2109-2114). Question No. 20 has been postponed to the next sitting of Parliament.]

"relating to the regulation of activities and institutions in the securities and futures industry, including leveraged foreign exchange trading, and for matters connected therewith, to repeal the Futures Trading Act (Chapter 116 of the 1996 Revised Edition) and the Securities Industry Act (Chapter 289 of the 1985 Revised Edition) and to make consequential amendments to certain other written laws", presented by the Deputy Prime Minister (BG Lee Hsien Loong); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to regulate financial advisers and their representatives, and to repeal the Insurance Intermediaries Act (Chapter 142A of the 2000 Revised Edition)", presented by BG Lee Hsien Loong; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Insurance Act (Chapter 142 of the 2000 Revised Edition) and to make related amendments to the Societies Act (Chapter 311 of the 1985 Revised Edition)", presented by BG Lee Hsien Loong; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to make provision for the enforcement of contractual terms by third parties", presented by the Minister for Law (Prof. S. Jayakumar); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to provide for the conduct of arbitration and to repeal the Arbitration Act (Chapter 10 of the 1985 Revised Edition) and also to make consequential amendments to the Bankruptcy Act (Chapter 20 of the 2000 Revised Edition) and the Limitation Act (Chapter 163 of the 1996 Revised Edition)", presented by Prof. S. Jayakumar; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the International Arbitration Act (Chapter 143A of the 1995 Revised Edition)", presented by Prof. S. Jayakumar; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Legal Profession Act (Chapter 161 of the 2000 Revised Edition)", presented by Prof. S. Jayakumar; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to provide for membership of certain local and foreign companies in the Singapore Business Federation and for certain matters relating to the management and operation thereof, and to make a related amendment to the Small Claims Tribunals Act (Chapter 308 of the 1998 Revised Edition)", presented by the Minister for Trade and Industry (BG George Yong-Boon Yeo); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to establish a scheme known as the CONNECT Plan to encourage long service by teachers under the control or management of the Government and the CONNECT Fund for the purpose of that Plan and for matters connected therewith", recommendation of President signified; presented by the Minister for Education (RAdm Teo Chee Hean); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." At this year's National Day Rally, the Prime Minister announced that the Ministry of Health will introduce Eldershield, an affordable severe disability insurance scheme to provide insurance coverage to elderly Singaporeans who require long-term care. The details of the Eldershield insurance scheme was released by the Ministry of Health on 24th August this year. The Ministry of Health had decided to allow CPF members to use their Medisave savings for the Eldershield premiums. It had also designed the Eldershield insurance scheme to operate as an opt-out scheme to attain as wide a coverage as possible. To provide for the use of Medisave for Eldershield premium, the CPF Act has to be amended. Sir, currently, the CPF Act allows the withdrawal of Medisave savings to pay for the premiums of medical insurance schemes such as Medishield, NTUC Income's Incomeshield and AIA's Healthshield. Such schemes are defined as insurance to reimburse the CPF members' hospitalisation expenses. The Eldershield is a severe disability insurance scheme which provides coverage for long-term care, including home care and does not cover hospitalisation expenses. Hence, the CPF (Amendment) Bill before the House today introduces a new provision to allow CPF members to use their Medisave savings to pay for premiums of any healthcare insurance scheme approved by the Minister for Health. For those who do not have enough Medisave savings, they can use the Medisave savings of their spouse, children, parents or grandchildren. This will give CPF members greater flexibility in using their Medisave savings to pay for approved healthcare insurance, including the Eldershield. Sir, this is in line with the Ministry of Health's objective of expanding the role of healthcare insurance to meet the healthcare cost of Singaporeans. Sir, the Eldershield will operate as an opt-out scheme. The Ministry of Health (MOH) has announced that the opt-out age will be set at age 40 and the maximum entry age will be set at 70. A special one-off exercise will be conducted for Singaporeans aged between 40 and 69 to decide whether to opt-out of Eldershield. MOH has also announced that to encourage greater private sector participation in the severe disability insurance market, they will tender out Eldershield to private insurers. To enable private insurers to operate opt-out insurance schemes, the CPF Board will need to provide these insurers with certain information. Hence, the Bill also seeks to amend the CPF Act to allow the CPF Board to release relevant information to an insurer administering or operating an approved insurance scheme, without the need for authorisation by the Medisave account holder. In the case of Eldershield, for example, MOH would require the CPF Board to pass information such as the names, addresses and gender of CPF members aged between 40 and 69, to the approved insurers to facilitate the running of the scheme. For those who did not opt out of Eldershield but have insufficient Medisave balance to pay for the premiums, the insurance companies have to know the premium shortfall so that they could request these CPF members to top up the outstanding balance by cash. Sir, CPF members may ask what are the safeguards and prevention of possible abuses of such information disclosure. I would like to reassure hon. Members that CPF account details would be safeguarded. For Eldershield, only the CPF member's name, address, gender and premium shortfall, if any, will be released to the insurer. Insurers will not have free access to CPF members' account details. For the vast majority of members who have enough Medisave to pay for their Eldershield premium, information on their Medisave account balance will not be released to the insurer. The insurer will know only when a CPF member does not have sufficient Medisave for the Eldershield premium to be deducted. This makes it convenient for CPF members, as they do not need to separately check whether they have sufficient Medisave for Eldershield premium. As Medisave savings can be used to pay for hospitalisation expenses and other approved insurance premium payments, releasing information on the member's Eldershield premium shortfall is not indicative of the savings that he has accumulated over the years in his Medisave account. Sir, the proposed amendments also stipulate that the insurer may not use the information for any other purpose other than for those connected with the administration of the scheme. The insurance companies will not be allowed to divulge such confidential information to their insurance agents or other parties for any other purposes. An insurer who misuses or wrongfully communicates confidential information will be guilty of an offence. Under the Statutory Bodies and Government Companies (Protection of Secrecy) Act, the insurer shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 12 months, or to both, and under the Official Secrets Act, the insurer shall be liable on conviction to a fine not exceeding $2,000 and to imprisonment for a term not exceeding two years. I would like to reiterate that only information that is essential for the administration of the approved healthcare insurance will be passed to approved private insurance companies, and that the approved insurance companies will be required to use the information strictly for the purpose of enrolling Singaporeans in the approved healthcare insurance schemes. Sir, I beg to move. Question proposed.

