TOURIST PROMOTION BOARD (AMENDMENT) BILL

Order for Second Reading read.

3.50 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

It is now quite apparent that Singapore is building an excessive number of hotel rooms. Research done by the Singapore Tourist Promotion Board shows that by the end of 1972 the number of hotel rooms available would increase from the present level of 2,800 rooms to 13,000 rooms, or about four times. One estimate of tourist arrivals in 1972 puts the number at 680,000 compared with about 360,000 in 1969.

In Hong Kong last year, there were 6,400 hotel rooms catering for some 600,000 tourist arrivals. Allowing for some degree of under-supply of hotel rooms in Hong Kong, these figures show that the hotel room supply in Singapore will be far in excess of demand unless a special effort is now mounted to attract more tourists to the Republic and to lengthen their stay here.

The Singapore Tourist Promotion Board is in the process of stepping up its overseas promotion activities, particularly in Japan, Australia, the United States of America and Germany. The Board has engaged full-time representatives in Sydney and San Francisco to handle promotion work in Australia and the United States of America. In Tokyo a very well-known Japanese firm has been appointed by the Board as our advertising and public relations agency. The Tourist Promotion Board is at present in the process of establishing another representative, this time in Germany.

The Government is also developing new facilities and improving existing ones to give tourists a more interesting time. A large aviary is fast nearing completion in the Jurong industrial estate. It will be one of the finest in the world. The high-lights will be a flight cage covering an area of five acres and a 100-foot man-made waterfall. To the best of my knowledge, these are the largest of their kind in the world. A no less spectacular marine-land is being designed and planned for the Bedok reclamation area, whilst a first-class zoo or a zoological garden is proposed to be established in the vicinity of Seletar Reservoir.

Perhaps the most concentrated development of tourist facilities in Singapore will eventually be located in the island now named Blakang Mati. Here we have engaged at some cost a well-known American corporation with great experience in the development of tourist facilities. It will review the development plans that we have made for this island. Their final recommendations and plans will be submitted to the Government in six months' time. Subsequent development of Blakang Mati will be a joint effort between the Government and the private sector, with Government providing the infrastructure facilities, such as jetties, roads and utility services, and certain basic attractions such as an 18-hole championship golf course, museums, art and craft centres, marinas and so on and so forth.

These plans to bring more tourists to Singapore and to lengthen their stay are, needless to say, very costly. Not all of them can be self-supporting. In addition to the money spent on the aviary, zoo, marineland and on projects at Blakang Mati, the Tourist Promotion Board's budget for overseas promotion and advertising also has to be increased in the coming fiscal year. It will be increased to $1.3 million from the previous rate of $400,000. This increased sum, however, is still small compared, for instance, to what Hong Kong is spending on overseas promotion and advertisement - no less than $2.1 million by the Government alone.

As the Republic's hotels and restaurants benefit from Government's efforts, it is, therefore, only equitable that they should make a small contribution. Hotels are already doing so on the basis of a three per cent cess on hotel room rentals. It is proposed to make first-class restaurants and bars do likewise. These would be bars which hold any of the following licences: a public house first-class (extended) (tourist hotel) licence, or a public house first-class (extended) licence, or a public house first-class licence. Restaurants which qualify are those operating a bar service holding any of the aforementioned licences. All bars and restaurants in gazetted tourist hotels are also to be included in this scheme.

In all, there are more than 360 of such establishments. An amendment to the Tourist Promotion Board Ordinance seeks to impose a three per cent tax on the sale of each item of food or drink in selected bars and restaurants. Their names will be gazetted shortly and they will be required to pay the stipulated tax as from 1st of March this year to the Comptroller of Customs and Excise who will be appointed by the Tourist Promotion Board to collect such tax.

In addition to this amendment, the Bill introduces three others. The first seeks to change the method of appointing members to the Tourist Promotion Board. Whereas existing legislation provides specifically for some members of the Board to be drawn from a particular body or institution, the proposed amendment does not set such a limitation. The other two amendments are minor in character. They seek to change the commencement date of the financial year from 1st January to 1st April and to bring the provision regarding the laying of regulations before Parliament into line with current practice.

Sir, I beg to move.

Question proposed.

3.57 p.m.

