CENTRAL PROVIDENT FUND (Use of contributions for purchase of private housing)

[Mr Speaker in the Chair]

Mr Teo Chong Tee asked the Minister for Labour whether he will reconsider the use of Central Provident Fund contributions for the purchase of private residential flats and houses.

The Minister of State for Labour (Mr Sia Kah Hui) (for the Minister for Labour): Mr Speaker, Sir, the issue on whether to allow the use of CPF contributions for the purchase of private housing has been raised many times in this House. The Member's request for the use of CPF monies for the purchase of privately-built residential properties has been consistently turned down in the House since 1971. I am afraid the answer this time is the same.

The housing needs of the lower income workers are adequately taken care of by allowing them to use their CPF savings to buy HDB/JTC flats. In July last year the Housing and Development Board raised its qualifying monthly family income ceiling to $2,500. In the case of middle income workers, they may use their CPF savings to buy HUDC flats and houses. The decision of HUDC in April this year to raise the monthly family income ceiling from $4,000 to $6,000 will also go a long way to meet the housing needs of the great majority of those in the middle income group. The housing needs of our workers have been largely met and there is, therefore, no compelling reason to reconsider the use of CPF contributions for the purchase of private residential flats and houses.

Mr Ho See Beng (Khe Bong): Mr Speaker, Sir, what is the Minister of State's justification for disallowing CPF members to withdraw their contributions? He must be aware that the funds are being eroded by inflation year after year.

Mr Sia Kah Hui: Sir, they are allowed to withdraw their savings to buy HDB, HUDC and JTC flats.

Mr Ho See Beng: If they are allowed to withdraw their savings to buy HUDC and HDB flats, why cannot they be allowed to use their CPF money to buy private houses? This is the only way to protect their money from being eroded by inflation.

Mr Sia Kah Hui: Sir, I think we are going into a long argument over this. But knowing the number of people who have the money to buy privately-built houses, I think the hon. Member will probably agree with me that the number is very small. The hon. Member surely knows the cost of a privately-built house these days, and even if they were to withdraw the full credit in their CPF account I do not think there are many people who can afford to buy them.