Sir, this is a straightforward Bill and the provisions are very good. I would like to support it. But I have a few questions for the Minister. How would the CPF Board counsel those CPF members who want to opt out of the Eldershield scheme, considering that this is a good scheme for them? On the supply and use of information on any member that the insurer requires, I welcome the Minister's assurance that the Government will take very seriously any misuse of information. But it is very important to every account holder that the information about him is not divulged to third parties. So I would like to ask the Minister how would the Government ensure that such information on the account holders is not divulged to third parties. Are there plans by the Government to widen further the use of CPF savings by account holders to buy insurance policies and any other schemes that would help workers and benefit their elderly parents to make full use of their CPF savings? Would the Minister inform the House of the number of active CPF account holders who use their CPF savings for monthly premiums for insurance schemes other than the schemes approved or administered by the Ministry of Health and related agencies? Would the CPF Board advise both the account holders as well as the insurers, if the Board has reasons to believe that, in some other insurance scheme, the CPF member may not have the means to pay, using his CPF balance? Sir, it is very important to ensure that CPF members do not overuse their CPF balances which could result in their not having the full benefits of the insurance schemes that they have signed up for, if they have to terminate the service only on account of their inability to pay the premium.

Sir, when I read the Bill, my concern was the loss of confidentiality of the CPF member in regard to his CPF account. I have just heard the Minister say that there are good preventive measures against insurance companies abusing their ability to have access to CPF accounts. But from what I read here, the insurance companies do not only have access to the main account of the CPF member but also including information relating to the amount standing to his credit in his Medisave account. In other words, they not only have access to the Medisave account, but also to the other accounts. So maybe the Minister could clarify on that point. I wonder whether the Minister has thought of any other schemes whereby CPF members could approach the insurance company and it could tell them whether or not they qualify, rather than for the insurance company to be given a blanket right to look into CPF accounts. Sir, I know the CPF Board is very strict on this point. Even we, as lawyers, have no access to our clients' CPF accounts. If we want to know what is in our CPF accounts, sometimes when we need to know that, we have to get the member's written consent or authority before we can have a look at his account. So perhaps the Minister could assure the House that this access to CPF accounts is definitely not likely to be abused. I have also heard the Minister saying that insurance companies wanting to participate in this scheme are subject to tenders. I hope that the Government shall be fair in approving insurance companies which wish to run this scheme, and not only to give a few select preferred insurance companies to have the monopoly of the business.