Madam Chan Choy Siong (Delta): (In Mandarin): Mr Speaker, Sir, as we all know, the promotion of tourism is a very important means of strengthening our economy. The Minister said just now that we must take measures to do so. He said the number of hotel rooms in Singapore is becoming too excessive for our requirements, and unless more tourists are attracted to Singapore, tourism as an industry will not be as revenue-producing as that in Hong Kong. The proposed measures to remedy the situation are very wise.

I am not an expert on tourism, but I feel that there are certain aspects of tourist development which are not comprehensible. For instance, has the Tourist Promotion Board any experienced guides who can inform the tourists about the history of Singapore? According to my knowledge, the Board does not seem to have done this in the past. I feel that it should pay more attention to these aspects of tourist development in future. The Tourist Promotion Board should employ tourist guides who are more conversant with our history. They should be genuine guides for tourists. People of dubious character should not be encouraged to serve as tourist guides. Only in this way will tourists be able to know that we are progressing. But I understand some tourist guides are employed by the Tourist Promotion Board on a temporary basis. These guides take tourists to places which do not reflect well on Singapore. For instance, they take tourists to the death house where old and sick people are waiting for their death. Naturally the tourists will report unfavourably on Singapore. This is the kind of thing that should not be stressed too much. Some guides even tell the tourists that the people of Singapore are backward. I think this is not good for Singapore and I hope the Tourist Promotion Board will take action to remedy this.

Secondly, the Minister said that since 1967 we have built more and more hotel rooms and there are now a good number of first-class hotels. I feel that the charges of these hotels are very high and are even more expensive than those charged by the first-class hotels in Hong Kong. For instance, for a single room the charge here is $56, whereas in Hong Kong it is from $30 to $40. Some hotels here charge as much as $100 for a room. This is a discouraging factor for tourists.

Thirdly, I feel that developers of hotels and people in the tourist trade have a wrong conception of certain matters. They think that tourists are all westernised people and that they want a certain kind of recreation. Hence we have strip-tease dances in our nightclubs. We should know that tourists might have seen even more naked dances in Europe and elsewhere. So if we want to attract tourists by these methods, I must say that they are all wrong. On the other hand, it will only create a bad impression on others. Such places as night-clubs, bars, and restaurants are visited not only by tourists but also by the local people. We can say that three-quarters of the customers are our youths and some older folks. Therefore, the intention to attract foreign exchange by tourism is defeated. Instead, it will create a bad environment for our people. What we should do is to create our own unique tradition and try to impress our own cultures on the tourists to enable them to understand us better. The traditional cultures of our various races have their own good characteristics and are unique in themselves. We should avail ourselves of every opportunity to manifest them fully especially to the tourists in order to convey a good impression to them.

Fourthly, the Minister for Finance said that we will try our best to promote tourism and to do more publicity work abroad to attract more tourists to Singapore. Of course, it is necessary to set up various tourist spots and attractions in Singapore. These will also provide interest for our local people who might otherwise go to unsavoury places to pass their time. The Minister said that the Government has recruited experts from America to advise it on how to develop tourism and to set up various tourist spots. I think these people who come here to advise us on matters of tourism have a different background and different views on how to promote tourism. In Singapore, we should create something that is unique and that can reflect our own culture. We should not ape others. I feel we have many people in Singapore, especially the artistes, who can help the Government to reflect local conditions,

4.09 p.m

Mr Teong Eng Siong: (In Mandarin): Mr Speaker, Sir, first of all let me avail myself of this opportunity to congratulate the Tourist Promotion Board on its success and achievements in promoting tourism. The main purpose of the amendment Bill is to enable the Board to collect a three per cent cess on all sales of food and drink from tourist food establishments and tourist public houses in order to use such cess to subsidise our publicity promotion efforts. This is a very practical method. We know that the Government has already spent large sums of money on tourist promotion and that it has set up offices in various parts of the world to publicise Singapore in order to attract more tourists to come here and in order to earn a large amount of foreign exchange for the benefit of our economy. As a result of the strenuous efforts of the Government to set up various tourist attractions, our tourist trade has improved greatly today. It has earned praise from all quarters. Since the promotion of tourism will involve Government in expending large sums of money, it has every reason to impose a cess on tourist hotels and food establishments to supplement its expenditure. By this means, it will be able to do more publicity and attract more tourists to Singapore. This will also bring about more job opportunities for our people. As a result, we will improve our economy. This measure is most appropriate.

