GOVERNMENT SUBSIDY ON SINGAPORE IMPROVEMENT TRUST RENTALS

4.01 p.m.

Mr Lee Choon Eng (Queenstown): Mr Speaker, Sir, early this year, the Government tabled a White Paper on the subsidy of housing. It is a policy of the Government and I congratulate them for that policy. But much earlier than this year, most of the Members sitting on the Government Benches made promises during their election campaigns that, if elected, they would try to reduce the rents of S.I.T. houses. I can speak with some authority on this because at that time I was a member of the Labour Front and it was a platform of the Labour Front to reduce rentals on S.I.T. houses, if elected. Apart from myself who also made that promise, I think members of other Parties made the same promise also because at that time when it was election time all sorts of promises were made, not caring whether they could be carried out or not. If my memory is correct, at one of the P.A.P. meetings, the P.A.P. even quoted figures to show how such rents could be reduced by granting loans to the S.I.T. without interest.

What has the Government done so far apart from introducing that White Paper? I do not see anything. The only benefit that can be seen so far is the abolition of service charges on the old S.I.T. houses. How much did that amount to: a matter of a dollar, two dollars or to five dollars? Would that relieve the poor tenant very much, a matter of reduction from one to five dollars? I doubt whether that would give relief to the tenant very much.

It looks to me now, Sir, that all those who made promises at the time of election are not any more interested. "Why bother? I have already been elected and I am now in this Assembly." But promises will be made again when the next general election comes round again next year or earlier. I will quote, Sir, paragraph 13 of the White Paper:

"It is clear that considerable subsidisation will have to be undertaken. Sites, particularly in urban areas, are becoming more difficult and costly to acquire and prepare for building. Buildings will have to be of solid and substantial design and construction if sites, particularly those in urban areas, are to be developed with the maximum degree of efficiency, having regard to locality, density of population and other planning considerations. The economic rents of these buildings, having regard to the cost of acquisition and preparation of sites and to the cost of construction, will in most cases exceed the rents which are within the capacity to pay of the sections of the public for whom the houses are built. The difference between the economic rent and the rents which the prospective tenants can pay will have to be met by subsidy."

Now, Sir, this paragraph 13 clearly indicates that Government is prepared to reduce the rents of houses which are to be built to a level which is within the pocket of the common man. At the sitting when the White Paper was tabled, the Government announced that only new houses built after the introduction of that White Paper would be benefited and that that privilege would not be granted to the old houses because the old houses were built at a higher interest or so. Why, Sir, should there be discrimination between the old houses and the new houses? Are they not all S.I.T. properties? Why should one section of the S.I.T. tenants benefit by the White Paper and another section of the S.I.T. tenants be charged at a higher rental? I will quote, Sir, an answer that was given to me by the Minister in his reply to my question regarding Singapore Improvement Trust Flats in Albert/Prinsep/Short Streets: Government Subsidy. I asked the Minister for Local Government, Lands and Housing if he will give complete figures pertaining to the Singapore Improvement Trust flats in Albert/Prinsep/Short Streets showing how the amount of Government subsidy in respect thereof is calculated and the answer I got was:

"The method of subsidy by Government on S.I.T. housing is outlined in the Government White Paper, No. Cmd. 6 of 1957. The subsidy is not related to any particular scheme but is in fact the amount required to make up the annual deficit in the Trust's Housing Account. It is not possible therefore to give any exact calculation of the subsidy in respect of the Albert Street/Prinsep Street/Short Street scheme for which there can be in any case no complete figures until the buildings are completed. The approximate figure of $30 to $40 given in oral answer to a question by Mr Lim Choon Mong at the last meeting of the Legislative Assembly as the subsidy for the $35/30 p.m. two-room flat is the best estimate which can be given."

Now then, the Minister himself is not sure of the amount of subsidy that would be granted to S.I.T. houses whether they be new houses or old houses. He himself is not certain what the amount of subsidy would be. Now, are the Prinsep Street or Short Street houses not completed yet? He says that unless they are completed, he is not able to give a correct figure. They have been completed long ago and complaints of grievances have come to the knowledge of the Minister through some Members of this Assembly. Why has he not looked into them? He has no reply other than to say that the method of subsidy is contained in No. Cmd. 6 of 1957. Well that Paper is here and I think everyone has read it.

All this year, Sir, the City Council and the Government have shirked their responsibility towards this housing subsidy and the reason given by these two organisations is that the S.I.T. is a statutory body which is of no concern to Government. During my application for this adjournment speech, I included the allocation of S.I.T. houses, but you, Sir, have ruled me out that it does not come within the purview of the Ministry. For all purposes, it is most convenient for the Minister to say that he has got no control -

Mr Speaker: Order. The hon. Member is out of order in referring to a matter in which he himself had been ruled out of order by the Speaker. Will he please confine his remarks to Government subsidy on S.I.T. rentals?

Mr Lee Choon Eng: Yes, Sir. I am just passing a remark that the Minister is always trying to shirk his responsibility by saying that it does not come within his control at all. I am just only making a passing remark on that and not in fact making reference to it.