Mr Speaker, Sir, I thank the Members who support the Bill. I will now answer the questions raised by both Mr Hawazi and Mr Chiam. Mr Hawazi asked whether the CPF Board will help to counsel members so that they do not opt out of the scheme. Certainly, when the Ministry of Health launches this one-off exercise to ask those aged above 40 and up to age 69 whether they are going to opt out or not, we will participate in the process of educating and informing our CPF members. We will urge them not to opt out recklessly. This is a good insurance scheme. Eldershield will help to provide for their old age. About 8% of the elderly population will be in need of such assistance. So it will be good for these people. It will be good for us. We do not know when we may be struck down by a disease or an ailment that requires long-term care. So it is a very affordable insurance scheme and members should not just opt out without making a careful consideration. Mr Hawazi also asked whether the CPF Board would ensure that the information would not be used for other purposes, just like Mr Chiam also raised the same point on confidentiality. In my Second Reading speech, I have addressed this point. The Board is very concerned and well aware of its responsibility as trustees to the CPF members for their CPF savings. We do not unnecessarily reveal any information concerning members' accounts. With regard to access to members' particulars provided for in this Amendment Bill, we are only limiting it to the Medisave account, because it is related to the use of Medisave to pay for the premiums for Eldershield. So we will not allow the insurance companies to have direct access to a member's CPF account in toto. For instance, the insurance companies will not have access to the balance in his Ordinary account. Also, to further safeguard confidentiality, we will not be conveying to the insurance company the member's balance position in his Medisave. As I have explained in my Second Reading Bill, our intention is to expedite the operation of this Eldershield insurance scheme to make it easy. If we have too many requirements, the cost of managing the insurance will go up, and premiums will, therefore, have to go up. We want to make it affordable by designing it as a simple, workable and pragmatic insurance scheme. What we are going to do is only to inform the insurance company when the member's account balance falls below what is required for him to pay the premium. So, knowing the anniversary date of his Eldershield policy, that we will have to deduct a certain amount of money for the Eldershield premium, and knowing from our records that he does not have a sufficient balance in his account, we will then inform the insurance company that so-and-so does not have enough to pay the full premium and that it will have to collect from him, say, "X" dollars in cash, to make up for the premium so that the policy does not lapse. In that sense, we are not revealing all the information concerning the Medisave account to the insurance company. As I said in my Second Reading speech, the fact that he may not have a sufficient balance in his Medisave account does not reflect on his financial position at all, because he may well have somebody in the family who fell ill recently and was hospitalised and his Medisave account was used to pay those hospitalisation expenses. If he continues to have a job, he continues to be able to service his mortgage, he has no financial difficulty at all. That is, in fact, a very poor reflection of the state of his financial affairs. So members should not worry that this Eldershield insurance will result in the confidentiality of their CPF account details being breached. Mr Hawazi also asked whether we intend to widen the use of CPF savings for the purchase of insurance policies. Today, under the CPF Investment Scheme, we do allow members to use their CPF savings, both in their Ordinary and in their Special accounts, to purchase investment-linked products. These are insurance policies with an investment component. I do not think we have allowed the use of CPF savings to purchase an ordinary life insurance policy without an investment component. Are there plans to widen the use of CPF savings for insurance policies? Under this Amendment Bill, I would like to point out to Members that this is only pertaining to health insurance. Hon. Members will notice that clause 3 of the Bill amends section 77(1)(ja) of the CPF Act, and that the section refers to "the withdrawal of money from the Medisave account of a member for payment of premiums payable by the member or his dependant who is assured under a medical insurance scheme approved by the Minister charged with the responsibility for health." So it is strictly a health-related insurance scheme. And the answer then would be, yes, I believe the Ministry of Health is looking at other health insurance schemes which will meet their requirements, and we would be encouraging CPF members to consider alternative forms of health insurance. Mr Hawazi asked for the number of CPF members who have used their CPF savings to purchase insurance schemes. I am afraid I do not have the numbers with me, but if the hon. Member has an interest in that, he can either file a Question or I can convey the answer to him. Mr Hawazi also asked whether the CPF Board would advise CPF members and insurers if the Board has reason to believe that a member is buying a policy that may well exceed his means to service. This is, of course, an area of some concern to us, especially in investment-linked products. That is why last year we stopped the use of CPF savings for the purchase of annual premium investment-linked products, because there is a chance that the member may not be able to service a future premium and the policy will lapse, and he stands to lose quite a large sum of his CPF savings. We will continue to advise and to educate CPF members on making prudent decisions with regard to the use of their CPF savings. Finally, Mr Chiam urged that the Government should be fair in approving companies to be named as the insurers for the Eldershield insurance scheme. Let me assure Mr Chiam that the Government is always fair and always above-board in its choice of service providers, whether it is just for ordinary service or for a special scheme such as an Eldershield insurance premium. I understand that the Ministry of Health will invite insurance companies to submit their tenders to participate in the scheme, and the merits of each tender will be studied carefully, and only those that meet the requirements imposed by the Ministry of Health will be selected. We are looking at, potentially, up to four insurance companies to be selected to run the national scheme. I hope this will reassure Mr Chiam that we will continue, as always, to be fair and above-board.

