TRAVEL AGENTS BILL

Order for Second Reading read.

5.37 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Last year, no less than 1,230,000 visitors came to Singapore compared with 580,000 visitors in 1970. Earnings from tourism increased from $280 million in 1970 to $758 million in 1974, contributing respectively 4.8% and 5.9% of Gross Domestic Product in these two years.

Currently, the Tourist Promotion Board is empowered by the Tourist Promotion Board Act (Cap. 205) to license only travel agents engaged in inbound travel. But instances of malpractices by agents handling out-bound travel have been reported. It is, therefore, proposed to license these travel agents as well.

The Travel Agents Bill, 1975, will empower the Singapore Tourist Promotion Board to regulate the activities of all travel agents in Singapore, whether handling in-bound or out-bound tours. All tourist enterprises will have to be licensed. In considering the grant of a licence, the Board will take into account the character and reputation of the applicant. Any applicant previously convicted of any offence involving fraud or moral turpitude will be denied a licence. The Board will also impose any condition as is reasonable, and to vary or to revoke any licence so granted. However, any person who is aggrieved by a decision of the Board may, within a month, appeal to the Minister whose decision will be final.

A Compensation Fund will be created to mitigate the difficulties of travellers cheated, or left stranded, by their travel agents. It will be made up of levies to be imposed on tourist enterprises as a condition of licensing. The Board has proposed that the levy be made up of two tiers, comprising a first-tier primary cash levy of $5,000 and a second-tier of acceptable instruments or guarantees for a value of $20,000. In the event of default, the second-tier guarantee will be invoked first so as not to drain the cash reserves proper of the Fund.

The Board is satisfied that the Compensation Fund Scheme will be welcomed by the tourist industry as one effective way of relieving problems caused by malpractices of unscrupulous travel agents. Major travel agencies, which assisted in the formulation of the Scheme, do not consider the proposed $5,000 cash payment and $20,000 securities as unduly onerous.

A Compensation Fund Committee, with powers to make payments, will be appointed by the Minister. The assets of the Fund, though the property of the Board, will be kept separate from all other property, and will be held in trust. The Board may, after consultation with the Committee, invest funds not immediately required.

Any licensee who fraudulently converts to his own use, fares or other monies paid by travellers shall be liable, on conviction, `to imprisonment for a term not exceeding three years.

This Bill, therefore, provides some safeguards against malpractices by travel agents. However, those who travel would be well advised to always exercise their judgment in purchasing services from travel agents, even if they are licensed. Disbursements from the Compensation Fund will not compensate in full measure for losses of money and, more important, time.

Sir, I beg to move.

Question proposed.

Mr N. Govindasamy: Mr Speaker, Sir, I understand the purpose of this Bill. While appreciating the rationale behind the introduction of the Bill, I am a little perturbed as to the consequences that this Bill will have on Singaporeans who wish to travel as well as those who are in the travel agency business.

I have no doubt, as a result of the Bill, that the cost of travel is going to increase. Although the intention of the Bill is to see that there are no fly-by-night travel agencies and that the travelling public is protected, the cost of travel is bound to go up. This protection that we hope to offer will no doubt ensure that travel agencies are properly organised and managed. The control we try to ad-minister will stifle the free enterprise economy that we have in Singapore. The additional expense that is to be borne by the travel agencies will certainly be passed on to the customers.

As I understand the Bill, there will be two financial commitments on the part of the travel agencies. One is the licensing fee and the other is the payment to the Compensation Fund. How much the licensing fee is going to be and how much the travel agencies have to pay towards the Compensation Fund will be left to the Board to decide, although the Minister mentioned just now about the primary cash levy of $5,000 and the other payment to be in the form of a bank guarantee, if I understood him correctly. The payment to the Compensation Fund could consist of, according to clause 32(f) an initial contribution as well as annual contributions. If these contributions are to be a deterrent to the setting up of mosquito travel agencies, then they should be substantial. If the payments are not substantial, then they would not be a deterrent to anybody to set up a travel agency. This would, as I have said earlier, increase the cost of running a travel agency and the additional cost will be passed on to the travellers.

If the purpose of the Compensation Fund is to safeguard the welfare of Singaporeans travelling abroad, if they are stranded and lose financially as a result of the shady business of the travel agency, and not to increase the funds of the Tourist Promotion Board, then I would suggest that the licensed travel agencies be required to provide a bank guarantee of a sum to be decided by the Tourist Promotion Board and not pay such sums into the Compensation Fund. The bank guarantee should be a sufficient deterrent and it would not be an excuse for travel agencies to increase their fares.

I contend, Sir, that it is a good thing to encourage Singapore citizens to travel abroad, especially to other countries in Asia. When the greatest critic of Singapore comes back after a trip abroad, he appreciates Singapore more than ever before. Let me quote the example of a politician who was the greatest critic of the Singapore Government and its way of life. When he came back after having been away for a short while from Singapore in 1972, he said that "there is no place like Singapore". Therefore, these restrictions imposed on travel agencies will result in an increased cost of running a travel agency which no doubt will be passed on to the travelling public and will reduce the number of Singaporeans going abroad.

I contend that the same safeguards for Singapore travellers can be obtained by other forms of registration of travel agencies, prosecuting them when they fall foul of the law or when they cheat their clients by not fulfilling their contractual obligations. Sir, there are reputable, well-run travel agencies as well as not-so reputable ones. But the enforcement of this Act will penalise the good travel agencies as well as the bad agencies.

Let me now turn to clauses 20, 21, 22 and 23 which deal with the power to search premises, power to arrest, power to investigate, and powers of the Board. Under the provisions of these clauses, any police constable has a right to search all persons found in a travel agency, seize all documents, detain persons, arrest any person without a warrant, take possession of all articles, etc, if the police constable suspects that the travel agency has committed an offence under this Act. This, I am afraid, with due respect to our Police Force, gives a police constable unlimited authority.

Does this Bill also cover those airlines that are not registered as travel agencies but offer package tours, which include travel, transportation, sightseeing, hotel accommodation, etc.?

I am glad that this Bill is being cornmitted to a Select Committee, and I am sure that the travel agencies will, make the necessary representations.

Mr Hon Sui Sen: Sir, I do not propose to make a lengthy reply since the Bill is going to Select Committee, but some of the comments by the Member for Telok Blangah can be considered now.

We are all agreed that there is a necessity for some kind of regulation. We are also agreed that this should be maintained at the lowest possible cost to the traveller. At the same time, we are all agreed that there should be a maximum fund to compensate a traveller in case of any malpractice by travel agents. Some of these objectives are in conflict with each other because obviously we cannot have the lowest possible cost to the traveller if we insist upon a very high compensation fund.

I need only comment on one suggestion that there should be a bank guarantee instead of cash. That is already taken care of in my speech, i.e, the second-tier of acceptable instruments or guarantees for a value of $20,000 could possibly take into account the bank guarantee instead of cash. The two tiers consist of a first-tier of a cash levy of $5,000 and a second-tier of acceptable instruments or guarantees which would be to the value of $20,000. Of course, these sums can be varied and I have no doubt that in Select Committee full consideration can be given to any representation.

On the other comment which the Member has made about the powers of the police constable to arrest and to seize documents and so on, I have no doubt again that these can be considered in Select Committee.

Question put, and agreed to.

Bill accordingly read a Second time.

Resolved,

"That the Travel Agents Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and seven Members to be nominated by the Committee of Selection."-[Mr Hon Sui Sen].