Now, Sir, we have an elected Government, not a colonial Government. At the time when the S.I.T. was managed by a Board of Trustees, it was under a colonial Government. Today, out of those nine Benches on the opposite side, five are elected, one is nominated and three are ex-officio Members which clearly indicate that there is a majority of elected Ministers in the Government. Can this elected Government now shirk its responsibility? Can this elected Government which made promises during the election campaign shirk their responsibility in that they have got nothing to do with housing subsidy? I doubt they are prepared to do so because election is coming very near - a matter of another year - and the election campaign will start in a matter of a few months. Did Government not also make a promise that they would set up a Housing Authority which would come under the control of the Minister for Local Government? When we have that Housing Authority, then the Minister will say, "Ah, this is within my Ministry and my portfolio. I will look into it." For how many months have the Government promised to set up that Housing Authority? So far, nothing has been heard about it except the Malayanisation of the S.I.T. and the protest by the employees of the S.I.T. When can this Housing Authority be set up? We have yet to see it. These promises here and there come in when election time comes round. I am quite sure that by the time the life of this Assembly expires, the Housing Authority will still be in thin air. I doubt there will be a Housing Authority. The Government should set their machinery straightaway and then set up this Housing Authority with the subsidy that the Government are prepared to offer to old and new tenants of S.I.T. houses, not to discriminate one section from another, but to all S.I.T. tenants who pay their rents to the S.I.T. or to this new Housing Authority.

4.11 p.m.

The Minister for Local Government, Lands and Housing (Inche Abdul Hamid bin Haji Jumat): Mr Speaker, Sir, in my Oral and Written Answers to the Questions in the Assembly during the last few months, I have been at some pains to explain that the Government subsidy policy is contained in Sessional Paper No. Cmd. 6 of 1957. The subsidy which Government provides is not related to any particular scheme for housing whether in Queenstown or Kallang or in Albert Street or anywhere in the island but it is operative over all the Trust housing estates. The total subsidy is in effect the amount required to make up the annual deficit in the Trust Housing Account as embodied in the White Paper and I will now, Sir, proceed to read the relevant paragraph. The Member for Queenstown read paragraph 13. I think it should be read in conjunction with paragraph 19. This is what paragraph 19 has to say, Sir:

"This Housing Account will contain, on the Income side, the proceeds of rents from all housing erected by the Trust and by the Authority, that is, rent from pre-war properties which arc still subject to rent control, from the properties which have been built since the war, and from all the properties which will be built in connection with slum clearance and other schemes in the future. On the same side of the account will appear contributions from tenants in respect of conservancy and service charges and income from miscellaneous sources. On the Expenditure side will appear the cost of administration of the Housing Authority, the cost of designing and supervising the erection of new buildings, and the cost of managing the housing estates. On this side of the account also will appear contributions to the City Council in respect of rates (rents on public housing include rates), payments to the City Council in respect of conservancy and service charges, maintenance of buildings, annual contributions to a Repairs Fund. Lastly, payment of interest and repayment of principal on all loans from the Government for housing."

So, Sir, if the Member for Queenstown were to read paragraph 14 in conjunction with paragraph 19, I am sure he will understand what is the policy of the Government on subsidy of S.I.T. rentals.

4.15 p.m.

Mr J. M. Jumabhoy: Mr Speaker, Sir, there are one or two remarks made by the Member for Queenstown which might be misleading to this House. One is that the S.I.T. is controlled by the elected Government. Sir, there is still in existence a Board of Trustees and the only control the Government has on the S.I.T. is in regard to the new buildings of the S.I.T. The houses that they are now putting up are covered by this housing subsidy policy laid down by the Government. In all other respects, the Board of Trustees of the S.I.T. take their own decisions even as regards the fixing of rents of shops. Government decides the rents of the new houses bearing in mind two things: the type of accommodation provided and the ability of the tenant, who is going to occupy that accommodation, to pay. That is laid down in the housing subsidy policy in Paper No. Cmd. 6 of 1957. Therefore, it is not right for the hon. Member to say that because we have an elected Government to ask what the elected Government has done about the rents, and so on. But one thing is clear and that is when the Labour Front went out for elections in April 1955, there was a promise that we would try to reduce the rate of interest charged by the Government to the S.I.T. for putting up the houses. Now, I believe that the rate of interest charged at that time - I am not the Minister for Local Government; but I do remember certain things - was round about 4 per cent and the promise that we made to the electorate was that we would try to reduce it to 2 per cent. A reduction of the interest rate by about 2 per cent would have probably given a reduction in the rental by about $8 or so, whereas now (if you see the new houses that are built in Short Street and Albert Street) according to the new housing subsidy policy, the reduction in the rentals is far greater. Normally the economic rent for that type of house, according to the present cost, would be somewhere in the region of about $60 to $70 and the Government has fixed the rents at $35 for newcomers and $30 for people who are cleared out from slum areas. Therefore, the subsidy is between $30 and $40 per house. My contention is that you could never have achieved such low rentals if we had just reduced the rate of interest by 2 per cent or even if we had abolished the rate of interest entirely. It is because of this bold subsidy policy that the tenants of those houses are going to enjoy a much greater reduction.

The other point I want to make is that the decision to waive conservancy and other charges has resulted in a reduction of $10 on Manila Street flats. In some cases, it is $2; in some it is $5, but in the case of Manila fiats, if I am not mistaken, it is $10.

The Financial Secretary (Mr T. M. Hart): Sir, it is with some reluctance and trepidation that I enter into what is largely a political debate but, for the purposes of the record, I would like to draw the attention of the hon. Member to the fact that as is stated in paragraphs 9 and 10 of the White Paper, S.I.T. houses are in fact subsidised at the present time.

Question put, and agreed to.

Resolved,

That this Assembly do now adjourn.

Adjourned accordingly at nineteen minutes past Four o'clock p.m.