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

Mr Speaker, Sir, I beg to move, That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury bills in Singapore, a revolving sum not exceeding twenty thousand million Singapore dollars (S$20,000,000,000). Sir, on 4th May 1999, Parliament resolved, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167), that the Minister for Finance be authorised to borrow, by the issue of Treasury bills in Singapore, a revolving sum not exceeding S$15 billion. This limit applies to the outstanding amount of Treasury bills. The demand for Treasury bills has grown rapidly in the past two years due to an expansion of banks' liabilities base. The outstanding amount of Treasury bills issued as at end-July 2001 amounted to S$14.6 billion. The banks' liabilities base is expected to continue to expand over the next few years, thus increasing their demand for Treasury bills as liquid assets. In addition, MAS' efforts to increase the issuance of Treasury bills to support capital market development have also contributed to the need to increase the borrowing limit for Treasury bills. It is proposed, therefore, that the current ceiling for borrowing by Treasury bills of S$15 billion, be raised by another S$5 billion to a total of S$20 billion. Parliament is requested to enable the Government to issue the Treasury bills up to a total amount not exceeding S$20 billion.

Question put, and agreed to. That this Parliament, in accordance with section 3(1) of the Local Treasury Bills Act (Chapter 167, 1988 Revised Edition), resolves that the Minister for Finance be authorised to borrow, by the issue of Treasury bills in Singapore, a revolving sum not exceeding twenty thousand million Singapore dollars (S$20,000,000,000).

Resolved, "That, at its rising today, Parliament do now adjourn to a date to be fixed." - [Mr Wong Kan Seng].

Mr Speaker, Sir, I beg to move, That Parliament do now adjourn. Question proposed.