In this connection, I want to know who will have to pay the three per cent cess. If proprietors of hotels and food establishments are asked to pay, then they will pass the three per cent cess on to their customers. Therefore, the customers will have to bear the additional charges and the proprietors and owners of these establishments will not have to pay the cess. I feel there should be certain regulations to ensure that the new tariff does not fall on the shoulders of the tourists. I understand there have been a number of complaints against the high charges made by the hotels, just as what the Member for Delta has described. If we impose on the tourists this additional cess, it would definitely have an unfavourable reaction on the tourist trade. Secondly, what yardstick would the Minister use in classifying hotels as tourist-class or first-. class? Thirdly, when can we see the, completion of the Bali project and how much money will be involved? Fourthly, at the moment we are short of good cooks. We have to recruit cooks, mainly from Hong Kong and elsewhere, because of the increase in hotels. This will not only incur a loss in our foreign, exchange, but will also deprive our people of jobs. So I wonder whether the Tourist Promotion Board can set up some kind of training school to train cooks for local employment.

Sir, I support this Bill.

4.16 p.m.

Mr Lim Soo Peng (Havelock): There has been considerable debate in this House, in the press, among trade and financial circles, over the ways and means of developing the tourist industry. Everyone agrees that something has to be done, but nobody has thought of what has to be done.

The Minister has just told this House that to woo tourists from abroad, money must be spent on publicising Singapore. Experience has shown that the amount of money needed to increase the flow of tourists cannot be obtained by voluntary contributions from the industry. It is with this view in mind that I support the Bill to levy a cess on or through the industry which stands to gain from the efforts of the Tourist Promotion Board.

In going through this Bill, I notice that no intention is stated or indicated as to who would have to pay the cess in the first instance. Is the cess to be collected as a sort of turnover tax on lodging, food and drinks, or is it to be additional to the bill to be presented to the guest or customer? I cannot agree with my colleague that the cess should be borne by the industry. I would prefer to have the cess as an addition, to the bill. The three per cent cess levy is not a heavy one and is unlikely to cause any resentment to tourists or the local consumers of food and drinks in certain more costly places.

I understand the Government levy in Japan is ten per cent and in Taiwan thirteen per cent. Hotel operators and restaurateurs will most likely pass on the levy through increased prices, if they are asked to pay a levy on the gross salary and, in so doing, they are more often likely to increase prices by more than the levy. What can be worse is that not only are the prices increased, but the volume of sales is reduced to a lower figure in order to defraud on payment of the cess as well as income tax. This is less likely to happen and there is less incentive to do so if the levy is initially and directly paid by the guest or customer. I foresee that the rate of levy will be going up and not coming down in the future. Other countries have a much higher rate than this Bill seeks to impose. The Minister has the power to vary the levy at any time, and I frankly do not anticipate him lowering the rate. The higher he varies the rate, the greater will be the incentives to defraud. It is, therefore, better to start the cess under conditions where there is less incentive to defraud. Having said this, it only remains for me to add that it should be decided that the cess be paid directly by the customer who partakes of the food and drinks in the same way as the hotel guest is now paying for his room. Therefore, either the schedule is amended or the Minister, under the powers conferred upon him under section 11, specifies a minimum cess.

A person can go to a first-class hotel and have a cup of coffee which may cost a dollar. If he goes alone, which is unlikely, he has to pay a cess of three cents. If he takes two friends along, he has to pay nine cents. This will be awkward. I suggest, therefore, a minimum cess of five cents and thereafter to the nearest five cents.

4.27 p.m

Dr Goh Keng Swee: Mr Speaker, Sir, I am much obliged to Members for putting forward various useful suggestions. The Member for Delta has brought up a number of relevant points which I propose to reply to in some detail.

First, as regards tourist guides. At present, they have to be licensed by the Tourist Promotion Board. They are carefully selected, trained and examined. The examination papers include questions on the history of Singapore. In fact, the examinations are quite stiff and I doubt whether any Member will relish going through such a stringent course.

As regards death-houses, which happen to be in my constituency, it is very difficult to put these institutions out of bounds to people who want to see them. I do not think it is practical to debar foreign visitors from having a look at them. In fact, I am told that some enterprising members of my constituency are selling little coffins as souvenirs to tourists.