2.31 pm

(In Mandarin): An article appearing on the 20th of August issue of the Yazhou Zhoukan (Chinese version of Asiaweek) ended with this conclusion: "The fast and continuing growth of China's economy will change the economic structure of Asia, and end the era dominated by the four dragons and conclude the leadership roles played by America and Japan in directing the economy of Asia." In other words, China has now become the new leader in the economic fast train in Asia and will affect the growth and prosperity of the region in definite ways. In view of these trends, our top leadership, including Ministers, senior civil servants and business leaders had led many delegations to China to explore new opportunities. The Minister for Trade and Industry, BG George Yeo also made a call to Singaporeans to hurry up and join the ride on this fast-tracked economic train to China. This call has generated a lot of discussions. But to take the ride, you must first buy the tickets for the train. Can you secure the tickets? Can you afford it? From where could you purchase the tickets? Where is the embarkation point and where is the destination point? If we look at the small and medium enterprises, do we have the economic robustness and potential to be aggressive players in the Chinese market? As the Chinese market is dynamic and complex, are our Singaporeans savvy enough to identify the way to go? Even if they have the guts to give China a try, many do not know how to adopt the next step. We all know that this kind of venture into China is a very difficult and arduous one and many give up half-way. Although our forefathers migrated to Singapore from China, the generations after them have changed. The new generation of Singaporeans are not familiar with the background, culture, history, law and systems of China. At the operation level, China first entered a business relationship on the basis of human sentiments, followed by reason, then secured by laws. Singaporeans are the exact opposite. Recently, a young reader was reported in the newspaper to have openly expressed contempt of China and denied his own cultural identity. This shows that a segment of our young people are short-sighted in perspective. This incident led to another question which was subsequently raised by many: Will the following generations of Chinese in Singapore become culturally "rootless" in their total acceptance of western influence? If this might have been the result of coping with political, economic and ethnic forces beyond the control of the government and any racial group, then how can this destiny help us now to identify a group of entrepreneurs willing and daring to break into the China market? We have been promoting bilingualism in Singapore. Yet, our standard of Chinese is way below that in Malaysia, Hong Kong and Taiwan. This is evident from the poor performance of our students in the inter-varsity debates and essay-writing contests held recently. Under our present education system, Chinese is only a second language and it has not been given adequate emphasis. Our students study Chinese just to pass the examination, and once the examination is over, they simply discard the little Chinese that they have studied. As a result, our students are not able to read newspapers and magazines and it explains why the standard of Chinese among our students is low. Even though language is not an absolute barrier against investment opportunity in China, it is nevertheless an important bridging factor in relationship- building. Because Chinese is one of the five official languages of the United Nations, it is incumbent on us to make it a policy to improve our standard and ability to speak Chinese internationally so that we can compete internationally. For example, when Deputy Prime Minister BG Lee went to China, he was able to cite Chinese poems from the Tang Dynasty, and it left an excellent impression on the officials and people of China. We should be able to establish better understanding and communication with the Chinese using the Chinese language which is our mother tongue. If we are clear about this need, is it time now to revitalise our search for cultural roots, seriously review and reform our bilingual strategy, and have a comprehensive overhaul of our bilingual policy? There is a famous Chinese saying to the effect that for a workman to do his work well, he must first sharpen his tools. In the last few years, the political, business and worker sectors had worked in partnership to search for new economic measures. I would like to propose five measures, which are not strictly economic in nature, which in the short-run are immediately implementable, and in the long-run, form the foundation prerequisites in coping with the continuing Chinese economic challenge. I would urge our Ministers and senior civil servants to speak in Mandarin when interviewed by the Chinese media, particularly when it is to be telecast over the Chinese-language television channels. All along, the promotion of Mandarin in the Speak Mandarin campaigns has been focused on the private sector. It is time for the Ministers to take the lead through various activities such as singing, speaking and other activities. I notice that in this House, the vast majority of speeches are made in English. Outside this House, we are talking about bilingualism. Why is it that inside this House, we are not practising bilingualism? We must have people on the top take the lead in practising bilingualism in this House. As the Chinese saying goes, "if people in power champion a cause, there will be many followers indeed." I am not playing up Chinese chauvinism by stressing the importance of the Chinese language. I am English-educated. But since young, I have not abandoned my interest in reading and studying Chinese and have never found it to have in any way diluted my sense of being a multi-cultural Singaporean, or my relationship with the other ethnic groups. When you are facing the economic reality of a huge market of 1.3 billion people in China, we have to come to grips with the destiny and work harder at the Chinese language. When addressing the gathering of World Chinese entrepreneurs in Nanjing recently, the Chinese Premier Zhu Rong Zi said, "To help develop the Chinese economy, we need professionals in all sectors, specialists who thoroughly understand the working of the international market, and who also understand the traditional culture of China." (Lianhe Zaobao, September 20). His pronouncements are worth our serious scrutiny and reflection. Secondly, I propose that we set up a professional translation bureau to provide batches of translators and interpreters equipped with the different language competence to assist the business community in successfully managing business discussions. I was told that many Singaporeans in China are incapable of reading Chinese documents and reports or taking notes in Chinese. Thirdly, I propose that we create a pro-Chinese economic strategy by starting first with our young persons. I hope the future generations of our students would be given more opportunities to take part in exchange programmes with foreign countries, including China. We must send students and teachers at all levels to visit China so that we should not be seen as being arrogant and harbouring the mindset of "we are better than you". I hope that in our Budget next year, we should have more funds allocated to enable more students and teachers to visit China. At the same time, I hope more resources can be poured into setting up Chinese-language Internet stations, to encourage those who are Internet users to also use the Chinese Internet stations to access the enormous virtual and real marketplace dominated by the Chinese language. Fourthly, we should form a special information resource department to enhance our understanding on doing business in China and assist Singapore businessmen overcome the initial anxiety in their venture into the Chinese market. Fifthly, we should compile case studies of earlier pioneers and investors in the Chinese market and hear their experiences and observations. As a Chinese saying goes, after we have done our homework, we are prepared and fear no consequences. By knowing the differences between China and ourselves, we are more able to win the battles. Upon knowing the differences, we have to learn the ways to manage them - this becomes a required lesson that must be learnt before anyone marches on to China. A few years ago, I wrote Stepping Out, stories of our pioneers who came from China to seek for their livelihood in Singapore. This time round, we should be talking about Going Back. Our pioneers once said, "By stepping out, we will find a livelihood. Today, we must say, "Let's go back and find new ways." When my brother learnt that I was moving this motion in Parliament, he wrote me a letter and urged me to share his experience with this House. He said that when he first went to mainland China in 1989, he came across many difficulties, experienced many setbacks, and witnessed a lot of irrational happenings. However, he insisted on doing things the proper way, rather than going through the "backdoor". As a result, he commanded the respect of the local government and relevant authorities and received strong support from them. After many years of perseverance and hard work, through communication and understanding with the various quarters, everything seems to be smooth and ready for him now, and he has attained certain achievements in his endeavour. As such, he feels the best opportunity for our local SMEs is in China. They can use mainland China as the production base, and develop their products and receive orders in Singapore. However, he reminds would-be investors to China that China would not roll out its red carpet to receive the investors, but it would provide all kinds of facilities to them. Many foreign investors go into China but are unable to adapt to the Chinese environment and they often go in with prejudices. They also come to the wrong conclusion that they are just not compatible with the Chinese environment. He also said that many people, Singaporeans included, feel that the Chinese are lazy and incapable. I think this is all a misunderstanding. Now the Chinese, especially the young ones, are full of drive. They are responsible, they are hardworking and they can think and adapt to changes. They all want to change themselves, change their environment. With the liberalisation of the media, ideological changes are taking place in China and the young people in China are able to accept new ideas from outside China. All that I have mentioned just now should not be confined to the Chinese Singaporeans. As far as possible, we should also bring up our Indian and Malay compatriots as well, so that together we can go into the China market and take a ride together, so that we can do our best in the China market. With cooperation among the various ethnic groups, we can also achieve higher level objectives in other non-Chinese speaking territories, like the west, the Indian and Muslim worlds. The event on September 11 brought to us a traumatic turning point, reminding us once again of the importance of political stability and multi-ethnic harmony. This moment we must specially cherish in gratitude the prosperity which this government has provided for us in the last 36 years. With 36 years of arduous nation-building effort behind us, the Singapore national identity is beginning to take root. We can stand firm on our multi-cultural legacies, and by integrating the wisdom of the Asian cultures and the creativity of the western culture, we can shape the winners for this millennium. This process does not need to depend only on the State. Community agencies, including the business groups and organisations as well as clan associations, can all play a part in building the bridges in promoting Singapore and Chinese business development and cultural understanding. I am anxious to move this motion on the Chinese challenge in this House because I feel that we cannot dismiss China any longer. If we can hurry up and ride on this economic train to China, we are closer to taking that small little bite in the huge economic pie and find the new pathways of livelihood and business route for Singaporeans. If we do not hurry now and embark on this exploration, then we shall soon become irrelevant and by the time we realise our destiny, I think it will be too late. In facing this uncertain and economic landscape, we should all work together to have a single heartbeat and achieve our prosperity.

Mr Speaker, Sir, I thank Mdm Chiang for raising some very pertinent issues about China and her urgent call. I agree that we need to raise awareness among Singaporean business leaders, the younger generation and also the students about the many opportunities and the importance of China, and also provide avenues for information exchange and networking to facilitate our companies' ventures in China. China is emerging as a major economic power. In the last 20 years, its GDP grew 9.7% per annum and in the 1990s alone, at 10% per annum. Few other countries in the world have achieved such impressive growth over this period. While there are potential risks that may slow down China's growth, analysts forecast that China's real GDP will continue to grow at about 8% for the next 10 years. Singapore already enjoys strong and growing bilateral economic relations with China. Bilateral trade grew at a robust rate of 15% per annum in the last decade, and China is currently Singapore's seventh largest trading partner. In 1997, China became Singapore's top investment destination in cumulative terms. Today, Singapore is also China's fifth largest foreign investor. But let me add, however, that the experiences of our businessmen in China have been mixed. In the early days, not a few were cheated. Even now, not everyone actually makes money. It is therefore important that Singapore investors go into the China market with their eyes wide open and learn both from the happy and unhappy experiences of others. The Trade Development Board (TDB) is the lead agency promoting external trade and investments, including companies' market expansion efforts into China. However, recognising that our engagement of China requires a concerted effort by many different Government agencies, MTI will set up an International Business Division (IBD) next month. For a start, IBD will focus on China alone, and play the important role of coordinating efforts and reviewing progress across the various agencies. It is important for our businessmen operating in China to do so on the basis of deep knowledge. Let me address Mdm Chiang's suggestions, which can be broadly classified into two categories: first, disseminating of information and, second, facilitating companies' efforts to tap on the many opportunities in China. On the first point, Singapore needs to be aware of the tremendous changes that have taken place, and continue to take place in China. It is important for us to deepen our knowledge of China and understand the opportunities and also the pitfalls. To facilitate the sharing of good and bad experiences among Singapore businesses, TDB will set up Network China. As the name implies, this will serve as a platform for networking among businessmen. The aim is to encourage businessmen to share their experiences and knowledge on China, and shorten the learning curve for other Singapore companies. In addition, this platform will also create opportunities for collaboration among Singapore businessmen entering China as well as for partnering Chinese companies for other markets. Apart from Singapore companies, Network China will also involve MNCs and the various Chambers of Commerce and Industries, including the Malay and Indian Chambers. Mdm Chiang's point is well taken. The Singapore Chamber of Commerce and Industry in China will be set up by our businessmen who are now in China by the end of this year. Headquartered in Beijing, the Chamber will also have extensions in key cities such as Shanghai, Guangzhou, Chengdu and Dalian later on. I am confident that this private sector driven effort will provide a useful platform to sieve on-the-ground market intelligence for dissemination back to Singapore through Network China. Such a grouping also creates opportunities for Singapore businessmen based in China to network with one another. In this way, they can learn from one another, and assimilate more easily into the new environment, both business-wise and socially. To help raise Singaporeans' awareness about business opportunities in China, TDB will set up a China Business Information Centre (CBIC) in Singapore. Besides serving as a first-stop centre to handle China business information inquiry services, the Centre will conduct market studies, collect market information and disseminate the information to Singapore companies. Mdm Chiang made a very good suggestion of providing information on the web. TDB will follow up on this and to add depth to its existing portal to reach a large audience in a timely fashion. But information by itself is not enough. Converting it into knowledge is much more difficult. Singaporeans have a reputation in China as straight dealers, but that also means that we get taken advantage of sometimes. In a different way, some too may have lost a little of their innocence. We must make sure that our good reputation translates into an asset, and not a liability. We note Mdm Chiang's suggestion that we have to create a conducive environment for Singapore students to learn Chinese, and also to improve the facility for the language. The Ministry of Education strongly encourages students to study their mother tongue for as long as possible and to as high a level as they are capable of. We currently have 10 Special Assistance Plan (SAP) schools offering Higher Chinese at the secondary level and three Junior Colleges offering the Chinese language elective programme. At the university level, NUS and NTU will introduce a bonus points scheme for admission to selected courses of the Chinese language and Chinese Studies Course from academic year 2002/2003. The Ministry of Education also offers teaching scholarships tenable in China, and our local universities already have exchange programmes for Singaporeans to spend some time in a Chinese university. Besides, Singaporeans have the opportunity to interact with many Chinese students pursuing their MBAs here in Singapore. Beyond a better grasp of the Chinese language, as has been emphasised repeatedly, it is also necessary to understand China better. For a start, seven officers from the economic agencies under the Firefly programme will be sent to Tsinghua University and Fudan University this October. They will pursue an International MBA. An immersion into China and in understanding the business culture will equip our economic officials to better formulate policies to deepen economic linkages with China. In due course, we hope we can also create a corps of officers who are steeped in both the language and culture. Beyond knowing China better, we also need to facilitate Singapore companies' entry into, and subsequent expansion in the Chinese market. To do so, TDB is looking into expanding its network of offices in China. TDB is also looking at ways to provide more and better services to help companies in their initial foray and subsequent expansion in China. Details will be announced at a later stage when finalised. Last year, TDB led 10 missions to China to explore trade and investment opportunities, and TDB will continue to spearhead business missions to China. These missions are useful for SMEs that are less likely to explore overseas markets by themselves. To achieve greater synergy and results, the missions will take on a stronger industry focus leveraging on Singapore's strengths, or a market exploration focus to help Singapore companies explore new emerging areas in China. Some of these have been, and will continue to be, jointly organised with Chambers of Commerce and Industry associations. It is good that in most business delegations, there is now a good mix of veterans and freshies. China is growing by leaps and bounds. Singapore needs to focus on industry clusters where we have strengths, and penetrate regions where these strengths are valued. Our companies will need to constantly upgrade their technology and management skills, or risk being left behind by the Chinese, or by foreign competitors in China. However, we must also recognise that China is a difficult market with a complex operating environment and, unless one understands this fact, it is easier to lose money there than to make money.