The Member also says that hotel charges are too high compared to Hong Kong. I do not know what the facts are, but I would agree with her that at one time hotel charges in Singapore were very high. That was because there was an acute shortage of rooms and the hotels decided to charge what the traffic could bear. The Government wrote to the members of the trade who were represented by the Hotel and Restaurant Association, or some association by this name, and asked them how they would respond to government controls. They said "No". They objected to government controls and thought that this should be left to the market forces of supply and demand. I am holding them to this answer, because in the years to come, when there is an excess of hotel rooms, I hope we will not hear complaints about hotel charges being too high, but cut-throat competition forcing them too low. So I think the problem of high hotel charges will solve itself.

As regards entertainment in hotels as a tourist attraction, the Member complained about the rather low standard of strip-tease performances in Singapore which do not come up to foreign standards. I agree with her, but I am not sure whether she is in favour of improving our standard to that in Soho or San Francisco. Of course, she is right that the patrons of these shows, and the people who go to bars, are not tourists but mostly local residents. However, if they want to spend their money this way, we cannot stop them. The Government is not a religious organisation. It is not a moral institution. Possibly the only thing we could do is to increase the entertainment tax on this kind of performances. Anyway, I do not think any special measure is called for in this respect.

The Member, however, has made a very valuable contribution in saying that we should not encourage this foreign type of entertainment, but that we should develop our own special characteristics. Actually, the Tourist Promotion Board is forming a company, in conjunction with private enterprise, to stage cultural performances for the benefit of tourists at a small charge. If all goes well, they will be performed in West Point Garden in about a month or two from now. Then it will depend on how well these cultural shows are received. The Member is absolutely right in saying that when tourists come here, they want to see something exotic of the Orient, and not some inferior imitation of what they could see at home.

The Tourist Promotion Board also proposes, as part of its long-term programme, to stage once a year, possibly around our National Day Celebrations, a cultural festival in which we will invite cultural troupes from the countries of South-east Asia, each of which has got dancers and musicians of very high standards. I do not think we will be able to stage one this year, but certainly in 1971 we should see something quite good and spectacular along these lines.

The Member for Sembawang asked who pays for the hotel cess. The answer is the consumer pays for it. I agree with the Member for Havelock that that is a very good idea.

The Member for Sembawang also asked for information on a number of points. I have taken down notes, but I am having difficulty in trying to decipher my own writing. So, if I missed out a number of points, I hope he will excuse me. He asked what is the standard for inclusion for this three per cent cess. There is a body in Singapore called, I think, Licensing Justices, and if anybody wants to sell intoxicating liquor as a business, he will have to obtain a licence from this body. They grade licences into "first-class", "second-class", and so on. The conditions of a first-class licence are spelt out. The place must have certain standards of comfort or cleanliness and drinking hours are more generous than those in a second-class licence. So we think it is a good thing if all those who have first-class public house licences, i.e., licences to sell intoxicating liquor, are included in this scheme. We will leave out the third-class licences, otherwise you will get all the coffee-shops into the scheme.

As regards the island of Bali, we are ready to start off, but our partners, unfortunately, are a bit slow in getting their money, their designers, or whatever it is. So while we hope to get this project off the ground quickly, the private sector is still dragging its feet.

On the shortage of cooks, the catering school, which is now being rapidly expanded, does of course give training in cooking.

Mr Lim Kim San: They are being trained in the Army!

Dr Goh Keng Swee: The Army also trains cooks. But I doubt whether they will find employment in our hotels! I always believe that a good cook, like a painter, is born. You cannot train a man to be a first-class painter, nor can you train a man to be a first-class cook. However, how these hotels are going to get cooks is their business. The Government has got enough worries of its own and will not bother with the troubles of others.

The Member for Havelock has made a very useful suggestion, and that is that there must be a minimum charge of five cents, and everything will be rounded off to five cents. I think we can look into this in our regulations rather than spell it out in the Bill itself.

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 Goh Keng Swee].

Bill considered in Committee.

[Mr Speaker in the Chair]

4.34 p.m.

Clause 1 -

The Chairman: There are two notes,

(i) In page 1, line 4, to leave out "1969" and insert "1970".

(ii) In page 1, marginal title, to leave out "and commencement".

They will be done.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 9 inclusive ordered to stand part of the Bill.

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

Mr Speaker: Order. I propose to take the suspension now, and will take the Chair again at 5 o'clock.

Sitting accordingly suspended at 4.36 p.m. until 5 p.m. Sitting resumed at 5 p.m.