Question put, and agreed to. Resolved, That Parliament do now adjourn. Adjourned accordingly at Three Minutes to Three o'clock pm to a date to be fixed.

asked the Minister for Manpower if he will, in line with the national objective of promoting lifelong learning, allow Central Provident Fund account holders to use their balances to pay for degree courses at the Singapore Open University and for distance learning courses from reputable overseas universities.

Several Members of Parliament have in the past raised the issue of allowing CPF for part-time courses, including those offered by the Singapore Open University and distance learning degree courses. I understand the desire of individuals who wish to have the flexibility to use their CPF savings for part-time courses. Since the special exception was made in 1989 to allow CPF for local full-time tertiary education, we have received many requests to liberalise the CPF Education Scheme to cover overseas education, part-time courses, distance learning, etc. The CPF is meant for a member's retirement, housing and medical needs. We have allowed CPF to be used for local full-time tertiary education as a concession to help low income families support their children through local full-time tertiary education. To ensure that the fundamental objectives of the CPF in meeting the retirement, housing and medical needs of its members will not be undermined, the scheme was confined to full-time tertiary education at approved local institutions, because such courses are heavily subsidised by the Government. CPF members who are working adults and wish to pursue further education at the Singapore Open University or take up distance learning courses are advised to plan in advance for their studies, and set aside sufficient cash savings to meet their education expenses. Those who intend to pursue part-time distance learning courses should plan ahead to ensure that they can meet the course fees and the time to devote to such courses before embarking on the course. We have found that the dropout rates for part-time students in our institutes of higher learning are much higher than that for full-time students. Allowing CPF savings for part-time courses could therefore result in erosion of the old age savings. In view of the above, CPF savings should not be used for part-time studies at the Singapore Open University and distance learning degree courses.

asked the Minister for Education if he will consider allowing children, who were born a few days after the cut-off date but who are ready to start their primary education, to enrol early for Primary One.

It has been the policy of the Ministry of Education to admit children to Primary One who are age 6 and above as on 1st January in the year of admission. This policy has served us well, and is well understood by Singaporeans. The Ministry does not intend to make adjustments to this policy.

asked the Minister for Education whether his Ministry has any plan to close the Department of Building at the National University of Singapore as the Building and Construction Authority will not be recognising the Bachelor of Science (Building) degree in the proposed contractor registration system in 2003.

The Building and Construction Authority (BCA)'s new Contractor Registration System requires various categories of sizable building and civil engineering contractors to employ specified numbers of professional and technical staff, of which one-third should have qualifications recognised by the Professional Engineers Board or the Board of Architects. The other two-thirds of the professional and technical staff can hold other industry-relevant qualifications not accredited by the 2 Boards. These would include the Bachelor of Science (Building) degree from NUS. The closure of NUS's Department of Building therefore does not arise. NUS's Building graduates have played a useful role in the industry as quantity surveyors, project managers and building performance specialists, and will continue to do so.

asked the Minister for Health if his Ministry has plans to build a new polyclinic to serve the residents of Sengkang and Punggol New Towns.

The Ministry of Health plans to build a polyclinic to serve Sengkang and Punggol residents. The polyclinic should be ready by 2004. In the meantime, we have extended the Primary Care Partnership Scheme to Sengkang so that needy elderly residents have the added convenience of receiving subsidised care at private General Practitioner (GP) clinics near their homes instead of travelling to a polyclinic.

asked the Minister for Communications and Information Technology if his Ministry intends to improve the roads in Singapore, especially in newer housing estates, to cater for bicycle lanes, so that more residents can adopt the healthy lifestyle of cycling when they need to travel short distances within their estates, instead of relying on cars or feeder buses.

In land scarce Singapore, road space is limited and should be used for the efficient movement of people, goods and services. Thus far, we have only set aside dedicated lanes on our roads for public buses. This is because buses provide an efficient form of mass transportation. Bicycles, on the other hand, do not offer such efficiencies. We must also recognise that our hot and humid weather makes it unlikely for cycling to become a major means of transportation. Hence, to provide dedicated bicycle lanes on public roads will not be an efficient use of our limited road space. However, we do recognise that cycling is a good form of exercise, and in this regard, we have been providing cycling tracks and facilities for our residents. The Park Connector Network being developed by the National Parks Board is one such example. This is a network of jogging cum cycling tracks that links our major parks and nature sites. They also link urban and residential areas, providing convenient routes to places such as MRT stations, bus stops and markets. In addition, we have also provided bicycle stands at MRT stations to cater to commuters who want to cycle between their homes and transport nodes such as MRT stations. Town Councils may provide cycling tracks within their HDB estates. The Pasir Ris Town Council, for instance, is providing for cycling tracks within its estate.

asked the Minister for Communications and Information Technology why is it that students from the polytechnics pay adult fares for rides on buses and on the MRT whereas those from junior colleges only pay student's concession rates, when both are of the same age and are students.

The public transport operators grant concessionary travel to various groups of individuals, such as pre-school children, students and senior citizens, to help lower their cost of travelling. The privileges and types of concession offered differ from group to group. The public transport operators have a different concessionary travel scheme for students in tertiary institutions compared to those in schools. The polytechnics are considered as tertiary institutions. For tertiary students, the operators offer two types of concession schemes. The first is the monthly bus concession stamp, which allows the holder to take unlimited number of trips on buses for the month that he or she holds a valid stamp. The other is the monthly MRT concession ticket, which entitles the holder of a valid ticket to travel on the MRT and LRT systems up to 4 trips a day. Thus, a tertiary student who makes extensive use of the public transport system can cut down his or her transport expenditure by making use of the available concession schemes. Public transport operators are listed companies and need to earn a profit for their operations. At the urging of the public, they have granted concessions to various groups of people. However the more concessions that are granted, it would mean that other commuters would have to pay higher fares to make up the difference.